5 steps to an effective financial wellness program

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Finding a solution to improve financial wellness that covers the masses, with their differing levels of knowledge and interest, has not proven fruitful. Despite this fact, financial providers have invested time and energy into materials for many decades in just this fashion.

In a nine-month study, completed in 2017, we looked at how financial wellness can impact participant behavior and stress levels to determine how to make financial wellness more manageable for plan sponsors to deliver.

We worked specifically with participants who were proactive in increasing their financial understanding, focusing on those who said, “I want a solution to improving my knowledge and taking charge of my financial well-being.”

Every effective change program out there counts on people raising their hand to say, “I want the help.” If you don’t want to lose weight, you don’t enroll in a weight loss program. If you don’t want to stop smoking, you don’t attend a smoking cessation class. Plan sponsors want participants to be educated in financial literacy, but if they don’t want to do so, we can’t force it on them.

e The goal of this particular initiative was not just to educate, but to move participants to action and have them confirm that they were helped. The resources we offered addressed both short-term goals, such as cash flow, debt management, and credit issues, and led up to the big long-term goal: be prepared for retirement.

The study included a broad range of eight diversified plan sponsors and 120 plan participants who were all eager and willing to participate in a study that could potentially improve their financial lives.

A quick overview of the results shows that 96% of the participants found the five-week program to be helpful. The highest impact was in the percentage of participants who felt stressed about their personal finances. This number fell from 52% to 19% after completing the program — a shocking drop of well over 60% of those enrolled.

Additionally, 15% of the participants increased their plan contributions after completing the program and more than half of the participants believe they are now better able to manage their monthly cash flow.

Designing the program
We know people learn differently, come from different backgrounds and knowledge levels, and have different life goals and concerns. This made it important for us to consider five key things during our design process:

First, we recognized there must be different learning methods to engage participants in a variety of ways. Simply doing stand-and-deliver enrollment meetings, or sending participants to a web page alone, was not going to work. We had to vary the mediums and provide different options for learning.

Second, while the idea of education is important, we knew in order to have an impact, we must go beyond just teaching them something and ultimately move the participant to action.

Third, if we don’t know what does work and what doesn’t, we can’t replicate it or implement it across populations, so we knew we had to measure the impact and embed some sort of assessment process to gauge success.

Fourth, we knew that if we were going to bring about a sustainable long-term impact we needed to develop a program that goes well beyond five weeks of learning and action-items. Financial wellness is a lifetime journey.

The fifth and last element was potentially the most important — knowing all that we needed to do, we had to focus on making it easy as possible to deliver for the plan sponsor. It had to be easy to understand and virtually turnkey so that busy, overloaded business professionals could access it without changing their entire program.

We were able to combine these five ingredients to create a powerful overall program that showed measurable results. In doing so, we proved that tackling financial wellness with a very targeted and manageable strategy can be effective and can positively affect the plan participant.

You can read part one of this series here and part two of this series here.

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Financial wellness Financial literacy Financial planning Retirement planning Retirement benefits Retirement readiness