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Bridging the Gap: Financial Planning to Financial Wellness

My Financial Coach > Know-More Blog > Retention > Bridging the Gap: Financial Planning to Financial Wellness

Business leaders work with fierce competition and constant change every day.

To succeed, leaders must understand how to dance with these unpredictable forces, learn resilience, and harness the potential for growth amid volatility.

You need your most important assets, your key employees, to stay focused on achieving the company’s goals. However, when dealing with those goals, leaders must also ensure their own personal financial security.

But we know that leaders strain to master their own money matters. Limited time, fewer resources, complex benefits, and compensation packages, wrapped in wealth enhancement opportunities, exacerbate the leader/executive dilemma.

While it may seem like employee financial issues should be outside the interest of employers, genuine interest in employee well-being improves work quality. In the same way health plans create peace of mind for employees, financial wellness can also create monetary peace for employees.

As financial wellness programs continue to grow, most programs merely represent the first steps toward wellness for your executives and key employees. High-income earners face a tall wall of complexities in pay arrangements and benefits than the average employee population.

Tasked with setting and meeting corporate goals, high-income earners only succeed when they meet those goals. While well paid, the leader/executive earns a portion of his or her compensation tied to company performance goals; often, they are entitled to participate in complex benefit programs.

In many cases, these individuals hold a meaningful equity interest or phantom equity interest in their employer company. That’s why, their financial fortunes are disproportionately tied to those of their employer. Finally, they can be exposed to unique legal and other risks related to their positions.

Financial wellness for the leader/executive must go beyond the needs of the average employee who may only need help with a budget or a will, let’s say. Their future financial success sits atop their shoulders, weighted down by how well the company performs, as a whole.

However, when I speak with CEOs and business owners, they tell me their executives are paid well and are smart enough to take care of their own financial situation.

Scott Spann in his Forbes article, Challenging the Myths about Financial Wellness says:

“It is a commonly held belief that more money will fix our problems at the individual level, but financial wellness is not a sole function of your income level or overall net worth. A seminal research study found that income beyond the $75,000 level did not improve happiness. Perhaps the underlying issue is finding a way to better utilize current resources while seeking a balance between living in the moment and planning for the future.”

Jason Hull, a CFP® professional, owner of Hull Financial Planning, and former HR chief explains the planning versus wellness dilemma in a recent post, 5 Reasons HR Directors Should Include Financial Planning in Benefits Packages:

“One of the mistakes that I made in determining a benefits package was assuming that if we paid our team members well and gave them good health benefits, they’d be well set up for taking care of themselves financially. It’s a common mentality.

Employers, who want their employees to be happy and taken care of, assume that there’s a fine line between work and private life and money issues are beyond that line. Pay them, but the employer doesn’t really have any business dealing with what happens once the paychecks are issued.

Jason continues: “In a sense, that’s the correct approach. As an employer, you don’t want to tell your employees whether or not they can go out to that restaurant on Friday because it may or may not be in the budget. Yet, employers feel that any financial decision that an employee makes is outside of the realm of what they should be concerned with, and this is the wrong approach.

If employees make poor decisions with their money, then they are going to have financial issues. Those financial issues will cause stress, and sometimes have other unwanted (from the point of view of an employer) repercussions and will affect the at-work performance of those employees.

If you provide a 401k plan as an employer, you may think that those one hour per year ‘employee education’ sessions fit the bill. They don’t.

Educating your employees on asset allocation doesn’t do a thing for them if they don’t know how much they should be putting against their debts, how much they should be setting aside for college for their kids, and how much they need in insurance to take care of their families if something happens to them. It scratches the wrong itch.”

Most likely, your organization offers solid financial resources through retirement plans, deferred compensation, incentive plans or corporate equity to help your key executives accomplish their financial goals.

Yet, so many fail to do so. Why? In my opinion, they receive conflicted advice from outside advisors who do not understand the complexity of benefit programs, in general, let alone your benefits package. What’s more, advisors may have an incentive to recommend something else.

An SVP of HR at a Silicon Valley company faced a situation recently involving a Ph.D. engineer in computer science who let his stock options lapse. When she approached him on why he allowed more than $1 million of options lapse, he said: “I didn’t have the cash to exercise the options.” She replied, “Why didn’t you do a cashless exercise?”

He didn’t know what that was.

