Top 5 myths about financial planning in the workplace

Financial well-being is an increasingly important topic for HR teams who want to help their employees improve their lives outside of the office. However, not all attempts at improving financial well-being are created equal!

Here at Hatch we believe strongly that financial planning is the very best way to help employees engage with their finances and make the most of their money. So, today we're going to tackle the 5 biggest misconceptions we hear from employers who aren't sure about introducing financial planning in their workplace.

They are as follows:

1. People aren’t bothered about it/don’t care

2. It’s expensive

3. Financial planning has no correlation to general well-being

4. You have to have a lot of money for it to be worth it

5. It’s time intensive

 

1. People just don’t care about it

Often when we talk to employers about financial planning they assume that not many people in the workplace will be interested.

Maybe the financial well-being benefits they already offer haven’t had good take up, or maybe they don’t really understand financial planning themselves.

The thing is, people rarely engage with specific aspects of their finances unless there is a driving factor behind it; by driving factor I’m talking about a goal. Start talking about specific financial products and people are likely to switch off. However, if you change tack and start talking to them about their plans and goals, they engage much better.

It’s the reason we always start with asking people about the goals and the plans they have. If you engage them there you’ll engage them with financial planning. After all, who doesn’t want to make sure they know how to achieve their goals?

People do really care about financial planning. They love having that feeling of purpose and they get a great sense of relief having something in place that helps them achieve their goals.

The number of people that after an initial planning session say something along the lines of ‘This has been playing on my mind for so long, it’s such a relief to actually get a plan in place and have something to start working towards,’ proves to me that they more than care.
 

2. It’s expensive

Financial advice and planning has traditionally been out of reach for many due to the fees involved. The world is changing however and there are options that are making financial planning and advice more accessible to the mass market and not just the wealthy.

Hatch for example can offer financial planning and coaching to the employee for as little as £44 a year!

Given that we regularly show how our clients could be hundreds of thousands of pounds better off by retirement, it's clear that you don't have spend big in order to put yourself in a much better financial position down the road.
 

3. Financial planning has no correlation to general well-being

This is possibly the most surprising misconception in my eyes. I doubt anyone will ever go through life not experiencing a detrimental effect on their well being caused by something finances related.

There will always be lows and times where things don’t go to plan but you will be much better prepared for them and able to cope if you have a plan in place.

I have spoken to so many people who have control over every other aspect of their life but the one area that keeps them up at night is their finances. One of the biggest reasons for this becoming a problem is that people just don’t know where to go for help.

One client who was quite the high flying young professional, looked in complete control from the outside. Inside however he was losing sleep every night because he was drastically overspending each month and genuinely had no idea how to fix it.

What kind of an effect do you think someone’s general well being has on their capacity to work? If there’s an employee who’s worrying about whether they can pay the mortgage this month then they’re probably more than a little distracted.

Sound financial planning has a very strong correlation to someone’s well-being as it is the major player in someone’s financial well-being. It is not something to be ignored!
 

4. You have to have a lot of money for it to be worth it

An important distinction to make is the difference between financial planning and wealth management. Classical financial advice has often focussed on the latter which is why people often think they are not in a position to get any help with financial planning.

The most important time in your career to start financial planning?

Right at the start.

Wait, that’s when you’re likely to be in the weakest financial position. How does that make sense?

It all comes back to having a plan. It doesn't matter how much you earn or how much wealth you have already. It matter what your goals are and how best to achieve them through financial planning.

Who can benefit from financial planning? Anyone who wants to be on track with a goal, but doesn't know how to do so. Wealthier people have more money and therefore might have more they can do with their money, but even someone who wants to buy their first house or save for a rainy day will benefit from financial planning.
 

5. It’s time intensive

A lot of people assume it takes months to put a financial plan in place.

You can receive your first financial plan from Hatch after a 20 minute call with a coach, and then a day or so for the coach to make the plan.

Once you have the base plan, that's something you can use as a starting point to evolve the plan as your intensive thinking is done in the background.

Yes your circumstances will change over time and thus your plan will need to be adjusted, but your core values that shape your planning will usually stay the same. Your goals will naturally change as and when you approach different stages in life e.g. buying a house, starting a family etc.

So what should I as an HR manager do about this?

Hopefully you’ve seen the huge value financial planning can have.

Make sure your financial well-being benefits tick the following boxes:

  • Affordable to entry level employees

  • Caters for all stages of life

  • Holistic

  • Includes financial planning

Check out the Hatch page if you’re interested in learning more about Hatch and offering it to your workplace.


 
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Caspian Paget
Senior Financial Coach at Hatch

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