The current economic climate and the fallout from the Covid pandemic have led to a radical rethink in the way many companies approach employee benefits.
This has presented challenges for those in the consulting area, but it is also creating opportunities, particularly for firms delivering more flexible benefit packages and utilising new technology options.
Ready to capitalise on this opportunity is the new corporate benefits arm of Radiant Group, headed up by David Dolding, a former senior manager at Aon, Portus and Lorica.
Dolding’s job title is director of corporate benefits at Radiant Financial Group, and he is confident this new venture is well- placed to benefit from these underlying changes in the market.
It is clear the group has ambitious growth plans, and in the last six months alone has taken on 20 new clients.
Dolding says one of Radiant’s USPs is its ability to bridge the traditional gap that has existed between corporate benefits and more personalised financial advice. Dolding says this has the potential to offer far more effective financial wellbeing and education services.
Radiant Financial Group is a IFA consolidator — which currently comprises of three companies: CWB, PPS & ReSource Mortgages. The firm has 20 advisers and assets under management of £800m But this newest division is focusing on the corporate market, rather than the private client world.
Dolding says: “There are a lot of companies that do a fantastic job of looking after their clients. But they do not always have the capability to look after the employees properly too.
“This was one of the main attractions of joining Radiant, and setting up a corporate benefit team within an IFA company. This offers the opportunity to look after employees as well as the employer.”
Dolding says the company isn’t necessarily targeting the large multi-national corporates typically served by the larger consultancy firms. The firms ‘sweet spot’ is companies with thousands of employees rather than tens of thousands, though he says they have the flexibility to provide employee benefits for those with just 10 employees.
Like many employee benefit firms, there is a focus on financial education and financial wellbeing. But Dolding says there is a “subtle difference” in the way this is delivered.
“Most employee benefit firms are only offering guidance. So they can explain why you should contribute more into a pension, or what the options might be in terms of debt or saving.
“This can get employees to the point where they understand what they can do with their money. But it doesn’t necessarily tell them what they should be doing. As all our one-to-one sessions and workshops are provided by qualified financial advisers we can help bridge this gap, and give more personalised advice.”
Without this advice he says many employees never take the action they are discussion in workplace seminars or workshops. “We move from what they could be doing to what they should be doing,” he says.
Allied to this he says, is the problem that in many traditional EBC firms, the focus is on pensions. “When people in the EBC businesses talk about financial wellbeing they are often only relating this to retirement benefits.”
Having workshops, seminars and face- to-face sessions run by qualified advisers can mean a far broader financial focus. “It is no good telling people to put more into their pension if they don’t have any spare money at the end of the month. Financial wellbeing needs to encompass budgeting, debt and credit scores.
“Better education and advice on these issues can help people free up some money each month, but then a wider discussion is needed around how this is used.”
Being part of the wider Radiant Group means advisers can also talk about mortgages, Isas and other savings products, as well as pensions he says, which are as relevant to day-to-day employee wellbeing as retirement saving, if not moreso.
There has been a renewed focus recently on financial education in the workplace and the challenge of providing advice as opposed to guidance. Many of the solutions proposed to date have been driven by technology to help reduce the regulatory and other associated costs of advice.
But Dolding firmly believes that this kind of financial support and advice is more effective when delivered by another human being.
In the current climate face-to-face advice has been challenging, but face-to- zoom discussions, for example, still allow for a more wide-ranging conversation that isn’t always possible using algorithm-driven robo-services, he says.
“Robo-advice has its place, but even the more sophisticated services are essentially using decision trees. The don’t get into the nuts and bolts of how people feel regarding financial decisions. People often know they are not saving enough into a pension, but it’s important to understand why they are not saving more. This often only emerges from a more in-depth conversation, which examines how people feel about certain financial decisions.”
Face-to-face advice is more costly, but Dolding says that the one-to-one meeting, seminar and workshops are all covered in the client’s fee. He says if employees need more extensive advice, for example building a bespoke investment portfolio, there is the option for the employee to use the same adviser but paying an additional fee. There is clearly an advice gap across the UK, but people may feel more confident talking to an adviser that has been introduced through their workplace and they have already spoken to. “Traditionally financial advice has been kept separate. An EBC might can pass on a business card or recommendation where employees can go to for more personalised advice, but it most cases this is never acted upon.”
