PlatformsMar 7 2023

Morningstar asks Praemium staff to work longer hours for same pay

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Morningstar asks Praemium staff to work longer hours for same pay
Praemium employees in the UK have been asked to up their hours after the company was taken over by Morningstar (Pexels Andrea Piacquadio)

Morningstar has asked Praemium employees to increase their working hours for no extra pay.

Employees of the adviser platform were told on a call last week (March 2) that they would be moving onto new contracts under Morningstar. 

These contracts stipulated a 40-hour working week, a change from the 37.5 hours outlined in employees’ previous Praemium contracts. A corresponding increase in salary was not offered.

A source with knowledge of the company told FTAdviser that morale is very low and a number of Praemium employees are already applying for new jobs as a result.

They said employees are concerned that they will be worse off in a difficult financial climate with the increasing cost of living.

The new Morningstar contracts offer a number of benefits including the option for a sabbatical after four years’ employment, improved life and critical illness insurance policies, and financial contributions towards industry exams.

The contracts must be signed by March 14, and will start on April 1.

Morningstar is not commenting on individual questions on group calls and is instead scheduling ‘office hours’ where HR answer questions on a one-on-one basis.

A spokesperson for Morningstar said all affected employees have been invited to group sessions to discuss the benefits of transitioning to a Morningstar contract, this has included aligning to a 40-hour week schedule.

"Employees are also able to express their views with their local HR representative to better understand the benefits that the Morningstar contract has.

"The package of benefits under the Morningstar contract is significantly better than the original Praemium contract and is therefore within the bounds of UK law that the change in agreement is not detrimental to the employee.

"Employees are under no obligation to sign the new contractual terms, but those who do, will be able to access all Morningstar benefits, including financial, physical and wellbeing programmes."

Morningstar announced its acquisition of Praemium’s UK platform business in December 2021 for £35mn.

The platform had been put up for sale after a review found it was at a disadvantage due to its smaller scale, despite strong sales and revenue momentum.

Morningstar’s president of wealth management solutions, Daniel Needham, said the platform is a challenger in the UK market, with a strong growth trajectory.