Welcome to Insider Insights, where we dive into hot topics facing the financial services industry. Today, we're excited to have with us Deb DuPont, assistant vice president of institutional research and workplace benefits research at LIMRA and LOMA, and Pat Leary, corporate vice president of workplace benefits research at LIMRA and LOMA, to discuss the importance of financial wellness programs in the workplace benefits space.
Hey, Deb. Good to see you today.
Morning, Pat. How are you?
Doing well. And that's a good segue. We're here to talk today about financial wellness. Right? So there's a lot of stuff going on around financial wellness and other types of wellness. And so, what we want to do today is have a conversation around financial wellness. And I think there's probably a few different topics that we can explore here. Like, you know, talking about the need for financial wellness.
Definitely want to share some of the research that we've been doing around financial wellness and then really get into some workplace stuff. Right? So, talk about, you know, the role that workplace solutions play in addressing the financial wellness needs that are out there. And then maybe we can wrap up and, you know, for our listeners talk a little bit, you know, provide some recommendations based on our research and some of our conversations with our members around this topic. How's that sound?
That sounds great. There's a lot to talk about.
There is. There is. So maybe we start out with, you know, why is financial wellness such a hot topic? Right? Could we see a growing need for financial wellness solutions? So maybe we talk a little bit first about what's behind that. So, like, from your perspective, what do you see as to what's driving that?
From my perspective and what we see after looking at wellness pretty deeply for the past couple of years is that wellness represents a convergence of a number of forces that are already in play. So, you know, since the pandemic, for example, we're dealing with a vastly different workforce. We're dealing with some vastly different social dynamics and interactions than we had before. And I know we're going to end with the workplace, but it's a good place to start as well because right now we're dealing with a post-pandemic, multigenerational workforce.
Consumer products, consumer goods, how we access products and goods have changed dramatically over the past decade and even more so since the pandemic.
We have issues of housing affordability that are threatening consumer financial literacy. We have questions of student debt, the crushing burden of student debt for many people, and then the uncertainty around it. Do I owe this now? Oh, today, I do. Tomorrow, I don't. What's going to happen in the future?
What's going to happen with Social Security, inflation, the price of groceries? All of these things factor into financial wellness, and what we're seeing is that you can't segment financial wellness from other types of wellness, that they're all holistically interconnected.
So, we do like to look at emotional factors and physical or health-related factors as well, because, as I said, they are all interconnected. We find there's a strong correlation, and how they play out in our own lives and in the workplace are huge questions right now.
Definitely. And I think, you know, what we're seeing is almost like a perfect storm of some things that are happening around. You know, we know the pandemic drove needs around some of the behavioral, mental, and emotional wellness needs.
But some of the as you know, I'm an economics nerd, so I always like to talk about economics. But you mentioned things like inflation and rising cost of living. I went grocery shopping, yesterday. Eggs. I'm like, oh my god. Look how much eggs cost now. Right? So, no omelette this weekend. Right? But, you know, a bag of chips, it's like six bucks for a bag of chips. Right?
So, people are seeing this, you know, every day. And, yeah, the rate of inflation is coming down, but prices are still really high. Right? And you mentioned, you know, real estate. So, I think young people in particular are getting hit by this. Right? We're seeing, you know, like you said, student loan debt, but real estate prices are going through the roof. Right? Rental costs. Right? So, what some of the things that I've seen is that, you know, research around younger workers and younger consumers is, you know, they feel that the American dream is now out of reach. Right?
And so, they can't afford a home and can't afford to build, you know, for their future around some of these things. And so, it's putting that added pressure on them. And like you said, it has an impact, and they're interrelated. So, I know we're going to get into some of the detailed research, around this, but I'm also a simple guy. I always try to get stuff to say it simply. But some of the stuff that I've talked about, it just increases people's stress. Right? So, the financial pressures that folks are under, it just stresses you out.
Right? When you go grocery shopping and see the costs, you're like, oh my gosh. I’ve got to put this off. I’ve got to put this on the credit card. So, it's kind of a snowball effect there. Right?
Well, that brings up a really good point too. It does increase your stress, the average pressures. And we do find in our research that sort of just meeting day-to-day demands are a significant cause of stress.
Take the grocery example because that impacts everybody. Right? It causes stress financially, certainly, but there's an emotional component to that too. What happens to your blood pressure over time with the extent of that? If you've got financial difficulties, that's going to affect you mentally. It's going to affect you emotionally. And in turn, that will have physical impacts on you as well.
