Some employers ‘cautious of offering financial advice due to reputation worries’

Some employers are being put off from offering financial advice as a workplace benefit amid concerns that it could potentially end up reflecting badly on them, a survey has found.

A third (34%) of organisations do not offer financial advice, rising to just over half (51%) of organisations with fewer than 500 employees, the research indicated.

Among those with no intention of introducing financial advice as a benefit in the near future, the most common reason given was perceptions around the risks of inappropriate advice being given and it reflecting badly on the organisation itself.

Some firms also did not consider financial advice to be an important workplace benefit.

When asked what would make them consider offering financial advice as a benefit, some employers said they would want to see staff requesting it, or evidence that employees would take it up.

The research, from Close Brothers’ Workplace Financial Wellbeing Service, also found that, when considering the workplace benefits that would most positively impact their financial wellbeing, financial advice came third on the list of priorities for employees (36%), after pension (52%) and private medical cover (38%).

Workers aged 25 to 34 would be particularly keen on receiving financial advice, the research indicated.

Pensions and retirement advice was found to be the most common type of advice offered.

Jeanette Makings, head of workplace financial wellbeing at Close Brothers, 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.”

She added: “When trying to navigate such a complex market on their own, employees are vulnerable to considerable variation in quality, price and service…

“When it comes to choosing a provider, note that some may not be able to provide the full range of advice services. So, employers need to understand the range of advice and any limitations of expertise from possible providers.”

YouGov surveyed over 1,000 employees and 500 employers between March and July.