With the unemployment rate in early 2020 falling to near record lows in the United States, Matthew J. Twedt, CFP, FSS, president of personal financial management for Minnesota-based Intellicents, was finding an increasingly receptive audience for his company’s worksite financial-wellness solutions.
Then the pandemic hit. Companies witnessed firsthand how COVID-19 exposed workers’ lack of preparedness for this unexpected financial disaster. Twedt has found companies now have a renewed interest in exploring solutions that include advice on foundational planning issues such as budgeting, debt management, emergency funds, insurance risk management and retirement readiness.
Offering financial planning as part of an employer’s worksite financial-wellness program is a tangible distinction in the competition to attract and retain workers in all industries and at all experience levels, Twedt said.
“I believe the next major employee benefit will be financial planning on a mass scale,” said Twedt, a nine-year MDRT member from Lake Mills, Iowa. “And our goal is to provide comprehensive financial planning to employees at the participant level. That’s a huge demographic that doesn’t typically get advice, except maybe from the internet.”
The idea is simple yet generally overlooked among the working class: Invest in financial planning services long before approaching retirement. “At my earlier practice, we would work with retirees or people at most 10 years from retirement,” he said. “Now, it’s expanding that base to include younger people too.”
For employers, it’s a valuable benefit that reaches far beyond just financial security. “We believe there will be a higher retention rate for employers who offer this,” Twedt said. The reason is simple: It’s a unique offering, and one that demonstrates a long-term commitment to an employee’s financial well-being.
“Financial stress manifests as health risks,” Twedt says in his presentations to prospective clients, “and is the No. 1 cause of stress-related illnesses.” It’s a pervasive condition, with 84% of employees reporting “some degree” of financial stress, and 24% who incur higher health care costs as a result of those stresses.
The service is receiving an increasingly receptive audience, attracting more than $260 million of new assets in the past 22 months. However, there is still resistance, especially as market conditions have declined. “Some employers want to do the bare minimum when it comes to employee benefits,” Twedt said. “So the ones who are doing this now are the ones who are truly committed to their employees.”
To overcome cost resistance, Twedt offers four tiers of participation for employers depending on what services they are providing. The program that involves Intellicents working with employees on a more holistic basis is the most popular.
“We provide a written financial plan that we customize for each employee.” More streamlined plans incorporate automated analyses that provide high-level planning recommendations.
Twedt is passionate about helping all types of clients, not just the wealthy. For him, the challenge and reward is in creating a plan and seeing it come together.
Once enrolled, employees proceed through a systematic, five-step financial-wellness process that ensures a customized approach:
- Set a goal: A workplace financial-wellness assessment identifies key vulnerabilities to address.
- Robo financial plan: This starts with a robo foundational financial plan for each employee and provides guidelines on budgeting, maximum debt load, necessary emergency funds, life insurance needs and retirement plan benchmarks.
- Organization: Employees are encouraged to organize information for all of their assets, liabilities and legal documents, and then upload this to a financial-wellness app that provides the employee with real-time access to their financial details.
- Education: Online financial learning opportunities, workshops and webinars, along with a staffed 800-number, provide participants with the most relevant financial information.
- Advice: Twedt believes this is the missing ingredient in most worksite financial-wellness programs. “Participants want and need advice.”
- Benchmarking: Employer ROI is monitored, and the aggregate retirement readiness of its workforce is benchmarked.
Twedt’s professional motivation springs from a deep affection for the clients he serves, and he delivers customized solutions to help them meet their financial goals. “I love meeting new people and families, as well as learning more about them and what made them who they are,” he said. “Helping them prioritize their goals and wants in life and putting a plan together is challenging and fun. Then seeing that plan come together is extremely rewarding.”
And while he has developed a broad base of wealthy clients, he is equally passionate about serving those with lesser means.
“We want to over-serve the under-served.”
Steps for success
Twedt incorporates automated financial planning analyses that provide key recommendations for clients.
Step 1: Get a handle on the basics: The first step details high-level organizational tasks for the client, such as setting aside a $1,000 emergency savings account and creating a family budget.
Step 2: Get serious about your future: The second step details 401(k) and term life insurance recommendations, along with estate planning considerations.
Step 3: Make it real: The final step provides detailed savings and investment recommendations, along with projected 401(k) balances by age bracket until retirement.