Exactly. Exactly. And I think, you know, as we talk about this perfect storm of, you know, there's these needs, these economic factors that are impacting wellness. There's this interrelationship between the different types of wellness. I think another contributing factor here is consumer and worker financial literacy and, frankly, the lack of financial literacy. So, it kind of feeds on it.
Right? As these financial pressures are impacting consumers and workers and younger workers in particular, they don't know how to deal with it. Right? So that also feeds on it and speaks to the need for financial wellness solutions.
Right. Right. And, you know, to the point we keep talking about consumers and workers, but the bottom line is that all of these factors have and can have an enormous impact in the workplace. And we see that the workers are distracted by financial issues. They can be distracted by emotional and physical issues. So, it's a very real issue, as it impacts productivity and presenteeism for employers, which I think creates a great opportunity for those entities that are you know, benefits providers, for example.
Exactly. And I think it's a combination of benefits. It's a combination of education around, you know, finances and financial literacy. Because one of the things that we, you know, we talk about, younger workers in particular here.
And I always love, you know, when you see the information on things like the time value of money. Oh my gosh. If you put fifty bucks away every paycheck for, you know, for twenty years, thirty years, you're going to end up with this big pot of money. And, you know, here's the impact of credit card debt and how that erodes your financial wellness and, you know, young workers and young consumers in particular. You know, I'm thinking, oh, man. If they just knew this.
Right? If they just knew this, they could set themselves up for success, be vigilant about their finances, be educated, and make some of the right decisions. That all feeds into this concept of financial wellness and the broader wellness impacts that are out there.
Particularly very good points. And, you know, especially with respect to the workplace, addressing wellness isn't a one-shot solution. It's a combination of what products, what benefits are available to help alleviate certain situations to help protect from certain situations, or to plan for certain situations. What tools do we make available? What education is available?
What are the additional services? Do you have access to support through the workplace? And right. And face it. Right. Most of us spend so much time at work that it's a logical place.
We spend too much time at work. Right?
It's a lot.
I mean, it's a logical place to access these things. And we do find that there's almost an elegant story about how workers are looking to their employers to help them out with this.
Right.
They absolutely would think that employers should provide those benefits, but also the other services that go into true wellness.
Absolutely. So, let's hold on that because I do want to, first, share some of the great research you did. Right? So, as we at LIMRA started looking at financial wellness, Deb came up with this great idea that, hey we ought to create an index to kind of measure the levels of consumer and worker wellness and start tracking it over time.
And it's pretty cool. You know, we did the pilot study a couple of years ago, and now we've updated some of that research. So, as researchers, this is where we're like, oh, this is great. Now we can start, you know, measuring some trends. Right? So, Deb, why don't you tell us a little bit about kind of the wellness index and some of the results you're seeing around that?
Sure. Well, as you say, two years ago was the inaugural year. I'm sorry. Now it's 2025. So let me start that thought again.
Happy New Year.
In 2022, we introduced the LIMRA Financial Wellness Index. And it's a number, so it's a great place to start a conversation. Right? So, on a scale of 1 to 10, with 10 being super, super healthy, I'm in great shape, and zero being I'm in really dire straits, where do consumers fall? Where do workers fall along that index? And back in 2022, most folks fell a little over midway, so say a 5.57 out of 10.
That's okay. It's not great, and there's still lots and lots of room for improvement.
We're talking about consumers there, but workers are very similar.
That number dropped by 11 percent in the ensuing two years. So that's really interesting. We also have a similar number along that spectrum for women, for men, for Gen Z, for all these different populations. So, we can take a look at how these consumer and worker populations stack up against each other.
And by digging a little bit deeper, we can also arrive at some serious insights for how to help them. Where do they need the most help? How do they want to get that help? What are their greatest causes of stress?
No doubt that yeah, when we saw those results, and it's like, oh my god. It actually came down. And then as we were talking about it, some of the other factors we're talking about, well, think about it. Inflation, you know, interest rates, mortgage rates, you know, those financial pressures, they really haven't let up, for consumers. So that was, I know, one of the things we talked about as to, you know, why we felt it ticked down a little bit.
