The anticipated repercussions of the COVID-19 crisis and Brexit ensure that few employers will have money to waste for the foreseeable future. So, getting the best bang for the buck should be a high priority.
Even the seemingly most menial costs should receive due attention. After all, Benjamin Franklin warned “Beware of little expenses. A small leak will sink a great ship.”
But it is crucial that cost cutting does not involve false economies, and dispensing with the services of a competitive expert adviser is probably the single biggest mistake a firm could make.
In most cases Chase de Vere has realised savings for its clients that far outweigh the remuneration we receive from them, and during the current economic climate this could prove crucial.
Our highly competitive fee structure is key to this, and we are happy to advise firms with other intermediaries how much they would stand to save if they switched to us instead.
Ways in which we can make attractive savings for our clients include setting up salary exchange arrangements for some employee benefits and introducing flexible benefits platforms – or switching to more suitable ones. Advances in technology now mean that flex and mini-flex schemes are no longer solely the preserve of larger organisations.
Reviewing and re-broking individual benefit schemes can also pay huge dividends, and pensions can be a particularly fruitful area. We offer a complimentary Workplace Pension Healthcheck to make sure investment choices and overall pension strategy are delivering the right outcomes and providing optimum value to both employer and employee.
We are finding that many employers have mistakenly rested on their laurels after complying with the letter of the auto enrolment law, meaning that their pension arrangements have failed to keep pace with the rapidly changing industry landscape.
Many newer pension providers have been entering the marketplace offering slicker propositions and lower annual management charges. Furthermore, if an employer has changed in size or in the age profile of its members since the introduction of auto enrolment, we may well be able to use this to secure even more generous terms.
Newer entrants and changing stances from existing players towards COVID-19 and other issues are also meaning that group risk and private medical insurance (PMI) arrangements can become quickly outdated and uncompetitive.
We can review, rebroke and benchmark these schemes and – crucially for maximising return on benefit spend – help communicate in an engaging manner to employees what they are offering.
To give a recent example of how we have helped, we were contacted by a prospective client that had two limited-term individual income protection policies for its directors and also needed to arrange two more.
We don’t think the directors, who were aged 40 to 45, had really understood that their cover limited benefit pay-outs to only five years. So we agreed that we would complete a market review to see what options were available.
We were consequently able to offer a group – rather than individual – income protection scheme which was £200 per annum cheaper and covered all four directors for benefit pay-outs right up until State Pension Age.
To give another recent example, on completing an insurance review of a client that had transferred to us from an IFA firm we purchased last year, we noted that the group life scheme had an expiry age of 65 – which could be discriminatory if employees worked past 65 as the firm could be providing different benefits based on age.
The client was originally apprehensive when we recommended increasing the expiry age to state pension age because it wanted to look at reducing costs, not increasing them. But, as a result of our market review, we were able to implement this recommended change and switch provider, creating a saving of around £100 a year in the process.
We have also secured clients some impressive cost savings on group PMI schemes by implementing or increasing excesses and by cutting back on other elements like outpatient cover.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.