Increasing numbers of employers are offering financial advice as part of their workplace benefits, according to latest research.
Research from financial education provider Wealth at Work, published in May, found that 35 per cent of the 290 employers surveyed offered their employees access to financial advice as a workplace benefit, compared with 12 per cent last year.
The report also found that financial education (41 per cent) and financial advice (35 per cent) were the second most popular finance-related benefits offered to staff, with the most popular being travel loans.
Jonathan Watts-Lay, director at Wealth at Work, said: "It’s great to see that it’s becoming increasingly commonplace for workplaces to support their employee’s financial wellbeing by offering them access to services such as financial advice."
Regulated financial advice can help employees better understand their personal financial situation, whether they’re saving for their future, or facing investment and tax considerations, Mr Watts-Lay explained.
He added that financial advice was particularly important among those approaching retirement age as they begin to choose retirement income options.
However, the research also found where employers do not offer certain financial benefits, the majority do not plan to change that.
For example, only 14 per cent of those that do not offer financial education stated that their business planned to introduce it; this fell to 10 per cent among those that do not offer financial advice.
A report from the International Longevity Centre and Royal London, published in 2017, found that those who received financial advice in the years 2001 to 2007 were on average £40,000 better off in 2012 to 2014 than their unadvised peers.
Since the pension freedoms were introduced in 2015, there are concerns that individuals are making decisions about their retirement savings without taking regulated financial advice, or really understanding the consequence of them, Mr Watts-Lay said.
He added: "The effects of this are that it can be easy for employees to make poor decisions and leave a permanent dent in their retirement income. For example, paying more tax than necessary, falling victim to a scammer or making ill-judged investment choices.
"Employers are increasingly utilising specialist providers to put services such as financial education, guidance and regulated financial advice in place, to support their employee’s financial wellbeing.
"After all, offering this sort of support is an efficient way for employers to help their employees access reputable providers who have undergone due diligence, rather than leaving them to go it alone."
However, in February, pension scheme trustees and employers revealed that many refused to appoint financial advice firms who get paid via contingent charging.
Consultancy firms LCP and Willis Towers Watson, which help trustees and companies, told FTAdviser due to this attitude, plus the need to be able to process a large volume of cases, there are less than 10 advice firms in the country suited to be hired by pension schemes.
Contingent charging means a client only pays for the advice if they go ahead with the recommended course of action. In the case of pension transfers, the adviser won't get paid unless the pension is transferred.
An outright advice charge, on the other hand, would mean the adviser gets paid for the advice regardless of the outcome.
amy.austin@ft.com
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