Financial worries can cause your Employees to bring their problems to work each day. According to Barclays, absenteeism and productivity loss from financial distress is adding an extra 4% to payroll costs for UK firms. (Barclays, 2014) The problem is, in the UK, companies don't tend to give their Employees financial advice as it can cause more problems than they set out to solve. Here we take a look at the two main reasons why financial advice isn't given in the workplace by the Employer.
1. Financial advice needs to be authorised and regulated
Everyone has an opinion on what you should do with your money. The problem is, it's just opinion and usually not based on any level of expertise. For a financial advice company to be regulated and authorised, the company and its advisers have to have relevant qualifications to practice. Controls and systems, set out by regulators, allow a financial advice company to enable them to look after existing clients and take on new clients. Financial advice is no different to any other sector or profession. Would you use an unregistered doctor or dentist?
2. Financial advice needs to be independent
Enforced by the Financial Conduct Authority (FCA), advice is regulated and independent from the Employer. If Employers’ were left to give out 'financial advice', there could easily be a scenario where an Employer gave advice that wasn't for the good of the individual, but potentially the good of the company. This would be a grey area where both parties, the Employer and Employee, may not have mutually exclusive interests. If an Employee had a financial goal to retire at 50, with potentially only a few years left in the business, it would bring up many legal problems regarding individual interests and possibly, discrimination. Such a scenario would lead to a minefield of problems for both parties.
Giving financial advice to an Employee which is independent from the Emloyer is a fantastic company benefit. This only works if the advice comes from a legitimate, regulated, authorised and independent third party. As an Employer, you can provide access to financial advice in the way of a company perk.
You may have decided by now that independent financial advice is something you would like to consider as an employee benefit. If you would like to discuss your options please give us a call on 01302 244 977.
Publish date: 19th December 2018