The workplace should be central to generic financial advice

In its response to the Interim Report of the Thoresen Review of Generic Financial Advice, the National Association of Pension Funds (NAPF) believes the role the workplace can play in offering generic financial advice (GFA) has been underestimated and that it should be more central to its delivery.

The NAPF believes that GFA in the workplace will be crucial to the success of the introduction of Personal Accounts in 2012 especially for millions of employees who are not currently active members of a workplace pension scheme.

NAPF Chief Executive, Joanne Segars, said: “Generic Financial Advice will have a vital role to play in delivering a successful outcome for the coming pension reforms.

“The NAPF’s experience with PENSIONSFORCE shows that generic financial advice delivered through the workplace gets results and is cost-effective. We believe the review underestimates the role the workplace can play.

“Before submitting its final report to the Government, the Review should, as a matter of urgency, undertake a thorough examination of workplace generic financial advice, including running a pilot. The workplace is an ideal environment to reach many ‘hard to get’ people and it must be seen as a priority.

“The NAPF has experience in this field as it offers a free, independent service for employers and people at work called PENSIONSFORCE which helps workers understand the importance of planning for their retirement. This is a good example of the kind of delivery model that should be included in the final recommendations when they are published.

The NAPF believes that the workplace provides an ideal environment for the delivery of GFA:-

The workplace is a key trigger because people are already engaged to make financial decisions;

Group face-to-face meetings are a preferred way of receiving financial information - 81% of those surveyed after PENSIONSFORCE3 meetings said they prefer to receive information about retirement planning at such meetings;

It is a trusted environment, independent of commercial product providers. Government research4 which shows that employers were the most trusted organisation when it came to pensions;

It gives access to consumers who would not otherwise be easy to contact;

It offers a cost-effective method of reaching large groups of employees – the average cost of GFA can be as little as £12 per employee per meeting (PENSIONSFORCE cost)