Last time I looked, about 86% of employees suffered from financial stress costing their employers millions. Here’s an idea ..
This is a reprint of an article I posted on Medium in 2014. While some of the information is a little dated (there’s now almost $1.5 trillion dollars of student loan debt!), the concepts, ideas and viability of the conclusion remain valid.
While certain firms are blindly cutting back on the level of employee benefits offered, more visionary companies have realized that providing their staff with a more stable and less stressful life outside the workplace can actually improve productivity and per-employee profitability. For this reason, many employers have begun instituting “wellness benefits”.
A recent study found that nearly two-thirds of surveyed employers have increased their employee wellness budgets since 2007  and it is estimated that 80% of small companies (3–199 employees), and 60% of larger companies (200+ employees) now offer physical wellness programs . Common initiatives include medical screening and treatment programs, smoking cessation assistance, subsidized health club memberships and even the provision of on-site fitness centers.
The return on investment on such programs has been estimated to be between $1 and $3 for every dollar spent, in terms of improved productivity, reduced absenteeism and decreased healthcare costs . Legislation such as the Heath Insurance Portability and Accountability Act, the Affordable Care Act, the Americans With Disabilities Act, the Genetic Information Nondiscrimination Act and the Employee Retirement Income Security Act ensures different degrees on non-discrimination among staff when it comes to a firm’s wellness offerings.
While the concept that a physically healthier workforce will perform better than a more sickly one has gained much traction in recent years, applying this logic to the financial health of employees has not yet taken root in mainstream corporate America. Yet plenty of evidence exists that financial stress negatively impacts work performance, directly through distraction and absenteeism among other factors as well as more indirectly through the recognized link between financial stress and general health. Indeed, personal financial problems among personnel has been cited as being one of the top four causes of lost productivity in the military .
There is a wealth of data and research concerning the effect of employee financial stress upon bottom-line productivity, much of which is referenced at the end of this report and also available on the website of the Personal Finance Employee Education Foundation.
WHAT PROBLEMS ARE FACED BY COMPANIES THAT OFFER LIMITED OR NO FINANCIAL PLANNING SERVICES TO ITS EMPLOYEES?
An employer facing financial stress among its staff will encounter a number of significant issues:
Unproductive Work Time and Absenteeism.
Employees in a “high financial stress” group use up more work time handling personal financial matters and are more frequently absent from work than those in moderate or low financial stress groups . Many studies have attempted to quantify the direct cost to employers of high levels of financial stress among their staff. A 2010 Federal Reserve study, cited by the National Financial Educators Council, put it at around $5,000 per employee per year (all employees) just in lost and reduced quality productivity alone due directly to financial stress in the workforce. Another  estimated that the average amount of work time lost due to these distractions was in range of about twenty hours per employee per month at an average cost to the employer of over $7,000 per employee per year just in lost and reduced quality productivity . It is also important to remember that these employees not only experience personal loss of productivity, but can often also serve as a severe distraction to their fellow workers.
Non-discrimination tests can require a balance between 401(k) contributions for highly compensated employees and lower compensated employees. A lack of saving on the part of the lower compensation employees can tie the hands of an employer who wants to offer more generous retirement benefits to senior executives or prospective hirees. The more financially unsophisticated a workforce is, the lower the contribution rate to qualified retirement plans is likely to be (and higher early withdrawal rates), thereby often restricting the contributions permitted to be made by existing or potential highly compensated employees and senior management.
The aforementioned Employee Retirement Income Security Act (ERISA) imposes fiduciary responsibilities upon employers including the provision of at least a minimal level of of financial education in order to reduce liability for the poor retirement decisions of employees. A strong program of financial education demonstrates goodwill and ensures compliance with this portion of the ERISA requirements.
Flexible Spending Accounts (FSAs)
Participation in FSAs brings about substantial cost savings for employers, as they do not pay FICA or Medicare taxes on the money that employees contribute to their accounts. Employees tend to be reluctant to contribute without proper education.