The coronavirus pandemic has certainly created challenges for those in the consulting industry. But as Radiant Financial Group’s recent growth shows that there is the potential to grow despite the current challenges.
Dolding says: “The government has talked about building back better after Covid-19. This doesn’t just apply to the economy as a whole, it also applies to many individual industries.
“Many companies have been affected by the events of the last year, and will be reassessing employee benefits. There is an opportunity to build better benefits here. This doesn’t necessarily mean spending more money or offering more benefits. It may be a case of reshaping the offering to ensure benefit are better targeted and more utilised.”
Again Dolding returns the key role financial wellbeing can play particularly in relation to mental health.
“In the wake of this pandemic there will be even more of a focus on mental health. But if you look at the figures the single biggest cause of mental health problems isn’t additions, it isn’t relationship problems and it isn’t stress at work: it is financial concerns.”
Figures suggest that one in 10 people now suffer serious debt problem, and this statistic is only likely to worsen as a result of the pandemic. Dolding says: “In a company with 1,000 employees this means 100 people are likely to have serious debt problems. This will impact on things like productivity and presenteeism, and HR departments may be unaware of the cause. “Putting in place an effective financial wellbeing programme that tackles issues like debt can help address these issues head-on. It’s about treating the causes of mental health, not just its symptoms.”
Dolding says he has drawn on his experience working for companies like Lorica and Portus when setting up this latest venture. “Portus was really successful when it came to focusing on individual customer experience.
“With Portus clients knew who their consultant was, and they knew who the administration support was for medical insurance or group risk. The team was build around the client.”
He says he wants to take this experience and expand it with Radiant. “Each client will have a named corporate consultant and a financial adviser or planner. The focus is on providing service for the employer and employees.”
One areas where Radiant is doing things differently is with technology. Dolding says Radiant will be “agnostic” when it comes to technology providers, and is not tied to any one provider or platform.
“Companies like Aon have developed their own in-house tech. If they are providing the technology this can drive the relationship. We see tech more as a tool to ensure we are delivering the right service. We will work with whatever platform or provider that is best suited for that particular client.”
He points out that this can vary depending on a number of factors, from the size of the client, their budget, existing systems and services and the range of benefits provided.
When it comes to technology Dolding is critical of the recent trend within the EB wellbeing market, which he describes as “an app for everything”.
While he says that there are certainly some very good apps being developed, he cites Bupa and Aviva wellbeing apps as being particularly effective, there is a proliferation of different services which is leading to “app fatigue”.
“There is a lot of crossover between many of these services, whether that are offered by group risk or pension providers. There are then also apps that look to consolidate a range of existing employee benefit apps. But in many cases these are simply going to sit on people’s phones and not be used.
“It is like when flexible benefit platforms where first launched. There were touted as being the panacea to everything at the time.” However, he says any technological innovation — be it platforms or apps — needs to be backed by proper engagement and communications. This has to be personalised and pro-active, encouraging clients to utilise their various benefits available. This he sees as being the key role of the consultant.
Getting high levels of engagement isn’t always easy — particularly during a pandemic. At Radiant, Dolding says he is trying to “shake things up a bit”. For example he says consultants will often offer seminar or surgeries on pre-retirement planning or making the most of pensions. Instead the financial advice team are running sessions titled: “I’ve never got any money” or “The trouble with kids”.
“Hopefully these will appeal to more people, and relate to the financial issues people face in their own lives. If we can get this engagement then we can start to address issues of financial wellbeing and education.”
While this new corporate team is looking to expand it client base, the company Radiant Financial Group also has ambitious growth plans.
Radiant, which is backed by Apiary Capital currently, is looking to acquire further businesses. However Dolding says the ethos of the firm isn’t acquisition for acquisition’s sake. “We are looking for to acquire like-minded businesses that share similar culture and values.”
He says this will include an innovative outlook, a focus on customer experience and a commitment to working in the best interests of the client.
This may reduce the pool of available businesses, he says. But the intention is to grow through acquisition, buying businesses that fit the working culture and help expand the scope and range of member services available. This should all serve to help Radiant’s proposition in the corporate market Dolding says.