SA professionals and management need financial education too

While there has been a significant increase in the quality and quantity of financial education offered by South African companies to low to middle income employees, professionals - such as doctors, lawyers and engineers as well as management - are often overlooked, leaving them without the necessary tools to plan for their golden years.

“Many companies overlook the fact that just because professionals and management are experts in their particular fields, they are not necessarily astute around financial matters,” says Haddon de Waal, Head of the Financial Wellbeing Programme at Old Mutual Corporate.

In order to meet this need for further financial education among professionals and management in South Africa, Old Mutual has developed FIN360° - a new holistic financial offering of Old Mutual’s Financial Wellbeing Programme, which targets the unique needs of the middle to high income bracket and retirement fund members.

According to de Waal, FIN360° has been designed to complement “On the Money” (an existing money management workshop offered by the Financial Wellbeing Programme), which has enjoyed success in the low to middle income bracket.

Importantly, these tools or offerings aim to offer assistance to individuals in planning for their financial future given the key findings from the recent Old Mutual Savings Monitor which showed that more than a third of urban professionals in South Africa were saving less in the wake of the recent global economic downturn.

Furthermore, the research also pointed out that South Africans have a hunger for savings knowledge. A key challenge was to broaden the reach of experts and facilitate the right conversations. In short, the need to share financial wisdom and empower South Africans to save is pivotal to fostering a savings culture.

David Hands, Senior Legal Adviser, Old Mutual Private Wealth Management and FIN360° Product Manager, points out that FIN360° provides a holistic overview of the main pillars of financial planning whilst emphasising the value of advice and providing a platform for the sharing of information critical to the financial wellbeing of individuals.

“The target audience is middle to senior management and directors as well as members of retirement funds. However, modules are also offered to small business owners, family owned businesses and current or future professionals, such as medical registrars, attorneys, chartered accountants and engineers.”

Hands says that other than member-education o­n a specific retirement fund, which would refer to the benefits of that fund, the modules discuss o­nly generic financial principles. “Employers, trustees, and small business owners have an opportunity to draw from a wide range of educational modules to ensure that employees and members are equipped to make informed financial decisions.”

In the employee benefits space specifically, modules include Advanced Retirement planning, Planning at Retirement, Retirement Fund Member Education, and Leaving a Retirement Fund (resignation, dismissal, retirement) which can also be offered in conjunction with the Building Resilience Group (Retrenchment Assistance).

Other modules cover Wealth and Your Business, Wills and Estate Planning, Investment Planning, Risk Management, Banking and Perspectives o­n Financial Planning.

Unsurprisingly, an Australian survey in 2008 (Mercer Benefits Outside the Square Study, 2008. Australian Financial Review 9 October 2008) found that “While fair pay, a rewarding job, and flexible working arrangements were still important employment benefits for over-50’s, many also wanted their employers to help with planning for retirement and to give financial advice”. The top answer by employees over 50 as to how employers could help them prepare for their retirement was “providing financial advice, guidance, and education”. Certainly, the success of such modules presented by Old Mutual shows that this appears to hold true for South Africa, too.

“The retirement sessions in particular assist trustees and employers to fulfil their obligations to educate and inform members,” says de Waal. “The impact of employee financial wellness should not be overlooked by employers.”

Hands further points out, ‘’There is a perception that the industry uses a lot of jargon and the FIN360° sessions aim to demystify the topics, while presenting the attendees with practical guidance o­n the various aspects covered and empowering them to take responsibility for their financial wellbeing. In addition, the value of advice is a critical part of the programme and by providing access to advice, the financial future of attendees is secured.”