Technology: Talking to a Financial Coach Reboots Financial Wellness and Narrows Gender Gap

Original post businesswire.com

In a year marked by increased market volatility and slow economic growth, it’s not a surprise that overall financial wellness levels remained virtually unchanged. Employees appear stuck, hitting a brick wall with debt, lack of emergency funds and inadequate retirement savings. However, the latest study from Financial Finesse shows that the way forward to improved employee financial wellness – and to narrow the financial Gender Gap – could be human-to-human coaching, with technology playing a supporting role.

The Year in Review: 2015, an analysis of employee financial trends based on anonymous data collected by workplace financial wellness firm Financial Finesse, describes a year where most employees have been treading water in terms of their financial wellness. Overall financial wellness levels were unchanged at 4.8 out of 10 vs. 4.7 in 2014.

The study shows that while technology was helpful in increasing employee awareness of their financial vulnerabilities, online interactions alone did not improve employee financial wellness. By contrast, employees who had five interactions including conversations on the phone or in person with a financial planner professional showed substantial progress. Those repeat interactions with a financial coach appear to help an employee get “unstuck,” and advance in key areas. For these regular participants:

  • 80% have a handle on cash flow, compared to 66% of online-only users
  • 72% have an emergency fund, compared to 50% of online-only users
  • 98% contribute to their retirement plan, compared to 89% of online-only users
  • 48% are on track for retirement, compared to 21% of online-only users
  • 64% are confident in their investment strategy, compared to 42% of online-only users

Employers who offer financial wellness programs consider tailoring communications to address these vulnerabilities in particular:

  • 58% may not be saving enough for retirement, with only 16% of Millennials on track to achieve their retirement goals.
  • 51% don’t have an emergency fund. While this declines with age, a worrisome 25% of employees 65 and older still don’t have an emergency fund.
  • 34% may be living beyond their means. For employees with family incomes of $100,000 or lower, less than half pay off their credit cards every month.
  • 33% may have serious debt problems. Debt may be hurting African American and Latino employees the most, with 75% of African American and 66% of Latino employees saying getting out of debt is a top concern.
  • Concern over market volatility is high. Many employees grew nervous about their retirement plan savings and turned to their financial wellness program for guidance on how to handle these market fluctuations.

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