Direct to Consumer in the Workplace

A comprehensive workplace engagement platform should enable much more than just communicating benefits and company information with employees. Well-engaged staff look at their company brand with a feeling of trust and belonging. It follows that if their company offers them a better deal on everyday goods or services than they can get on the high street, then that feeling is reinforced. An example of this is the success of rewards and discounts through providers such as Logbuy, Asperity, Next Jump and PeopleValue.

One of the desires of Employee Benefit Consultancies is for employees of their corporate clients to become individual private clients. So in order to nurture them, the EBC needs to build a trusted relationship with the employer as a referrer. Until now, this process has never been an easy one, but two recent regulatory changes have massively increased this opportunity:

  1. The Retail Distribution Review (RDR)
  2. Auto-Enrolment (AE)

The RDR has left a hole in the affordability of personal financial advice. As a generalisation, individuals with under £50,000 to invest do not have the cashflow to justify paying for suitable independent investment advice, plus those costs are likely to outweigh the investment benefits. Therefore they are looking for affordable alternatives in the Direct-to-Consumer sector. Typically they will choose a well-marketed national execution-only brand, such as Hargreaves Lansdown or a newer platform such as Trustnet Direct or Nutmeg.

If an EBC is to keep those potential private clients from going to the main D2C providers, they could consider offering access to their own platform (which can be surprisingly affordable for the EBC to implement). And this is where AE plays a part – an EBC that is using an AE platform for employees to visit regularly can introduce this technology on the same platform so it’s a warm sale, plus all data is securely in the same place for meaningful MI and dynamic cross-selling.

When the employer provides their own-branded portal for staff to use (supported within the EBC’s platform), then those employees will have a good reason to use the employer-endorsed system rather than going to an established third party D2C provider. Not only does this deliver a convenient and affirmed approach for the workplace, but it also strengthens the bond with the EBC.

The income opportunity is there for the EBC/IFA firm to monetise the employees whilst improving employee engagement with their corporate client. So that’s not just a win-win, but a win-win-win at all levels.

It needn’t stop there; those employees can now access direct investments as well as other financial products such as term assurance, critical illness, annuities and general insurance, all off the back of simple worksite marketing techniques through the platform.

See Aegon’s article on Auto-Enrolment as a Trojan Horse.

So how does an EBC set up such a platform?

Rather than have to invest in building an expensive integrated investment platform from scratch, crowd software development is bringing these tools affordably to the Employee Benefits sector. The software integration provider takes the initial risk, then spreads the cost across many EBCs and their client companies, thus allowing a meaningful margin to be made on even relatively modest volumes. This makes it realistic for EBC to empower companies to have their own platform, retaining staff for longer and increasing their own revenue whilst passing on that business strength to the EBC.

The long-term benefit is of course that the employee is retained as a private client for the long term, even after they have left their employer, instead of losing them to the incumbent traditional big names.

Avantus Systems (builders of MyWorkPal) is one company that has created many successful D2C systems. Want to find out more? Give us a call.

mwp-logo-icon

Comments are closed.