Right. And, you know, going to develop that index, we did look at a number of different factors as well. So there are sort of three main pieces to it. The first is emotional. What's your confidence in your financial literacy and your own situation? The second is practical and current. Where are you now? Can you pay the bills? Can you set some money aside? How do you feel about that? And then the third component is forward-looking. Can you plan for the future? Are you able to save for retirement? Are you able to set something aside to meet those long-term goals? So, all of these things combine to create the LIMRA Financial Wellness Index.
Yeah. So that financial literacy component comes into that last one you said. Right? Kind of the ability to plan for the future. Right?
Sure. Absolutely. And with confidence and knowing what you're doing.
Right. Yeah. Right. That's important too.
How many people are throwing money into Bitcoin and other things trying to make a quick buck or watching, you know, the TikTok videos of, hey here's how you pay off your mortgage in a year. It's like, oh, boy. Oh, boy.
Well, and that's the interesting thing about confidence indexes too is sometimes you need bigger context if you're looking at confidence because certainly, false confidence is a thing. The Lake Wobegon effect, you know, where all of the children are exceptional and all of the women are good-looking.
That's right.
You know, so where does false confidence come in? But anyway, to look at that wellness number, we also look at emotional wellness, and we look at physical wellness, not quite as deeply. But there's such a strong correlation there. And financial wellness over the past two years actually dropped almost twice as much as physical wellness and emotional wellness.
Wow.
So that says something to those factors that we've talked about that come into all of this to create an unhealthy soup, for example.
Right.
An unhealthy soup for financial wellness.
Yeah. And I think it was interesting, again, to see those trends and kind of see how it's moved over time, and a lot of it makes sense. But I think there's, you know, maybe we shift gears here a little bit and circle back and talk more about the workplace and kind of the role that workplace solutions can play in helping workers address their financial and related wellness and hopefully bump up those scores. Right?
Right.
So, one thing I know, and you touched on this earlier, Deb. But when we did our research around this, you know, we found that the wellness levels have an impact on things like worker productivity, whether they like their job, turnover, absenteeism it was a nice little correlation that we saw that, you know, workers who scored higher on the index, right, who were more financially well, they scored high you know, they said that they found it easy to focus on work and higher productivity and lower turnover, right, versus those who were stressed out.
Right? They were financially stressed out and scored lower on the index. Right? So, kind of the takeaway here is that financial wellness levels, they have a direct impact for employers.
You know, the workers' financial wellness levels have an impact for employers on workforce turnover productivity. So, they have a vested interest in “a financially well workforce.” Right?
Absolutely. And employers can do something about it too. That's the interesting thing as well.
And they have a vested interest in doing so.
A very vested interest. And there can be some serious benefits for employers for making that effort.
We talked earlier about employees seeing a natural fit with workplace solutions. Employees absolutely do look to their employers to help them address their financial wellness.
And I had a thought, and I apologize.
No. I got a stat.
I came right out of my mind here.
I have a stat. I came armed with a couple of stats around there. Great minds think alike. But, yeah, to your point, there's definitely a demand from the workers.
So let me throw a couple of stats out. So, half of workers say that employers should offer programs to address financial stress. But get this, that jumps to 79 percent for workers who are highly stressed. Right?
So, they're looking for programs.
Another stat, 70 percent of workers say their workplace benefits contribute to their overall levels of financial wellness. So, they help improve it. So, we're going to get into more solutions here in a second. But it's not just about, like, the education and some of these wellness things, but there's other products and other benefits that contribute to workers financial wellness levels.
So, we think of retirement savings plans. We think of debt assistance plans. We think of life insurance, disability insurance, having those protection products in place really helps a worker feel good about where they are financially.
Right?
Absolutely. And when you think about the spend that employers do have on benefits, which can be substantial.
When you ask workers who participate in a wellness program versus those who do not, right, about the impact of benefits on their financial security, you find almost double the number of workers who participate in wellness say that those benefits are more effective in addressing their financial wellness.
Wow.
So, you know, having a wellness program certainly increases the efficacy of your benefit spend in the first place.
Exactly. Exactly.
The same holds true, by the way, for emotional wellness programs and for financial and physical, you know, health-related wellness programs.
So, there's a definite link there.
Satisfaction with those programs is also extremely high among workers.
Yep. Yep. No. I remember seeing that as well. Yeah. And especially those that are utilizing and needing them. Right?
Exactly.
