Hearts & Wallets Study Shows Workers Want More Personalized Financial Advice

As American workers shift their priorities on saving and investing due to COVID-19, many are also expecting more out of their workplace financial advice programs, according to a report from Hearts & Wallets.

The study, titled “Attitudes & Sentiment: COVID-19 as a Catalyst for Change in Saving, Investing and Advice Solutions” surveyed close to 6,000 U.S. households, and found that one in three Americans say COVID-19 has influenced their current attitude. More are now open to seeking out financial advice and learning how to pay for expenses into retirement, as well as establishing savings, despite struggling with rising feelings of financial anxiety.   

Older workers and those nearing retirement—ages 55 to 74—are looking for personalized guidance. Hearts & Wallets research found these employees believe workplace advice should be tailored to their specific needs, such as how long they may be able to work, real estate options and tax optimization. This desire for a more personal touch can be best addressed using in-plan income solutions combined with retail advice, suggests Laura Varas, CEO and founder of Hearts & Wallets, in an interview with PLANADVISER.

Older workers have also cited workplace advice as frequently generic, with representatives who are often inexperienced and have too little proactive outreach. Varas notes that these problems can be addressed within the plan. For example, call routing can connect older, affluent consumers with more experienced reps, she says. 

According to the study, the one-third of U.S. workers who say their attitude has been impacted are also three times more anxious and more likely to have experienced job loss or reduced hours at work. Additionally, half have experienced a decline in income. These individuals are also more receptive to financial advice, as 36% said they “see value in paying for professional financial advice.” Forty-three percent are also “interested in advice on the best way to tap into my retirement and general savings to fund my expenses during this crisis.”

The study found that while more plan participants are warming up to employer resources—especially in-plan investment products—many are not receptive when it comes to retirement-planning benefits. Just 26% say they use the retirement planning resources offered by an employer or would if they were offered, and 21% say they are comfortable leaving money in a retirement plan sponsored by a company where they no longer work.

Other American households surveyed reported feeling no financial alarm. One in five households nationally stated feeling “no anxiety” and instead reported feeling “confident, comfortable and secure” about their financial future. However, it’s important to note that these households were unlikely to face major troubles due to the pandemic, as those who experienced job disruptions and low assets did not feel this same optimism, according to the study.

As more firms offer broader, more holistic programs that address issues beyond retirement, such as emergency funds, 529 plans and college debt, more workers are focusing on financial goals other than retirement, says Varas. “These are positive steps toward recognizing the entire financial life goals of workers. Money fuels our dreams throughout life, and not just retirement.”

Looking ahead to 2021, more consumers have refocused their attention on saving and investing goals, especially on short-term goals, which will likely continue for the time being. As the COVID-19 pandemic exacerbated a need for immediate savings, more American workers also listed building an emergency savings accounts as a top goal for the future. According to the study, retirement-related goals, such as setting aside sufficient funds for retirement, declined in importance compared with last year.

However, Varas says she anticipates these longer-term goals, such as retirement, will become important again as workforces move forward; however, how quickly that happens remains to be seen. For now, many American workers are simply determined to establish an emergency savings account.

“Americans are looking for security and reassurance,” she notes. “An emergency fund is a great way to feel more prepared in an uncertain time, especially given the high rates of unemployed and furloughed workers and the health implications of the pandemic.”