An employee defaulting on loans or otherwise not paying his debts may often have his wages garnished by a creditor, frequently as a result of personal financial mismanagement. This can prove costly and complex to the employer. There are substantial guides for garnishment procedures and issues, and employers must comply with numerous regulations, including garnishment limits. These costs are almost impossible to recoup because employers are not legally permitted to charge a fee or dismiss an employee on the grounds of wage garnishment.
ID theft/Credit fraud
Experts in the field estimate that an identity theft victim can easily need to spend around forty hours trying to repair their situation. There is a strong positive correlation between the likelihood of being a victim of this crime and higher net worth. Without the assistance of a reliable credit repair professional, an employee or an executive can be significantly distracted for a meaningful amount of time.
Theft and embezzlement
A study conducted in 2000 identified a clear link between levels of personal financial pressure experienced by employees and the rate of theft and embezzlement from their employers . This is an increasing problem in American corporations.
One of the most common ways for a financially-troubled employee to attempt to improve their short-term situation is for him or her to actively seek higher paid employment elsewhere. Indeed it is estimated that close to forty percent of employee turnover is due to considerations brought about by financial stress . This is significant to employers in an environment when the estimated average cost of replacing an employee can be anywhere from $10,000-$15,000.
Most of these issues end up in the lap of a firm’s Human Resource department. Indeed, anecdotal evidence from discussions with HR professionals indicates that around ten percent of their workload can be related to financially-troubled employees. Handling calls from bill collectors, helping employees file bankruptcy claims, processing 401(k) loans, taking calls from ex-spouses concerning past due child support payments, processing wage garnishments, processing advanced wage payments and negotiating un-merited or excessive pay demands or law suits are only a few of the distractions that such employees can create for them.
While HR professionals are qualified to understand the mechanics of retirement plans and other company benefits, they are not qualified as financial advisors in the fields of investments, private insurance, income tax, college planning or estate planning. The introduction of a qualified professional in these fields can be a huge asset not only to the employee concerned but to the HR department as well, who will be freed up to continue to carry out the essential tasks for which they are qualified.
Uniqueness, the “stand-out” factor
The provision of significant financial planning services to employees can prove to be a significant differentiator when a firm is attempting to attract talent from the outside. Precisely because it is so uncommon as a “perk” among employers, it can viewed by a potential hire as an attractive factor to consider when making a choice about where to join.
Employees in receipt of sometimes sizable bonuses are almost always left to their own devices as to the most effective way to deploy them. Bonuses can be paid out in a number of ways; cash, stock, deferred compensation etc. Each of these methods carries different taxation characteristics which may impact the employees retirement planning, college planning for children, investment and insurance strategy and estate planning. Companies generally simply pay out the bonuses and that’s it. An attractive alternative may be for the company to say, “Here’s your bonus and we have a certified financial professional on staff who can advise you, within the context of your complete overall financial situation, on some of the best options for you when it comes to what to do with it”. The firm could even consider adjusting the size of the bonus to take into account the fact that it is being paid out in tandem with “complimentary” (to the employee) financial advice.
Dealing with terminated employees
It is highly unlikely that a firm finds getting rid of employees for economic reasons to be anything less than a very stressful experience. While they may (or may not) provide severance packages, they still face the prospect of sending an ex-employee out into the world of unemployment and job-hunting. This is often life-changing for the individuals concerned who have maybe not faced such issues for many years. It can often lead to resentment on the part of the ex-employee which might then lead to either valid or spurious lawsuits for wrongful dismissal which may need to be defended against at great cost to the employer. If part of the exit package were to be to spend time with the firm’s financial planner, who could help the exiting staff members deal financially with the termination and its consequences, thereby “softening the blow”, then I believe this would be viewed by the employee as a positive gesture and is likely to reduce the potential for possible conflict.
Response to demand
In the financially cataclysmic year between December 2007 and December 2008, the number of employees who requested personal financial planning “guidance” from their employers went up by an astonishing eighty-eight percent  and — perhaps not unrelated — a study at around the same time discovered that seventy-one percent of employees in America did not have enough savings to cover six months of personal expenses .
