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The Dirty Secret Advisors Know About Content-Based Financial Wellness Programs

There’s a dirty secret that plan advisors know, but are not willing to admit to employers, and it’s this:

     Financial wellness programs do not change behavior.

So let’s think through this as plan advisor. Even though you know that financial wellness programs do not change employees’ behavior, you’re under pressure to offer a financial wellness program to clients. So you select one that is easy to implement – a program that you don’t have to spend much time implementing or supporting.

Instead of recognizing this employer need as an opportunity to differentiate your services, promote your unique value proposition (i.e. your team and service model) and deliver a profitable new client service, you decide to take the easy way out and provide your client with a content-based financial wellness program providing:

  • Assessments

  • Monthly webinars or seminars

  • Broadly focused online videos and content

After a year (or two if you’re lucky), the employer realizes that employees are not using this service and it’s not worth renewing. So where does that leave you? With the dubious distinction of having introduced a lackluster, or worse, a failed financial wellness program.

Even more than that, you don’t want to be in this firm’s position, where you pick the “safe” solution and then readily admit that you have no point of differentiation or value-add to your financial wellness program (see fourth paragraph). Why bother?

Now I’ll let you in on another secret- this is what employers really want (these are the actual words of a Retirement Benefits Manager for a large retirement plan):

“I would like for the [financial wellness] program to include individualized and actionable steps to reduce debt, improve saving, and increase deferral rates in the 401k plan, without requiring a big up-front investment of time from the employee.”

Now, what if you could meet that employer’s need and also add greater value by providing a solution where a member of your team automatically coached each employee to success? That means you could:

  • Integrate your unique value proposition (i.e. your team)

  • Automate your solution, so that you can easily scale your team

  • Charge for your team’s time spent with an employee

  • Build trust and effortlessly uncover new advisory opportunities

This is financial coaching.

Financial coaching is built around your team, incorporates your service model and is a service, not a tool. Financial coaching also introduces a key ingredient that all financial wellness program are missing:

Accountability.

Without accountability, employees won’t act. It’s that simple. Personal finances are too easy to procrastinate and “do tomorrow” (i.e. never), which is precisely what employees do in content-based financial wellness programs.

Also, in a world where more and more advisory services are “productized,” financial coaching serves as a bulwark against being commoditized and helps you differentiate.

What most advisory firms lack are the skills and resources to build out their own custom solution and that’s where Retiremap 2.0 comes in. We’ve already built a fully customized, branded financial coaching platform that can easily be adapted to your firm.

And for a limited time, we’re offering advisors the chance to pilot Retiremap with any plan having up to 250 employees for only $950/year.

We want to show you how financial coaching can transform how you engage employees and open up a profitable new client service that is also fully aligned with your firm’s mission. Watch this video explaining our new Pilot Program:

There are only a set number of pilot spaces available and they’ll be allocated on a first-come, first-served basis.

If you’d like to learn more about the pilot program, watch the video on our Pilot Program page and fill out the form next to it:

http://retiremaphq.com/pilot

 

Join a Webinar On The New To Do Dashboard

Join us for an informative webinar highlighting how the highly customizable To Do Dashboard coaches employees to achieve their financial goals. We will cover both the behavioral strategies and the technology we used.

Agenda:

  • To Do Dashboard presentation and demo (20 minutes)
  • Q&A (10 minutes)


Please start registering by entering your name and email address. For those who can’t attend our live session, we’ll provide a recording. The session we are offering include:

Introducing the To Do Dashboard

We’ve just launched the latest enhancement to the Retiremap platform with our new employee To Do Dashboard. We developed the Dashboard with our partners at Duke’s Common Cents Lab in order to take the complexity out of financial decision-making and help people make real progress on their money.

In fact, we created a whole page explaining how it works, so rather than replicating that in this post, you can read all about it here.

Why financial wellness will face a reckoning with employers

There’s a very real danger that financial wellness programs will flame out with employers. That’s because they are designed to educate, not change employee behavior.

Without metrics to show behavior change (e.g. open a new 401(k), HSA, emergency savings account + income flowing into those accounts), employers will sour on these programs. And it could happen before financial wellness gains real traction.

I just sat down to discuss these dangers and how advisors can counter the trend of low or no impact financial wellness programs. Check it out our recent video interview with Fred Barstein for 401kTV.


Fred and I also discussed how advisors are missing out on a critical behavioral strategy to reinforce their value to clients, while measurably impacting employee behavior.

