By this point in the 21st century, many employers have left their employees on their own when it comes to managing their retirement and savings. Now, some big companies apparently feel a tinge of guilt for switching defined-benefit pensions to mainly self-managed defined-contribution plans. Or else they’re just realizing that better financial planning makes for a more contented work force. So reports Forbes.
Enter policy wonk-turned-entrepreneur Matt Fellowes, who combined electronic communication, big data and behavioral finance to create runaway start-up HelloWallet, which he decided to market to employers as a low-cost “financial wellness” benefit. And it’s rapidly catching on – just ask Morningstar, which paid $52 million last year to acquire the “electronic-nag” company that helps employees achieve greater financial health with regular cyber-alerts that cost them nothing.
Their bosses pay between $50-100 per user per year to link their bank, credit and retirement accounts; after that, individuals receive recommendations for more competitive credit-card interest rates than the one they’re currently carrying; or perhaps a nudge to consider a higher 401(k) contribution to take maximal advantage of their employer match; even a suggestion to open a pre-tax health-saving or flexible-spending account to better manage their medical expenses.
HelloWallet claims its customers (who tend to skew younger) who use the service for a full year increase their savings by 29%. That can certainly add up over the course of a long career.