Solving the advice gap: There’s only one viable solution…
With millions of people left to make complex financial decisions without professional help, wider introduction of technology designed to improve financial knowledge could be one way to help close the advice gap.
An obvious way this is beginning to happen is through financial wellness services aimed at helping people transition from work to retirement.
Retirement planning is a natural starting point
Because they have had a long role in attracting, retaining, and engaging employees, pensions are a natural starting point for employers.
Today, technology can be used to help workers understand and manage their accumulating pension pot.
Apps that provide easy access to online valuations and the ability to switch between funds and assets help to increase people’s understanding of – and engagement with – their financial futures.
These days, the majority of private sector pensions are defined contribution schemes. This helps increase the benefits of technology, which can be used to help people understand the real-time value of how the contributions they make today can affect the income they might have to retire on.
Pensions aren’t the only consideration
Financial wellbeing is about more than planning for retirement – it’s about feeling secure and in control throughout life.
Improved financial wellbeing relies on education and an all-round better understanding and awareness of managing money and personal finances.
Deployed in the right way, technology can help more people understand their financial situation, improve knowledge, and make better financial decisions.
There has been a significant increase in the number of employers acknowledging the importance of financial wellbeing over the past few years. And the Covid pandemic only served to increase the number of businesses seeking to introduce financial wellbeing initiatives to their employees.
Through user-friendly apps, companies like AdviceBridge can help improve financial understanding and knowledge and support employees to make improved financial decisions. The hope is, of course, that this should help lead to more people enjoying improved outcomes.
Employers also benefit from financial wellbeing
It should come as no surprise that people who enjoy good financial wellbeing are more productive at work.
According to a 2014 survey by Barclays, lost productivity, due to lack of financial wellbeing, could affect businesses’ bottom line by as much as 4%.
Meanwhile, in 2016, the UK economy lost £120.7 billion and 17.5 million work hours to financial stress. Two years later, in 2018, 11% of UK workers reported they had experienced a fall in productivity at some point over the preceding three years as a result of their personal financial situation.
Given the current cost of living crisis, it’s easy to see how businesses could benefit by providing some form of financial advice as a work perk to their employees.
This is borne out by research published by TheHRDirector, which states that 51% of employees would like more guidance on retirement and pensions from their employer, while 29% would like more guidance on savings.
Businesses are key to financial wellbeing and AdviceBridge can help
While many people aren’t out there seeking financial advice, most people are employed.
So, if every employed person was given financial advice, or simply access to technology that provided financial guidance, this would surely have a direct and positive affect on the advice gap.
As the leading automated digital retirement advice and guidance firm for financial planners, the AdviceBridge platform is the perfect way for advice firms to offer business owners a way to provide affordable financial advice to their employees.
The client-facing app gives employees a simple way to engage with their finances, as well as with their adviser/advice firm.
The goals-based tool allows clients to see how altering their finances will affect them now and in retirement. And they can update their information 24/7.
Because the intelligent software automates the processes, research and analysis, and identifies which wrappers the client should be utilising, while also automatically updating the financial plan, the platform is hugely cost-effective for advice firms.
In fact, it can cut the time spent on a new client from the typical 25 to 35 hours to under 6 hours (and that includes meetings) – saving 75% to 85% of the usual time.
By increasing the level of profitability substantially with smaller clients, AdviceBridge bridges the gap for lower value clients, making it ideal for use with group employee clients.
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