FINANCIAL FINESSE RELEASES TRENDS IN EMPLOYEE FINANCIAL ISSUES FOR Q2 2012

Employees are increasing their focus on proactive financial and retirement planning issues, but their efforts are still not enough to adequately protect against economic instability.

Financial Finesse, the nation’s leading provider of workplace financial wellness programs, has released its quarterly research report on Trends in Employee Financial Issues for the second quarter of 2012.

Among the report’s key findings:

• There is a continued trend towards proactivity as employees seek more control of their finances in advance of a crisis or problem in order to improve their financial security. Seventy‐ four percent of questions received by the company’s team of CERTIFIED FINANCIAL PLANNER™ professionals were proactive in nature, up from 69% in Q2 2011, 66% in Q2 2010, and 59% in Q2 2009.

• Employees are also focusing more on retirement planning than in previous years. Retirement planning is employees’ top financial priority across most age and income groups. In addition, retirement planning questions made up 32% of total questions received by the company’s financial planners in Q2 2012, up from 25% in Q2 2011, 20% in Q2 2010, and 14% in Q2 2009.

• Despite the increased focus on proactive financial and retirement planning issues, many employees are still vulnerable to a double‐dip recession without strong cash reserves or sufficient credit to get through layoffs or other financial emergencies. Year to date, 42% of employees are uncomfortable with their debt levels, 51% do not have an emergency savings account, and 84% are under financial stress.

“The positive news is that employees are continuing to sustain resilience during uncertain times and recognize they need to keep their focus on improving their finances,” says Liz Davidson, CEO and founder of Financial Finesse. She states:

“The proactivity, in particular, is a good sign. It shows that employees are recognizing the importance of being financially healthy and of taking the steps today to become financially secure. In the past we have seen a much greater percentage of crisis calls, with many employees waiting until they had a serious problem to begin seeking help. The new paradigm for employees is to focus on becoming more financially stable in the event another recession happens.”

Davidson points out that although employees appear to have the right attitudes and mindset about their finances, most will need to accelerate their improvements to be adequately protected in the event of another economic downturn.

Financial Finesse’s Think Tank of CERTIFIED FINANCIAL PLANNER™ professionals, which has been tracking trends in the industry for over 13 years, is most concerned about the subset of employees who are not making ends meet, do not have an emergency fund, and are struggling with their debt. Greg Ward, Director of the company’s Thank Tank, notes that “If you look at any of these issues in isolation, there are some clear red flags, but what is much more concerning is that many employees in this subset are falling down in just about every area of day‐to‐day money management. These employees are barely hanging on as it is, and are especially vulnerable to the impact of another recession.”

As employers recognize how their employees’ ill‐preparedness to manage economic changes impacts their work and benefits decisions, the issue has spurred urgency to help employees better manage their finances on a broader financial planning spectrum. Financial Finesse has seen this approach take hold among large companies in particular, with over 90% of inquiries the firm receives from employers centering on programs that improve employees’ financial wellness.

Trisha Brambley, founder of Retirement Playbook, Inc., a retirement plan consulting firm that helps employers develop strategies for a successful retirement program, says she is seeing the same phenomenon. According to Brambley, “There’s been a complete shift among both employers and employees from topic‐focused financial education to holistic financial wellness.”

Brambley believes that financial wellness is so critical to retirement preparedness that her firm has increased their suite of tools available for plan sponsors. She notes that the most important component of retirement preparedness is actually one the employees can control, that is, saving enough in the first place, and that helping employees to do that is an important step in running an effective retirement plan.

Dperry@financialfinesse.com
(424) 218-7954

Financial Finesse is an unbiased financial education company providing personalized and
innovative financial education and counseling programs to over 500,000 employees at over 400
organizations. Financial Finesse partners with organizations to reach goals such as reducing
fiduciary liability, increasing plan participation, decreasing stress, and increasing productivity
through its unique approach to financial education. Financial Finesse does not sell products nor
manage assets. For more information, visit www.financialfinesse.com.

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