I am an employer who put in place a benefits package for my staff over 10 years ago. I want to make sure that it is still good value and want to use technology wherever possible. What can an independent financial adviser do to help me?
The workplace group pension market has changed a lot over the last 10 years and will continue to do so with improving pension scheme design and the need to keep to up to date. Bigger employers have less than a year to prepare for auto-enrolment, which presents challenges affecting payroll and fund choices. Questions such as how will you communicate with your staff, is Nest suitable, what technology you need and who provides employee advice are areas an IFA can help you with.
With advances in medical science and increased longevity, the cost of protection has reduced. All employers should commission an IFA to review their employee benefits to ensure “best of breed” in product selection while maximising cost efficiencies. Without specific advice, many employees do not fully understand the benefits offered to them and do not bother to join employer sponsored schemes even though over 25 million employees are members of an occupational pension scheme.
The full range of employee benefit plans can be split into non-tangible products such as income protection, death in service, private medical insurance, critical-illness cover and dental cover. The more tangible benefits are things like discount-off consumer goods, extra holiday, concierge services, cars or more commonly cash for cars, bonus, child care, bicycles, computers, flexible hours, alternative health treatment.
Due to this demarcation in benefits, the communication of their value needs to be made clear.
IFAs can provide costs for employee benefit services on a menu basis. This will be predominantly on a fee basi sbut commission can become an option to offset against time spent providing employee advice, researching products and implementing schemes. IFAs will carry out a “beauty parade” process to ensure each provider meets your benchmark criteria.
Technology based admin solutions allow transactional efficiency. For protection products, ongoing admin is minimal but pension admin can be daunting. The IFA will process new business, find out who the main provider points of contact are, understand the providers’ systems and help you interact with this, develop familiarity of their products and arrange services and products to match your needs.
An increasing number of IFAs have systems that can administer the scheme internally. Bulk feeds such as leavers and joiners and are able to access scheme information and download from payroll. Many systems feed into the provider’s backoffice systems so the process is minimal and providers’ documents can be accessed instantly.
Many product providers now allow worksite access for employees. This means new employees can access information on the benefits package via the web and existing members can check on their benefits and valuations. This simplifies the process and will entail less work for the employer.
Do not underestimate the importance of financial planning and technology to employees in the workplace. An IFA firm that can advise on employee benefits is a valuable commodity, especially in the run-up to auto-enrolment.
Kim North is managing director at Technology & Technical