Depending what industry they work in, companies may lack access to other financial professionals such as property and casualty insurance agents, life insurance agents, trust and estate planning attorneys, health insurance specialists, domestic or international tax advisors, mortgage brokers, real estate specialists, credit and identity theft specialists.. the list goes on. A certified financial planning professional will already have this network at his or her disposal and can bring that network within the reach of the firm and its staff, especially if they already are, and continue to be, active members of various networking groups or trade associations like the Financial Planning Association.
Overall levels of stress
Financial stress is the leading contributor to general stress levels  and this can lead to significant issues in the workplace. For instance, around seventy percent of all workplace accidents and subsequent legal claims are considered to be stress-related which, in 2001, cost employers an average of $29,000 per workplace accident in lost productivity, uninsured costs, accident investigation, production slowdowns, and new employee training . Thirteen years on, it can safely be assumed that these costs will now be significantly higher. Indeed, a compounding effect is created as employees tend to turn to destructive behaviors in response to this personal financial pressure. A study by the American Psychological Association showed that, of those suffering from high levels of personal financial stress, eighteen percent increased their drug and/or alcohol consumption level, eighteen percent indulged in increased levels of impulsive shopping, sixteen percent took up or increased their rate of smoking and four percent even developed what could be considered as a gambling habit .
On any given day, over one million employees are on sick leave in the US due to stress-related conditions. Reductions in the stress caused by personal financial problems, in addition to enhancing productivity, has also been shown to also reduce workplace violence  and a 2014 study published in Financial Planning magazine even strongly linked personal financial stress to the high level of military suicides . In another study, twenty-two U.S hospitals implemented stress reduction techniques among their staff and immediately saw a seventy percent fall in malpractice claims from patients . The provision of financial stress reduction programs can clearly create more harmonious corporate relations resulting from a feeling of gratitude on the part of the employee that the employer is taking an interest in this critical aspect of his/her well-being, resulting in improved workplace performance.
HOW MUCH OF THE WORKFORCE IS IMPACTED BY THIS PROBLEM?
It’s all very well providing compelling evidence that there is a clear correlation between the financial health of a firm’s staff and its productivity, but how widespread is the problem? If we were talking about a small number of people, on average, who are in this category, then companies could probably just close their eyes and accept the costs as the price of doing business and could justify taking little or no corrective action.
Unfortunately, this is not the case. Financial Finesse monitors the levels and frequency of financial stress among employees and here are some highlights from its most recent report :
*86% of all employees are experiencing some degree of financial stress (this number peaked at 97% in 2008 at the height of the financial crisis).
*23% of all employees report that their level of financial stress is “high” or “overwhelming”, and this number is back on the rise again for the first time since 2009. It goes up to reach 27% the thirty to forty-four age bracket.
*58% of females earning less than $60,000 with minor children report experiencing “high or overwhelming” levels of financial stress and the same levels of stress are felt even by women earning over $100,000 in seventeen percent of cases.
*83% of those suffering from “overwhelming” financial stress feel that their financial situation is out of control and sixty percent of them believe that they will not reach their future financial goals. Only 8% of this group have a proper emergency fund of any kind and almost half of them have already dipped into their retirement plans for an emergency loan or premature withdrawal.
*35% of those suffering from “overwhelming” financial stress do not even contribute enough to their 401(k) to get a full employer match and only 12% of them make a contribution of any kind to a Traditional or Roth IRA.
*Only 18% of those suffering from “overwhelming” financial stress are comfortable that they are appropriately allocated in their retirement plans and seventy-seven percent of them say that they do not understand the tax implications of their investments.
The Financial Finesse report demonstrates that there is a significant portion of the workforce (almost one in four) that is overwhelmed, scared and does not know where to turn for help. Additionally, these people are tending to make behavioral mistakes that risk compounding their financial situations in the future. And even beyond this group of the most troubled, almost 9 out of 10 employees are experiencing some degree or other of financial difficulty and are feeling stressed by that fact.
Money Magazine has coined a term for this feeling among America’s employees right now: “The Great Insecurity” that is following the recession as many Americans remain deeply worried by the prospects for their long term financial security at the same time as becoming deeply distrustful of the traditional financial institutions that they believe were responsible for many of the problems of 2007–2008.
