The joint Advice Guidance Boundary Review aims to tackle the advice gap, aiding individuals in financial decision-making.
- FCA and Government proposals seek to empower employees with better financial support and understanding.
- Employers increasingly offer financial education and guidance programmes in the workplace.
- One-to-one guidance and educational seminars are proving beneficial for employee financial literacy.
- Due diligence on financial service providers ensures quality and regulatory compliance for workplace guidance.
The joint Advice Guidance Boundary Review, initiated by the FCA and the Government, is focused on bridging the ‘advice gap’. This gap signifies the challenges individuals face in recognising the necessity of financial support. The proposals presented are preliminary and open to modification, dependent on feedback and ongoing discussions.
Employers and Trustees are advised to proactively assist individuals in managing their finances effectively. As Jonathan Watts-Lay from WEALTH at work suggests, implementing simple yet proven methods can greatly aid in providing the right financial support. Employers frequently collaborate with specialists to deliver programmes that improve employee financial outcomes, such as guidance on investments and pension access.
Watts-Lay explains that financial education, through seminars and webinars, helps employees grasp a general understanding of their options. Moreover, personalised financial coaching allows for an in-depth comprehension of one’s financial situation. Recent research by the Reward & Employee Benefits Association indicates that 57% of employers plan to offer financial guidance services within two years. This shift recognises the need for more comprehensive support to aid employee decision-making.
Financial guidance becomes particularly crucial when employees approach retirement, needing advice on accessing pensions and savings. It serves as a preparatory step toward regulated advice, helping individuals identify complex financial requirements. As evidenced by Pension Wise statistics, users of such guidance are more likely to consult financial professionals.
To enhance this support, employers are turning to financial wellbeing and retirement service providers. Choosing the right provider requires stringent due diligence to ensure they possess necessary qualifications and experience. The focus is on ensuring that providers offer robust, compliant, and cost-effective services. Ultimately, empowering employees with timely and appropriate support can significantly improve their financial decision-making capabilities.
Empowering employees with adequate financial guidance at the right time results in improved financial outcomes for all involved.
