Storytelling About NUDGE With Reagan Bonlie

William Tincup: [00:00:00] This is William Tincup and you are listening to the Use Case podcast. Today we have Reagan on from Nudge, and we’ll be learning about the business case or the use case, or sometimes people call it the cost benefit analysis of why is customers and prospects select Nudge. So Reagan, would you do us a favor and introduce both yourself, but also introduce

Reagan Bonlie: Nudge.

Absolutely. Thanks so much for having me William. Sure. Great to be on here. So happy to give you a background to me and nudge. So I am a former JP Morgan, executive w was with the company for 12 years. [00:01:00] Traverse through many roles helping clients one-on-one through their financial journeys, helping them achieve their financial goals.

I was at one point a financial advisor in Manhattan. And then Ended up managing a three, 4 billion team in upstate New York overseeing various different VPs of investments. So throughout that journey, I realized that there’s a lot better ways to help people achieve their financial goals.

And there’s some challenges with. Distributing quality financial advice. So the Nudge team came together former finance and technology executives that are passionate about helping people achieve their financial goals. And our goal is to solve some key personal finance challenges for individuals through robust technology.

And we’ve found that our technology as an employee wellness benefit is a match made in heaven, and that’s because we’re solving some of those fundamental challenges as it relates to retirement [00:02:00] savings and their paycheck is really where that problem starts.

William Tincup: When most people think wellness, they obviously think of health, but the way that y’all nudge is thinking about it is more of the financial wellness which also gets back to health and mental health.

When you think about it, a lot of these things are kinda linked together. So let’s go through the product itself. Where do, obviously you go through the employer to the employees and it’s served up to them. What are some of the what are some of the features of the

Reagan Bonlie: product?

Yeah, absolutely. And just quickly touching on that wellness piece, it is, one of the biggest. Components or causes of stress is right, is finances. And that’s something that, not only we recognize from a health, mental health standpoint, but employers are recognizing this as well, HR professionals.

As it relates to the product, are the at a core of what we do is connecting people’s current financial behaviors and activities. With their financial goals, [00:03:00] retirement being of the biggest portion. So making sure that they are on track towards achieving those goals. So whether it’s retirement or putting their kids through college or buying that that next home, or making sure they have enough save for travel expenses when they ultimately retire.

If I were to put an analogy to it I took my four year old bowling the other day and he was throwing gutter ball after gutter ball until someone finally came up and put up the bumpers, right? And so we’re, so nudge provides the guardrails and when it comes to something as, as important as your finances, you wanna make sure you’re throwing strikes.

So no matter your level your skill level and your financial acumen, you wanna make sure that you have those guardrails. And it’s, think about. You’re 401k you put in a 3% contribution, and then maybe your employer matches that 3% and it’s okay, what does that really do? You know when you get to retirement, is that enough?

Is it 3%? Is it 4%? Is it 6%? And that really depends on the person. Do I want to retire [00:04:00] in Panama or do I want to live a modest life? And what comes with that? Is it a big travel budget? Is it, putting my kids through college along the way? So we help people make sense of those things, the mechanics of that.

And then there’s a lot of other things that we help employee employees with throughout the way, whether it’s. Building up an emergency fund, whether it’s paying down debts, whether it’s, strategically saving for that college fund, like I mentioned. So there’s a number of different components that we guide through people through with along the way, but at our core, it’s really making sure that they are on track towards achieving those long-term.

Long-term goals. You

William Tincup: know, it’s interesting because, this is something, it’s a failure of Yeah, I wouldn’t say parents. Let’s just go ahead and blame the schools. It’s easier that way, but it’s like when I went through high school, There was no financial literacy class. Very true.

Very true. My parents were savers, so I got to learn a lot of it from home. That’s, that was great. But at the same time, I’d look at my peers and, not [00:05:00] all, not everyone had this, the like literacy, like we have English literacy. We have a math literacy but there’s no financial literacy.

So some people, had credit cards when they were 16 and understood. Had a checking account and understood credit. Like my brother older brother, he has understood credit since I, I think he popped outta the womb understanding, how the credit agencies worked and has a, I think, perfect credit rating.

I. On the other end of the spectrum, really didn’t understand credit until I was in my thirties. So you’re not alone. Yeah. So like how do we, because cuz obviously employees are gonna be on a fully on that spectrum, right? They’re gonna, some of ’em are gonna have some knowledge and literacy and some of ’em are just gonna not.

