Keys to Successful Financial Education Programs

By: Neil M​rkvicka

Seeing the workplace financial education trend, but not sure whether to hop on? The International Foundation’s new study titled, A Closer Look: What’s Working in Workplace Financial Education shows successful programs produce less stressed workforces and reveals best practices from successful programs. Let’s take a closer look . . .​

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Does Financial Education Work?

The study compares survey results of organizations providing financial education (68%) with those not offering financial education (32%). Organizations not offering financial education are more likely to regard their participant populations as highly stressed, not financially savvy and not well-prepared for retirement compared with organizations with financial education. ​

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What Are Some Best Practices for Providing Financial Education?

Of the responding organizations providing financial education, about two-thirds have found their financial education program/initiatives to be successful. (This “success group” of organizations experiences double the average participation rate in initiatives compared with the “nonsuccess group” and rates average participant financial savviness and retirement preparedness higher than organizations with nonsuccessful programs.)​

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In an examination of financial education topics provided, the success group is far more likely to offer preretirement financial planning (60% to 25%) and retirement plan benefits education (85% to 55%). The success group is also considerably more likely to offer retirement plan distributions education (60% to 33%), education on the phases of retirement (37% to 12%) and postretirement financial planning (44% to 20%). The average success group organization is covering 3.5 more topics with its education than the average nonsuccess group organization (7.4 to 3.9, respectively).

​​​ ​[Related: Financial education/retirement security resources to help plan participants.] 


Regarding financial education methods, the success group is also far more likely to offer retirement income calculators (70% to 51%) web-based online resources and courses (66% to 50%), newsletters (54% to 37%) and workbooks (27% to 11%) compared with the nonsuccess group. On average, the success group provides financial education in 2.1 more formats than the nonsuccess group per organization (7.4 to 5.3, respectively). 

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​ The success group is more likely to have assessed which financial education topics are most needed (35% to 8%), have a budget devoted to financial education (32% to 9%), provide education to spouses (50% to 31%), provide education to retirees (32% to 18%), customize education for specific groups (28% to 15%) and target education around life events (12% to 4%).

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Regarding financial education approaches, the success group is far more likely to offer free personal consultation services compared with the group not having success (69% to 36%). The success group is more likely to deem improving participant retirement asset allocation/investment decisions as among the most important reasons for providing financial education (61% to 44%) and the success group was less likely to regard a lack of time and resources as a significant obstacle compared with the group not having success (38% to 53%). The success group is also more likely to feel a greater responsibility to provide financial education compared with the group not having success—They are more likely to agree with the statement “It is our organizational responsibility to educate on pension and benefit options, encourage retirement savings and improve participant financial literacy/money management” (45% to 36%). Lastly, patience is key—The data reveals a consistent positive relationship between the length of time an organization has offered financial education and the likelihood of success. ​

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