This week Jeremy Fawcett (@jfawcett), Head of Direct, looks at new technology for workplace savings on the eve of the publication of our latest Workplace Savings Guide…
Recent McKinsey research shows that chief execs and landscape workers are unlikely to be replaced by automation, but aspects of many other roles will be. However, another way the workplace is being impacted by the robos is the workplace savings arena. The benefits of the pension freedoms are only available to those aware of the choices available and who do something about them. Cue the development of guided journeys to engage more people and here are three examples:
Aegon Retiready has been around for 18 months as the consumer interface for Aegon’s retirement planning service with a focus on helping the less confident investor understand how to prepare for retirement. The intention is to use the proposition in all channels – D2C, adviser and workplace – and employee engagement is delivered by a digital first strategy.
It is easy to navigate with a tight investment choice of four BlackRock volatility funds and it all works well on mobile devices. Nearly half of existing employees have registered online and 70% of members of new schemes have used the tools.
Hyman Robertson has developed a set of tools called GO (Guided Outcomes). The starting point is realisation that inertia is the problem rather than aversion to more saving… people are happy to save more if it’s easy. However, for many people, establishing how much they want to target as a retirement income is not easy.
GO helps them to establish target income, know what chance they have of achieving it and then build a strategy for getting there. Employees can choose to take or ignore the suggestions or ask the system to manage the process for them in the workplace. This is done by ongoing monitoring of their circumstances and automatically changing retirement age, investment risk or contribution levels to keep on track.
It is offered to employers and trustees as a white-labelled tool so they can help their employees without offering advice. A partnership with Aberdeen Asset Management will be the first implementation by a provider.
500,000 scheme members have used it and £2.5bn new assets have been acquired by Hyman Robertson’s DC consulting business through it.
The pension freedoms have also inspired LV= to address the mismatch between more choice for the consumer and a lack of current demand for retirement advice. Its workplace offering, CORA (Clear Online Retirement Advice) provides full regulated advice at a fixed cost – £199 with implementation for a further £499.
The acquisition of Wealth Wizards enables LV= to offer retirement choices ‘robo-advice’ for the workplace and, while some see the rise of the ‘robos’ as a threat to traditional advice, LV= is offering automated processes to people who wouldn’t typically have sought advice.
It’s a little over 18 months since George Osborn’s pension freedoms budget speech and that’s enough time for new propositions that it inspired to be launching. With the new paternalism looking to nudge more people into looking after themselves, the workplace will be the centre of long-term-saving gravity for many. Platforum’s latest research looks at this topic in depth. In particular, we found that ease of use for employees was among most important criteria for selecting a workplace provider according to both employers and advisers/EBCs. We will publish our latest Workplace Savings Guide next week – for more information click here or give us a call at 020 7970 4165.