Retiremap 2.0 Released After 10 Month Collaboration with Duke University and Renowned Behavioral Economist

SAN FRANCISCO, September 8, 2016 — After an intensive 10 month product and research collaboration with Duke University’s Common Cents Lab, Retiremap is relaunching its financial wellness platform. The new vision for Retiremap 2.0 is based on a close collaboration with renowned behavioral economist, NY Times bestselling author, Wall Street Journal columnist and James B. Duke Professor of Behavioral Economics at Duke University, Dan Ariely.

To learn more about Retiremap 2.0 and the new research-backed platform, attend the launch webinar on Thursday, September 22nd at 11am Pacific:

http://RetiremapHQ.com/New

“We usually think that the best cure for bad financial decisions is financial literacy.  Just teach people, and all will be solved. Sadly this is not the case, and even worse, the evidence is that financial literacy’s effectiveness is close to zero.” said Professor Dan Ariely.  “What we need is a system that takes the complexity of financial decision making, breaks it into actionable components, and coaches us on taking one step at a time. This is what Retiremap is designed to do.”

“Retiremap 2.0 is much more than a financial wellness program- it is a technology platform that works to improve financial well-being using key insights from the field of behavioral economics.  We have created a personalized communications platform that coaches employees based on what research tells us works in real life,” said Matt Iverson, CEO at Retiremap.  “Retiremap 2.0 uses employees’ data to deeply personalize their path to financial wellness, while automating and scaling many of the most impactful aspects of advisor-employee interactions, including confidence-building, trust and the perception of value.  Additionally, in the situations where it makes sense, employees can easily connect live with their retirement plan advisor through any number of channels.”

Retiremap 2.0 will be made available to only a very limited group of retirement plan advisory firms.  The selection process will be announced on the September 22nd webinar. In additional to exclusive access to Retiremap 2.0, selected firms will be able to demonstrate financial wellness thought leadership with exclusive access to some of Duke and Retiremap’s key research findings.

RETIREMAP 2.0’S NEW BENEFITS

The Retiremap 2.0 platform empowers employers and advisors to deliver:

  • Personalized, automated financial wellness coaching covering a range of needs, including getting out of debt and buying a home

  • An easy and efficient way for employees to connect live with their plan advisors

  • A research-backed model for behavior change

  • Dramatically increased scale and efficiency

  • Unique strategies to boost financial confidence and close the intention-action gap

  • Just-in-time messaging via email, SMS, online and in-app, as well as through channels such as Facebook and Twitter

  • Real-time, plan sponsor level analytics and reporting

“There are no financial wellness programs that come anywhere close to what we’ve built with Duke’s Common Cents Lab and Professor Ariely,” said Iverson. “The combination of Retiremap 2.0’s automated technology and sophisticated use of behavioral economics results in a program to close the employee intention-action gap. Advisory firms that are invested in improving employees’ financial lives and growing through access to a unique, research-backed financial wellness program should attend Retiremap 2.0’s launch webinar.”

About Retiremap

Retiremap (RetiremapHQ.com) is a research-backed financial wellness platform designed with Duke University and renowned Professor Dan Ariely to help employees achieve their financial goals.  Unlike existing financial wellness solutions, Retiremap’s personalized, automated coaching platform leverages the presence of the plan advisor to get employees to save more.

 

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3 Key Concepts Missing from Financial Wellness Programs

You already know that there’s a ton of buzz around financial wellness.

But what you might not know is that there are three key concepts that are completely missing from financial wellness programs. By not including these key behavioral economics concepts, advisors, providers and employers are losing out on their opportunity to have a big impact.

duke-and-retiremap
Retiremap’s partnership with Duke University’s Common Cents Lab uncovered three missing key concepts

Don’t just take my word for it. These key concepts are the result of 10 months of product development between Retiremap and Duke University’s Common Cents Labs, headed by the renowned behavioral economist, NY Times bestselling author and WSJ columnist, Dan Ariely.

I want to talk briefly about three missing concepts and how they’ll shape the future of financial wellness. They’re not what you expect.

MISSING CONCEPT #1: Start with goal-setting

If we focus on explaining more of the fundamentals of personal finance, will employees change their under-saving behavior? No way. People care about themselves, their goals, their future. Start every engagement with a detailed discussion about which financial goals they want to accomplish, in order to motivate behavior change.

