Financial Wellness: Nurturing a Healthy Relationship with Money

By Rick Rodgers & Natalie Miller | Innovest Portfolio Solutions LLC

In today's fast-paced world, time is a precious commodity. With various demands competing for our attention, it is easy to overlook the importance of planning for our financial future. Whether it is buying a home, starting a family, or preparing for retirement, these goals require a solid understanding of our finances. Unfortunately, the overwhelming nature of financial management often leaves individuals feeling stuck or avoiding financial planning altogether.

Financial wellness encompasses the overall financial health of an individual, covering a wide range of topics. While some aspects like budgeting and retirement savings are familiar, others, such as estate planning, debt management, and insurance, can be more complex and daunting. However, the significance of financial wellness cannot be overstated. Surveys show that finances consistently rank as the top stressor for American households.

According to the 2023 PwC Employee Financial Wellness Survey, over 50% of employees reported that financial stress negatively affected their mental health and sleep, while more than 40% experienced negative effects on their physical health and relationships at home. Surprisingly, even individuals earning $100,000 or more annually reported elevated levels of financial stress, with over 45% expressing concern about their finances. Likewise, the BrightPlan 2023 Wellness Barometer Survey indicates financial stress is at an all-time high, with employees suffering from such stress losing an average of 11 hours per week in productivity at a cost of over $4 billion in lost productivity for employers.  The study also confirmed that employees expect to receive financial wellness resources and benefits at work, with 9 out of 10 respondents stating the same.  Fortunately, employer-sponsored financial wellness programs are having a positive impact on their employees, with the majority indicating they would work harder, feel more financially secure and be more engaged and productive. 

As an employer, it is crucial to recognize the impact of financial stress on employees and their work. Financial stressors contribute to decreased productivity, reduced engagement, and higher turnover rates. Prioritizing financial wellness is essential not only for employees' personal lives but also for their performance in the workplace.

The good news is that resources are available to support employees in achieving financial wellness. As a retirement plan sponsor, you can take various initiatives to enhance employee participation, such as implementing easy or automatic enrollment into retirement plans, as well as automatic contribution increases. Additionally, participants may already have access to financial wellness tools through your recordkeeper, including one-on-one meetings and educational webinars. However, it is important to evaluate these services carefully, as some may generate revenue for the recordkeeper and may not be suitable for all participants, such as managed accounts, wealth management, and financial planning services. Recordkeeper sponsored services may also forward participant information to other providers, such as life insurance providers, without the participant’s knowledge.

Another approach for plan sponsors is to direct employees to free resources that provide valuable financial education. Organizations like the Institute for Financial Literacy, the Council for Economic Education, and the Consumer Financial Protection Bureau offer a wealth of resources, worksheets, and tools that participants can utilize.

The Institute for Financial Literacy is a nonprofit organization with a mission to promote effective financial education and counseling. Their website hosts various forms and worksheets, covering budgeting resources and financial goal planning. Additionally, they provide educational resources like glossaries, best practice guidelines, and important websites.

The Council for Economic Education focuses on equipping K-12 students and families with the tools and knowledge of personal finance and economics. By empowering individuals to make better decisions for themselves, their families, and their communities, this organization contributes to overall financial wellness.

The Consumer Financial Protection Bureau is another valuable resource offering guides and educational materials to assist with financial decisions. Whether it is buying a house, paying off debt, planning for retirement, or funding education, their resources provide essential guidance.

Employers can make a significant impact by actively promoting these resources and encouraging employees to engage with them. By prioritizing financial wellness, employers demonstrate their commitment to employees' overall well-being and foster a culture that values financial literacy. Integrating financial education programs into employee benefits packages can also be an effective strategy. This might include seminars, workshops, or even partnering with financial experts who can provide personalized guidance to employees. By investing in their employees' financial knowledge and skills, organizations can contribute to a healthier and more productive workforce.

In conclusion, financial wellness plays a vital role in our personal and work lives. By recognizing the importance of financial wellness and offering resources, employers can take proactive steps to support their employees in achieving a healthier relationship with money.

About the Columnists

Rick Rodgers, AIFA, is a Principal and Consultant at Innovest Portfolio Solutions.  He is a member of Innovest’s Retirement Plan Practice Group, a specialized team that identifies best practices and implements process improvements to maximize efficiencies for our retirement plan clients. He is also responsible for new business development in Innovest’s retirement plan practice. 

With more than 30 years of experience working as a consultant and educator to public and private-sector retirement plans, Rick offers clients a rich perspective.  As a former professional musician, Rick is a gifted speaker. His thoughts, ideas and successes concerning investment consulting, education, retirement planning practices and fiduciary due diligence have been presented to plan sponsors, employee benefits professionals and human resource organizations from coast to coast.

Rick worked with a California-based investment consulting firm, Advisory Consulting Group (ACG), as Director of Retirement Plan Consulting from 2018-2020.  At ACG, he was responsible for leading the retirement plan and investment consulting practice.  ACG was acquired by Innovest in 2020 to expand their existing operations in California and Rick returned as a partner of the firm. 

Rick joined Innovest in 2005 and was Co-Founder and CEO of InSight Employee Benefit Communications, a subsidiary of the firm. He also served as Director of Marketing & Client Services for the Colorado County Officials and Employees Retirement Association 1998-2003.  In addition, Rick was formerly a Managing Director with Nationwide Retirement Solutions and worked with the State of Florida Deferred Compensation Program prior to relocating to Colorado in 1991.

Rick has earned the Accredited Investment Fiduciary (AIF®) and Accredited Investment Fiduciary Analyst (AIFA®) designations from the University of Pittsburgh, Joseph M. Katz Graduate School of Business, and has received formal training in investment fiduciary responsibility assessment.  Also, he has earned the Series 65 License (Registered Investment Adviser Representative) through FINRA. Rick was recently chosen to join the Institutional Investors Retirement Plan Advisory Board. He is a member of the Institutional Investors Retirement Plan Advisory Board, National Association of Plan Advisers, Florida Public Pension Trustees Association, TEXPERS, Western Pension & Benefits Council, California Society of Municipal Finance Officers, and currently serves as Industry Chairman of the Board for the Colorado Public Pension Coalition.

Rick, his wife and three children spend their free time enjoying outdoor sports, including skiing, golf, fishing, hiking and mountain-biking.  They love to travel to destinations for vacations where they can sail, snorkel and fish.

Natalie Miller is an Analyst Assistant on the Research and Retirement Plan Teams. Her responsibilities include monitoring investment products and strategies, creating deliverables for Innovest’s retirement plan clients, and completing quarterly performance reports.

Natalie earned a Master of Science in Applied Quantitative Finance at the University of Denver, where she also completed her BSBA in Finance. During her time at DU, Natalie was an active member of the Marsico Fund, a student-managed investments fund. In August 2022, Natalie completed the CFA Level II exam, which is one of the key requirements towards earning the highest distinction in the investment management profession.

In her free time, she enjoys skiing, hiking, and camping.

Innovest Portfolio Solutions is a Consultant Member of TEXPERS.

Disclosures

Innovest Portfolio Solutions LLC is a Denver-based investment consulting firm.  More information on Innovest can be found at www.innovestinc.com.