Have any literacy or basic literacy. So where do you, what do you start? I’m thinking of what are the building blocks of building that literacy for, and I’m called it literacy. Nudge, y’all might call it something different.

Reagan Bonlie: Yeah. Yeah. It’s, I [00:06:00] love this topic. So the, on, just talking about the education for a moment.

It’s we’re, as it’s struggling in the United States, we just don’t have enough financial education in grade school. I was talking to some friends of nudge co-learning books and they believe that your financial. Acumen and your beliefs are set at the age of seven.

And we don’t have any financial education. Uhuh, until seven, really not until high school. And it’s only now a partial class or a full class, one full class in, in, in high school. So it’s not enough. We, no, we need a lot more. If you think about Sweden, Norway, Denmark, these are the most financial literate countries in the world.

Every year from grades, from kindergarten through high school, they have financial education, wow. So it’s a stark difference. And then talking about employee financial wellness, hard, real

William Tincup: quick Reagan, as you’ve studied that, what’s interesting is those countries also have [00:07:00] a really good, a high quality of life.

Yes. I don’t know if that’s causation or correlation, however, it’s just as you said that I’m like, these are two countries that are really well thought of places to live. But they also are from a wellness perspective, from a health perspective, they’re really healthy countries.

Reagan Bonlie: Absolutely. Yeah, and I haven’t thought of that correlation. I’m actually going to research it now that we’ve talked about it. I believe if I were to peel back the layer, that onion, it’s probably stress related. Hundred percent. Hundred percent.

William Tincup: I’m right there. So once you figure it out, Tell me if it’s correlation or causation.

Reagan Bonlie: Absolutely. Yeah, I’m gonna look into that. Okay. Another interesting thing from a history standpoint on this is that there, the fundamental change that occurred with savings for employees was when we switched over from pension to 401k. And that’s one of the problems that we’re solving is that there was pensions for decades up until really about the eighties.

And the 401K was [00:08:00] created in 1978. And then what happened is that all these companies flock towards this new system of the 401k. And it’s been said many times that it’s a failed system because It benefited people that were at the high end of the wealth and income spectrum, right? But the others, they didn’t quite contribute to the level that they really needed to supplement their social security.

So again, going back to. Our product and what we solve for are those guardrails. We don’t provide a pension, but we aim to achieve a pension like experience by helping people understand what they actually need to contribute in those 401ks to, to solve their goals. So back to your question, what are the building blocks there?

It is deeply understanding that employee. Related to what they want to achieve throughout their life. What does retirement look like? And it may and may be years or decades away. And that’s perfectly fine. But we help people conceptualize that, what is retirement [00:09:00] down the road?

What are the things that you wanna achieve along the way? What types of cars do you wanna purchase? And, thinking about your maybe children, if you have ’em. What type of education do you wanna provide to them? So we really, really dissect that, for the individual.

And then we align that with their current finances. What does income look like? Expenses. And we, help them solve budgets and provide alerts. We understand assets and liabilities. And then throughout time we. We provide them with nudges, and these nudges will guide them to various different action items that they need to act on to, to make sure that they’re going in the right direction, whether it’s paying down certain debts.

In a certain fashion or it’s setting up an ira or it’s then looking into certain insurance policies now that you’ve had children. So it’s the literacy component. It’s very different depending on the specific employee. And we are able to understand that employee through [00:10:00] the data that they provide, and provide them with very bespoke nudges that are related to them.

William Tincup: So if I, the old model of debt of paying off debt is you start with the one, again, this is dated, but the one you have the least amount of debt and you pay that off, and then you go the next one, there’s a little bit more paid that off, and then you just kinda work your way down to the, the biggest one.

And I, I don’t have any debt, so I it’s been a while, however so like getting people to understand. Where they’re creating debt. Like credit cards are in a really expensive form of debt, I guess there’s a, there’s good debt and bad debt, right? Like your home and paying a mortgage that’s technically debt, right?

But that’s not necessarily bad debt. You just gotta understand what it is. And, I, I guess understanding kind of debt in general, I think gets back to some of that literacy of understanding, APR rates. I guarantee if we went and just man on the street type stuff and asked a hundred Americans, what they’re paying on [00:11:00] their credit card, I’m not sure 90 of them would

Reagan Bonlie: know.

