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Group pensions; Beyond the AVC conversation

Financial worries of employees are now cited as the biggest contributor to personal stress, over any other. The 2019 PWC Report on Workplace Wellness found that for more than 60% of employees, money worries were their biggest source of stress, more than that of work issues, relationships and even health concerns.

Whist advisers are keen to get to a deeper conversation level with scheme members, the ability in most cases to only see them once a year tends to label advisers more as the pension-man than the company’s financial planner.

Our regulatory fact-find doesn’t help matters either. It is often used as a type of blunt sales tool to prise open member needs, like a Pandora’s box of treasures, when it really, (if a member is prepared to compete it), just identifies the member’s product gaps, comparing what WE sell and they don’t have.

To move beyond the annual AVC conversation, advisers need to acquire new tools and a new value proposition.

Talking Financial Health

Most scheme members know that it's good advice to contribute more to their pension but in most cases what individuals really need, (know it or not), is help with their financial health.

Much research has been done into this area, which has illustrated that the areas of spend, save, borrow and plan are the 4 key components that mirror financial daily activities for individuals. It is said that what we do today in terms of spending, saving, borrowing, and planning either builds towards or detracts from our resilience and ability to pursue opportunities. This is our financial health.

What’s your FinScore?

In the US, the Financial Health Network developed an algorithm to measure the financial health of Americans called the FinHealth Score®. A scoring mechanism that has since been adopted by many entities both sides of the Atlantic, including a number of US banks, Barclays UK and the global personal finance App NerdWallet.

Centric & the Engage App now has exclusive access to the FinHealth Score® for advisers in Ireland.

Talking financial health resonates with individuals as the spotlight starts to focus on their real issues, relevant to them today… will I go into overdraft this month, how much will I pay off the credit card. By comparison the “need” to do an AVC for 20 years’ time tends to be pushed down the line.

Only by helping members in what they need today will advisers really reap the benefit of providing for their tomorrows.

Shifting your value proposition

Group schemes can be a lucrative and profitable part of an advisers business but this won’t be achieved being the pensions-man with a single annual meeting and a conversation about AVCs. Advisers need to be positioned as the financial planner for the company and have access to tools and technology to elevate them to this position.

HR and business owners are all too aware of the financial strains of employees and are continually in a tug of war about benefits and salary increases. An adviser that can assist in the financial health of employees starts to be a strategic asset for the business and an integral part of their financial wellness solution.

Getting scheme members engaged in their finances using tools and interactive calculators is the first step to shifting the dial. If the conversation becomes relevant to them you will win their interest and their loyalty.

Digital connection

The other vital element is communication. Advisers cannot build sufficient credibility and brand from a single yearly meeting.

Going digital with scheme members gets the advisers brand in front of the scheme members throughout the year and provides a platform for relevant content to be presented to members at key times.

With digital technology all around us and in our everyday lives it now seems archaic that an adviser, who can be such a positive influence on a member's personal finances, may only communicate once a year.

Karl O Meara


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