How to help employees understand the value of financial planning

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It’s hard to see our own blind spots, and it’s easy to be overconfident in our financial stability. But when it comes to your employees, a lack of personal financial resilience can have ramifications in the workplace when reality sets in.

For example, Gallup’s consultancy “State of the Global Workplace Report 2021” found that 56% of US employees reported themselves as prosperous. However, a 2020 report from the Federal Reserve Board found that 25% of adults have no retirement savings at all, and in 2019, three in 10 did not have enough savings to cover three months of expenses.

These numbers don’t quite add up, and stories like these can be found throughout their workforce. Morgan Stanley at work has found that employees with low financial resilience tend to be more distracted at work and less productive, which affects their bottom line. How can companies overcome the disconnect and help people understand where they really are financially and what steps they can take toward a stronger future?

Changing perceptions

Many of us tend to assume we’re financially stable if we can pay monthly bills, but true financial wellness also means having an emergency fund, managing debt, saving for retirement, paying for education, covering estate planning, and more.

That’s where providing financial planning support at work can help your employees assess their true needs, identify goals, and organize actions that make sense to move them toward greater financial strength. Many of your employees may view financial planning as something that only works for the wealthy, but anyone who uses money can benefit from having a plan in place. It’s important to spread the message that financial planning is for everyone and that workplace benefits can help them get started.

Why at work?

Many employees seek help with essential financial tasks. In fact, according to a Financial Health Network Survey conducted on behalf of Morgan Stanley, 71% of employees are willing to receive personal financial support at work, nearly 75% believe it is important for employers to offer financial wellness benefits, and 60% are more likely to be stick with employers who do.

To meet this need, start with individualized data that bridges the gap between what your programs offer and where your employees are in their lives. Financial wellness programs can meet many needs, but employees must be able to connect the dots. A personalized assessment is a critical first step in letting them know what they’re doing well and where they can improve.

Just as companies conduct market research before launching new products, it’s important to do the same when designing your financial wellness programs. Survey your employees, host focus groups, work with employee resource groups – that’s an invaluable opportunity to hear what’s most important to constituents within your organization in a live setting. We often find that when employers do, they find they have programs that are out of date with the current needs of their population, or there is an awareness gap between what is offered and employees’ understanding of what they have access to with your company. .

Usually one of those gaps is financial planning. Providing financial planning services through workplace benefits can make a world of difference. That’s how sometimes explain that:

  • Construction of a personalized roadmap. Working with a coach can help employees budget and create a plan to build savings. It could also mean helping employees plan for their children’s education or working on specialized topics, such as setting up special needs trusts. The input of a professional can make the process less overwhelming and more productive.
  • Increase utilization of benefits in the workplace. Candid discussions with a neutral third party can help employees and their families make strategic financial decisions and take advantage of workplace benefit programs, such as how to stretch a budget with the help of discount programs or transit benefits .
  • Support financially responsible self-care. Working with a financial coach or advisor through work can help employees approach money decisions more mindfully, reducing financial stress and helping them feel more supported, which contributes to a more positive work culture.

empowering your people

Of course, employees will also need to do some of the financial wellness work on their own, but they will appreciate your education and support along the way. Employers can add value not only by offering financial planning or advice as part of a benefits package, but also by helping employees understand how to think about and pursue their financial goals in tangible ways.

Helping your employees understand the value of a financial plan and focusing on strategies that can help them build wealth can go a long way toward creating greater stability and success in their personal finances. And that can translate directly into a happier, healthier and more productive workplace.

Krystal Barker Buissereth, CFA, is Managing Director, Head of Financial Wellness at Morgan Stanley at Work.

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