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Missed opportunities

The world of financial services is being affected by widespread change – from new regulations and Government-inspired product launches, to structural changes and provider consolidation.

Amid these changes, there has never been a better time for IFAs and providers to look more closely at what many may consider an old idea – worksite marketing. So why has this concept not been as successful in the UK as it has been in the US and how can we get it right in the future?

Worksite marketing is about developing closer relationships with companies and their employees. It is about coming to agreements with companies to become their preferred supplier of financial products and/or advice.

This relationship can be augmented with services from other companies with different service offerings such as travel advice, general insurance and personal finance products. The list could go on but the most important thing is to ensure that it is what the target audience at the worksite wants.

It sounds easy – so why has it not been done more successfully to date? In the US, 30 per cent of all financial product sales are already generated via worksite marketing relationships. There is clearly more we can do in the UK to exploit this channel.

So why have worksite initiatives largely failed in the UK and what more can be done?

Firstly, some UK providers attempting worksite marketing initiatives have seen them purely as a lead-generation exercise for their direct sales-forces. The need to earn commission off the back of these leads can get in the way of building successful long-term relationships with the employees at the worksite.

This possibility increases when the “leads” are referred to a new company representative who is still in the process of training. A key com- ponent of a successful worksite venture is integrity – and this must be transparent to all those involved.

There is a greater degree of cynicism about employer-sponsored initiatives in the UK than the US. This increases the need for the IFA or provider to be clear about their motives and value. Some have tended to treat these links with corporates as a short-term means of generating additional commission, rather than a long-term relationship-building exercise, generating increased profits over time.

It is not unheard of for advisers fresh from completing the FPC3 exam to be given a couple of corporate accounts as sweeteners to get them started. The result is that these corporates tend to feel they are talking to a junior salesperson rather than a trusted financial adviser whose services they feel comfortable about offering to all employees.

Another challenge that IFAs and providers face is with the quality and speed of the administration used to support product sales. There is no doubt that there is a genuine desire by both parties to improve their administration and the industry is making a significant effort to deliver improvements with the increasing use of e-commerce.

However, until they do, they will carry some of the associated cost burden of paper-based processes and the often negative reputation of poor quality support. Even if more senior advisers have approached corporates, all too often, the relationships they have developed have been soured by the lack of strong administrative support.

Policy applications are all too often delayed or lost. Supporting documentation may not be provided to human resources in time for them to calculate employees&#39 benefit packages.

Employers often find it easier to encourage employees to make their own financial arrangements. They have to consider the “introducer” implic- ations of the relationship. Often they do not allow employees to spend company time being advised on their financial arrangements, especially if this has an impact on the payroll and adds a considerable administrative burden for the employer as applications proceed.

IFAs and providers are often guilty of spending insufficient time researching their prospective corporate clients. Companies usually have a unique culture and set of values and the vast majority of staff will share a single set of values and ambitions.

Providers that can understand the needs of these distinct groups will be able to tailor products to better meet their needs. All too often in the past, the products offered to a company have been off the shelf with only minor tweaks to make them appeal, if only superficially, to the majority of staff.

Another mistake some providers have made is to assume that worksite marketing is simply about getting a presence on the corporate extranet – or better still the intranet – and then pumping new offers at employees sitting at their PCs. This is clearly one important point of presence but it is not a panacea.

Indeed, a dedicated extranet will appeal more to employers, who will generally be extremely sensitive to a third party being present on their intranet.

What then should UK providers and IFAs approaching employers consider?

Providers and IFAs should focus their attentions on companies with more than 100 employees, making their investment in time and effort worthwhile. They must also be very focused on what the employer and his employees really want – and design product propositions specifically to meet their needs.

Most employees of a particular company are united by a common bond, often much stronger than more traditional affinity groups, like members of a football team&#39s supporters club. These days, many people spend more time at work than they do at home with their family.

There will be categories of employees with similar levels of disposable income, similar interests and spending habits and, as such, if a tailored product meets a need accurately, its percentage of sales will be significantly higher than the usual figures.

Building a presence in the company is critical. Providing generic financial advice on the corporate intranet or extranet will go a long way to helping to achieve this. This enables employees to gather financial information and consider their financial needs in their spare time between meetings or during their lunch hour. This channel can be used by advisers to attract attention and interest, beginning the sales process from the relative comfort of their office desks.

Focus and others already provide the technology that enables employees to provide fact-find data and complete some financial product applications at their desktops via their corporate intranet or extranet.

The most successful worksite marketing initiatives are those that offer employees some kind of financial advice surgery where the IFA makes himself himself available in the corporate offices for several hours a week or a month, depending on the number of employees. Employees are then able to drop in to fill gaps in their knowledge and take the process beyond the fact-find stage.

Finally, electronic provision of financial product information and e-processing of applications make life easier for providers and IFAs developing closer relationships with corporates. It opens up a number of new communications channels for their use, which, if handled sensitively, can work together to create the feeling that a financial adviser is sitting alongside each and every employee as he or she faces their individual money worries.

Increasingly, companies are understanding the importance of attracting and then retaining high-quality staff to sustain growth. Staff benefits in the form of pensions and sickness and health provision are becoming important aspects of the package needed to attract and retain the best employees.

With the help of a good IFA and the technology to implement sound solutions, companies can provide these types of benefits to staff simply and easily.

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