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Financial well-being: take advantage of new opportunities



The COVID-19 pandemic has shed light on financial well-being as an essential benefit at work. How can advisors identify and exploit the opportunities created by the growing interest in financial wellness programs?

During a September 14 workshop session at the 2021 NAPA 401 (k) Summit, three industry leaders shared their views on this issue: Jason Chepenik, Senior Vice President at OneDigital, Lisa Petrino, Director general at Strategic Retirement Partners, and Petros Koumantaros, a financial advisor with smart people. Nevin Adams, Content Manager at the American Retirement Association, moderated the session.

The COVID effect

The panel agreed that there has been a significant increase in plan sponsors’ interest in financial well-being during the pandemic. “There is no doubt that over the past year we have seen a change in attitude brought about by the pandemic,” Koumantaros said. “From March of last year, we saw workers as unsure of their situation as they had never been before. To me, this highlighted our role as financial advisers – the mismatch between the needs of employers and the emergency financial needs of workers.

This had developed over the past two years, he said. “The problem is that the needs of the workers have become more sophisticated; however, our role as advisors was always focused on one aspect of financial need: the pension plan, ”he said. The same silo applies to archivists and TPAs, Koumantaros added, noting: “Nowhere in all of this are there emergency savings or budgeting and planning – looking at holistic overall financial health. .

It is clear where this leads, says Koumantaros: “It creates opportunities to rethink our role in the future. Regarding emergency savings in particular, he noted that during the pandemic there had been a financial emergency, and people found that they were ill-equipped for their financial needs.

“The point is, for the American worker, their financial needs are met in the workplace,” Koumantaros said. “But we are approaching this largely in the context of pension consulting work. We really need to rethink our roles. I would say that our roles should really be more in the context of construction financial planning advisors, whose pension plan is perhaps the most important lever in ensuring a decent financial future for people. But there are other aspects as well – emergency savings, debt relief, budgeting and planning – and there are ways to rely on our supplier partners to take advantage of these opportunities.

“If not us, who?” Who helps people figure out how much emergency savings they need, as well as budget and plan? The workplace is where we can begin to provide these types of services to the vast majority of American workers. For the wealthier, Koumantaros said, “the workplace is the center of their financial life – it is where they are paid, where they receive their health and pension benefits, their benefits. disability. They could get corporate benefits. And here we are.

Additionally, plan members and plan sponsors strongly support financial wellness programs, Adams noted, citing a recent NAPA Net reader survey that found that 86% of plan members feel it is important to their lives. employers offer financial wellness programs and 62% of employers feel they have a responsibility to do so.

Chepenik noted that commitment to financial well-being has increased during the pandemic. “The conversation we have with our clients, be it the committee, HR or finance or the people we work with, is much more meaningful today,” he said. “And that makes it a much more fun and meaningful job for me too – for us to have these larger conversations and make a difference. The plan sponsors are waking up and having these conversations with us. After the last few years, with the cost cutting and we become more and more a commodity, this is a great opportunity for us not to have to do this anymore. ”

Koumantaros encouraged advisors to think about their value proposition and service model. “Consider rethinking your role,” he said. “If you’ve stayed in your path as a retirement advisor, consider expanding that and finding solutions to make this type of expanded service more cost effective for you and your practice, and to capitalize on the opportunity. Because the business value is there, and the value we deliver to customers is there too.

Harmony of work life

Petrino sees financial well-being as part of a larger arc of well-being dynamics in the workplace today. In addition to the dynamics of health and wellness, she cited topics that were at the center of several other 401 (k) Summit sessions she attended. “We talked about mental well-being and burnout; we talked about professional well-being. But there is also community well-being and social well-being.

Petrino sees financial well-being as an entry point to this arc. “If we can help people reach a place where they have better financial well-being, it helps improve their physical well-being, their mental well-being, everything is interdependent and interconnected,” she said. . “The pandemic has really helped us understand this and start to see it holistically as a ‘work-life harmony’ and where financial well-being fits when you think of the whole person. . “

The DEI factor

Petrino also sees a strong link between financial well-being and diversity, equity and inclusion (DCI). Citing research revealing that the only group that identifies retirement savings as their # 1 financial priority is white men, she encouraged advisers to think about their plan design through the lens of DCI. “For a long time we talked about things like stretch games, like 50% to 10%,” she said. “But when you look at who is able to take full advantage of a stretch match, could there be a better, fairer way?” An example, she added, would be looking at non-elective contributions to provide a basis for everyone.

“A lot of it starts the conversation,” Petrino said. “I know there are people who think this is an uncomfortable conversation, but the plan sponsors want to talk about it.” Chepenik added, “Most customers these days have some kind of DEI program or initiative. So, they are definitely talking about it.

Petrino offered some tips to get started. “First, learn enough about the statistics and research on the racial dimension of retirement savings,” she recommended. “Then have some of these discussions with your own team or other industry professionals so that you start to feel the confidence to bring it up to the committee. ”

“Have the courage to have a meaningful conversation on this issue,” Chepenik added. “In most committee meetings, we talk about numbers all the time. It’s much more interesting and relevant for their teams. And stop using the word participants, it makes it look like he’s not a real person. They are real people.

Additionally, he suggested, “Work more closely with our friends on the benefits side. It doesn’t matter who runs a business, they offer similar wellness and wellness programs. And hold our supplier partners accountable for the work done in this area, and that they are aligned with what we want to deliver. We need their help to keep up with our message. “



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