How to help employees understand the value of financial planning

(Photo: Shutterstock)

It’s hard to see our own blind spots, and easy to be overconfident about our financial stability. But when it comes to your employees, a lack of personal financial resilience can have ramifications in the workplace when reality sets in.

For example, consultancy firm Gallup’s “State of the Global Workplace 2021 Report” found that 56% of US employees reported themselves as thriving. Yet a 2020 report from the Federal Reserve Board found that 25% of adults have no retirement savings whatsoever—and, in 2019, three in 10 didn’t have enough saved to cover three months of expenses.

These numbers don’t quite add up, and stories like these can be found across your workforce. Morgan Stanley at Work has found that employees with low financial resilience tend to be more distracted at work—and less productive, affecting your bottom line. How can companies break through the disconnect and help people understand where they truly are financially and what steps they can take toward a stronger future?

Changing perceptions

Many of us tend to assume we are financially stable if we can pay monthly bills, but true financial wellness also means having an emergency fund, managing debt, saving for retirement, paying for education, covering estate planning, and more. 

That’s where providing financial planning support at work can help your employees assess their true needs, identify goals, and organize actions that make sense for them to move toward greater financial strength. Many of your employees may view financial planning as something that only works for the wealthy, but anyone who uses money can benefit from having a plan in place. It’s important to get the message out there that financial planning is for everyone—and workplace benefits can help them get started.

Why at work?

Many employees are looking for help with essential financial tasks. In fact, according to a Financial Health Network survey conducted on behalf of Morgan Stanley, 71% of employees are open to receiving personal finance support at work, nearly 75% believe it’s important for employers to offer financial wellness benefits, and 60% would be more likely to stay with employers that do.

To meet this need, start with individualized data that bridges the gap between what your programs offer and where your employees are in their lives. Financial wellness programs can meet a lot of needs, but employees need to be able to connect the dots. A personalized assessment is a critical first step to let them know what they’re doing right and where they can improve. 

Just as businesses conduct market research before launching new products, it’s important to do the same when designing your financial wellness programs. Survey your employees, hold focus groups, work with employee resource groups—that is a priceless opportunity to hear what’s top of mind for constituencies within your organization in a live environment. We often find that when employers do so, they discover that they have programs that are out of date with the current needs of their population, or there is an awareness gap between what is offered and employees’ understanding of what they have access to with their company. 

Typically, one such gap is financial planning. Providing financial planning services through workplace benefits can make a tremendous difference. Here’s how we sometimes explain it:

  • Building a personalized roadmap. Working with a coach can help employees build a budget and create a plan to build up savings. It could also mean helping employees plan for their children’s education or work through specialized topics such as establishing special needs trusts. Input from a professional can make the process less overwhelming and more productive.
  • Increase workplace benefits utilization. Frank conversations with a neutral third party can help employees and their families make strategic financial decisions and take advantage of workplace benefits programs—for example, how to stretch a budget with the help of discount programs or transit benefits.
  • Supporting financially responsible self-care. Working with a financial coach or advisor through work can help employees approach money decisions more mindfully, reducing financial stress and helping them feel more supported—contributing to a more positive workplace culture.

Empowering your people

Of course, employees will also need to do some of the work of financial wellness on their own, but they will appreciate education and support from you along the way. Employers can add value by not only offering financial planning or coaching as part of a benefits package, but by helping employees understand how to think through and pursue their financial goals in tangible ways.

Helping your employees understand the value of a financial plan—and focus on strategies that can help them accumulate wealth—can go a long way toward building greater stability and success in their personal finances. And that can directly translate into a happier, healthier, and more productive workplace.

Krystal Barker Buissereth, CFA, is Managing Director, Head of Financial Wellness at Morgan Stanley at Work.

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be appropriate for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.  By providing links to third party websites or online publication(s)/article(s), Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is not implying an affiliation, sponsorship, endorsement, approval, investigation, verification with the third parties or that any monitoring is being done by Morgan Stanley of any information contained within the articles or web sites. Morgan Stanley is not responsible for the information contained on the third party websites or your use of or inability to use such site. Nor do we guarantee their accuracy and completeness. The terms, conditions, and privacy policy of any third party web site may be different from those applicable to your use of any Morgan Stanley web site. The information and data provided by the third party web sites or publications are as of the date when they were written and subject to change without notice. © 2021 Morgan Stanley Smith Barney LLC. Member SIPC. CRC 3708114 08/21