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34% of companies don’t offer financial advice to staff
One in three companies do not offer financial advice as an employee benefit, often because of the risk of inappropriate advice being given and the negative fallout.
Yet employees say that financial advice is one of the top benefits they would like to help improve their financial wellbeing.
Just 12% of UK companies offer full financial advice for all employees, according to research from Close Brothers’ workplace financial wellbeing service.
Other companies restrict it to certain staff, or those at certain life stages such as retirement.
The data revealed that one in three (34%) UK organisations do not offer financial advice. The number climbed to 1 in 2 (51%) organisations with fewer than 500 employees.
Nearly half of these organisations said they had no intention of introducing financial advice as a benefit in the near future.
When asked why, the most common reason was the perceived risk of inappropriate advice being given and it reflecting badly on the organisation itself (27%), or the risk of selecting an unsuitable advice firm (21%).
The other reason was because financial advice is not deemed to be an important workplace benefit (23%). When asked what would make them consider offering financial advice as a benefit, a third of employers said they would need evidence that employees would take it up, along with requests from individual employees (21%).
The research also revealed that the biggest financial challenges faced by employees are managing normal living costs, and the cost of rent/mortgages.
With this in mind, when considering the workplace benefits that would most positively impact their financial wellbeing, financial advice came third on the list of priorities for employees (36%), after pension (52%) and private medical cover (38%).
The priority was in every all employee age category, with particular relevance given by those aged 25 to 34, with 42% of employees ranking it as vital.
Jeanette Makings, head of workplace financial wellbeing at Close Brothers Asset Management said: “Despite a clear call for financial advice in the workplace, it is evident employers that do offer it are not recognising all employees would benefit from this for all areas of personal finance; the need isn’t limited only to pensions or at retirement.
“And for those that are still shying away from offering it as a benefit, the risk of individuals finding a suitable adviser on their own, with consistent quality, service and price is far greater than the perceived risk of a workplace selected adviser providing inappropriate advice and possible repercussions on the organisation.”
• Data was based on research carried out among 503 employers with 200 or more employees in the UK on behalf of Close Brothers Asset Management by YouGov between 28 March and 19 April and other research conducted among 1,009 employees from companies with 200 or more employees and 504 employers with 200 or more employees on behalf of Close Brothers Asset Management by YouGov between 15 June and 31 July 2023.
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