When it comes to successfully introducing a corporate wrap platform it would be easy to claim that we already have all the answers. But our our break-out sessions at the Corporate Adviser Summit in October still provided much room to debate.
In our session – 21st century workplace savings – we asked more than 40 corporate IFAs and employee benefit consultants what they expected from the roll-out of corporate benefit platforms, offering a range of short-, medium- and longterm savings vehicles.
The clear message from these discussions was while the concept has strong support across the market, there is no consensus yet on how these saving vehicles should be designed. But while employers clearly like the concept, and fully expect the financial services community to be able to deliver the sort of proposition they and their employees will want, what is less clear is how we and our intermediary partners will ultimately bring such an offering to them. Choice remains a key issue. Employers want a greater choice of solutions for different types of employee.
But advisers have emphasised the risk that too much choice can paralyse staff into inaction. Clearly, intuitive screen design and messages which nudge and simplify rather than direct and confuse are important in platform design.
Intermediaries also raised concerns over how pension, Isa and short-term savings vehicles can be positioned as core benefits, to differentiate them from being perceived as just another set of fluffy new alternatives. While a limited choice of savings alternatives could appeal to employees bamboozled by the overwhelming range of options available to them in the wider marketplace, advisers underlined the regulatory challenge of determining how such a limited range will be selected, and how this limitation would be communicated to the client.
And while talk of choice and flexibility is generally considered a good thing, consultants also raised questions over how corporate ISA can avoid being seen as simply giving staff easy access to cash.
A further challenge will be the communication of the new wrap technology. Even the best new systems will sit unused in some rarely visited corner of the employer’s intranet if nobody knows about them.
Advisers know there is more to rebuilding a culture of savings in the workplace than simply dropping a website onto a portal. And while
technology will never replace face-toface advice, we already know that used cleverly, it can be successful in increasing take-up and contribution
rates in workplace pensions.
Adapting those lessons for a wider range of benefits and taking them to the next level will form part of the work we expect to carry out with our intermediary partners in the coming months and years. The rate at which new platforms are adopted will vary from employer to employer.
Some may embrace the whole concept of the platform at once, while for others a gradual introduction to features may be more appropriate,
with external factors such as defined benefit deficit reduction and the increased cost of auto-enrolment affecting some buyers’ decisions.
But auto-enrolment has to offer a unique opportunity to talk about employers’ entire benefits packages.
Whether employers level down or take the extra cost of higher scheme membership ratios on the chin, the idea of getting more value for your benefit spend will appeal.
Advisers also told us that positioning corporate wrap platform differently for different parts of employers’ businesses will be key. HR directors
will be receptive to the concept as it will help them to provide something for everyone, from the high earner to those individuals concerned with debt or shorter term savings.
And a clear message on how features such as group Sipp and share rollover can benefit decision-makers in the boardroom will also help take-up. Now is a pivotal moment for our market and advisers have a great opportunity to shape the future into something that will work for them. We look forward to hearing more of your views on how to make corporate benefit platforms a success.
Head of Workplace Development