And it’s a scary number too. It’s 20 plus percent.

William Tincup: Oh, yeah. Oh yeah. It’s usually the old trick was they’d give you the first year or first x number of months would be a low rate, and then it would just automatically move up to a higher rate. Exactly. Yeah, that’s we didn’t, my wife and I did this bit after college.

We took all of our credit cards and burned them.

Reagan Bonlie: I love it. I love it. So it’s a great

William Tincup: way to do it. So we basically forced ourself to just go for cash only if it’s not the ATM or if it’s on the checking account. Can’t get it. Absolutely. And so we burned all of our credit cards. It was just a fun bit cause we had a coffee can and like lighter fluid.

We just burned them all. We’re like, all right, now we don’t have ’em. Exactly. It forced us to, it forced as a young couple, it forced us like we’re gonna have to live within our means.

Reagan Bonlie: Exactly.

William Tincup: And I’ll tell you another thing, and I’m, this is the advice, I’m [00:12:00] sure you your team, gives people.

But like when we looked at our first house, 25 years ago, the first thing we did is we went to a mortgage. Oh no. We went to a real estate broker and they maxed out our, they’re like, okay, you can go all the way up to a seven 50. And we started looking at 750,000 homes. We were like 24, 25 years old.

We were like at seven 50,000 homes and like we’re like these mansions and all this stuff. It’s like this is great. Good gut. Exactly. All this stuff. And then we went to a mortgage broker. And we sat down with him as a Greek guy and he said, how much you paying in rent right now for your apartment?

A thousand dollars. Okay, great. 10% more than that. That’s all you get. So what? 11? $1,100. That’s all you get. So find a house where you’re gonna be paying $1,100. Okay? And his reasoning was, You’re gonna have all these other hidden expenses like couches and stuff and all this other stuff. That’s what comes with the house that people don’t think [00:13:00] about.

And right now you can manage a thousand dollars pretty easily. And it’s not gonna be that much of an adjustment. Hey guys, don’t max out, don’t do that, don’t do that to yourself. And I fought it. I fought like, no dude, did you see them in these houses? This is great. And he’s yeah. So he drove me in around Dallas.

Highland Park in particular a really nice neighborhood in Dallas, and he was just like he goes, let me, I’ve written most of the paper in this neighborhood, so let me just tell you second mortgage, first mortgage third, mortgage second. Like he’s going, just driving down streets, pointing at houses.

He’s yep, these people are leveraged. They’re over leveraged, and you don’t need to do that to yourself. Why start off? Exactly. Why don’t, why start off, but this. I had to have this guy explain this to me and I’m in. I’d already been to business school at this point

Reagan Bonlie: I love it.

So

William Tincup: I should have known better, right? I didn’t know better. I can’t imagine what just normal employees are going through today. There’s I got that a nudge, right? I got that great [00:14:00] advice at the time that I needed it. That saved, good god, it saved my we would’ve been upside down easily.

Exactly.

Reagan Bonlie: So I love that. I, it, that’s invaluable advice. And the interesting thing is that he would’ve got, he would’ve made more money if he hundred percent would’ve bought a bigger house. So it’s rare that you get that. And one of the cha, one of the struggles that I’ve always had being in the wealth management business is that there’s the reverse effect.

Dealing with advisors is that you, right? They force you to over save. Not force you, but they always suggest that you save, continue to save more and spend less. But there, there’s the flip side of that is that, sometimes people can’t afford more. That’s right. I think at least giving them the platform where they can really understand what makes the most sense for them.

And that example of buying a house is, it’s crucial. There’s very few even I. It’s even char hard to get that advice from a financial advisor even. But if we give them a platform to really understand, is it 750,000 or is it 500,000? [00:15:00] And what’s that difference? How does that impact when you retire?

Because if you buy that $750,000 house, maybe you’re not retiring for an extra three more years, right? So we help people, through one page, simply conceptualize that so they can make that decision and then back it up by professionals that will guide them as well.

William Tincup: What I love about what you’ve built is again it’s in their best interest.

