Finance & Wealth

Why Your Financial Wellness Program Might Make You Sick

By Kelley Long | Nov 12, 2019
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 quickly. If you’ve had experience with something labeled “financial wellness” that didn’t meet your expectations, don’t give up forever. At Financial Finesse, many of our clients started out with another provider, only to learn that they’d either chosen a company that just wanted to sell or that the provider they’d brought in didn’t have the flexibility to meet their employees where they were and personalize the benefit.

As a financial coach, I literally talk to employees every day about anything financial and we work out a plan that is specific to their situation. Many employees start out engaging with us either because they’re required to in order to qualify for some other benefit or because they have a pressing transactional question like how to handle a tax situation or which funds to pick in their retirement account. But once they realize that we are experienced financial planners who understand all the complicated stuff but can speak in their language, they are hooked for life (or at least as long as they work for their employer).

What to look for

One of the downsides of using your financial wellness benefit to truly create and follow your financial plan is that if you leave your job, you lose your financial coach. I’ve had several instances of that in my 4 years so far and people always ask me what to look for at their new job. Here’s what I tell them after I obviously suggest that they lobby for Financial Finesse to be brought in!

  • Find out what it is – Many companies are rolling out financial wellness tools in the form of fancy technology. They can be useful if you need that, but they probably won’t help you to answer the questions you have around making financial decisions specific to your personal life. In this case, you may need to find an outside planner to help you.
  • Find out what it isn’t – The idea of a financial wellness benefit is often confused with retirement planning. Retirement planning is part of your overall personal financial wellbeing, but it’s obviously not the be-all and end-all of your financial concerns. If your retirement plan provider is also your financial wellness benefit provider, you can expect a heavy focus on retirement. I’m not saying that’s totally wrong, but you may need to temper your expectations on how much insight you’ll gain on other life goals like buying a house, paying for college or even just finding a way to budget that works for your personality.
  • Find out if it’s unbiased – Does the person you’d be working with have any incentive to get you to do anything, whether that’s add to your 401(k), roll over your old 401(k) to an IRA, increase life insurance, etc? If so, tread carefully. They may still be able to offer helpful financial guidance, but keep a skeptical eye on any specific product recommendations or conflicting information like discouraging you from paying down student loans in favor of buying whole life insurance.
  • In my opinion and in my daily work, financial wellness is about where you are right now and helping you to establish and accomplish the steps that will get you to where YOU want to go. In other words, you may have a load of higher interest student loan debt, but really want to buy a house. Technically speaking, it would make the most sense to get that student loan debt down to a better interest rate first before saving for a 20% down payment on a home. That’s what any book, fintech tool, standard money workshop or blog post is going to recommend.

    However, I work with plenty of people who choose to buy the house first with a smaller down payment, and that’s the right decision for them as long as they have fully considered the trade-offs they are making with that choice. That’s the true meaning of meeting you where you are. It’s not telling you where to go. It’s helping you figure out the best way to get where YOU want to go, while ensuring that you are preserving your ability to move toward financial independence on your timeline. When you’re happy with your life and finances aren’t getting in the way, that’s really the essence of financial wellness, and that’s what you should expect from your financial wellness benefit.

    This article originally appeared here

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