The range of issues confronting the 21st Century IFA is daunting.
Stakeholder pen- sions are just a year away. Electronic commerce is here
already. Polarisation is an issue that never seems to go away. IFAs
themselves are asking if they can survive if their remuneration is
dependent on the sale of a product.
In line with that, IFAs are focusing on advice as their product rather
than the financial products themselves. They are building their businesses
by developing opportunities to disseminate advice in different parts of the
changing financial services marketplace.
Worksite marketing is one opportunity to provide advice cost-effectively.
In essence, it is about creating opportunities to communicate with people
in groups in the workplace and thus provides a continuous source of new
prospects for IFAs and providers alike. With the forthcoming launch of
stakeholder pensions, worksite marketing is a concept whose time has come.
The reasons are obvious. For every employer with five or more employees
but without suitable pension provision, the need to provide access to a
stakeholder pension scheme is rapidly becoming a fact of life. Schemes
start to operate in April 2001 and, six months after that, the requirement
that employers must provide access to schemes comes into force.
This will transform the opportunities for distributing financial services
and products to people at their place of work.
Already, in the US, some commentators are predicting that the worksite
market for financial services will grow by 10 to 15 per cent annually over
the next decade, making it one of the most dynamic areas of growth in the
In the UK, it is stakeholder pensions which will almost certainly be the
spur for similar growth. In essence, to be successful, worksite marketing
has to make the workplace a convenient forum within which people can look
at financial services and products with confidence.
The potential rewards from creating such forums is enormous.
Ernst & Young recently cited research showing that 70 per cent of people
would be willing to buy voluntary financial products through their employer
if they were sold at a modest discount. The same survey also found that 56
per cent of employees who had attended an employer- sponsored worksite
marketing presentation bought some form of life insurance.
The opportunities are enormous. There are a lot of employers which are
going to have to provide access to stakeholder pensions and they will need
the help of IFAs to negotiate the framework of rules that is rapidly being
constructed. But pension provision forms only part of the potential
inherent in worksite marketing.
Extending the principles to embrace worksite marketing as a whole gives
employers the opportunity to enhance the benefits package they offer their
employees, at no cost to themselves. It is, therefore, a win-win situation
for the employee, the employer and the adviser.
But how does the IFA get involved in mining this potentially rich seam?
There has to be a three-stage plan of action:
Establish a worksite marketing “partnership”.
Identify the worksite marketing opportunities.
Communicate the value of worksite marketing programmes.
Effective worksite marketing requires a partnership between advisers and
their selected product providers. Working together, they can create a
package of benefits which adds value to employers and their employees.
Stakeholder pensions can be a very effective prompt for this to happen
but, even where an employer already provides a well-developed occupational
scheme, there is often scope to enhance the financial services offering to
At the same time, working together, advisers and their chosen product
providers can build up knowledge and understanding of the business needs of
The employee benefits' package which one type of business – say,
construction – has to offer to recruit and retain the best staff will often
be dramatically different from the package which another type of business –
say, manufacturing – has to offer.
So, after establishing effective links with a range of providers, the
adviser can then move to the second stage of identifying specific worksite
It is never easy to generate new business – but it is essential to any
business. The key here is to understand who are the key organisational
decision-makers – the people who set and implement policy for pay and
reward are usually the most relevant individuals to target – and then help
them understand what worksite marketing can do for them and their
It is at this point, that the partnership principle has to be extended.
Worksite marketing only works where the adviser works closely with the
employer and is able to persuade the employer that it enhances the overall
package the company offers its employees in a way that actually adds value
to the business.
The fact that stakeholder pensions are almost upon us means that the pay
and reward is particularly high on employers' agenda at the moment.
The best means of persuading employers to buy into the worksite concept is
if the package does not require extra staff on their part and if the
service costs nothing. On a more positive note, a good package can cut the
costs of providing employees' benefits and improve employees' satisfaction
– all by helping the employer to become a facilitator of benefits, rather
than a provider.
It is important to note also that a worksite marketing strategy will
differ between employers. At one extreme, it may amount to little more than
an opportunity for an adviser to establish some kind of presence in the
workplace. At the other extreme, it may be formalised as part of the
employee benefits package.
Either way, the business opportunity is obvious.
The point at which employers have bought into the worksite marketing
concept is not the point at which the job is done. All employers can do is
open the door to their employees. But those employees are potential clients
for the IFA and customers for the provider, and they represent very warm
leads indeed. This takes us to the final stage in the process – converting
those leads into new business opportunities.
Worksite marketing requires good presentation techniques, bespoke to
individual organisations, which relate directly the benefits on offer to
the needs of the employees in question. The “any colour so long as it's
black” model will not do.
Worksite audiences are far too discerning for this approach, so
communication with them has to be intelligent and appropriate to their
This is especially so given that worksite marketing ought to imply a
long-term relationship between providers, adviser, employer and employee.
That long-term relationship can be very beneficial for all concerned but
it requires the proper investment of time and effort at the outset.
Groups of employees share a common benefit package from their employer.
Information about their potential needs should be readily available. If the
right worksite marketing opportunities have been identified, then
communication to employees can also be adjusted according to their needs.
At its most basic, worksite marketing is simply the provision of financial
information and advice to the employees of individual companies and
organisations. IFAs have proved themselves time and again as an efficient
and value-adding distribution channel. They are well placed to tap into
this rich seam of potential by bringing together a partnership with
employers and providers which yields genuine benefits for them all.