Financial wellness programs work best on a one-on-one basis

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Well-meaning companies spend a lot of time, money and effort on employee wellness programs. But counting calories, climbing stairs or chanting can be a challenge for people psyched about money matters.

For a happier, healthier and more engaged workforce, employers need to acknowledge and address the connection between financial and overall wellbeing.

Tammy Vigue, Group Retirement Plan Consultant for Porchlight Financial, says rather than be prohibited by the cost of investing in financial wellness plans, advisors need to urge clients to consider the long-term costs of not doing it – loss of productivity, absenteeism, healthcare costs.

That’s sound advice, buttressed by research. According to a recent Manulife/Ipsos Reid wellness study, financially unprepared employees are 16% less likely to say they are productive on the job, compared to their financially prepared counterparts.

Now consider the math: for an employee who earns $50,000 annually, a 16% drop in productivity equates to $8000 paid out for minimal work; for 10 employees, it’s $80,000; and for 100 it multiplies to $800,000.

According to Vigue, “We aren’t taught financial basics in school. Most people pick up what they know from parents or salespeople. And there are inherent problems with both. A good financial wellness program offers the opportunity to get objective information (if not advice) from someone who’s qualified, but not motivated by selling product.”

Her team offers a lot of group sessions to plan members. “We look at the plan demographics and then work with the employer to create a campaign, whether it’s around debt management, budgeting for millennials, or retirement readiness for older employees.”

While these sessions are well received, Vigue finds her one-on-one interactions are much more effective. “They give employees a chance to talk about personal issues that aren’t group-retirement-plan-related. Personal guidance always trumps high-level concepts dispensed in a group session.”

For example, one of the advisors on Vigue’s team recently had a one-on-one meeting with a plan member who was doing a lot of the right things when it came to her Group RRSP and benefits, but still struggling with family spending and debt management. She desperately needed someone to break down her goals, simplify her financial picture and give her simple, achievable action items to tackle her spending and debt.

“Being able to address this as a part of the service we offer was a massive relief to her,” says Vigue. “So too was the knowledge that she could check in with us at any time in the future, if needed.”

The questions plan members most often ask Vigue, usually fall outside the purview of the group plan. For example:

    1. Which is better for me: RRSP or TFSA?
    2. How should I invest in my TFSA?
    3. How do personal tax rates work?
    4. Does the Home Buyers’ Plan make sense for me?  How does it work?
    5. Should I opt for fixed mortgage or variable?

Cindy David, VP of the Estate Planning Division at Dupuis Langen Financial Management, agrees one-on-one sessions are far more effective as they address every client’s unique situation. They also allow her to establish long-term relationships with the plan members, and thereby prove to be a great prospecting tool. “We pay so much for marketing and referrals. This is virtually free for us. The only cost is our time to help set up the sessions.”

And they’re a good value add as well. “Oftentimes, clients are unsure about the cost of offering this service. When we volunteer our time and expertise, it comes as a pleasant surprise. They don’t always expect it,” David adds.

Even if advisors don’t have the time or bandwidth to offer group sessions or individual guidance, they can still add value by helping clients set up an Employee Assistance Program. Or, they can reach out to their clients’ existing providers and help leverage their resources. Most providers have an abundance of resources for plan members, such as online webinars targeted to different life stages, financial wellness assessment tools and targeted workshops.

In the end, advisors also need to impress upon their clients that these programs are effective only if as a long-term commitment, not a one-time event, Vigue says. After all, employers don’t expect employees to work out just for a day or watch what they eat for a week to stay healthy. It’s the same with finances.

Transcontinental Media G.P.