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Financial Finesse Releases Year in Review 2011 Research on Employee Financial Issues

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The report finds employees continued to make improvements to their finances in 2011, providing early evidence of a major shift in society’s approach to financial planning.

El Segundo, CA— Financial Finesse, the nation’s leading provider of unbiased workplace financial education programs, released today its Year in Review 2011 research report on trends in employee financial issues. The firm’s research, which has been regularly tracking trends in this area for 13 years, is most widely known for predicting large-scale economic trends, such as the explosion in consumer debt that lead to the Great Recession and the positive behaviors that indicated a financial recovery.

The report reinforced a trend seen early in the company’s 2010 research which showed employees are focusing on what they can control to improve their financial situations in light of a bumpy economic recovery.

Some of the most significant findings in 2011 were:


• Employees are experiencing less financial stress as they continue to better manage their day-to-day finances. Since 2009, the percentage of employees reporting high or overwhelming financial stress has dropped significantly from 33% to 19%. There appears to be a distinct correlation between a growing number of employees able to comfortably manage their finances and reduced stress levels.

• Employees continued their personal recovery in 2011, demonstrating lasting behavioral change in how they are managing their finances after the recession, despite a slow economic recovery. Employees improved their financial situations significantly in:

  • Cash flow management. 72% of employees reported spending less than they make each month in 2011 versus 56% of employees in 2009.
  • Building an emergency fund. 56% of employees reported having an emergency fund in place in 2011 versus only 39% in 2009.
  • Focusing on long-term planning issues. 62% of questions received by the firm’s CERTIFIED FINANCIAL PLANNER™ professionals were specifically around retirement and other long-term planning issues in 2011 versus 43% of questions in 2009.

• Employees are still uncertain they are on track to retire despite their improvements in financial management. Only 17% of employees feel prepared to meet their retirement income needs. This illustrates employees’ growing awareness of their personal responsibility to fund their own retirement, as well as their concerns about the economy and worries their nest eggs will be eroded by increases in taxes, inflation, and health care expenses.

Liz Davidson, CEO and Founder of Financial Finesse, says employees’ focus on their personal recovery amidst a still rough economic recovery is a sign that they are taking more responsibility for their financial futures, and believes the trend will continue.

“People have no choice these days but to manage their finances better and save more for retirement,” she says. “They recognize they cannot depend on their employer, the government, or, in many cases, even family members. There is a new urgency attached to financial planning as a result.”

These positive behavioral changes being made by employees denote a crucial time in American society, and Davidson sees a growing focus from both the private and public sector on the importance of financial education as a key solution to the nation’s economic challenges.

According to Davidson, “Every pillar of society is focusing on this issue. Our government is funding more financial literacy programs both at the federal and state levels, school systems are implementing more hands-on, practical finance education for students, companies are realizing retirement is a major problem for employees and are providing financial wellness programs to help employees retire, and the financial industry itself is putting more emphasis on providing transparent planning advice. It’s in the early stages now, but financial literacy is really becoming the new ‘green’ movement.”

It’s too early to forecast the longevity of this trend, but Davidson, along with most members of her firm’s Think Tank of CERTIFIED FINANCIAL PLANNER™ professionals, believes it will persist, in large part due to the growing popularity of workplace financial wellness programs which are designed to reach a high percentage of employees with the personalized, ongoing financial coaching they need to sustain positive financial habits and behaviors.

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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America Economic Recovery US financial finesse Liz Davidson Signature Awards employee financial issues employee financial education financial education economic trends retirement crisis retirement preparedness financial finesse research economic research financial trends workplace financial education Social Security trends in employee financial issues Q2 2011 Resesarch on employee financial issues CFP Board Founder Liz Davidson

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Employees are experiencing less financial stress as they continue to better manage their day-to-day finances. Since 2009, the percentage of employees reporting high or overwhelming financial stress has dropped significantly from 33% to 19%. There appears to be a distinct correlation between a growing number of employees able to comfortably manage their finances and reduced stress levels. •
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Employees continued their personal recovery in 2011, demonstrating lasting behavioral change in how they are managing their finances after the recession, despite a slow economic recovery. Employees improved their financial situations significantly in: o Cash flow management. 72% of employees reported spending less than they make each month in 2011 versus 56% of employees in 2009. o Building an emergency fund. 56% of employees reported having an emergency fund in place in 2011 versus only 39% in 2009. o Focusing on long-term planning issues. 62% of questions received by the firm’s CERTIFIED FINANCIAL PLANNER™ professionals were specifically around retirement and other long-term planning issues in 2011 versus 43% of questions in 2009.
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Employees are still uncertain they are on track to retire despite their improvements in financial management. Only 17% of employees feel prepared to meet their retirement income needs. This illustrates employees’ growing awareness of their personal responsibility to fund their own retirement, as well as their concerns about the economy and worries their nest eggs will be eroded by increases in taxes, inflation, and health care expenses.
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