I’ve recently encountered possibly the greatest new source of demand for financial advice, since starting VouchedFor in 2011 – workplace financial well-being.
From seemingly nowhere, “financial well-being” has become a major agenda item for HR leaders. According to a new report from Close Brothers, 48% of employers have already implemented some form of financial education, and 20% plan to introduce it in the next 12 months.
Just dwell on that last number – 1 in 5 employers plan to introduce financial education in the next 12 months. That’s huge.
It’s hard to pinpoint the exact source of this new trend, but at least three drivers spring to mind –
- Workplace awareness of mental health issues has grown substantially in recent years – a focus on financial well-being follows naturally
- Auto Enrolment has forced companies to re-look at their financial benefits – and reminded them just how low employee engagement with such benefits is
- New entrants such as Neyber and Salary Finance have invested heavily in creating a rising “financial well-being” tide to lift their innovative “cheap workplace loan” ships
Now, most the HR leaders I’ve met in recent weeks would love to offer all employees access to one-to-one advice. However, “benefits” budgets border non-existent.
And so when IFAs look at this market, the best they tend to be willing or able to offer are free seminars or such-like, in the hope it will tease out one or two diamond clients from the rough.
However, let me give an example of a better way.
We (at VouchedFor) recently launched a new service – Hatch – fusing technology with financial “coaches” to deliver one-to-one financial planning for as little as £20/month. We built it because VouchedFor advisers are increasingly focusing on higher-net-worth clients, and we need a solution for all the lower-wealth people visiting the VouchedFor site.
We’ve recently taken Hatch to workplaces, and been blown away by the response, from both employers and employees. The £20 monthly fee can be funded through salary sacrifice – making great use of the new £500 employer-funded pension-advice allowance.
Inevitably, through this model we encounter clients with complex needs and higher wealth-levels (the “diamonds”). We refer them either to a VouchedFor IFA or where applicable, the IFA the firm already works with.
Whether through partnering with something like Hatch, or developing a similar service yourself, I believe the workplace financial well-being trend represents a huge opportunity for IFAs looking to grow their business.