With more employees looking to their employers for guidance on money matters, bridging the financial advice gap may be about building trust and confidence.
Whether it’s your close friends, trusted family, or Uncle Seamus thrice removed on your great-nana’s side (you know the one) someone is often ready and willing to share their advice. And if it’s not someone at the dinner table, it may be an advice column, an influencer or advice for a price, like financial planning subscription programs.
Yet it seems there’s an advice gap made up of people who would benefit from advice on money, but don’t use it. So, with all the options of what’s available, there may be a disconnect around financial advice.
89% of the GB population haven’t paid for any type of financial advice, with only 11% paying for advice in the last two years, according to our recent LangCat report.Footnote [1]
This may mean that some of your employees, who want to improve their money matters and aren’t sure where or how to begin, are stuck.
Helping employees get un-snagged with trusted tools to grow their financial knowledge and confidence could build a more productive as well as resilient workforce. Footnote [2]
What’s the snag that has your employees stuck?
Although cost is one reason people hesitate to get financial advice, according to the 2023 LangCat report, with 20% saying it would need to cost less, there are also concerns around:
- trust – being sure they could trust the advice they’re given.
- awareness – understanding the value of advice, recognising that it would save them money, and knowing how to find the right adviser.
- confidence – lacking confidence with money matters may lead to getting advice, but often people go to their friends or family first. Just under a third (29%) go to their bank or other financial companies.
A person’s relationship with money could be tricky and bring complicated feelings that aren’t always obvious. Getting to know employees’ needs or barriers with finances means doing so sensitively and mindfully.
So, before throwing pasta at the wall to see what sticks (or unsticks), putting together an anonymous survey may help uncover how to best support your employees.
It could be that their barriers feed in to three types of advice gaps, which you could then help them bridge.
How to help employees bridge the gap
The free advice, awareness, and referral gap – employees in this group feel they would benefit from free advice, but either don’t know about or aren’t able to find free services. They may not know, for example, about the UK government’s free financial guidance service.
This group grew from 20 million to 24.3 million people in the past two years (2021-2023), so there’s a good chance one of these people may be someone you’ve chatted with at work recently.
For businesses that are time and money conscious, there are relatively simply ways to help employees that fit this group.
- Gather – sometimes, half the challenge is getting all the resources in one place, so your employees don’t have to spend time (or brain space) clicking their way through lots of websites. Putting together a list of free online resources for financial guidance could be a positive first step in supporting this group. To start it off, your list could have resources from Money & Pensions Service, MoneyHelper or Pension Wise from MoneyHelper, which are free online resources provided through the UK government. Citizens Advice also have information about getting financial advice, debt, and money matters that employees may find useful to kick off their journey into financial wellbeing. This is worth noting as it gives free, independent, and impartial information.
- Signpost and remind – once there’s a hub of information and resources, get on your loudspeakers and let your employees know. Whether through monthly newsletters, online communities, the company intranet or posters in the office, it’s important to remind employees that taking charge of their financial future is possible with good resources and support.
An additional benefit to creating a financial wellbeing resource hub with access to free guidance is that any employee can find it useful – no matter where they are in bridging their financial knowledge or confidence gap.
The affordable advice gap – this group is made up of 6.5 million people (2023) who are willing to pay for advice but think it’s too expensive. For this group, the cost of advice may not outweigh the value the advice may bring.
To support employees in this group, you may think about:
- building up value – with people worrying about how far their money will stretch to everyday items, it’s understandable that they might not prioritise paying for advice right away. However, there are tools available that may springboard them towards more guidance or advice. Encouraging employees to use tools like our Mid-life MOT app, pension calculator and the Shape my Future tool could give them a start in visualising their financial future.
- finding the right advisor – reaching out to your Client Relationship Manager (CRM) and chatting through what options may be available to your employees is a positive first step. They may let you know about some competitive rates your employees didn’t know about. And after building their confidence through the tools, your employees may see that the value of an advisor could outweigh the cost of one.
The preventative advice gap – for employees who fit this group, including up to 15 million people, having earlier access to advice could lessen the impact of non-money issues on their financial well-being. Having financial advice offered at key moment in peoples’ lives could help them plan and prevent problems before they get sticky.
To support employees through this gap, it’s important to know where they are on life’s path. Recognising that this may have more to do with circumstances than age, including questions on your anonymous survey about different stages of life could be helpful.
Having a better understanding of how many employees are new to the profession, raising young families, actively looking to learn more about retirement options, or on the cusp of retirement will help the right information find the right employees at the right time. And guiding them towards resources like the Pensions and Lifetime Savings Association’s (PLSA’s) Retirement Living Standards, for example, could help them figure out what kind of lifestyle they’d like in the future.
For your employees aged 50 plus, the Retirement Preparation Review is a free 20-minute discussion with our dedicated team to understand their individual situation and whether financial advice would be beneficial. The Pension and Investment Consultation is also a free 20-minute chat tailored for employees in their 40s who have questions about their investments.
From there, with the advice gap closing behind them, they may want an advisor to help them cross the bridge between their current finances and future financial wellbeing.