Financial wellness benefits are a major trend in 2022, as employers look for new ways to help defray the financial stress caused by rising healthcare costs, record inflation, and economic volatility. Classic benefits like the 401(k) and health insurance simply aren’t enough to insulate employees from the burden of out-of-pocket costs and they don’t help with nearer term financial challenges like student loan debt and saving for a child’s education.
You may know Betterment at Work for their low cost automated investing services, but Kristen Carlisle is looking to do more. Kristen is a veteran of the B2B technology industry with over 15 years of experience with companies like Yieldbot, Meetup, AOL, and Google. She’s now the General Manager at Betterment at Work, where they are looking beyond the 401(k) to make it easier for small and midsize employers to offer a range of differentiated benefits such as 529 plans and solutions to help employees shoulder student loan balances
We chatted with Kristen to hear about how she’s building Betterment at Work into a full-fledged financial wellness toolkit that can help employees save for retirement, build up college savings, and pay down student loans.
Challenges with Traditional Financial Wellness Benefits, and how Betterment at Work Solves Them
Kristen highlighted several pain points around the 401(k), the most common type of traditional financial wellness benefit.
For employees, the 401(k) has high fees associated with it and is often difficult to understand when it comes to investment selection. While the 401(k) is an essential savings tool for employers to offer their teams, it often has outdated online interfaces and investment options, and it doesn’t tackle all the issues that really drive financial stress for employees today. In the midst of booming student debt and the decline of pensions for everyone across Gen Zs and Boomers, employees today are facing underfunded retirement across the board. This is because when employees are not able to understand financial wellness benefits and plan for their past, present, and future financial concerns, they are not set up for success.
On the employer side, the 401(k) can be extremely difficult to administer due to complex compliance and administrative requirements. This as a result creates a higher barrier to entry, limiting adoption. In a time where employers at HR teams are more burdened than ever before, managing workforce changes driven by the pandemic and the Great Resignation, an easier-to-implement alternative has never been more needed than it is now.
How Betterment at Work Leverages Technology to Set Employees Up for Financial Success
Kristen and her team saw a huge opportunity to help employers and employees by providing them with not just a low cost and high quality 401(k) offering, but also an integrated way to look at their finances across multiple different goals as they plan for retirement.
Betterment at Work is a holistic savings and investing solution that is meant to empower employees on their journey to financial wellbeing using their 401(k) as the foundation. They’ve created technology with today’s employees in mind that shortens the process around setting up a 401(k) to just a few minutes. They focus on goal-based investing, so that employees can articulate their goals, make savings and investment choices accordingly, and measure their progress.
Kristen highlighted, “there's so much work that we've put into our technology to make it look that easy, because it can otherwise become incredibly overwhelming. That's one of the reasons why people sometimes put it to the backburner and don't prioritize how to actually save for their futures. And we know one size does not fit all.”
Betterment at Work enables employers to administer their benefits at a low cost, which is one of the highest barriers for a lot of small and medium sized businesses. What’s more, Betterment at Work streamlines administration by doing things like integrating with payroll providers, such as ADP Workforce, Workday, and others, to allow them to make that process easy for the employer with as little overhead as possible.
Why Betterment at Work Looks Beyond the 401(k)
With Betterment 401(k), employers can ensure they're supporting the financial needs of their employees at every stage of saving for retirement. A low-cost, easy to administer 401(k) is critical for employers who want to remain competitive while trying to attract and retain talent. However, today’s employees need more than a 401(k) account.
Amidst the Great Resignation and Reshuffle, there is increasing evidence that employees are demanding more financial support from their benefits packages for other significant financial hurdles such as paying off student debt and saving to put kids through college.
One of the most important examples is student loans. Betterment at Work recently ran a survey that revealed that 83% of employees believe their employer should be responsible for at least a quarter of their student debt, and 24% will consider leaving their current role for a new one with student loan benefits. As newer generations come into the workforce dealing with increasing student loans and financial hardships, financial wellness offerings that address student debt will become increasingly important. This is why Betterment at Work has a sharp focus on student loans and 529 plans alongside their 401(k) offering.
Kristen’s Recommended Resource
On every episode of Better Benefits, we ask our expert guests for a book or resource they’d recommend to others working in the benefits space. This week, Kristen recommended:
The Financial Wellness Mandate: Be The Employer of Choice by Offering the Benefits Today’s Workers Want and Need Most, by Daniel Bryant. By unpacking the challenges of today’s workforce and what they look for in benefits, this book is a must-read for benefits advisors and employers. Bryant drives home the idea that employers who take the time to understand the financial obstacles employees face and the most important trends shaping workplace benefits are the ones who will win the war for talent and improve financial outcomes for both workers and businesses alike.
If you’d like to connect with Kristen you can message her on Linkedin.
Note, this episode is for informational and educational purposes only. Kristen Carlisle and Betterment at Work are not endorsed, affiliated with, nor compensated by Brella Insurance Inc. To learn more about Brella, check out our plan and get in touch.