Even your most senior, highly educated executives may not grasp the principles of sound financial planning.

Spouses and Stress

When the 401(k) education sessions come around, how often does the employee’s spouse sit in? Rarely, if ever. Yet the spouse is responsible for earning money, spending it, saving it, needing insurance, and making financial decisions.

If the spouse does not support what the employee decides to do financially, discord bubbles up, marked by a potential for distrust. Unhappy employees result. Include the spouse in familial-financial decisions. That way, you have an opportunity to minimize the employee from bringing financial problems to work.

Whether dealing with budgeting issues, stock market volatility or daily stress triggers, employees will not be 100 percent focused on the job you pay them to do.

Even if they cannot solve their problems immediately, if you, the employer, can help put your employees on a path towards financial security, you’ll allay concerns, reduce stress, and create the space for employees to focus on the job at hand.

According to a 2018 Pricewaterhouse Coopers study, the average employee spends three to four hours a week of company time dealing with personal financial matters.

By including spouses in the financial wellness process, you can produce better retention rates, too. Let’s face it; when employees consider job changes, it becomes a family decision. The more knowledge the spouse gains about the employee’s current company benefits, the better.

Julie Houghton in How to talk to your Partner about your Career Change says:

“Talking to a partner about wanting to make a career change can feel really hard. When you want to make a career change it can feel really out of control for your partner, so the conversation often ends up focusing on the ways in which your partner’s fears (How will we pay our bills??) or their beliefs about work (You should just live for the weekend like everyone else!) are in direct conflict to your desire to make a change.”

The grass always looks greener on the other side.

Offering financial planning not only shows the employer cares about employee well-being, but it also gives an opportunity to communicate and educate employees and their spouses on the full scope of their benefits.

The Financial Planning Imperative—Objectivity

As financial planning/wellness programs spread across corporate America, product-focused financial services companies have embraced the concept. Some firms sell financial products and services under the guise of financial planning or wellness programs. However, it is essential to understand how Certified Financial Planner® professionals earn compensation.

Scottrade surveyed 1,030 adults with at least $2,500 in investments. The study concluded that 80 percent of people in the millennial generation wish they had “access to trustworthy retirement investment guidance,” with those numbers falling to 72 percent for Generation X, 49 percent for baby boomers and 30 percent for seniors.

Mistrust of investment advisors characterizes another area where younger investors stand out. Of the millennial participants in the survey, 67 percent think their adviser “sometimes recommends products and solutions that are in their advisor’s own best interest,” with the percentages declining to 64 percent for Generation X, 22 percent for baby boomers and 15 percent for seniors.

If your 401(k)-brokerage firm offers “free” financial services to your key people, remember the adage, there’s no such thing as a free lunch. Even with this free service, the primary focus is on retirement planning and often limited to the 401(k) assets. Executives and employees require a comprehensive plan from an unbiased advisor that encompasses workplace benefits and personal assets.

Making Sense Of It All

As more employees struggle with financial planning challenges, their retirement, saving for children’s education, caring for their aging parents, sometimes all at the same time, their need for personalized help from a trusted source becomes urgent.

My Financial Coach (MFC) has created a unique financial planning guidance and planning service to meet the needs of individuals struggling with very real-life challenges.

MFC combines the power of SmartTech, a Web-enabled planning, guidance, and advice tool, with direct phone access to unbiased Certified Financial Planner® professionals who are highly experienced, objective financial planners to help employees make sense of it all.

The goal of the financial planner is to instill a sense of financial peace of mind for employees and their families. Accordingly, it is necessary to focus on five main objectives, the keys to effective planning for highly compensated employees:

  1. Maximize benefits and rewards offered by employer
  2. Achieve financial independence
  3. Minimize taxes
  4. Plan for the well-being of significant others in their lives
  5. Manage risk

Each of these objectives demand extensive planning work.

MFC, its team of CFPs®, and subject-matter experts join forces for the employee to resolve and strengthen issues in tax and estate planning, concentrated stock positions, life insurance, property, causality and liability insurance, risk management, family business issues, disability insurance, charitable planning, stock option planning, and much more.

To workplace wealth,


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1 Response
  1. It is really interesting that most people spend three to four hours a week of company time dealing with personal financing problems. My wife has her own small business and she is trying to help out her employees with these problems by finding a financing coach for the company and employees. I will send her this article as it was very informative about financial planning for a business.

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