By: Megan Cipperly
Financial Wellness Insights Across Industries
Insurance carriers and retirement plan providers have been working for decades to create financial wellness solutions to help consumers prepare for a secure financial future. In recent years, the concept of financial wellness has become a trending topic of popularity across all areas of financial services and encompasses everything from retirement planning to credit score monitoring.
In 2021, financial wellness continues to be a growing area of interest as consumers are dealing with the effects of the pandemic and other economic pressures affecting their financial, professional, and personal lives as well as their health. In fact, 37% of consumers surveyed stated that the pandemic has negatively impacted the state of their finances.
When it comes to financial wellness, credit risk shapes consumer perceptions.
We often think of tailored financial wellness solutions in terms of age groups, as consumers approaching retirement have different needs compared to those that are still early in their retirement savings journey. In this study, in addition to looking at differences among age groups, we looked at financial wellness needs through a different lens: credit risk. The differences in needs and perceptions among credit risks groups were stark. Consumers with subprime credit risk were three times more likely to indicate that financial stress is affecting their work, health or relationships compared to consumers with a prime credit score. Subprime respondents were significantly less likely to respond that they felt confident in their current, or future, financial situation. Furthermore, only 18% of respondents with subprime credit risk felt they had an adequate amount saved for retirement.
When looking for financial health providers, while trust was a leading attribute universally, our subprime audience ranked effective communication and cost next, whereas prime respondents value provider expertise more. For those respondents who were already using financial wellness tools, subprime respondents were most likely to use personal budget/credit health software or apps vs. a financial wellness solution offered by their retirement plan provider or employer.
81% of consumers are concerned with the rising cost of healthcare expenses and insurance.
There were significant generational differences in what areas consumers felt were most important. However, there was consensus on one primary concern – the rising cost of healthcare expenses and insurance. Specifically, managing healthcare costs was noted as the second most important area for consumers in helping them achieve financial wellness. From reviewing marketing materials within Competiscan’s database, messaging around this topic is often focused on retirees – particularly in providing information on planning for healthcare expenses that are not covered by Medicare. However, this research shows that there is an appetite for resources that help consumers across all age groups prepare for unexpected and rising insurance costs.
Gen Z and Millennials need help with budgeting and saving.
Roughly half of consumers under the age of 34 indicated that they need help with budgeting and that they spend more than they make each month. Based on our findings, consumers preferred financial tools that offered immediate benefits and low effort. Over half of respondents overall indicated that they were at least somewhat likely to use interactive online tools or automatic savings tools to help them manage their financial health – these options were preferred over solutions that required more active participation and time commitment, like educational events. Retirement plan providers, banks, and fintechs have been quick to adopt to this consumer trend. Particularly within the last year, Competiscan has observed several product enhancements that include built-in automatic savings and budgeting features and a slew of marketing materials that feature these tools within lead messaging.
Financial wellness experiences targeting underserved populations are becoming more prominent.
What’s next for financial wellness solutions? Competiscan anticipates a continued focus on personalized financial wellness experiences. When reviewing financial wellness marketing materials from the past year, some providers are already tailoring their messaging to more specific population segments, particularly among marginalized communities. Whether it’s a series of articles on the unique financial concerns of women, insights addressing the racial wealth gap and its impact on retirement savers, or banking and investing products designed to help the next generation develop good financial habits – we’re seeing a greater diversity in the approach providers are taking to address the unique needs of consumers.
For more information on Financial Wellness Insights Across Industries, join the Competiscan Insights team for a live discussion on Monday, December 20, 2021 at 1pm CT. Click here to register
Competiscan clients can access the full Financial Wellness Insights analysis here.
For more information on Competiscan data and insights, please email us at research@competiscan.com.