Enhancing Financial Wellness

Prudential’s financial-wellness programs demonstrate its deep commitment to enhancing financial wellness.

“Financial wellness isn’t always a matter of having more money. It’s a journey that requires a combination of smarter benefit designs, better investment tools and products, and appropriate advice and guidance.” –Brad Hearn, Prudential Advisors.

 The onus is on us to drive home the importance of financial education.” Brad Hearn, Prudential Advisors

 Brad Hearn, President, Prudential Advisors

As we celebrate National Financial Literacy Month, many companies are shining the spotlight on financial wellness and stressing the need for consumers to show more interest in managing their financial affairs. In a recent interview with Advisor Today, Prudential Advisors’ President, Brad Hearn, shares highlights of a financial-wellness survey recently conducted by Prudential and some of the initiatives the company has undertaken to help Americans achieve a higher level of financial wellness.

 Advisor Today: Please provide a few highlights of Prudential’s new financial-literacy survey.

Brad Hearn: There is a significant gap between real financial literacy and financial confidence and taking actions to improve it. Financial wellness isn’t always a matter of having more money. It’s a journey that requires a combination of smarter benefit designs, better investment tools and products, and appropriate advice and guidance.

According to our survey, more than half of people grade themselves a “C” at best when it comes to their financial literacy, and many of those take responsibility for that (73%). Information overload may be to blame. Two thirds of Americans (66%) say the list of things they need to learn to successfully manage their finances keeps on growing, not shrinking.

But the onus is on us to drive home the importance of financial education and lead the way in providing it, to help clear a path. A lot of that starts with the advisors who are on the frontlines with the tools and solutions to best help the unique needs of their clients.

The need for financial education and advice is more important than ever. Of Americans who have retirement savings and debt, nearly one quarter have more in total debt than in retirement savings (23%), while 15% of Americans say that they have no debt, but also have nothing saved for retirement.

Determining how much monthly or annual income you need to live your desired lifestyle in retirement is a starting point and one of the most valuable benefits of working with a financial professional.

AT: According to your survey, nearly two thirds of Americans don’t have a financial advisor. What is their reason for not working with an advisor?

Hearn: Prudential research shows that 68% of Americans say they don’t use an adviser either because they can’t afford one or don’t have the assets to warrant professional advice. But the truth is, advice is more within reach than ever–and it’s not just for the wealthy. A financial professional can help at various stages in life—whether the consumer is just starting out or nearing retirement–and can work with him to create a strategy based on his timeline, risk tolerance and goals.

It’s critically important that we speak openly about the financial challenges people are facing. It’s important that we drive awareness, educate people and help them understand the options available to tackle their financial-wellness goals because we know that taking that first step is often the hardest, but also the most important.

AT: What are some of the steps Prudential is taking to enhance financial literacy?

Hearn: Prudential is deeply committed to helping Americans achieve financial wellness, and financial-literacy programs and professional financial advice play a key role in helping toward that goal.

One example is the Prudential Pathways program, which offers sales-free, no-cost financial education training for employer clients. With the free financial-education tools provided by Pathways, available through both a digital platform as well as in-person onsite seminars conducted by trained Prudential advisors, we’re helping to tailor financial-wellness education to the unique needs and challenges of the individual.

Another way we’re helping support individuals in finding their path to financial wellness is by joining our peers to create the Alliance for Lifetime Income. Formed by some of the nation’s leading financial services organizations, the Alliance seeks to create awareness about the importance of lifetime income. As one of the founders, Prudential is playing a leading role in launching awareness and education campaigns for consumers and financial professionals.

On a personal note, last year, my son had an opportunity to take a Basics of Finances course in 7th grade.  Many schools don’t offer these types of courses but in my view, offering basic financial wellness courses in school can help with financial literacy.

After some encouragement, he took the course and now has a basic understanding of financial management, which is so important.  He actually enjoyed the class and now has his own checking account that he manages.  In addition, he now has a better understanding of how his dad’s job in supporting advisors helps with financial wellness too.  As you know, courses like this are not taught at many schools, and my hope is that will continue to improve. Having a foundation in financial literacy only helps as we are all are faced with life’s challenges.

AT: Why is it so important for consumers to be more involved in managing their finances?

Hearn: Because we know that planning is critical to meeting financial goals (whether it’s buying a car or a house, paying for college, or planning for retirement). It’s important that people find the method that works best for them. The path to financial wellness differs from person to person, and things like life stage and personal preference will impact how individuals choose to plan for their financial future.

AT: What can the industry do to help consumers show more interest in managing their financial matters?

Hearn: Our challenge is to help individuals translate retirement uncertainty and financial insecurity into actions that help them to achieve financial wellness before and into retirement. Financial wellness isn’t always a matter of having more money. It’s a journey that requires a combination of smarter benefit designs, better investment tools and products, and appropriate advice and guidance. Innovation today is accessibility. It’s about how to make solutions and advice accessible and able to meet a person’s needs across their lifetime.

AT: What three things would you like viewers to take away from this interview?

Hearn: Here are three things viewers should keep top-of-mind:

*Professional financial advice can bridge the gap between financial education and action, and it is more critical than ever on the path toward financial wellness.

*Access is the most important component for consumers– to information, solutions and advice–and we’re committed to providing that across life stage and income, where and how they want to get it.

*We recognize that advisors are increasingly playing the role of financial counselor. There is no one-size-fits-all solution. Financial wellness is deeply embedded across a spectrum of needs and challenges that need to be addressed to produce personalized outcomes.