Some employers are turning to digital technology for their employee benefits experience. The Thomsons Online Benefits survey from April this year highlighted that over 60% of respondents place this as “high priority within their benefits strategy”.

 

Employees are seen as consumers and therefore want to see technology that can provide an instant experience that they can use and understand to make financial decisions. In my opinion, the employee is making decisions based upon a series of questions placed in front of them on a screen and they will react accordingly to the answers. This is an “algorithmic” solution which is a step-by-step procedure to solve a problem. The employee will receive an answer to their problem in very short period of time, make an instant decision and, press the button to proceed.

 

Purchasing financial products should NOT be the same as purchasing products from Amazon, your Supermarket or your favourite high street retailer. It is important to realise the purchase you make now has consequences for your financial future in, say, 25 years’ time!!

 

However, a financial planner does NOT see these as an employees as a “consumers” but as INDIVIDUALS, who have unique circumstances and unique needs. An experienced financial planner would reassure the individual that before any recommendation is made, they would need to fully understand their personal circumstances, to understand the reasons why it is important to them and, to have regular checkpoints to make sure they are on target to achieve the outcome they really want.

 

From an employer’s point of view, digital technology is simple, affordable and, a cost-effective way for providing employee benefits solutions. Using an Employee Benefits consultant such as Richmond House Corporate Services is about treating your employees as individuals who have unique circumstances.

 

Does it not make more sense as part of your Employee Engagement strategy to make your employee “feel part” of the business and, that you as their employer actually care about their financial wellbeing?

 

For instance, an employee is about to retire from your business and wants to know what their retirement options are. A digital technology solution may ask a series of questions and, hey presto there is the solution – either a guaranteed income (annuity) or a non-guaranteed income scheme (income drawdown).

 

A Financial planner would take into account their individual’s circumstances such as their health, their expenditure needs, potential life expectancy and, their dependants. They would investigate the various options available with the accumulated retirement fund and make recommendations.

So my question is – Would you personally make some of the most important decisions about your financial planning from answering computerised generated questions or, prefer to have a discussion with human being, who is professionally qualified to give financial advice?

Nigel Taylor Financial Planning Consultant CertPFS

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned about the content hereof and any such action or inaction. Professional advice is necessary for every case.