Banks Weigh in on Financial Wellness

By Marilyn Kennedy Melia

Favorable coverage in outlets like The New York Times and Money Magazine is hard to come by.

But that—and other positive press—is just what SunTrust Banks garnered this summer, with stories describing unique perks it provides its workers through its “financial wellness” benefit.

Quickly becoming commonplace, financial wellness benefits really took off in the aftermath of the recession, as employers noticed productivity was suffering from workers distracted by money troubles.

Now, nearly one-half of the U.S. employers surveyed by the Society for Human Resource Management report they have a financial wellness benefit of some type.

Professor Michal Grinstein-Weiss and Project Director Meredith Covington at Washington University who research this benefit, define it as “any program designed to improve an employee’s financial security, independent of retirement and insurance benefits.”

For instance, a firm might offer lunch hour seminars on topics like budgeting or one-to-one counseling with a trained third-party professional.

Sometimes, employers provide actual dollar assistance.

In fact, the media attention on SunTrust came from its generous benefit, which gives SunTrust employees a paid day off to handle personal financial chores, and a dollar-for-dollar match up to $1,000 if a worker establishes an emergency savings fund.

Because so many workers are buried in education debt, the latest twist on this benefit is for employers to make direct contributions to their workers’ student loans.

It’s a natural fit.

Banks are ideally positioned to promote financial wellness in two ways: One is by providing such benefits to their own employees, as SunTrust does. The other is by creating financial wellness programs that business clients can offer their employees.

“More and more financial institutions are moving into this space by designing a financial wellness program in-house for their own employees, and then begin selling it to other companies that may be interested in offering it,” Covington and Grinstein-Weiss explained in an email interview.

Financial wellness curriculums are typically devoid of any product advertising. That said, SunTrust’s Brian Ford pointed out that the bank sponsoring the education is often known to the employees, “just as you might know who your 401(k) provider is.” Ford is a financial well-being executive for Momentum onUp, the re-branded name of the financial wellness firm SunTrust recently acquired. Even without advertising, he added, the association of a particular bank with healthy money practices creates goodwill.

Banks that have branched into administering 401(k) programs should include some type of education for their clients’ employees on the importance of saving for retirement and choosing appropriate investments.

PNC, for example, provides retirement education as part of its 401(k) administration services. “For years we were talking about asset diversification in education meetings, when [workers]were in debt up to their eyeballs,” said Brad Bonno, senior vice president and director of Product Delivery at PNC Retirement Solutions.

“Workers needed more of a foundation before they could think about retirement planning,” Bonno pointed out. Realizing that, PNC branched into financial wellness programs.

PNC kicks off its programs by issuing a survey to discover what types of money questions workers at a particular firm want addressed. “The employees of an engineering firm might differ from the workers at an auto parts manufacturer,” said Bonno.

Financial wellness can become contagious.

The typical consumer finds learning about budgeting or other financial topics about as interesting as a visit to the dentist, said credit expert John Ulzheimer.

But when “they’re currently going through some sort of financial issue,” workers are eager for help, he added—one reason financial wellness benefits have blossomed since the recession.

Moreover, bank personnel—who customers look to for expertise—are not immune from personal money trouble.

That’s what SunTrust learned when it first began providing financial wellness programs to its own employees. Even the bank’s chief executive was surprised by the financial insecurity of some staffers. But that’s what led to the dollar-for-dollar match to help workers get started on an emergency fund.

Ulzheimer pointed out that it’s important for staffers who interact with customers on financial issues to have confidence and knowledge about their own personal money matters. “To the extent a bank’s employees are bolstering their own brainpower,” he said, “the better they’re going to be able to engage with the bank’s customers.”

Ford added that in a survey of SunTrust employees, “Ninety percent of workers who interact with clients regularly reported that they apply what they have learned from financial wellness some or most of the time.”

Build or buy?

SunTrust got into financial wellness by acquiring a third-party provider—which already had a roster of about 30 corporate clients. But some other banks report that their wellness programs evolved in-house over time.

PNC has developed its own financial wellness programs by “leveraging all the resources we have throughout the bank” said Bonno.  The service is free to employers who use PNC for their 401(k) administration, Bonno explained, with the bank only charging for the travel expenses of the consultants who visit employer sites to conduct seminars. PNC does, however, charge for wellness education provided to firms without that relationship.

The First At Work financial wellness program offered by First National Bank in Omaha has its roots back in the mid-1990s. That’s when the bank made available a free, preferred checking account for any worker whose firm had payroll deposit with the bank, explained Chris Schaible, financial wellness coordinator with the $20 billion bank.

Then in 2007, “We decided, let’s really add more tools,” he added. Now, the bank has an internal speakers’ bureau with staffers who can speak about budgeting, debt management, and other topics at employer sites throughout the bank’s multi-state region.

First National offers these services free to employers with a banking relationship. The cost of training employees and sending them out on speaking engagements is recovered through the value of strengthened relationships and the opportunity to give back to the community, according to Schaible.

Attract and retain.

Because they’re in the financial services business, banks view financial wellness through a different prism than other types of firms. While some firms may simply be concerned about declining productivity from workers dealing with money woes, banks stand to see a marked improvement in customer service when their employees enjoy financial health in their personal lives.

However, when any firm—bank or non-bank—couples wellness education with actual financial incentives, like student loan help, the cost is also justified in the ability to attract and retain skilled workers.

The American Bankers Association recently endorsed a student loan assistance program offered by Gradifi, (recently acquired by First Republic Bank), to help attract the next generation of young adults to a banking career.

Marilyn Kennedy Melia is a banking and personal finance writer based in Chicago. Email: [email protected].