Finance & Wealth

Why Your Financial Wellness Program Might Make You Sick

By Kelley Long | Apr 6, 2020
Kelley Long | ACHNET

When I joined Financial Finesse (the company that basically created the financial wellness industry 20 years ago) as a Personal Financial CoachTM in 2015, no one really knew what I meant when I said I worked for a financial wellness company. I had to come up with all sorts of creative ways to describe what I do so that people would understand that a) I don’t manage investments and can’t tell you how to time this market or what stock to buy (although I will say just stay in unless you need the money in the coming few years) and b) I don’t accept clients, but I work with real people all day every day. It was a strange concept. Most people only understood what a financial advisor does and unless they were looking for a product or had just come into some money they weren’t planning to spend right away, they shied away from me, thinking I might try to sell them anyway.

The wild west of ‘financial wellness’

It’s amazing how quickly things can change in just 4 short years. Thanks to some large financial services companies throwing major ad dollars behind their own scrambles to get in on this “hot, new way to get employers to pay you and then give you access to their untapped employees,” pretty much everyone has at least heard of financial wellness, and they generally understand that it’s usually tied to your work and is supposed to help you with your money. Now I’m often the person who gets cornered at parties and family gatherings, helping someone work through a financial question they have

There are pros and cons to this. On one hand, it’s great that people are now more aware that they might be able to get help with their financial questions and concerns through work. Before they either had to pay for a financial planner, sit through a product pitch or just be really good at Internet research in order to get help with things like how to pay off debt the best way or whether or not they are really ready to buy a house.

On the other hand, as these large financial institutions jump in the game and basically use the financial wellness “benefit” as a sales channel, there’s a huge risk that employees will quickly become skeptical and run from an actual financial wellness benefit the same way people used to slink away from me when I worked as a financial advisor. (Are you surprised to learn that one company’s solution to pretty much every question and issue raised in their employee financial assessment somehow involves insurance? Shocker!)

This is what bugs me the most about this big boom in the use of “financial wellness.” Many of the products and services that are out there are using the label, but in my opinion, they have nothing to do with financial wellness. For example, I’ve talked to companies who offer their employees discount purchase programs and call this financial wellness. While taking advantage of deals in order to direct the money you save toward other goals is indeed a healthy financial behavior, many people are more likely to use such programs as an excuse to spend money they weren’t planning to spend, which can actually lead to being financially “unwell.”

There are other providers out there that do discuss the various bits of financial planning, which is a big part of financial wellness, but the hidden agenda is to sell participants insurance or encourage them to invest more money with them. As an unbiased financial coach, I frequently help people figure out whether they need insurance (many do) or how to decide where to move their old 401(k). The difference is that I have no horse in the race, so I can truly say that I help people make the best decision for them, while also ensuring they understand the pros and cons of all the options.

Here’s what you need to know

The financial wellness industry is evolving