How Financial Planners Can Work with HR Officers

by Amyr Rocha Lima, CFP®

When taken at face value, the roles of Financial Planner and HR Officer may not appear to have much in common. Yet, it has become increasingly clear in recent times that these two roles can dovetail together perfectly in some situations.

The clearest benefit to be found in this joint approach is when it comes to helping senior employees who are considering their retirement options. So, how can these professionals work together to everyone’s benefit?

Financial Wellness and the Benefits of Working Together

Let’s start with the phrase “financial wellness”. This is an expression that has entered the HR lexicon in recent times but what exactly does it mean? Well, it can be described as an indication of how aware a person is of their current financial position, as well as their capability for saving and spending wisely in the future.

Employers have an important role to play in helping their staff to increase their financial wellbeing. This becomes even more crucial when dealing with employees who are getting ready to plan their retirement. This can be done in a number of ways and at any age, although it is most typically aimed at workers over the age of 50. The expanded freedom and choice now available in pension planning – following the Government’s 2014 Budget – has made getting professional advice at this stage more crucial than ever before.

A 2018 survey by Everyday Health (one of the world’s largest consumer health websites) showed that 52% of people regularly get stressed out about their financial situation, making this the most common source of stress reported. In addition, retirement is classed as the 10th most stressful event in life on the Holmes & Rahe Stress Scale, coming in not far behind getting fired and just ahead of a major change in a family member’s health.

Not to mention that financial problems or uncertainty over the future can seriously impact on someone’s performance at work. It is virtually impossible to keep this sort of issue away from their workplace. This situation is made even more difficult if they feel that their company has let them down by offering them incorrect or inadequate financial advice.

Therefore, it is easy to see why HR officers are so keen to increase the financial wellness of their staff. This becomes an even more pressing concern with senior management, particularly those who are at the stage of pre-retirement planning.

When offering independent financial advice from a trusted source, the business looks after its employees by letting them take control of their retirement planning. This kind of service can also allow staff to get advice on how best to use their employee benefits scheme, as well as give them the sort of general financial advice that everyone needs from time to time.

The Society for Human Resource Management reported that financial wellness training was one of the key trends for the years ahead. In fact, their studies showed that almost half of all employers offered some form of financial advice to their staff in 2017. Any company that fails their employees in this respect is likely to fall behind in terms of employee perception.

How Does This Work?

Even highly educated and experienced employees can lack the financial knowledge needed to plan their own retirement. HR officers can help to a degree, but the complexities of financial planning are quickly becoming hard to keep up with for anyone outside the financial planning profession.

Bear in mind that HR officers currently face a double-edged challenge too. As well as keeping up to date with the latest pension planning legislation, they also need to attempt to provide independent financial planning that their senior employees can trust and that is genuinely useful to them.

On the other hand, a financial planner can come in and offer independent advice that is drawn from their own years of studying and experience. A professional financial planner can ensure that the conversation with each employee is designed to help their specific needs, rather than merely being a general chat about financial education.

It is generally recommended that pre-retirement planning should be carried out 5 to 10 years before the anticipated retirement age. However, the earlier that it is done the better for the employee. Of course, the Equality Act 2010 needs to be taken into account, to avoid the risk of being accused of discriminating against older workers.

What Comes Next?

Think about this: as an executive in the HR department, hiring a CFO for your business is a smart decision, right? So, why not consider hiring a “personal CFO” to help senior employees navigate their own financial landscape?

It is usually the case that business can set aside a certain monetary budget that can be dedicated to this service. 

This will allow their employees to better understand and control their own financial future.

Amyr Rocha Lima, CFP® is a partner at Holland Hahn & Wills LLP, a financial planning practice based in Kingston upon Thames. He specialises in working with successful professionals age 50+ helping them reduce taxes, invest smarter and retire on their terms.

This article was originally published by Money Marketing. You can keep up with all future updates by clicking here.

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