Employers not helping employees with financial advice

by | Aug 28, 2018

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Over 70% of employers are not helping their employees with financial advice and the numbers are getting worse.

So says research by Chase de Vere, the independent financial and corporate advisers, and Lightbulb, an independent research company.

The figures show that employers aren’t willing to spend money to facilitate the provision of financial advice for their employees, despite understanding the benefits of doing so.

 
 

 The research consisted of making around 10,000 phone calls to employers which are representative of the UK company population and then conducting in-depth interviews with senior HR decision makers in 300 randomly selected businesses, ranging from 30 to 38,000 employees, to capture their attitude and current perspective on benefit provision. This research, conducted in 2018, follows similar research conducted in 2017.

The key questions of the research report were:

Is financial advice something you feel your employees would value and benefit from?

 
 

83% of employers said that financial advice is something their employees would value and benefit from. This is a fall from 85% last year, but still demonstrates an overwhelming majority of employers who see the value in financial advice.

Do you plan to do more to help your employees make more informed choices regarding their retirement?

56% of employers said yes. This is a fall from 58% who said yes last year.

 
 

However, following on from the question above, where the majority of employers recognise that financial advice is something that employees would benefit from, it is still encouraging that 56% of employers plan to help their employees make more informed decisions.

Would your company have the appetite to pay for financial advice for your employees?

33% of employers said yes. This is a significant reduction from the 42% of employers who said yes last year.

This shows that, while employers are recognising the need to help their employees and they understand that their employees would benefit from financial advice, the majority of companies aren’t keen to pay for it.

Do you anticipate including a cost for financial advice for your employees in your 2018/19 budgets?

27% of employers said yes. This again is a significant fall from last year when 36% of employers said yes.

There is a significant reduction in the number of employers who understand the benefits of financial advice for their employees, to those who have the appetite to help pay for it and finally to those employers who are actually planning to make provision to pay for financial advice for their employees now.

 

Questions asked of employers 2017 2018
Is financial advice something you feel your employees would value and benefit from? 85% 83%
Do you plan to do more to help your employees make more informed choices regarding their retirement? 58% 56%
Would your company have the appetite to pay for financial advice for your employees? 42% 33%
Do you anticipate including a cost for financial advice for your employees in your 2018/19 budgets? 36% 27%

 

Sean McSweeney, Corporate Advice Manager, Chase de Vere, said: “The overwhelming majority of employers are aware that their employees would benefit from financial advice. This is a very good starting point and it is positive that more than half of employers are planning to do more to help their employees to make informed decisions.

“However, while their intentions may be good, relatively few employers are willing to spend money to help facilitate the provision of financial advice, even though they understand that their employees would benefit from it. This is disappointing because employers are well placed to help their employees. It could also be a false economy for employers.

“Those employers who don’t help may, over time, be faced with an ageing workforce that cannot afford to retire and as a result suffer from lower productivity, succession planning issues and losing younger talent to competitors that provide more opportunity for advancement.”

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