Full launch of the product is pencilled in for the second half of 2010. One corporate IFA who has seen the system has described it as ’the first corporate wrap proposition I have seen that actually works’.
Widows says My Money Works is designed to connect with the one in two employees who do not sign up to pension schemes.
Information will not be fed in from other providers in the first stage of roll-out. Instead employees will input figures for their other savings, and they will be guided through a series of scenarios, modelling tools and financial information.
Widows says it expects a high number of employees using the system to be able to arrive at a purchasing decision whether for pension, protection – which Widows is not currently distributing – or savings. This could be online or by being guided towards Widows direct advisers. People with more complex needs will be given the option of independent financial advice.
The product will have a traditionally priced corporate pension at its core, with an additional charge for the extra services. How many more basis points the service will cost is yet to be determined.
Widows says its research shows that while some employers do not want their staff dealing with financial matters in company time, there is a substantial proportion that see the retention and motivation benefits of doing so.
John Taylor, market director, corporate pensions at Scottish Widows says: “Not so long ago we had people like the Man from the Pru, but they are gone. With the RDR pushing IFAs even further up market than they already are, that creates an advice gap. The challenge is to help employees deal with financial issues.
“We will be going live with an employer with many thousands of employees in a couple of months, and then launching in the second half of the year.
“We are excited at the prospect of revolutionising the way the workplace can be used to help these people who have no access to advice elsewhere to deal with their financial issues.”