I was just going to say, I think another important point, you touched on it a little bit earlier here is that when you look at and keep me honest here, Deb. But a lot of the financial pressures in particular, they face are higher among middle market and lower-income workers as opposed to affluent, which kind of makes some sense there. Right? So, at the same time, that group of workers, they are less likely to have a personal financial adviser or agent. Right? Retail agents and advisers tend to focus on mass affluent and affluent consumers. So, the workplace is a natural source, a resource for them for education and products and services around these needs.
Absolutely. Without a doubt. It's your older workers and consumers and your higher income workers and consumers who certainly do fare a little bit better on the financial wellness indices, all other things being equal, but are much more likely to have that financial adviser, where your younger workers who want advice, they're crying for advice and guidance.
And you don't want them going to TikTok. Right?
Right. Or whether they even can.
I know. Right. Alright. Well, let’s wrap up here and talk about you know, we talked about kind of why there's this growing demand and need, some of the factors that are driving that lack of financial literacy among consumers and the impact on young people, talked a lot about our index, and kind of teed up some of the workplace and why that's a really good place for folks to get solutions to help address their needs. So, let's wrap up and, like, share some thoughts we have based on our conversations with our members, you know, some recommendations for carriers, advisors, and others who are looking to tap this opportunity at the workplace.
Okay. Well, you know, first, I think integration with benefits is key.
Yep.
And when we talk to workers, they are so open to getting this wellness advice from their employers and from their benefits advisors.
Yep.
Or their benefits providers. So, right. So, if you're a company who's already supplying benefits, whether that's an insurance protection or a retirement plan or something, you're two steps along the way to helping both your employer and your employee customers.
I think we need to, again, consider that it's the four pieces that we've talked about. It's services, products, tools, and education. To some degree, it might be personal advice, but there are other ways to enjoy and employ economies of scale in reaching large employee populations with wellness solutions.
Yeah. I think another thing you're getting to there, Deb, is not looking at solutions providers, looking at solutions kind of one at a time.
Right.
Kind of thinking of it as kind of a holistic view of the worker, right, and meeting their needs. Right? So, it's not just going in and offering a retirement plan and that's it. It's not just going in and offering, you know, a voluntary critical illness plan. It's kind of stepping back and saying, what's you know, what are the holistic needs of the workforce?
And I think another thing is, you know, how do you know? How does an employer and the providers know? So, I think another recommendation is to really understand the workers, right, and use data-driven insights to really identify where those needs are. Right? It doesn't have to be this really crazy technology solution to do predictive analytics. That's all cool and fun but do focus groups with your workers.
Right?
Find out what they are.
Take a look at the demographics of your workforce. Do you have an older workforce, a younger workforce? We know the benefit needs are different, around wellness and related benefits. Really get a good understanding of what worker needs are and look to help provide solutions to address those needs because, as we talked about, that impacts productivity, satisfaction, absenteeism, turnover, all that good stuff.
Right. And I think one word that providers, employers need to keep in mind is engagement.
Engaging people in them, in these solutions. Engage the opinion leaders in an organization. Engage the team leaders in helping to both communicate and implement solutions, projects, and products. Yeah.
That's a great point because I know one of the things that I would always talk about coming out of the pandemic as the world of work really changed, I said it, boy, this is a real opportunity for employers to step back and reimagine their value proposition to their workforce and really make workplace benefits, you know, part of the conversation. Don't just do once-a-year enrollment season and say, okay, everything's jammed into this one month in October or November. Right?
Make it part of the conversation throughout the year. Right? And that way people are educated and informed. So, when they do select some of these products and services, you know, they know what they're like, as we've been talking about, they'll know they can make informed and better decisions.
Make wellness part of the culture.
Exactly. Exactly. Exactly. Because as we talked about, employers have a vested interest in a financially well workforce.
And who better to help them than their benefits providers?
Exactly. Exactly. Because we know workers trust them.
Exactly.
Alright. So, yeah, why don't we wrap on that? I think we hopefully, everybody listening in has had a, you know, we provided some good background information on financial wellness, why there's a need out there, some of the drivers behind it, Financial Wellness Index so definitely check that out for LIMRA members. You know go online and download, you know, Deb has done a great job producing a whole series of collateral materials around the wellness, around the LIMRA Financial Wellness Index.
And, yeah, you know, we wrapped up talking about recommendations for carriers and advisors. So hopefully folks get some ideas and start delivering on this need because there definitely is an opportunity.
Great. Thank you.
Alright. Alright. Thanks, everyone.
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