With some of the industry, they’re serving their interest in your interest, trying to serve both interests, of course, as best they can. But sometimes that’s hard. And so like this, y’all don’t make y’all aren’t making money off stock. Tips. Correct. That’s not the, that’s not the bit, you’re trying to help them through life and their financial portion of life, which is tethered to their health instead of to their mental health.

Tether. The stress tethered to probably even performance on the job, quite frankly. Exactly.

Reagan Bonlie: Exactly. Yeah. And what we’ve found is that when we lay it all out and people understand where they sit financially, and it boils down to a financial health score. So [00:16:00] they’re very akin to a credit score for us.

Oh, cool. So they get their score and they see it on a regular basis. And we provide them with not just to keep them up to date on, if you do go out and buy that $750,000 house and maybe your score is gonna drop a little bit. But what we. When we lay that foundation, let people know where they stand financially, and then put them on a path towards improving their finances, that’s where financial stress drops incrementally.

And then, that we are seeing that as translating to improved productivity. Reduced retention. So it’s, all certainly a win-win for the employer and employee.

William Tincup: And then, so this, I would assume that the sale to HR or the people who manage any of these types of programs for hr, the benefits, because this would fall under a form of benefits for folks and the sale to them is this, is, this also helps retain talent. I’m assuming well maybe even attract talent if they have nudged will. It’ll help them attract some talent, but also [00:17:00] retaining their talent. Is that, is there any other things that I’m not, that I’m missing there?

Reagan Bonlie: Correct. Yeah, so there’s there’s been quite a few studies really since 2016.

I’ve started to see this pop up and it was done by the Consumer Financial Protection Bureau, and then PWC did one, and then you’ve seen a few more pop up. So the retention, to put a stat to it, 76% of financially stressed employees. Will be attracted. To other companies. So it is certainly a concern as it relates to retention.

So if you have the ability through employee benefits to improve their financial wellbeing, we’d anticipate that would improve retention. And then same with productivity. We find that financially stressed employees are spending on average about three more hours per week dealing with their own money issues.

So that all works hand in hand there.

William Tincup: One of the things I wanna get back to is the score. So as you’re giving people the, based on what they’ve inputted, et cetera, you’re [00:18:00] coming back and giving ’em a score and how to increase their, or how to improve their score. What do we’ll use the anonymous, like what are you seeing right now as the average score of employees?

What is it, how bad is it? I’m, I’ll start with the cynical part, right? But but what does it look like right now?

Reagan Bonlie: Yeah. Yeah. Interesting. So it is typically on, on the lower end to start, so I’d say it’s on a scale of a thousand. Yeah. So we typically find that it’s floating right around 500 or a little bit less.

So what we do throughout that process is help them reframe. Rethink about some of their financial goals, right? Helps people put things into perspective. And sometimes it’s a, it’s an exercise of, carving off some expenses, thinking, rethinking how much they’re spending at restaurants.

Everyone uses Starbucks as the goal culprit. That’s that’s something that we can use as an example. We’ve, as we. Employees have their accounts linked. We’ll see, oh, you’re spending about $300 a month on Starbucks. [00:19:00] Did you know, since you want to retire a little bit early, if you instead spend a hundred dollars a month, then you might be able to carve off six months of your career and retire a little bit early.

So we can connect those dots between, the, what’s going on in their finances today to the long-term goals. So it’s a matter of finessing that score. Higher. So they overall improve they improve their overall wellbeing.

William Tincup: And each one of them obviously is gonna be coming from a different vantage point.

Is there something, if you could wave a wand right now and just okay, it’s student debt that’s kinda holding people back, or is it credit card debt or it’s just not understanding, how credit agencies work or how credit works? Like what, what’s, what would be the one thing that you’d think that if we could focus on this one thing, we’re gonna bump those scores up across the board?

Reagan Bonlie: I really think it’s the retirement savings component. There’s obviously the DEIB, the debt conversation is big the budgeting conversation is big. How much are you spending every month? Is that translating to enough savings? But [00:20:00] at the end of the day, The average person in a country like the United States as well as Canada and UK and such, they by the time they reach retirement, they have enough money to last until their early seventies.

So that’s only a handful of years, but Right. They’re expected to live until the mid eighties. So there’s a, there’s a. Decade plus gap there. Now this problem’s growing and in the United States currently it’s, it translates to trillions of missing savings. But when millennials are expected to retire, that’s gonna be over 100 trillion in missing savings.