Not reflected in this particular report, but as reported by Forbes magazine in 2010 :
* only 35% of all Americans have a valid will in force and, perhaps even more shockingly,
* only about 50% percent of parents do. Even less (29%) have advance medical directives (AMDs) in place by means of a living will. There is no evidence that this situation has improved in the four years since the study.
Employees lack information about the possible consequences of dying without a will, with poor beneficiary designations or becoming incapacitated without AMDs in place. It’s not something that the HR department or a middle manager will generally talk about with employees. So who will?
There is generally a very low level of understanding among employees of the effects of reversed compound interest, and therefore of the potentially crippling effects of high annual costs of some mutual funds or annuities held in brokerage or retirement accounts along with often excessive management fees. This can lead to them to make the same mistakes in their asset allocation year after year. Who can snap them out of this damaging spiral?
Many employees are woefully under-insured or badly insured in many ways; life, disability, liability, homeowners, auto etc. Still others may well be over-insured over-paying for unnecessary coverage they have scandalously been talked into by some slick insurance agent, often even a family member or “friend”. This is likely because they have probably never sat down and calculated what the correct level of coverage is in their particular circumstances (especially true in the case of life insurance).
Any of these scenarios could well ultimately lead to increased financial stress. Who can talk them through the calculations? Who can give an objective opinion without the motivation of earning huge commissions on insurance or annuity sales?
Outstanding undergraduate student loan debt now totals well over $1,000,000,000,000 (one trillion dollars), an amount now greater than all outstanding credit card debt in America. One in seven student loans are defaulted on within three years of graduation. At the current pace of academic inflation, the all-in cost of sending a child born today to a private university for four years will not total very far short of half a million dollars. How should parents prepare for this? How does the financial aid system work?
Survey after survey highlights financial difficulties as being in the top two or three reasons for divorce. Divorcing or soon-to-be divorcing employees are obviously highly distracted from workplace responsibilities as they take time to meet with counselors, attorneys, tax professionals, mediators, real estate agents etc.
Many firms may have a significant part of the workforce that is made up of foreign nationals, either here on work visas or who are green card holders. These non-US-citizens have an abundance of potentially problematic issues in the fields of estate tax, college planning, credit, mortgages and income tax that American citizens simply do not face.
There are also increasingly onerous overseas account reporting requirements (FBAR, FATCA) about which they may well be unaware, which carry massive penalties for even accidental non-compliance (these requirements apply equally to US citizens with accounts overseas). Who can inform them about all this? And help them navigate the regulations?
HOW IT CAN WORK: THE ROLE OF THE IN-HOUSE CERTIFIED FINANCIAL PLANNER
Becoming a fully-qualified CERTIFIED FINANCIAL PLANNER™ professional is a long and demanding process. Having the designation demonstrates that strong familiarity with all aspects of financial planning has been achieved, that a demanding and lengthy education program has been completed, that a highly challenging exam has been passed, that a strong program of ethical and fiduciary responsibility has been learned and that a significant period of relevant financial experience has been attained. It is considered the gold standard of the profession and a firm looking to do the best for its employees should only consider candidates with the CFP® designation, which imposes a fiduciary standard upon the holder when it comes to conducting financial planning as determined by the CFP Board. A CFP® designee is exempted from having to take the FINRA Series 65 exam, which addresses the giving of financial advice.
The role and responsibilities of an IHCFP could include ..
As-needed advice to all staff
From the CEO to the lowliest clerk, all staff would have access to the IHCFP. A couple of days a week might be designated and then it would be made known to staff that the IHCFP would be available until, say, 7:30pm for “drop-in” or scheduled consultations on those days. These types of consultations could also be scheduled at other times during the week when the IHCFP was available. At these consultations almost anything could be on the table for discussion.. debt repayment issues, asset allocation questions, windfall advice (including bonuses), credit problems, correct beneficiary designations, advice on mortgages, real estate, life insurance, reviews of property/casualty insurance coverage, college planning advice, divorce planning, non-citizen and overseas account issues etc. etc.
