Liz Davidson told friends 15 years ago that she was
quitting her job running a hedge fund, they thought she
Davidson revealed her new career plan, and they thought
she was really nuts.
launched a company that gives financial guidance to
average Americans through their jobs. Employers hire
Financial Finesse Inc. to provide group workshops and
one-on-one counseling to workers on topics such as debt
management, college savings and elder care.
was a noble goal but a long shot.
employers offered only bare-bones advice on 401(k)
plans, much of it online to limit expenses. It was
unclear whether companies would pay for broader
education, especially more costly personalized guidance
from financial planners.
thought I was insane," Davidson said. "People
didnít understand the business because there was
nothing really like it. How could there be demand for a
business that people didnít really understand?"
the El Segundo, Calif., company has more than 500
clients around the country, including Aetna, Nestle and
the NFL Players Association. Financial Finesse is
profitable and has experienced its best growth in the
past three years, Davidson said.
employers pay for planning services is still a fairly
new concept, with only a few companies in the field. But
experts say the workplace-based model has the potential
to improve the sometimes dreary finances of regular
may be the one best mechanism for reaching the mass
market in an efficient way, the most effective
way," said Sheryl Garrett, head of a national
network of fee-based planners.
company has benefited from the concern among some
companies that employee financial troubles could cut
into the corporate bottom line.
stress can lead to absenteeism or increased medical
costs. And employers donít want workers with
inadequate retirement savings to stay on the job solely
for a paycheck.
knows the person in the office whoís financially
stressed," said Annette Grabow, retirement benefits
manager at M.A. Mortenson Co., a Minneapolis
construction company. "Theyíre on the phone half
the day, with either family members or debt collectors,
trying to straighten out and fix (their finances), and
theyíre not productive."
growth of Financial Finesse is a tacit acknowledgment of
the deep gaps in Americansí financial literacy.
studies have shown that many people lack even a
rudimentary understanding of personal finance and
investing. Vast numbers of Americans are mired in debt
or have meager retirement savings.
financial-services companies over the years have tried
to bite off pieces of the advice business, typically
with limited ambition and success.
of advisors fawn over wealthy people. But itís hard
for middle-class and even upper-middle-class people to
find knowledgeable and trustworthy assistance.
study found that middle-income people often distrust
financial advisors and donít even realize that they
should seek help.
advisors who hold themselves out as financial experts
have spotty training and undisclosed conflicts of
interest, critics say. Some brokers, for example,
recommend investments that pay them high commissions
rather than whatís best for clients.
who look hard enough can find skilled and objective
financial advice, but it doesnít come cheaply.
Depending on the services, financial planners can charge
several hundred to several thousand dollars.
consumers are unwilling or unable to shell that out.
clearly a huge need for the middle class and the masses
to have access to financial planners, but they have
trouble finding advisors," said Michael Kitces,
research director at Pinnacle Advisory Group in
Maryland, who writes a planning industry blog. "And
there are huge numbers of advisors who want to serve the
middle class but they canít get enough clients to make
42, understood the obstacles when she started out. But
she preferred that to running her small San Francisco
the rich become richer is not necessarily the most
satisfying thing," Davidson said. "Even if we
had a good quarter, no one ever said, ĎThank you. My
life is better because of you.í "
who graduated from the UCLA Anderson School of
Management in 1997, got the idea for the company after
doing informational seminars for friends. She realized
that even well-educated people were often clueless about
financial planners donít recommend specific
investments. Instead, they give personalized guidance
over the phone or in person, typically to any employee
on any subject, as often as needed. (Some employers sign
up only for annual seminars, though most pay for
unlimited financial coaching of workers over the phone.)
Finesse is paid by employers ó individuals canít
even hire the company directly. To eliminate conflicts
of interest, Davidsonís planners donít sell
financial products or get commissions.
objectivity appealed to the NFL Players Association,
which wanted advice for its members, often retired
players navigating post-career finances.
great to have a place where a player can have a second
set of eyes," said Dana Hammonds, the unionís
director of player affairs and development. "They
say, ĎIím going in to meet with my (financial)
advisor on Monday. What should I ask?í or ĎMy
statement doesnít look right. Can you help me?í
at other companies have sought advice for a variety of
her employer, Michelle Sirois got a planner to help her
through a divorce. She got guidance on budgeting,
mortgage issues and taxes to ensure that she could
maintain her house on a single income.
certainly could have researched it myself, but there are
only so many hours in the day," said Sirois, 43, an
actuarial consultant at Aetna, the insurance giant.
M.A. Mortenson, the construction firm, Jennifer Mukhtiar
attended workshops on estate planning and mid-career
financial needs. She immediately noticed the difference
from the boilerplate 401(k) presentations at past
in my career I remember the typical black-and-white
slides of ĎIf you invest $10,000 today, hereís how
much it will be worth at retirement,í " said
Mukhtiar, 47. "It was ĎOK, fill out this
paperwork and hereís how you sign up and itís up to
the biggest challenge, experts say, is convincing
employers that improving workersí finances improves
the bottom line.
as some companies have moved to assist workers, others
have gone the opposite way.
Inc., for example, now matches 401(k) contributions only
at the end of the year, rather than every pay period.
That saves the cost of making contributions to workers
who leave the company midyear.
hard part is getting enough companies to have faith that
this does benefit their employees and itís worth the
investment," Garrett said.
are recognizing that they have to provide support,"
she said. "The cost of not providing support, in
terms of the impact of financial stress on employees and
delayed retirement, can be a major cost."