Thursday, April 21, 2011

The Workplace Financial Fitness Toolkit

On April 12, 2011, we launched the Workplace Financial Fitness Toolkit. With the support of the New York Stock Exchange (NYSE) Foundation, Punam Keller, from the Tuck School of Business, and I have designed a customized workplace financial fitness program using an innovative and practical approach based on well-established financial literacy and marketing principles. Every employer interested in starting a financial education program can use this toolkit.

Lack of financial literacy in the United States is well documented—the research tells us that most people lack basic financial knowledge and are not well equipped to deal with complex financial decisions. As a result, many individuals have difficulty making sound financial decisions. Remedying this problem is terribly complicated, one reason being that individuals have different needs, different preferences, and face different economic circumstances.

The workplace is an ideal venue to provide tools to facilitate financial decision-making. The goal in developing the toolkit is to provide a checklist of recommended financial fitness action items along with marketing materials to encourage employees to improve their financial fitness.

In essence we have developed two toolkits: an Employer Customization Toolkit and an Employee Customization Toolkit. The Employer Customization Toolkit contains (1) the Employer Checklist, (2) motivational information about the importance of every employer providing or facilitating 10 key steps to financial fitness, and (3) additional materials to help employers with implementation of the financial fitness recommendations. The recommendations are divided into three stages: basic, intermediate, and advanced. Employers who currently offer financial fitness assistance can use the Employee Customization Kit to motivate employees to participate in the financial fitness programs offered.

The Employee Customization Toolkit is designed to empower employees to improve their own financial fitness. The Employee Customization Toolkit contains (1) the Employee Checklist, (2) motivational information on the importance of every employee improving aspects of their financial fitness, and (3) implementation guidelines for each recommendation. Like the Employer Customization Toolkit, the employee toolkit allows individuals to customize or select the fitness recommendations that suit their needs.

Developing the program was a challenging task. But we very much benefitted from the guidance of Michelle Greene, the VP, Head of Corporate Responsibility, executive director of the NYSE Foundation and a champion of financial literacy. We also assembled a team of experts to help us in this work. We benefitted from the insights of academics like Robert Clark (North Carolina State University College of Management) and Eric Johnson (Columbia Business School), financial literacy leaders like Carrie Schwab-Pomeratz and Michael Townsend from the Schwab Foundation and Ted Beck from the National Endowment from Financial Education (Carrie and Ted also serve on President Obama’s Council on Financial Capability), Janet Parker from the Society for Human Resource Management (a former member of President Bush’s Council on Financial Literacy), and Jennifer Wayman from Olgivy PR Worldwide (one of the creators of the The Heart Truth, an award-winning national awareness campaign about women and heart disease with its signature Red Dress symbol).

On April 12, not only did we launch the program but we also rang the opening bell at NYSE, an experience I will never forget. And yes, we took a lot of pictures which are now posted on the FLC’s Facebook page. You can also watch a video of the opening bell ceremony (did I say it was memorable?).

We hope many companies will embrace the Workplace Financial Fitness Toolkit and customize it to meet their goals of assisting employees in the attainment of financial independence and security. The program can be found here:


Josh Verienes said...

Lack of financial literacy is a worldwide problem, not just in the US.

The first time my eyes were opened was when I read the book "Rich Dad, Poor Dad" by Robert Kiyosaki, in the age of 17. This is when I understood that my financial education is dull but also that my parents' too (and other parents and adults around).

Your cause is good, hope you'll succeed and open the way for financial education at an early age.

Steven Bulmer said...

There seems to be a lot of studies that address small bits of the Financial Literacy topic. The challenge is that lack of Financial Literacy is a global problem. All countries of the G-8 and G-20 have programs but there is no framework for Financial Literacy. That is something that would require all politicians and scholars to all nod in agreement at the same time. It is not happening presently.

However, there are common threads. One identified is basic numeracy skills. Basic arithmetic skills are directly correlated to the capacity to manage money properly.

There are more but they are tied up in the taboo topic of Financial Psychology. Only when concensus is reached on how to deal with our Psychological aversion to managing money properly will we be able to build the framework to expand Financial Literacy.

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