One in three (34%) UK organisations admitted they do not offer financial advice, increasing to 51% of employers with fewer than 500 employees, according to new research by Close Brothers’ Workplace Financial Wellbeing Service.
The research was carried out among 503 employers with 200 or more UK employees. It found that nearly half of respondents have no intention of introducing financial advice in the near future. When asked why, the most common reason was the perceived risk of inappropriate advice given that may reflect badly on the organisation itself (27%), or the risk of selecting an unsuitable advice firm (21%).
Another reason was because financial advice is not deemed to be an important workplace benefit (23%). When asked what would make them consider it, a third said they would need evidence that employees would take it up.
The majority said financial advice is one of the top benefits they would like to help improve financial wellbeing, with 12% offering full financial advice for all employees. Pensions and retirement advice is the most common type offered, at 48% and 44% respectively. Within this, 17% offer advice only to certain employees, while 11% provide it just for retirees.
When considering the workplace benefits that would most positively impact their financial wellbeing, financial advice came third on the list of priorities (36%), after pensions (52%) and private medical cover (38%). As many as 42% of those aged 25 to 34 ranked it as vital.
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Jeanette Makings, head of workplace financial wellbeing at Close Brothers Asset Management, said: “Despite a clear call for financial advice in the workplace, it is evident employers that do offer it are not recognising all employees would benefit from this for all areas of personal finance; the need isn’t limited only to pensions or at retirement.
“And for those that are still shying away from offering it as a benefit, the risk of individuals finding a suitable adviser on their own, with consistent quality, service and price, is far greater than the perceived risk of a workplace selected adviser providing inappropriate advice and possible repercussions on the organisation. Employers need to understand the range of advice and any limitations of expertise from possible providers.”
