Financial Wellbeing - intrusive or valuable?
Recent research* has found that 45% of employers believe they are intruding into their employees lives by offering financial wellbeing. Eight out of 10 said they don’t know the difference between financial advice and financial guidance.
There is still some scepticism around financial wellbeing and whether employees’ financial problems can be patched up with a ‘shiny wellness package’.
If you segment your audience effectively to ensure you are talking to your employees about topics relevant to them you can successfully inspire them to take action to improve their finances.
It is also important to give them time out of their busy lives to sit down and really consider their future financial plans as most people very rarely get this opportunity.
To help demystify this differences between ‘financial guidance’ and ‘financial advice’ have a look at the cards below which shows what ‘financial guidance’ might cover verses what you could have a 1-1 advice meeting for.
Financial Guidance:
Clearing debt
Building savings
Buying your first home
Protecting your family
Investing for the future
Planning retirement
Maximising your assets
Inheritance tax planning
Financial Advice:
Investing in a personal pension
Buying a financial product
Creating an investment strategy
Transferring a DB pension
Other significant financial decision
Essentially, you would require ‘financial advice’ if you need/want a specific recommendation from a qualified advisor. A financial wellbeing programme would typically cover the topics under ‘financial guidance’ and give broad recommendations.
EXAMPLE
Financial guidance would be telling Chris to join his company pensions scheme because he can benefit from his company also paying in.
Financial advice would consider Chris’ personal circumstances to give him a recommendation, which might be to increase his pension contributions because it’s affordable for him and will allow him to hit his target retirement income.
Typically it is the young, free & single group that worry about their financial futures the most and according to research* employees in the UK reportedly take four million days off a year because of financial worries.
When considering how to help your employees with their financial worries it is imperative to put yourself in their shoes and be aware that they might feel embarrassed to discuss their financial struggles with their employer, for fear it may hinder their career prospects.
Financial wellbeing doesn’t have to feel intrusive if it is approached in a considered and reassuring way. If you appoint an experienced third party financial wellbeing provider and even consider hosting sessions away from the office it will already feel more private to your employees. You can also reassure them through communications that all discussions will be treated in absolute confidence.
So, in answer to the title of this blog - we believe that financial wellbeing is very valuable and approached in the right way is unobtrusive to your employees. Giving them the time and arming them with the expertise they need to get their finances on track will leave them feeling valued and less stressed.
*Financial Wellbeing research - conducted by YouGov and Aegon - survey of more than 2,000 UK employees and 500 HR decision-makers.