Companies believe the responsibility to deliver financial education to their employees sits firmly with the Government, new research has found, with only 3% of employers recognising that financial advisers might be involved in the process.
The research, conducted by independent financial and corporate adviser Chase de Vere in conjunction with research company Lightbulb, involved the analysis of 2,500 business records, which were deemed representative of the UK company population, followed by interviews with the decision-makers in 300 randomly selected businesses.
Nine out of 10 respondents (88%) recognised the importance of financial education in the context of greater freedom to access pension funds. Despite this perceived need, however, two-thirds (65%) put the responsibility of actually delivering it on the Government, rather than the financial sector. Respondents also looked to pension providers (14%) and employers (also 14%), with just 4% placing the responsibility on employees themselves and an even smaller percentage (3%) picking out financial advisers.
"It is encouraging that employers understand their employees would benefit from financial education in the workplace," said Sean McSweeney, corporate advice manager at Chase de Vere. "It is alarming, however, that many of them believe the responsibility for this falls on the Government, a relatively small number believe they are responsible themselves and hardly any think that financial advisers should be taking responsibility.
"These employers' views are in conflict with the Financial Advice Market Review, which says: ‘The workplace presents an opportunity to help more people access financial guidance and increase take-up of financial advice.' While the Government's guidance services are useful, they are limited in their scope and rely on employees being proactive to contact them in the first place. We know this does not happen enough."
Although a relatively small number of employers had seen themselves as responsible for delivering financial education, the survey did find three-quarters (74%) of companies saying they had made their employees aware of changes to pension fund access for those aged 55.
The research also found employers' communications about pensions and benefits were in the main provided by way of individual personalised letter or email (78%). The next most popular method of communication was an induction pack (69%), followed by a handbook (43%), meetings (34%) and automated letters (28%). Less common alternatives were noticeboards (17%), payroll (16%) and seminars (also 16%).
"Most of the communications provided by employers are written rather than face-to-face where employees would be able to ask questions," said McSweeney. "This is a real challenge - and a real opportunity - for financial advisers to be speaking with employers and explaining the benefits that financial advice services, delivered by professionally qualified advisers, can provide for their employees and their business".
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