The goal is to engage the employees and their issues, reduce their stress, offer constructive and educated advice, point them in the right direction of a solution (which may involve educated referrals to outside advisors within the IHCFP’s own network) and make them comfortable that they will have continued access to a qualified professional whose whole job is to assist them and not to make sales of proprietary products and take commission dollars from them. Issue-spotting at an early stage will be of immense value to the employee and, by extension, the employer.
The important thing is that the employee and the IHCFP will be on the same side and not working from different agendas. This is a vastly different experience from the one that the employee may face when selecting an professional advisor from the “outside world”.
Another significant advantage is that the IHCFP would become intimately familiar with the firm’s benefits package and retirement plan and can advise from an extremely well-informed perspective when issues relating to group benefits and retirement planning come up. As mentioned earlier, this is an area where the IHCFP can significantly take pressure off the HR department and can talk in depth to employees about company benefits and the retirement plan within the the context of the individuals’ full financial picture.
Full financial plans for employees who request them
The IHCP could be engaged by particular employees from time to time to carry out and deliver fully comprehensive financial plans customized specifically to their circumstances. Such a plan would examine everything about their financial lives; their auto and homeowner’s policy, college planning, retirement planning, insurance coverage, investments and asset allocation, tax planning, debt and credit management, household budgets, spending analysis, estate planning etc. This would then followed by recommendations in all these areas as to how their situations can be improved, suggested alternative asset allocations, action items in the fields of insurance, estate planning and college and retirement planning contributions, how they can become more financially organized going forward (including providing personal cash flow and balance sheet items), how they can make smarter financial decisions thereby saving both time and money and importantly, how they can achieve more peace of mind.
The IHCFP’s network of outside professionals in all these fields can be brought in to help with implementation of the recommendations. All this would be delivered by the IHCFP, who is an independent financial professional specialist who is not motivated by making commission-based product or policy sales to the employees, but rather only by their best interests.
Such a service in the outside world can cost many thousands of dollars if carried out by a professional financial planner.
The firm could come to some form of arrangement with the IHCFP whereby the employee could be charged a discounted rate for the same quality service to be provided by the IHCFP, perhaps subsidized to a degree by the employer themselves and the IHCP would be compensated for creating and delivering a plan. The essential “selling point” here is that the recommendations remain free of bias and misplaced incentives as the IHCFP will not have any commission-based arrangements with any third-party investment or insurance providers to “push” their particular products or policies — the compensation will come exclusively from the employee (and the employer, should they wish to subsidize) and the advice therefore remains untainted by conflict of interest and thereby truly invaluable to the employee.
Providing organized and regular financial education to company employees
On a periodic basis (monthly?) the IHCFP would make highly interactive presentations to all staff on a particular aspect of personal financial planning. Topics covered could include retirement planning, allocating the company 401(k), college planning, debt management, estate planning, insurance strategy, budgeting, investment 101, foreign national issues, IRAs etc etc.. There could also be an annual tax planning presentation sometime between January and April where any recent tax law changes likely to impact the staff can be discussed. This can be even more powerful if the IHCFP has developed strong presentation and public speaking skills through active membership of leadership organizations such as Toastmasters. The IHCFP could regularly dip into his large network of financial and legal professionals to bring in highly-qualified guest speakers on their areas of specialty. The workforce would be encouraged to request specific topics of interest to them.
Publishing a periodic internal-only newsletter
In addition, and as a supplement, to the regular presentations, the IHCFP could publish a newsletter (perhaps bi-monthly or quarterly?) for all staff discussing updates and changes to financial regulation or product offerings, some feature articles, financial market commentary, a performance review of the company retirement plan and useful resources for employees.
Providing a large and valuable network of resources and outside professionals
The IHCFP will likely have a large network of outside professionals in the field of investments, estate planning, insurance, taxation, credit etc. The company and its staff would be able to access this invaluable network through the IHCFP. Employees who need specialist advice or help in these areas can be referred to these professionals with a degree of comfort that the IHCFP is familiar with the individuals or firms involved.
