U.S. Financial Wellness Benefits Market - Industry Outlook and Forecast 2021-2026

INDUSTRY INSIGHTS

The U.S. financial wellness benefits market size by value to cross USD 835 million by 2026, growing at a CAGR of 14% during the forecast period. The U.S. financial wellness benefits market has undergone a major shift with employees in the US changing their thinking toward financial wellness, especially after the outbreak of the COVID-19 pandemic in 2020. The pandemic has driven wellness benefits such as futuristic planning, flexible pay, and loan repayment schemes backed by employees. COVID-19 has led to new realities and advancements in the market. Pay raises in the near future have been affected as companies face unpredictable revenue streams and budgets. As employers begin to realize that monetary benefits are not the only way to retain employees, they have become inclined to offer customized schemes. Larger employers are offering wellness programs in sync with retirement plans. Companies also focused on certain other benefits such as debt counseling services and emergency savings accounts during the pandemic. Since millennials and the older workforce nearing retirement age are the ones most struggling, wellness programs that tend to them are expected to witness the increased engagement.

SNIPPETS

• Advanced algorithms and data analytics are helping employers determine if employees are taking actions, making behavioral changes, and whether they need guidance and a push for accomplishing their goals
• Vendors are focusing on dealing with a specific or one more financial stressors – i.e., a looming debt or retirement readiness
• Debt management programs are likely to grow at the highest CAGR with the most predominant benefit being counseling to help workers avoid consequences such as foreclosure and repay outstanding loans.
• Large businesses are likely to contribute USD 380 million by 2026 to the U.S. financial wellness benefits market share.
• Online wellness programs are witnessing high traction due to high benefits such as personalized content, account aggregation option, and progress tracking.

U.S. FINANCIAL WELLNESS BENEFITS MARKET SEGMENTATION

This research report includes a detailed segmentation by

• Program
• End-user
• Delivery
• Type
• Industry

INSIGHTS BY PROGRAM

The fluidity of the current pandemic-afflicted landscape has increased the importance of financial planning programs among employees. As employers increasingly realize the impact that it can have on business in terms of performance, they are onboarding financial planning advisors and asset managers, thereby boosting the growth of the segment. The pandemic is also driving the demand for planning to build savings in preparation for future emergencies. Financial wellness tends to be a way of life for most workers in the US with monetary challenges expecting not to go away anytime soon, making the market a lucrative one.

US nationals are not financially savvy. This has developed a barrier for financial wellness benefits to witness uptake. The COVID pandemic has brought into view the need for monetary literacy as a survival skill to navigate difficult situations. Given that counseling and education could help employees develop more mobility and arm them with the knowledge, skills, and confidence to make their way through complex monetary scenarios, the education and counseling segment is expected to witness a lot more interest. Almost 26% of employees want access to unbiased counselors, which is among the most widespread demands in the market.

INSIGHTS BY END-USER

Large businesses are blending physical, mental, and financial programs to provide holistic support to their employees. The concept of “health meets wealth” is gaining immense traction in the market because both are largely interdependent and healthcare costs are continuing to rise as well.  However, a major challenge for large-sized companies is that almost 35% of workers have no clue that their employer offered benefits in the financial wellness realm. Participation rates are often low as well. The segment is expected to witness the growth due to the growing realization among employers to observe the link between financially well employees and how they work – aka employee productivity. Nearly 40% of employers are thus offering wellness programs with about 30% citing “differentiation from other employers” as the second most important reason. 

The contribution of a medium-sized business to the financial wellness benefits market is expected to reach over $351 million by 2026. The benefits are gaining momentum as an economical way to attract and retain employees, with nearly 70% of employers offering them to keep their workers happy. Digital and information platforms are combining to offer holistic guidance and work independently of other providers of financial services in these businesses.

INSIGHTS BY DELIVERY TYPE

Although the growth rate of personalized financial wellness programs is expected to grow at the highest rate, online/digital wellness programs are not much beyond. Personalized counseling for finances is growing a rapid rate since advisers can easily adapt to the needs of the employee. They are particularly popular in workforces with highly diverse employees. Employees are asking for one-on-one interactions more than ever in order to help navigate finances, which increasing advisers to meet employees regularly, thereby driving up revenues of one-on-one programs. 

Since online or digital deliveries eliminate the hassles of manual processes, employees are able to engage with these programs meaningfully. By providing instant access, employees are choosing to stick by rather than forgo the process altogether. Applications are going beyond simply delivering content or serving as a budgeting tool to coming to the rescue in dire situations. Fintech apps, for instance, are on-demand applications that allow employees to draw money when they need them for smaller expenses. However, low engagement is often a complaint when it comes to online wellness.

INSIGHTS BY INDUSTRY

Workplace financial wellness programs in healthcare companies have been going strong in the US because the industry is specifically susceptible to disadvantageous outcomes due to workforce volatility in a system, where reliable and consistent care is a priority. The Gen Z and millennial workers are driving this market, showing interest in budgeting, investment advice, debt management, student loan repayment, retirement income planning, college expense planning, special needs planning, and protection.

The US financial services industry has been tipped over by the coronavirus pandemic, forcing brands operating in the market to maintain margins in a low-interest-rate environment. The companies are thus hard-pressed for funds that can be allocated to wellness programs. However, the financial industry is notoriously unpopular for its high turnover rates. With work-life balance has often gone for a toss in this industry, professionals such as fintech analysts are working up to 70 hours per week, companies in this space have focused on offering holistic wellness programs.

INSIGHTS BY TYPE

Consumer tools are gaining popularity as employees increasingly want solutions to their grievances in an instant. Therefore, there is an increasing demand for wellness services that include accountability prompts and personalized delivery of content. Firms are investing in a combination of high-touch and high-tech. Technology is increasingly being used to optimize financial health holistically and seamlessly integrate it into the employee’s daily life and schedule. 

Employer tools are gaining traction from leveraging talent analytics to gauge what is vital to the workforce to using employee engagement surveys, which is increasing dynamism in the segment ever before. Therefore, offering structures and tools for program architecture and improving decision making are key importance to success in the market. Almost 90% of employers have taken at least one step in the direction of finding out their workforce’s monetary needs with over 70% looking at employee data and over half of them using qualitative data. These benefit decisions are thereby being powered by people's data.

INSIGHTS BY VENDORS

With the future of financial wellness benefits expected to be governed by targeted communication, integrated, multichannel approach, accessibility to reliable resources, and personalized learning paths for exponential engagement, the US financial wellness benefits market is witnessing a steady entry of EAP, healthcare, insurance, and employee benefits service providers. The market has over 300 players. Vendors compete in terms of cost, ease of implementation, brand value, expertise, breadth of benefits, customization ability, employee communications, skilled workforce, and technological capability.

The U.S. financial wellness benefits market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

Programs

• Financial Planning
• Financial Education and Counseling Services
• Retirement Planning
• Debt Management
• Others

End-user

• Large Businesses
• Medium-sized Businesses
• Small-sized Businesses

Delivery Type

• One-on-One
• Online/Digital
• Group

Industry

• Healthcare
• Financial Services
• Education
• Manufacturing
• Public Sector
• Others