U.S. Financial Wellness Benefits Market - Industry Outlook & Forecast 2023-2028

The U.S. financial wellness benefits market is expected to grow at a CAGR of 20.49% from 2022 to 2028.

MARKET TRENDS & OPPORTUNITIES

Increasing Growth in Early Wage Access

Employers are finding new ways to engage their employees and deliver value through new solutions, partnerships, and early access to their earned wages more than ever before. Considering that a major percentage of the U.S. population, or nearly 80%, is living paycheck to paycheck, even a small contradiction between earnings and expenses can thrust them into debt as many fees and bills Americans pay late, and it incurs costs that can add up quickly. For instance, a bank overdraft fee can be over USD 30, and rent payments that are paid beyond the required date can be even heavier. Most individuals have little savings for emergencies, even those much smaller than the ones caused by the pandemic. While several organizations have been forthcoming about advanced wages, some don’t, leaving employees with fewer choices, such as not meeting financial responsibilities, tapping into retirement savings, and high-cost, high-risk payday loans.

Integrating & Leveraging Existing Benefits

Financial wellness has found its place in the benefits space as a natural extension of health-based benefits, which are augmented and made more rewarding through physical and mental wellness programs. This is a good enough reason to mix in financial wellness and leverage an integrated approach for maximum benefits and impact on overall well-being. Furthermore, although no specific definition can round off a financial wellness program, several elements overlap in the current benefits package. Financial wellness programs and benefits differ from the perspective of duration and recurrence.

INDUSTRY RESTRAINTS

Fiduciary Concerns Hinder Efforts

For businesses and organizations, there is a real threat of lawsuits that is fuelling reluctance to implement employee financial wellness programs and doling out benefits. The litigious environment has created a lot of panic among employers about possible repercussions from giving advice that can go wrong or not adhering to legal requirements and financial fiduciary responsibility. Several employers do not vet their services to create financial wellness benefits.

SEGMENTATION INSIGHTS

INSIGHTS BY PROGRAM

The U.S. financial wellness benefits market by program is segmented into financial planning, financial education & planning, retirement planning, debt management, and others. Among these, financial planning accounted for the highest share, followed by financial education & planning. Periodic employer encouragement can motivate employees to use these beneficial programs and lead to more proactive employees with positive outcomes. Vendors can work with top management in companies to implement changes.

Segmentation by Program

• Financial Planning
• Financial Education & Counseling
• Retirement Planning
• Debt Management
• Others

INSIGHTS BY END USER

Large businesses end-user accounted for the highest portion of the U.S. financial wellness market. Large companies have always invested more in financial wellness, recognizing financial anxiety as a particularly serious issue. However, they have only recently started offering a more full-bodied set of voluntary financial wellness benefits, occasionally with discounts or cash incentives, to help employees manage money. This is because leading companies with a diverse global workforce are beginning to see the link between financially well employees and how they work - aka employee productivity.

Segmentation by End-User

• Large Businesses
• Medium-Sized Businesses
• Small-Sized Businesses

INSIGHTS BY DELIVERY

The U.S. financial wellness market by delivery is segmented into online, one-on-one, and group. The one-to-one segment accounted for the highest share of almost 48% in 2022. Organizations use various channels to deliver information to employees for financial wellness benefits. Much of it depends on the size of the employee population, resources available, how employees want the information to reach them, the type of information or counseling, components involved, the density of the workforce in a particular location, and their geographical dispersion. These programs are delivered via in-person sessions, through the intranet, via email, through a screen, or in groups. Utilization varies by delivery and population, along with income.

Segmentation by Delivery

• One-On-One
• Online/Digital
• Group

INSIGHTS BY TYPE

The consumer tools type segment has the largest U.S. financial wellness market share. Consumer tools typically help employees develop financial action plans and budgets, games to facilitate saving, programs that help with debt management, budgeting and bill payments, and other approaches that can help employees understand their full financial picture. While consumer tools aim at providing teachable moments, one of the paradoxes is that change takes longer and happens slower than anticipated. In addition, a major reason why individuals may want to speak to a financial expert is that it tends to have higher related accountability and motivation.

Segmentation by Type

• Consumer Tools
• Employer Tools

INSIGHTS BY INDUSTRY

The U.S. financial wellness benefits market by industry is segmented into healthcare, financial services, education, manufacturing, public sector, and others. The healthcare industry had the highest market share in 2022. Workplace financial wellness programs in healthcare companies and systems have been going strong in the country because the industry is specifically susceptible to disadvantageous outcomes due to workforce volatility in a system where reliable and consistent care is a priority. Given that the industry’s turnover is almost 21% among the worst across industries, financial wellness benefits are being viewed as a way to drive retention.

Segmentation by Industry

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

REGIONAL ANALYSIS

The Southern region accounted for the largest U.S. financial wellness market share in 2022, accounting for over 34.82%. The Southern region consists of the following major states: Texas, Florida, Virginia, Georgia, and others. It has one of the largest companies and ranks the highest regarding the number of employees in the United States. Furthermore, the primary drivers of health and wellbeing programs in the U.S. are the need to manage workplace stressors like long working hours, the quality of work-life balance, and rising workplace competition.

Segmentation by Region

• South
• West
• Midwest
• Northeast

COMPETITIVE LANDSCAPE

The U.S. financial wellness benefits market is highly fragmented, with several top vendors. Start-ups and employee benefits providers (offering EAPs, healthcare, and insurance) occupy the player space in the market. They are the most recent ones and could have a better track record. However, they are fueling innovation and re-imagining the financial services space, for instance, micro-savings as against savings accounts. The key players in the U.S. financial wellness market include Bank of America Merrill Lynch, Financial Finesse, Mercer, Prudential Financial, and Virgin Pulse.

Key Company Profiles

• Bank of America Merrill Lynch
• Financial Finesse
• Mercer
• Prudential Financial
• Virgin Pulse

Other Prominent Vendors

• Aduro
• Ayco
• BaySport
• Beacon Health Options
• Best Money Moves
• BrightDime
• BrightPlan
• Brightside
• DHS Group
• Edukate
• Enrich
• Even
• Financial Fitness Group
• Financial Knowledge
• FinFit
• FlexWage
• FutureFuel.io
• GoPlan 101
• HealthCheck360
• Holberg Financial
• Health Advocate
• Integrated Wellness Partners
• LearnLux
• LifeCents
• Limeade
• Money Starts Here
• My Secure Advantage
• Origin
• Payactiv
• Pro Financial Health
• Purchasing Power
• Questis
• Ramsey Solutions
• Salary Finance
• Savology
• Sqwire
• SoFi
• The Financial Gym
• Transamerica
• Your Money Line

KEY QUESTIONS ANSWERED:

• How big is the U.S. financial wellness benefits market?
• What is the growth rate of the U.S. financial wellness benefits market?
• What are the growing U.S. financial wellness benefits market trends?
• Which region holds the most significant U.S. financial wellness benefits market share?
• Who are the key U.S. financial wellness benefits market players?