The IHCFP will be expected to continue to spend significant time networking to expand these centers of influence, actively participating in trade associations, attending conferences and education courses offered by various organizations in order to not only constantly grow and improve the quality of this network but also to consistently enhance their expertise in the field of financial planning (the CFP® designation requires many hours of continuing education credits to be attained each year, which can be partly fulfilled by attending such events and presentations).
In many cases, it could be negotiated that the referral from the IHCFP would result in services being provided to company staff at a discount to the fees normally charged by the outside professional to the public. The IHCFP could aggressively negotiate this on behalf of the firm. This will be particularly advantageous to a firm that may have few natural connections in these fields. Again, these resources can be brought to the table by the IHCFP and made available to all staff from senior management all the way down.
Providing a “financial concierge service” to expat employees
Arriving in a foreign country poses significant challenges to expatriated employees arriving in the US, which is liable to significantly affect their performance during, at the very least, the opening weeks of their stay. From the very start of the process, when immigration documentation needs to be prepared, the IHCFP and his network can provide important help in smoothing the ride for the expats and their families by preparing for their arrival, setting up bank accounts, helping get them credit (a huge issue for foreigners arriving to live and work in the US), dealing with financial specialists who have niches and experience in providing services particularly for expats.
This demographic faces particular potential challenges in the fields of estate planning, gifting, college savings, tax return preparation, management and reporting of assets in their home countries (FBAR, FATCA), changes in immigration status, the status of spouses and children, education of offspring etc etc. It’s a long list and one that will inevitably distract the employee significantly.
An IHCFP with specialist knowledge and connections in this area can make a significant difference in terms of time taken by the employee and his family to acclimatize to the new location and make the cultural leap by explaining the financial and tax system here and helping the family adjust to a new country, a new culture and a new set of financial regulations. The family aspect is very important here, since visa regulations will often prevent a spouse from working during their stay and much of the financial organization burden will fall on them. It is important that the IHCFP engage with the spouse as well, something that is likely to vastly improve the mindset of the expat employees who know that their spouses are being helped with all the tasks they are expected to undertake while they are at the office being productive.
While a HR professional or a hired third-party global mobility firm can help with the logistics of the move (hotel accommodation, temporary housing, flights, visas etc), most are unlikely to be qualified or feel comfortable giving advice and help in the areas of international finance and taxation. Also, it should be noted that the fact that the already-salaried IHCFP is doing much of the “heavy lifting” accomplishes two things.
One, it further reduces pressure on the HR department who may be reluctant to advise beyond their areas of expertise. Two, it may have the effect of reducing the extent to which the firm may need to hire a likely very expensive global mobility provider.
Once again, the vast professional network of the IHCFP, particularly one who specializes in this field, will come into play, encompassing as it does immigration attorneys, international tax accountants and lawyers, mortgage bankers, insurance, real estate and credit professionals who specialize in the international arena to whom the employee can be referred if needed. I believe this is one of the most invaluable and differentiating areas in which the international-specialist IHCFP can play a role and make a major positive and measurable contribution to the bottom-line productivity of these often essential in-bound foreign employees and executives.
Specialized employee assistance and advice
This is at the heart of the IHCFP’s role. In addition to the foreign national employees, other demographics within the workforce will need specialized help. These include ..
* New employees who may need help adapting to and navigating the firm’s suite of benefits and retirement plan or older employees contemplating retirement and qualified plan distribution strategy as well as possible long-term care options.
* Employees with special needs (or whose family members have them) or those who have recently gone through a family death or divorce may also need specialized help with understanding the impact of gift and estate rules, probate issues or asset division.
* An employee considering or in the process of buying a home, refinancing or contemplating a large cash outlay will want help with finding the best loan options for their particular circumstances.
* An employee who suffers a significant casualty loss or medical emergency in the family may well need help with insurance claims.
* A parent employee with significant looming college costs may well want to develop a cash flow strategy.
* An employee about to get married or have children may well have a lot of questions about how their financial, tax, life insurance and legal outlooks will be affected.
* Employees with large student loan or credit card debt will likely be looking for the most effective way to handle repayments.
