Employers Neglect Financial Ed

According to the 2017 PLANSPONSOR Plan Benchmarking Report, 50% of employers offer no financial education of any type to their workers. This reveals an opportunity for advisers to increase participants’ satisfaction with their employer, as, per the 2017 PLANSPONSOR Participant Survey, 81% of employees say a retirement plan and accompanying education is either very important or important to them, and, 64% say personal financial education is either very important or important to them.

“Financial wellness” has become an industry buzz term. While there is no standard as to what the concept entails, general financial education is a widely accepted component. Again, looking to the Plan Benchmarking Report, among the 50% of employers that do offer financial education, the three most common topics are: investing basics and strategies, cited by 42%; saving and budgeting, cited by 36%; and credit and/or debt management, cited by 20%.

One-fifth of respondents to the Participant Survey said they would like to browse an interactive, online library that allows for self-paced learning. The same percentage preferred their communication to be a periodic newsletter via email with links to additional information and actions. Retirement plan advisers may help plan sponsors offer these programs by leveraging, and potentially customizing, available recordkeeper resources.

Interestingly, though maybe not surprisingly, participants’ preferred option, when asked how they would like to receive education, is actually through advice—28% of employees indicated they would choose to meet one-on-one with a financial adviser for 30 minutes. This is an expensive proposition, but food for thought as advisers look perhaps to partner with another provider, if they or their firm do not offer such a service.