When preparing for retirement, many financial services employees fare little or no better than their peers in other industries, according to a new industry profile released by MetLife.
More than half (54 percent) of financial services employees surveyed say they are behind schedule for achieving their retirement financial goals, which is above the average (47 percent) for employees across all industries. Only about one-third of employees (30 percent) in the financial industry say they are on track regarding their retirement savings goals.
Despite higher than average pay, employees in the financial services industry (finance, insurance and real estate) have similar coverage levels for basic financial protection coverage (life and disability) as those of workers in other industries.
“These findings highlight a tremendous opportunity for employers,” said Randy Stram, vice president of MetLife Institutional Business. “Human capital is arguably the greatest asset of financial services employers, and retention, therefore, is a high priority. Employee retention is linked with benefits satisfaction. For employers to realize the full retention value inherent in offering a comprehensive set of benefits, their employees must understand and appreciate what they receive.”
“Financial services industry employees’ familiarity with financial products and services does not necessarily equate to an understanding of workplace benefits and personal financial needs,” Stram said. “Employers have the ability to create more potential retention power by bridging employees’ knowledge gap around their benefits.”
MetLife research found that:
• Fewer than half of surveyed financial services employees are confident that they can articulate the difference between worker’s compensation coverage and disability income insurance.
• One in four admits knowing little or nothing about long term disability insurance protection and term life insurance – two of the more common workplace benefits.
• Sixty-one percent of employees surveyed are unfamiliar with variable universal life, almost half (48 percent) are unfamiliar with long-term care insurance and 29 percent are unfamiliar with accidental death and dismemberment policies.
Many lower-income or entry-level employees in this sector are still missing key components of a strong financial safety net. MetLife research reveals that more than 40 percent of employees making less than $50,000 a year in the financial services industry do not have disability insurance, while 34 percent of these employees do not have term life insurance. Additionally, 10 percent of these employees are unsure whether they own disability insurance, and 17 percent are unsure whether they own term life coverage.
On the other hand, highly compensated employees should be considering additional financial protection to cover themselves, their families and their accumulated assets. An unexpected critical illness or need for long-term care services can impact years of savings – and anticipated retirement plans – if individuals have not created a strong personal financial safety net.
MetLife research reveals, however, that over 35 percent of financial services employees making over $100,000 have not considered annuities in order to provide income in retirement; 45 percent of these employees have not evaluated the costs of long-term care for elderly parents or spouses; and nearly half (45 percent) have not discussed how they will afford medical care in retirement with a financial professional.
“For financial services employers, employee retention is the top benefits objective,” Stram said. “Offering a benefits program that can be customized to meet the needs of a diverse workforce delivers greater value to employees and their families and helps employers optimize the success of meeting business objectives.”