* In the case of credit fraud or identity theft, a quality IHCFP will have in his network a specialist credit development/repair, ID theft prevention/repair professional who can be brought in to assist employees who are victims of such attacks. From a more preventative standpoint, this professional can be on hand at an earlier stage to talk to employees about the best ways to maintain good credit scores, avoid pitfalls and set up programs designed to prevent ID theft. Such a professional will not normally be available or necessarily known to the majority of the firm’s staff, another example of how the IHCFP’s network can help the company.
IHCFPs can help with all these issues and many more. They will be able to rely on their networks of financial and legal professionals to assist in the giving of advice and bring them more directly into the picture to assist these employees when the need arises. By means of letters of authorization, they can deal directly with the financial institution on behalf of the employee, thereby freeing up valuable time on the part of the staff member. As well as developing a sense of gratitude towards the firm for providing assistance with all these issues, employees will be more productive as they need to devote less time to trying to navigate these problems on their own or have to pay an outside advisor far less familiar with their financial circumstances or working conditions to do it for them.
Employee advocate with the retirement plan provider
The IHCFP would be strongly involved in the relationship between the company and the retirement plan provider, meeting with them regularly in an attempt to ensure that the investments offered align with employee and management needs and that a suite of low cost investment alternatives are offered within the choices of funds made available. The objective would be to make certain that the options available in the firm’s qualified retirement plan were, at a minimum, as competitive as possible relative to competitors’ offerings and, in time, become far superior.
Being a resource for management and HR when reviewing, amending or changing benefits packages
From a position “on the ground” with employees and their particular financial needs and issues, the IHCFP would be an invaluable member of any team brought together to contemplate amending the offerings of the company’s benefit packages. Advice on what is of concern to the staff and how they are likely to react to any changes would be very important input into the discussion.
Potential involvement in the hiring process
As a significant perk offered by the firm, the IHCP could be introduced to targeted employment candidates to explain the offering which is one that the prospective employee is unlikely to have available either at his/her current employer or at any of the firms competing with the firm for his/her services. It is entirely possible that the likely unique access to an IHCFP could be a factor that swings a candidate’s decision in favor of the firm over other suitors.
WHAT THE IHCFP WOULD REQUIRE IN TERMS OF COMPANY RESOURCES
Salary and benefits
For the integrity of the position to be maintained, it is essential that the base pay of the IHCFP is a negotiated salary and entitlement to full benefits and not associated with any financial incentives or inducements from outside providers. Further compensation can accrue to the IHCFP when they carry out fully comprehensive financial plans paid for by employees (discounted to “outside world” prices and possibly subsidized by the employer) as described above.
A private office
Given the sensitive and confidential nature of many of the discussions held between company employees and the IHCFP, a fully private office would need to be provided, along with a computer, a phone and access to the company network and database of employees.
Access to a conference room
Periodic presentations would need to take place in a conference room, as may smaller gatherings of employees with similar issues and requests. In person meetings there may also be required with outside professional members of the IHCFP’s network.
Software, subscriptions, events, memberships and possible further designations
Quality financial planning software programs, a desktop publishing program, certain online subscriptions and a few memberships of appropriate trade associations and networking groups would be required. Periodic attendance at relevant conferences, seminars may also need to be funded. Time will need to be granted occasionally to the IHCFP to attend educational events that fulfill the continuing education requirements of the CFP® designation. Other designations might subsequently be pursued such as Certified College Planning Specialist™ (CCPS) or Certified Divorce Financial Analyst® (CDFA), for example.
Compliance and confidentiality
An outside compliance professional would need to be put on some kind of retainer and consulted if necessary from time to time when certain initiatives are contemplated and implemented. For the protection of both the IHCFP and the firm, some form of errors and omissions insurance will need to be taken out. Most prospective IHCFPs will be familiar with a compliance professional that they have worked with before and can possibly recommend. A strict confidentiality protocol would need to be created in order to protect employees.