MISSING CONCEPT #2: Focus on pre-commitment

How can we ever get employees to change their behavior if we don’t ask for a specific commitment? We need to engage them around their goals and then get them to commit (multiple times, in different ways) to follow through. The use of positive social proof (i.e. 78% of people aged 34-45 selected this option) is also key.

MISSING CONCEPT #3: Accountability drives behavior change

We all know how easy it is to ignore an email from a personal finance app. But if that email, SMS or in-app message comes from someone that we’ve been matched with and we have committed to work with them on our goals, it’s a very different story. The trick is how to scale that accountability (more on that in another email).

Last week, we were discussing with our research partners at Duke how we could get the word out on these concepts so that your current and future financial wellness programs will achieve better results. We decided to put together a cheat sheet to show you what you need to know. Introducing, the first ever cheat sheet on the 3 Key Concepts Missing from Financial Wellness Programs:

The financial wellness cheat sheet contains all new material that:

  • Highlights each concept’s “Superpower”
  • Examples of the “Superpower In Action,” so that you can apply it to your programs

Employees Want More Retirement Guidance

American workers are expecting more help from their employers in regards to retirement planning, according to a new study from American Century Investments. The survey, which included responses from over 2,000 defined contribution plan participants, found that retirement is top of mind for employees but they still need more help.

80% of participants believe that they would have saved more if their employer had given them more of a “nudge.” Participants were especially interested in investing help.

Employees are also open to more aggressive saving targets; 70% support automatic enrollment at 6% and nearly 80% support automatic contribution increases. 90% of participants had at least some regret about retirement savings.

Not saving enough for retirement was mentioned more frequently than not doing better in careers or personal relationships.

Other studies support Americans’ desires for more financial guidance and growing trust in financial professionals. The Allianz LoveFamilyMoney study found that 92% of respondents who have used financial professionals said they believe that the relationship is helping them achieve their financial goals, and 74% believe that the extra guidance is worth the cost.

Even respondents who have never used a financial professional believe that professionals are helpful in achieving financial goals.

The differences in behaviors and feelings of financial well-being between those who use financial professionals and those who do not are clear: 12% of those who have never worked with a financial professional are unsure of how to fund their retirement, compared to 3% of those who have worked with a financial professional.

60% of respondents who work with an advisor feel very secure about their retirement, as compared to 32% who do not, according to Deloitte.

Working with a financial professional also encouraged more savings, investing, and long-term goal-setting.

Deloitte also found that 78% of consumers surveyed in 2014 trusted their own financial professional, compared to 68% in 2012, indicating an ongoing upward trend. The positive sentiment towards financial professionals and openness towards receiving help should be good news to plan sponsors.

However, employers still have a lot of room to expand their engagement and guidance. Only 14% of respondents believed that their employers had done everything possible to help with retirement planning, and employers underestimate the amount of employees that want at least a “slight nudge,” according to American Century Investments.

Financial Wellness Gains In Popularity for Employers

Financial wellness programs are becoming more and more prevalent as employers, large and small, rethink the importance of helping their employees achieve financial goals and become retirement ready.

According to Bank of America Merrill Lynch, most companies feel somewhat responsible for the financial wellness of their employees, and most companies believe that financial wellness programs will be standard in 10 years. Employers’ growing concerns over their employees’ financial situations make sense, especially since 20% of employees report that issues with personal finances have been a distraction at work. Financial stress causes employees to be less productive in the day-to-day and more dissatisfied with their employers in the long run. Financial wellness programs are not only good for employees; they can also help improve the bottom line for employers.

The Financial Wellness Trends one-pager summarizes key findings from four major studies released earlier this year. It provides essential information for quickly understanding the current state of financial wellness, from the perspective of the employer and employee.

Advisors: A branded video to introduce financial wellness

As a retirement plan advisor, you can get your own branded video and be the first to share financial wellness with your clients.

More and more top advisory firms are offering financial wellness programs as a way to develop relationships with prospects.  Don’t let other firms be the first to present financial wellness to your clients.

How Financial Wellness Reduces Fiduciary Risk

If you missed the recent webinar “How Financial Wellness Reduces Fiduciary Risk” covering how a program such as Retiremap can mitigate fiduciary liability for plan sponsors, you can listen to the webinar or review the slides below.

These slides were developed with the assistance of The Wagner Law Group expressly for the benefit of Retiremap and are not appropriate to extrapolate to another financial wellness program.

Enjoy!