Workplace planning boost is one upside of the downturn

The financial crisis is helping to boost financial planning in the workplace.
Fifty corporations now use employee financial services from Ernst & Young LLP, a nearly 20% increase from this time last year, while PricewaterhouseCoopers LLP’s financial-education corporate clients increased 25% to 30 at the end of last month, from 24 last summer. Both firms are based in New York.
About 2 million employees are eligible to use Ernst & Young’s financial services as a benefit, and about 700,000 employees are eligible to use PricewaterhouseCoopers’ services.
“There’s been much more interest,” said Lynn Finkelstein, the national director of Ernst & Young’s employee financial services practice.
‘COUNTERINTUITIVE’
“It’s somewhat counterintuitive. While companies want to cut costs and expenses, they also want to get out in front of this and help their workers with this benefit, because if their employees are obsessing about their finances, they’re not being productive,” Ms. Finkelstein said.
“Companies are realizing employees are struggling not only with dealing with investing in these unique and uncertain times but are also struggling with everyday cash flow and debt management,” said Kent Allison, a PricewaterhouseCoopers partner who heads the firm’s personal-financial-services unit in Florham Park, N.J., and is also national leader of its financial-education practice.
Ernst & Young employs about 100 professionals in its employee financial services practices, said Ms. Finkelstein, while PricewaterhouseCoopers employs about 300, according to Mr. Allison.
About 70% of Ernst & Young’s financial services professionals are certified financial planners, and all are required to have a Series 65 license, she said. PricewaterhouseCoopers’ financial education professionals are either CFPs, certified public accountants or attorneys, according to Mr. Allison.
Both Ms. Finkelstein and Mr. Allison said that they expect their firms to hire more planners in the coming year.
“Growth will probably be unprecedented,” he said. “It’s part of a push by employers to have employees be more self-sufficient, and the need is greater now than it’s ever been.”
Not surprisingly, employee interest in the financial services benefit also has risen since the financial crisis began.
“There’s been a high level of concern. The No. 1 question I get, far and away, is: ‘Am I doing the right thing with my investments?’” said CFP Patricia Pearsall-Ramey, a senior planner for Ernst & Young’s Financial Planner Line, which provides phone counseling services to employees.
“The next-biggest area of concern is retirement. People want to know if they are on target to meet their goals and if they’ll need to work longer,” Ms. Pearsall-Ramey said.
“No. 3 is cash management and worrying about debt,” she said.
In addition to investing questions, Mr. Allison said, his planners are being asked questions about mortgage payments, credit card debt and foreclosure.
One of PricewaterhouseCoopers’ customized programs, Healthy Money, is being offered at The Pepsi Bottling Group Inc. in Somers, N.Y., which has more than 28,000 employees.
Workers are offered confidential phone counseling, access to a personal-finance website and workshop sessions that cover a wide range of financial topics, including college savings, insurance needs and refinancing a home loan.
The program is “designed to be a personal-financial-fitness program to help employees take control of their personal financial situation,” said Pepsi Bottling Group spokesman Jeff Dahncke.
This year, the program will put workshops on DVDs to target different employee demographics. he said.
Financial planners have nothing to fear from these services for employees, according to the companies providing them.
“Our goal is not to supplant an existing relationship,” Ms. Pearsall-Ramey said.
WORKING TOGETHER
“We may work with a client on college funding, for example, but we don’t sell any products. If the client doesn’t buy a 529 college saving plan directly, they will go to an adviser to buy an adviser-sold plan,” Ms. Pearsall-Ramey said.
“Similarly, we may be discussing insurance and recognize a gap in their coverage, and they will then go to an agent,” she said.
Tom Orecchio, principal of Modera Wealth Management in Old Tappan, N.J., said that it has a client who uses a similar financial planning employee benefit service, provided by The Ayco Co. LP of Saratoga Springs, N.Y.
“We talk to the Ayco planner directly and have a better understanding of our client, especially regarding her employer’s benefit package,” said Mr. Orecchio, who is a past chairman of the National Association of Personal Financial Advisors of Arlington Heights, Ill.
“We see it as a positive,” he said. “Anything that increases the amount of legitimate financial planning out there is a plus.”