Significant cooperation from the HR department
It should be evident that a cooperative and efficient relationship between the IHCFP and the company’s HR professionals is critical. There will need to be significant sharing of information and it is upon the HR department that the IHCFP will rely most heavily in the first few weeks in the role. While the HR professionals should welcome the fact that the IHCFP will take a degree of pressure off them in areas they may feel less than fully qualified, there will be an inevitable period of acclimatization as the respective roles are defined.
Highly visible backing of senior management
A strong level of visible endorsement from senior management for the project is essential for all concerned. It is likely to increase engagement and participation rates in the initiatives proposed and will serve to associate senior executives with what is likely to be regarded by employees as a very positive workplace benefit.
Financial stress among employees is a significant issue facing corporations today. As the concept of mitigating stress and promoting wellness in all aspects of the lives of the workforce becomes more prevalent, it is inevitable that companies will need to begin to address this problem.
Firms have a number of choices in this area. They can attempt to improve the financial, legal and fiscal knowledge base of their existing HR professionals. They can attempt to “put out fires” as and when situations arise by periodically bringing in third party financial advisory assistance whenever required (e.g. when a key employee has a crisis or a financial issue, when inbound expat employees arrive, when layoffs are contemplated, when changes are made to company benefit plans etc.).
One of the problems with this approach is that the third party will need to take time to learn about the firm’s benefit plan details, retirement plan options, employee history, personal situation and financial data as well as about the general culture of the firm and how it wants to handle a particular issue.
A better alternative would be for the company to have an IHCFP on staff at all times. The IHCFP will be knowledgeable about all these aspects of the firm and will be available to deal with issues immediately they arise. The knowledge base of the staff would be considerably enhanced through education programs and the IHCFP’s network of financial and legal professionals would be accessible to the firm’s staff. Particular groups of employees would be able to turn to the IHCFP at times for assistance on their specific issues and it is likely that almost every employee, from senior management on down will have some need to meet with the IHCFP.
The existence of this position will not only help immensely with company morale and a feeling of empowerment among existing employees, but could prove a very attractive differentiating factor to potential employees being courted by the firm. It can help soften the blow when it comes to laying off staff and it can be of invaluable assistance in helping employees receiving substantial bonuses. It is essential to the process of on-boarding an in-bound expat member of the workforce and helping the to become more productive more quickly.
A financially educated workforce is likely to make greater contributions to the firm’s retirement plan (thereby potentially boosting the contribution limits available to senior executives) and to increase participation in Flexible Spending Accounts (thereby saving the employer money in FICA and Medicare expenses) and generally make smarter decisions.
In order to create this position, a company would need to be already predisposed towards the idea of improving working conditions, job satisfaction and wellness among its employees. A company looking to get by with providing minimal benefits is not going to be interested. But a firm that does want to enhance the lives of its staff will inevitably have to address the issue of financial wellness and in doing so, will likely find that significant productivity improvements will be associated with the process and that the engagement of an IHCFP may be the most effective way to achieve this.
*DATA AND SOURCES CITED*
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 Kaiser Family Foundation, Employer Health Benefits 2012 Annual Survey, 177–88 (2012)./
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 Kim, Jinhee and E. T. Garman. 2004. “Financial Stress, Pay Satisfaction and Workplace Performance,” Compensation and Benefits Review, vol. 36, no. 1, pp. 69–76./
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 Walpert, Bryan, 2000. “Your Practice Tips to Detect — and Prevent — Theft in Your Practice: Divvying Up Financial Duties Among Your Office Staff Can Help Keep Embezzlement at Bay,” ACP-ASIM Observer, American College of Physicians, November./
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 American Psychological Association, ADA, 2007./
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 Financial Planning Magazine article, May 2014 “Could Financial Planners Help Stem the Rate of Military Suicides?”/
 Jones, John W., Bruce N. Barge, Brian D. Steffy, Lisa M. Fay, Lisa K. Kuntz, and Lisa J. Wuebker. 1988. “Stress and Medical Malpractice: Organizational Risk Assessment and Intervention”, Journal of Applied Psychology, vol. 73, no. 4, pp. 727–735./
 Financial Finesse 2014 Financial Stress Research report/
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