This week, Heather Hopkins (@heatherahopkins) and Miranda Seath (@SeathMiranda) give an update on Platforum’s recent survey of Employee Benefit Consultants, Corporate Advisers and Employers as part of our Workplace Savings Research.
Our recent survey of Corporate Advisers and EBCs has yielded some interesting results. When we asked what most influenced selection of workplace savings provider, we were a bit surprised that “ease of use for employees” came in first place, followed closely by cost and charges.
- 51% say cost/charges most important in selecting a provider for workplace savings compared to 54% for ease of use for employees.
We had expected that charges would supersede ease of use for employees.
In our conversations with employers, these two criteria keep coming up at the top of the list. If the employees can’t use the member portal, the HR team is going to get complaints. Ease of use has become a bit of a hygiene factor.
One head of HR of a mid-size employer told us last week that ease of use for the employee was key, followed by charges. But as with everything – the devil is in the detail. This particular head of HR had used the system once to make sure it worked but wasn’t aware that the provider offered an app for example. She relied on the number of complaints from employees to tell her if the system was a problem.
The importance of ease of use is being recognised by providers. Without it, employee engagement becomes extremely difficult. And the pension freedoms have been driving a focus on improving employee engagement across the board.
There has been some talk in the press in the past few weeks about the importance of fund charges versus fund performance in workplace savings. The view of many is that low charges may be important but not at the expense of fund performance because in the long-run investment performance can have a much bigger impact on the value of the investment.
But EBCs and corporate advisers don’t agree. They tell us that fund charges are nearly twice as important than past performance in selecting funds for workplace savings plans.
- 45% say fund charges most important for selecting funds compared to 25% who say past performance
We are doing follow up calls with advisers and EBCs now to ask their views on these issues. The reality is that as a result of the charge cap of 75 bps (introduced in April 2015), fees have become paramount in selecting funds. Whether that will change – time will tell.
As ever, if you would like to contribute to our research on these issues do get in touch.
And finally…huge congratulations to Natalie and the team at our sister publication Money Marketing for scooping four awards at the Santander Personal Finance Media Awards. A nice way to end the week.