Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Table of Contents 4
Table of figures 5
Table of tables 6
Introduction to workplace marketing 7
Workplace marketing distributes financial products via the workplace 7
Standard, flexible and voluntary benefits are usually offered in the workplace 7
Standard benefits cover an array of retail financial products 8
Flexible benefits allows employees to choose the extent of provision 8
Voluntary benefits place a larger role of responsibility on the employee to arrange the service 9
Life and pensions products are offered under workplace marketing 9
Other products offered include private medical insurance and retail banking perks 10
Companies' benefit strategy hinges on employee demand 11
Workplace marketing benefits financial service providers, employers and employees 11
Key drivers for establishing workplace marketing 12
Changing workplace structure: The UK labor market is offering the opportunity to establish workplace marketing 12
The UK employee market is vastly underserved 13
Industrial variations in size of business need to be taken in account before establishing workplace operations 16
The number of employees per site is important in assessing how to service the employee base 17
Changing consumer priorities: A workplace channel will meet the requirements of today's consumer priorities 18
Consumers' trust in financial service institutions are lower than ever and it is to the workplace they need to turn to 19
Workplace marketing provides an opportunity to meet consumers' short-term priorities 19
The workplace can facilitate consumers' search for more financial information 21
Consumers are now paying significantly more attention to financial services literature, and providers should take note 22
Pensions reform: The introduction of NESTs will change the UK pension product landscape 23
NESTs will provide a pool of 10 million employees who are currently not saving enough for retirement 23
The UK government is reforming workplace pension provision from 2012 to make saving for retirement the norm 24
Automatic enrollment under the Pensions Act 2008 hopes to reform workplace pension provision 24
Automatic enrollment is seen positively as a way of overcoming employee's apathy towards pensions 25
Employees need to grasp the opportunity offered from workplace marketing as the move from DB to DC pensions transfer financial risk onto them 26
Prior to NESTS, the introduction of stakeholder pensions in 2001 had failed to produce the expected take-up results 28
However, policy must also place emphasis on financial education among young people to increase financial responsibility 28
Distribution reform: The Retail Distribution Review will change the pattern of distribution in the market 29
The RDR produces key challenges for IFAs who will now need to capture opportunities within workplace marketing 30
Higher qualification requirements will intensify competitive pressure on IFAs 30
The proposed remuneration structure may cause investors to switch from the IFA route to bancassurance 32
New independence requirement for advisors will improve the reputation of financial advice 32
A basic and generic advice model in the workplace will promote employees to have a holistic approach to financial planning 33
The type of advice on offer will affect employee take-up rates 33
The RDR demonstrates clarity of offering and value to customers 35
The steps to success 37
Employers must allow for flexibility of benefits to match current labor and workplace trends 38
Flexible benefits need to be offered to match the wider labor market move towards a more flexible working environment 38
Flexible and innovative reward systems will foster employee loyalty and increase staff retention 38
Motivating employees is vital in order to enable successful implementation of workplace marketing 39
Businesses must engage their employees the same way as they expect to engage their consumers 39
The right targeting, effective education and correct levels of service are essential for a successful workplace operation 40
Providers must target the right industries and consider the level of access they are able to achieve within each company 40
Workplace communication and marketing is of high importance to enable employees to appreciate the personal value of a benefit 41
Communication and understanding are vitally important for the development of benefits in the workplace 41
The right employer attitude will also be an essential factor influencing the success of a workplace project 42
Financial services providers must also not forget the role of service in workplace marketing 42
A main driver for growth is to increasingly focus on ways of maximizing profits through cross-selling and product innovation 43
Opportunities like in offering total-product suites in the workplace 43
Benefits offered need to suit the flexibility required to meet consumers' short-term anxieties 44
Provider opportunities lie in proactively encouraging companies to set up financial benefit schemes 44
The most common channel for establishing a workplace partnership is through direct negotiation between provider and client 45
Employee benefit consultants are widely used by companies as a strategic management tool to help recruit and retain talent 45
IFAs provide a unique selling point of being able to research and advise on all available products 47
Direct partnering with a financial institution is a method that eliminates the need to employ a benefits consultant or IFA 48
APPENDIX 49
Definitions 49
Single premium policy 49
Regular premium 49
New business 49
Wrap accounts 49
Product definitions 49
Life based savings products 49
Life Assurance 49
Single Premium Life 50
With-profit bond 50
Unit-linked bond 50
Income and growth bonds 50
Guaranteed Equity bonds 51
Distribution bonds 51
Purchased Life Annuities 51
Other bonds 51
Annual Premium Life 51
Endowment Policy 51
Whole of Life Insurance 52
Term Assurance 52
Income Protection 52
Critical Illness 52
Collective Life 52
ISAs 52
Personal Pensions 52
Stakeholder Pensions 53
Group personal pensions 53
DSS Rebates 53
Employer Sponsored Stakeholder pension (ESS) 53
SIPPs (Self Invested Personal Pensions) 53
FSAVC (Free-Standing Additional Voluntary Contributions) 53
ABI definitions of distribution channels 53
Independent Financial Advisors (IFAs) 53
Direct sales forces 53
Tied agents 54
Multi-tied agents 54
Bancassurance 54
Direct marketing 54
Telesales 54
Other 54
Matrix-Data definitions 54
IFA firm types 54
Grossed Annual Aggregate Turnover 55
IFA sales people 55
Further reading 55
Ask the analyst 55
Datamonitor consulting 55
Disclaimer 55
List of Tables
Table 1: UK employment by number of employees per business size 15
Table 2: Yearly earnings (£m) split by industry 16
Table 3: Average number of people per physical site split by industry 18
List of Figures
Figure 1: Distribution within the UK labor market is focused around big companies 14
Figure 2: The construction and education industries have the lowest average number of people per physical site 17
Figure 3: Consumers lack motivation to invest more for the long term in the next six months 20
Figure 4: Consumers fail to look more interested in the financial world in general 21
Figure 5: Although the financial world in general has failed to inspire consumers interests, consumers are paying more attention to FS literature than before the downturn 22
Figure 6: Ten million people are expected to participate in the Personal Accounts scheme in 2012 24
Figure 7: By 2012 it is proposed that employees will have a minimum of 8% of their salary paid into a personal pension scheme 26
Figure 8: The basic state pension forms the foundation of pension provision 27
Figure 9: The RDR creates three key challenges for the IFA model 31
Figure 10: While individual face-to-face advice is the most effective method of communication it is the most expensive to provide 34
Figure 11: The RDR proposes a three way split for advice 36
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