What is Financial Planning?

Today, employees have more choices than ever in terms of employee benefit programs and are taking a more active role in securing their financial future. An employee benefit that can help your employees to understand the often confusing world of investment and retirement planning is financial planning education/services. Many employees would appreciate education on financial topics to help them make informed investment and retirement planning decisions. In addition, many of your employees probably do not fully understand the various types of plans, such as the 401(k) plan, that are offered as part of their overall employee benefit package. This lack of knowledge can lead to decreased plan participation and improper decision making regarding plan investments. Decreased plan participation coupled with improper decision making can result in employee dissatisfaction with plan offerings. Financial planning education allows your employees to become more aware of their benefits, assists them in understanding plan provisions, and helps them to reach their financial goals.

Advantages of financial planning education

There are many advantages to providing your employees with financial planning education. These advantages include the following:

  • Allows your employees to recognize that they have the ability to secure their own financial future
  • Enables your employees to more effectively utilize their benefit programs, resulting in a maximization of benefits and increased appreciation for the benefits that you offer to your employees
  • Improves company morale and increases employee productivity
  • Increases participation in benefit plans
  • Allows employees to invest more effectively

Types of financial planning education

There are numerous types of financial planning education that you can offer to your employees. Group seminars allow a large group of employees to learn about financial planning in general and provide employees with an explanation of their benefit and investment options. Online, self-study materials that provide them with a comprehensive overview of financial planning topics can be offered for use at their convenience. You can supplement online offerings with printed materials covering a wide array of financial planning topics (e.g., planning for retirement, investing, and getting married). Enhanced benefit statements can not only provide your employees with a detailed explanation of their benefits, but also include useful financial planning information (e.g., how to use a particular savings plan for retirement saving, projected balances, and estimation of retirement income).

The financial planning information that you offer to your employees should be objective. For example, many sellers of investment products conduct seminars or provide financial planning materials free of charge.