Humans Plus Technology Solve the Financial Wellness Problem

Digital advisors are the wave of the future and the good news is that they’re already here.

Robo-advisors seemed like a good idea. Firms could use technology to market directly to consumers using attractive splash screens and algorithmic advice, with the potential to reach millions at scale with little effort. But it hasn’t quite panned out. Could one-size-fits-all financial advice be part of the reason why?


According to Steve Wilbourne, CEO of Questis, "Humans solve human problems." As a former advisor, he realized that technology alone cannot solve the financial problems faced by defined-contribution retirement plan participants, which is why he chose to partner with advisors and plan providers.


"Humans solve human problems." - Steve Wilbourne, CEO of Questis

As defined contribution plans have replaced defined benefit plans, responsibility for retirement planning has shifted from the employer to the employee. As a result, the workplace is rapidly becoming the place where financially-stressed employees are seeking to address their financial issues. They are looking to the employer for help with not just retirement planning, but also consumer and student loan debt management, college savings, and building an emergency fund.


Employers are waking up to the fact that their workers are more productive when they're not worrying about their finances and bringing those concerns to work with them. As unemployment rates hit record lows, an integrated, comprehensive financial wellness program is a compelling recruiting and retention tool that can keep top talent on board.

The comprehensive part is the key. It’s the best way to help individual participants, and focusing on better ways to manage their money today can help them more easily find the means to save for tomorrow. Using people to act as financial coaches is a critical piece of an authentic financial wellness program. Instead of replacing human advisors with robo-advisors, use technology to scale the reach of advisors so that they can offer truly personalized advice that is tailored to meet the individual participant’s situation and goals.


Coaching is relatively new as part of financial wellness, but is building a track record of success. In 2013, NeighborWorks America and the Citi Foundation partnered on the Financial Capability Demonstration Project, which involved 30 financial coaching programs, and assessed the effectiveness of financial coaching offered by participating community-based organizations. The project began by developing training for the coaching practitioners, and then evaluated the results of the coaching. More than half of clients who reported no savings at the start of services reported some savings after participating in coaching, with a median savings increase of $668. Clients also saw an average increase in their FICO scores of 59 points, with clients who participated longer being more likely to see increases in their credit scores. Almost two-thirds of clients who reported feeling stressed about their financial situations when they began coaching no longer felt that way after participating in coaching and related programs offered through the project.

Highly compensated employees are not immune to financial stress and stand to benefit from coaching as well. According to CareerBuilder, even people who earn $100,000 or more annually reported living paycheck-to-paycheck, and 59% of people surveyed who make that kind of money admitted to carrying debt in a 2017 survey. Of that 59%, 56% say they’re heavily in debt. Especially in coastal urban areas, like New York, San Francisco, and Seattle. $100,000 just doesn’t go all that far anymore.


Managing employee stress resulting from financial issues can benefit a company’s profitability as well, through improving workers’ physical and mental health. An American Psychological Association survey finds that 1 out of 5 Americans put their health care needs on hold because they can’t afford it. Over 12% admitted to skipping doctor’s visits and letting health issues go because of financial concerns. Another study has found that high levels of debt relative to assets is associated with poorer health, including higher perceived stress and depression, worse self-reported general health, and higher diastolic blood pressure among those in their 20s and 30s. These associations were statistically significant even after controlling for prior socioeconomic status and other demographic factors.


Bottom line, the cost of adding a comprehensive financial wellness program that includes human advisors or coaches is offset by improved employee health, reduced turnover costs from employee retention, and increased employee productivity.

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