Oh my goodness. So if we can just simply. Make sure that employees are, have the right percentage contribution in their 401k. Some, something as simple as that. I think that’ll go a long way. Obviously we have to follow that up with all the other habits that go along with that. If you go from saving 5% to saving 9%, now you have less money coming in your checking account, and we have to rethink some of the expenses.

So those are problems that we help with. Also the 401K [00:21:00] contributions along with that budgeting and spending aspect. So

William Tincup: I was gonna ask you a generational question in terms of do millennials and Gen Z look at financial wellness or financial literacy differently than gen X and boomers?

So do they look at it differently or is that just in my head? Do they have different expectations?

Reagan Bonlie: Yeah. It’s interesting that, that’s an interesting topic. I do believe so. I think you have I think you have the younger populations that have some have a less propensity to save, some have more propensity to save.

So it’s quite interesting. You have younger populations that are learning about finances on TikTok. For great balance. So the habits that come along with that are interesting. They’re getting a lot. I’ve I’m sensing that they’re getting a lot of Guidance from those platforms.

It’s not truly translating to true, healthy financial habits. So I, I think people are gen X are seeking out more, [00:22:00] but I don’t necessarily know that they have the right platforms for it currently. So I think it’ll be an interesting topic, but it’s certainly a concern.

So two

William Tincup: que two quick things and it’s on the buy side. Your favorite part of the demo, like when you get to show people nudge for the first time, occasionally you get to break it out and show people. What’s your favorite part of showing people nudge.

Reagan Bonlie: So there’s, I’m actually thinking about my whole team because we all have different favorite components, but I, I personally, my heart is on the goals.

That’s where I’ve spent my career is really understanding people’s financial goals. So that’s one of the first experiences is that we really understand what are you looking to accomplish? Is it retirement? Is it, is travel top of mind? So we. We have them select from a platform of roughly 20 goals.

And then we force them to organize them. So is retirement first or is it children’s education first? And then [00:23:00] what falls in line with that? And that’s a pretty interesting mental exercise. And can they

William Tincup: change that? Do Oh yeah. Do goals change, I guess is the bit.

Reagan Bonlie: Goals do change. I find they don’t change too often.

It’s usually when you have major life experiences, you have a child. Actually, I had two friends that just had children and they reached out to me wanting to create a financial plan. So it’s, it’s usually when you have a big life event. So it’s every couple, few years.

So they have the ability to quickly rearrange that and change their thoughts around that. So That’s that other people really love the score. Yeah. Making sure that they’re closely connected with that and really understand all those components there. But there’s plenty of other features that are pretty exciting as well.

William Tincup: The type A personality in me would like the score to understand like, how do I ma increase the score? I would just wanna know what it is to then wanna figure out okay, now how do I make it better? Exactly. I could see both of those being really powerful. La last question.

It’s buying questions that [00:24:00] HR and benefits folks should ask of financial wellness products. Like what should the, what questions should they be asking you?

Reagan Bonlie: What questions should they be asking? I think one thing that we will uniquely be able to provide is based on how we understand this problem set and the technology that we’ve built around it, is how are we improving the lives of your employees more than just providing reports and showing them the engagement.

But what are some ways that you can translate that to. Provide better wellness for your employees. We, we understand EM employees pretty. Pretty uniquely we understand their financial challenges. So I think we’ll be able to provide a pretty interesting level of insight.

So they can ultimately, take that into their workforce and improve that, any particular problem. And we’re. We’re at a stage right [00:25:00] now where we wanna be very hands-on, so we’re not a cookie cutter type product where, we just give you this platform and, hope it works, right?

We are making sure that it is working and providing any one-on-one guidance that we need to the employees. Speaking to some employers and, making sure that we’re addressing certain challenges that they’re having. And then working very closely with the HR professionals to make sure that we are really solving these challenges.

I think really leveraging our knowledge our executive core has over 86 years of combined experience, so we can very precisely make sure that we’re addressing those concerns there.

William Tincup: That’s awesome. Reagan, this has been amazing. I love what y’all have built and and obviously I see the value in it for both the employers, the, and the employees.

Thank you for coming on the show.

Reagan Bonlie: Thanks so much for having me. Absolutely.

William Tincup: And thanks for everyone listening. Until next time. [00:26:00]