Education is the cornerstone of any successful retirement plan. The most common way companies run their retirement plans is to focus on fiduciary responsibilities, plan design, investments and fees—often treating education as an afterthought. As an industry, we are realizing that with the large account balances people have accumulated in their retirement accounts, their knowledge and skill on how to manage those balances probably didn’t keep up with the growth they have seen. This causes stress, it's real and employers are recognizing that they need to address it along with other stressors. The solution is wellness. Financial wellness in particular.

In the past, the goal of any good plan was to ensure that clients had enough money to live a comfortable retirement and while that goal remains the same, we have also learned that most people are not sure how or if they can achieve that outcome. Uncertainty can also be a source of stress. The significant change in our industry is a new appreciation that a person's financial situation directly impacts their "wellness," regardless of their account size.
Stepping back and examining the common goals that transcend income and wealth levels, we understand the significance behind the rise of financial wellness concepts. There is a pressing need to articulate and more effectively assist individuals with the definition of “success.”

The first and most obvious tool, which is readily available to most Americans, is the employer retirement plan. If a participant is auto-enrolled and, if available, takes advantage of a match, after some years these accounts can represent their single largest asset after their home. In fact, as of the end of 2022, a total of $37.8 trillion was held in U.S. retirement plans and accounts. This incredible success story represents the financial stability of many American families.

Target date funds are currently winning the asset-gathering game in retirement plans. They serve a great purpose for participants and have been largely successful. Other programs are gaining significant traction as well, including custom models and managed accounts. All of these products have the same goal, to help participants invest throughout their lifetime. This has been a huge win for participants.

However, surveys consistently tell us that participants are confused over many aspects of their retirement plan. In fact, retirement plans may have created a population of reluctant investors; meaning people have successfully saved, but they don't know if it's enough or how it should be managed. This is where the intersection of wealth and retirement planning is in plain view, and a holistic financial plan is the best way to ensure an individual's long-term financial wellness.

Online tools are readily available for participants and investors in this area. These tools are excellent and can give valuable information to people who seek them out. What online tools lack though is empathy.  It can be more impactful to help participants through group education meetings held at companies or virtually. Interestingly, many people are finding that virtual meetings are more highly attended and engaging than in-person meetings. This is another great way to pass on knowledge, but it does have a drawback: in a group setting very few participants will ask questions, and even fewer will ask questions about their accounts.

The best way to educate people is one-on-one, face-to-face even if it is virtually. Money is emotional and people who are willing to open up and discuss their financial questions with a trained professional (at SageView we call them Coaches) are exactly who our target audience is for financial wellness. The more our industry can help people understand their accounts, the better people will feel.

Companies looking to offer the best holistic wellness programs to their employees understand that this endeavor is a process that requires constant work and attention. For the financial aspects of this effort, the goal is to help people achieve something extremely personal—financial security for themselves and their families. Investing the time and resources to ensure that a plan is well-supported, remains relevant, and focuses on individuals versus groups or online will result in better results for participants and employers.

Robert Patton is a senior vice president of SageView Advisory Group and leads SageView's participant education and advice program named "PersonalSAGE."