How are employees managing today’s financial uncertainty and how can employers help?

A war in Ukraine, a volatile stock market, rising inflation and the risk of recession – these are the headlines that have dominated the first four months of 2022. It’s no surprise many employees have heightened anxiety and are tempted to make emotional decisions with their investments.

Yet impulsive reactions to market movement or the news cycle can have irreversible damage to long-term goals. And the truth is, even in better times, continuous engagement on financial goals and maximizing the financial benefits offered in the workplace are some of the best ways employees can solidify their financial future. It’s one of the many reasons why my team and I are so passionate about providing employees access to trusted and experienced advisors in the workplace.

I sat down with David Ankrom, vice president and head of Edelman Financial Engines’ Advisor Center, to discuss what his team of advisors is hearing from employees and how we can shift employees’ behaviors from reactive to proactive. ?

Kelly O’Donnell: David, it’s definitely been a volatile few months in the market. Are we seeing an increase in the number of employees calling our advisors?

David Ankrom: Yes, we have seen higher volume than we do when markets are steady. There is a direct correlation between large market events and an increase in call volume. Right now, participants’ biggest concerns are mainly focused on rising inflation and the war in Ukraine.

Yet, while we’ve seen an increase in volume, the level of urgency we hear from employees is less than we’ve experienced in the past. People have been bombarded with news and negativity over the past few years, so when developments like these come up, they don’t drive the same level of financial panic and concern. They’re still calling for validation and guidance, but the good news is that fewer of our clients want to take drastic action as a result of market conditions.

Kelly: It’s great news that our clients are taking a long-term investment approach but are employees considering how the economy and market outlook may impact their financial goals?

David: Although market movement will not always create long-term consequences to an employee’s financial plan, there are certain issues that may need to be addressed, particularly for those nearing retirement. We have all heard the stories about investors who don’t look at their statements when the market is in a slump, and it’s true that some retirement investors would rather avoid talking to an advisor about the impact of the market and the economy on their financial goals. The reality is that advisors help people stay ahead of issues that might come up and ensure that they stay on track.

In my experience, I’ve seen just how resilient employees can be in the face of financial uneasiness and hardship. They just need empathetic and customized guidance on how to adapt their lifestyles or financial plans to meet their goals. Our goal is to create a safe space for employees to open up and get to the root of their concerns so we can help them create an actionable plan. It is amazing to see the peace of mind that comes from talking to a professional and feeling grounded in a plan.

Kelly: Employees often don’t take full advantage of the financial resources and advice available to them. How can employers help to improve engagement?

David: Oftentimes, the hardest part is getting employees to pick up the phone and begin the conversation. Many people are afraid to reach out to a financial advisor because they don’t know where to start or what questions to ask. To help mitigate this, we’ve increased proactive calls to our participants. It’s amazing the openness we find when people are engaged. Once employees are comfortable, the flood gates open and they go into great detail about the challenges they’re facing. Through these calls, we’ve helped people through complicated financial questions, provided peace of mind that they were on the right track and even identified instances of fraud.

I do think employers can play a big role in empowering employees to get the most out of financial resources. Some people don’t understand what a financial advisor does, or they may think they can’t afford one or they don’t have enough saved to qualify for help. That couldn’t be further from the truth – and in our case, we act as a fiduciary, which means we always serve each of our client’s best interests. If employers increase education around the financial resources they provide and offer that “stamp of approval,” it can go a long way to improving trust and increasing engagement.

Kelly: Absolutely. At Edelman Financial Engines, we see how much employers care about their employees’ financial futures every day – and they have done extensive due diligence to select advisors they can rely on to help their employees. Financial concerns are a big source of stress and anxiety. Access to a financial advisor and other financial wellness resources can go a long way to increasing employee financial confidence, improving retention and creating a happier workplace. For employers already offering these resources, the next step is making sure employees know what help is available to them. It could be as simple as making the resources as visible as their health care resources.

Thanks, David for sharing your insights and for all the great work you and your team do to help employees.

? 2022 Edelman Financial Engines, LLC. Edelman Financial Engines? is a registered trademark of Edelman Financial Engines, LLC. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM 2173196.