It’s widely known that employers have little confidence in their staff’s awareness of the new-for-2015 retirement income options. Here’s a recent supporting example from a survey by Wealth at Work: http://bit.ly/12WtDZ4
Whilst some employees may be getting basic information such as this Government news page,
https://www.gov.uk/government/news/pension-reforms-eight-things-you-should-know it’s clear that the majority are unaware of this impending change and what it can mean for their future – and ultimately the legacy they can leave for their dependants. But pension income is just one part of someone’s financial life.
This leads to the question:
Who is responsible for educating staff about their financial future?
- the employees themselves?
- their employer?
- their adviser?
- their family/friends/bank/etc?
The real answer might start here: For an adviser’s business to grow, their corporate clients need also to be growing, which itself requires healthy and engaged employees. This 3-way symbiosis creates a virtuous circle that underpins the success of the adviser.
It’s a simple case of “you reap what you sow”; in this case reaping successful corporate schemes after having sown the knowledge that helps to engage staff.
So what can you tell them? What do employees need to know? How can you word pension reforms in layman’s terms without using dull financial jargon and losing their interest?
Whilst at risk of stating the bleedin’ obvious, here are a few points about employees:
- They are interested in things they find interesting (i.e. not financial regulations).
- Current pension rules will undoubtedly be superseded before their retirement.
- But… They want comfort that their financial future is safe, as it will enable them to pursue and ideally achieve the items in (1).
By narrowing down the above, we can reasonably identify that whilst most employees are unaware of the forthcoming reforms, it probably doesn’t matter for the vast majority, as they simply don’t need to be distracted by what they see as irrelevance, particularly the younger workforce.
For those that are in their 50s upwards it’s probably the opposite – it’s critical that they know their options, as the changes can have a very meaningful impact on the success or failure of their anticipated retirement goals.
But here’s the angle: educate them all anyway. It’s a foot in the door to discuss other aspects of their financial aspirations and nurturing them as future private clients for other business within the advisory company.
And that’s where good use of technology comes in.
A straightforward and no-nonsense information bulletin, containing “wake-ups” for an array of life events (starting with the new rules), can stir the pot and grab people’s interest. There’s always someone needing advice for getting married, moving house, helping their elderly relatives, planning kids’ university fees, etc.
It just needs to be an email or text broadcast, linking to an information page on their company intranet or workplace platform (shameless plug: e.g. MyWorkPal). It must be relevant, timely and informative, so you must ensure that you have researched who your audience is.
Not everyone will respond, but as long as it’s well written and clearly targeted, the key thing is: those that want to respond, will.
With your qualified respondents, you now have the opportunity to give 1:1 on-site advice. If you are solely an EBC and don’t do individual advice, then get an IFA partner involved. You’ll be taken even more seriously as a business partner by the employer.
Giving employees personal and relevant attention makes them feel included, resulting in greater emotional confidence in their employment and their future. It’s simply another step in the overall goal of successful employee engagement. Knowing their financial future, including in retirement, is a core part of this education and engagement process.
So it’s not about drumming the latest pension reforms into 100% of the workforce; it’s about helping them to feel engaged and interested about possible futures that matter to them emotionally, by using the latest reforms as the ice-breaker.
In the end, with a simple and targeted approach, you’ve educated people, helped them get a clear vision of their future, retained your business and increased your pool of prospects.
Ask us how MyWorkPal can hep with your employee communications.