Defining the Value

Discussing “Financial Wellness” typically includes a focus on individuals. This concept has recently gained much attention across the financial industry. Yet, even with its rapid rise to prominence in the retirement marketplace, the phrase “financial wellness” still lacks a universally accepted definition. Some organizations define it as being knowledgeable about various retirement and investing concepts, while others think it applies to financial behavioral change around more holistic topics such as budgeting, debt management, and even estate planning.

Framing Consumer “Financial Wellness”

Despite the various definitions, most professionals involved with financial wellness agree that an effective program benefits both the employers offering it, and the employees who participate. 

One organization that has explored the concept extensively, and developed numerous resources around financial wellness, is T. Rowe Price.

In its “Wellness Works” presentation, T. Rowe Price defines financial wellness as the ability of individuals and families to manage daily finances while setting short- and long-term investment goals. While individual behaviors, discussed in more detail later, are vital to achieving system-wide wellness, we will spend more time building the case for wellness at a higher level—examining quantifiable return on investment that translates directly to the bottom line for an organization. In that context, we will frame consumer “financial wellness” as the state of being protected against risks that are unique and may have significant financial consequences. Continue reading.....