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- What have mortgages got to do with staff superannuation?
What have mortgages got to do with staff superannuation?
- By Deborah Blakey
- Published 4/09/2008
- Winter 2008
- Unrated
Employers are increasingly faced with challenges in retaining good staff. Most employers are asking how they can go about creating a work force that is committed and satisfied, especially in a market where the average tenure of employees hovers around the two-year mark and HR and managers alike are consumed with the seemingly endless task of hiring and re-hiring.
Organisations are faced with the challenge of creating a workforce that is ‘engaged’, with employees who are true advocates for their organisation. Psychologists define engagement as a state where employees achieve performance levels beyond what is required of their stated jobs because they feel valued by the organisation and that they have a vested interest in the organisation’s success.
International research has confirmed that there are many drivers of engagement. They may differ from country to country and industry to industry, but consistent drivers include the opportunity for development, confidence in the organisational leadership and rewards which are evident and well-communicated. As independent financial advisers to both employers and employees, we believe we can assist the employer in giving their employees evident and well-communicated rewards.
Faced with the pressure to stop the leakage of talent or to attract key staff, many organizations succumb to immediate short-term solutions such as enticing workers with higher pay. Although remuneration is obviously a key driver in retaining staff, it is interesting that increased remuneration can be a stop-gap solution and may not really change the culture in the long term to one that is committed and loyal. One of the issues with remuneration is that it does not have the high visibility that other staff benefits may have.
Interestingly, superannuation offers significant opportunities to give staff visible benefit. Moore Stephens is working with employers to investigate opportunities to use their corporate super arrangements to deliver this visible benefit. There are many areas that can be considered and one of these is debt management advice. Which begs the question – what has debt management got to do with members super? If you're looking for a direct link, the answer is probably not a lot. However, a person's financial well-being is a complex composition of many areas and leading advisers are seeing the value in regarding a super member's whole financial situation.
The service provided by Moore Stephens to our corporate super clients is structured under our own Australian Financial Services License and gives us the ability to design a fully-rounded service to employees, as opposed to promoting the actual product of whichever super fund has been selected as the default fund. Many services can be included as part of the wider member value proposition and mortgages are increasingly playing a prominent role.
For example, the overall corporate super service can be structured so that every super fund member is entitled to receive a free ‘loan health check’ with a mortgage professional at no cost to the employer or employee. A mortgage is likely to be the biggest single debt that most people have, and one that may not be paid off for many years – and ultimately an employee's super is likely to be the biggest single asset apart from the family home. The whole package can give considerable benefit to the employee and kudos for the employer, who is seen by staff as providing an immediate and visible benefit.
The interesting thing about debt management is how it transcends all age groups. Although generational factors will play a role in terms of what debt scenario the member is currently facing, every age group is faced with issues around managing their debt.
Members of generation Y (age 20 to 30) are likely to be more interested in paying off student debt or consolidating consumer debt in a mortgage arrangement. As first-time home-buyers there are considerable advantages to talking to a mortgage professional rather than relying on a local bank for their best deal.
For generation Xers (age 30 to 43) the issues are likely to relate to getting the best deal on a home mortgage product. Especially if they have been in the property market for a few years, it is vital to re-assess whether the mortgage deal offered a few years ago is still as competitive as it once was. For example, a client who set up their mortgage several years ago may be proud of the fact they negotiated a 0.5 per cent discount, unaware that in recent years discounts have been increased to 0.7 per cent.
Furthermore, many existing mortgage clients are not conversant with the benefits of having a free redraw facility which can make it worthwhile to have salary credited directly to a mortgage account.
For those nearing or at retirement, mortgages may play a key part in retirement planning. Many retirees have heard remotely of reverse mortgages – very few would understand the way different products operate or have any notion of the increasing trend of retaining modest levels of debt in retirement by using a reverse mortgage product.
A mortgage professional combines professional expertise with access to many different lenders and hundreds of home loan products, thus providing an efficient and cost-effective method of reviewing, negotiating and organising home loan options or consolidating debt.
It's all about options and employers making it easy for employees to explore their options. There’s nothing quite as easy as havin
g a mortgage professional visit your work-place and being given the opportunity to have a free loan health check and assistance with refinancing, debtconsolidation, investment loan design – or whatever your current debt needs are.
It’s all about options and employers making it easy for employees to explore their options.
Organisations are faced with the challenge of creating a workforce that is ‘engaged’, with employees who are true advocates for their organisation. Psychologists define engagement as a state where employees achieve performance levels beyond what is required of their stated jobs because they feel valued by the organisation and that they have a vested interest in the organisation’s success.
International research has confirmed that there are many drivers of engagement. They may differ from country to country and industry to industry, but consistent drivers include the opportunity for development, confidence in the organisational leadership and rewards which are evident and well-communicated. As independent financial advisers to both employers and employees, we believe we can assist the employer in giving their employees evident and well-communicated rewards.
Faced with the pressure to stop the leakage of talent or to attract key staff, many organizations succumb to immediate short-term solutions such as enticing workers with higher pay. Although remuneration is obviously a key driver in retaining staff, it is interesting that increased remuneration can be a stop-gap solution and may not really change the culture in the long term to one that is committed and loyal. One of the issues with remuneration is that it does not have the high visibility that other staff benefits may have.
Interestingly, superannuation offers significant opportunities to give staff visible benefit. Moore Stephens is working with employers to investigate opportunities to use their corporate super arrangements to deliver this visible benefit. There are many areas that can be considered and one of these is debt management advice. Which begs the question – what has debt management got to do with members super? If you're looking for a direct link, the answer is probably not a lot. However, a person's financial well-being is a complex composition of many areas and leading advisers are seeing the value in regarding a super member's whole financial situation.
The service provided by Moore Stephens to our corporate super clients is structured under our own Australian Financial Services License and gives us the ability to design a fully-rounded service to employees, as opposed to promoting the actual product of whichever super fund has been selected as the default fund. Many services can be included as part of the wider member value proposition and mortgages are increasingly playing a prominent role.
For example, the overall corporate super service can be structured so that every super fund member is entitled to receive a free ‘loan health check’ with a mortgage professional at no cost to the employer or employee. A mortgage is likely to be the biggest single debt that most people have, and one that may not be paid off for many years – and ultimately an employee's super is likely to be the biggest single asset apart from the family home. The whole package can give considerable benefit to the employee and kudos for the employer, who is seen by staff as providing an immediate and visible benefit.
The interesting thing about debt management is how it transcends all age groups. Although generational factors will play a role in terms of what debt scenario the member is currently facing, every age group is faced with issues around managing their debt.
Members of generation Y (age 20 to 30) are likely to be more interested in paying off student debt or consolidating consumer debt in a mortgage arrangement. As first-time home-buyers there are considerable advantages to talking to a mortgage professional rather than relying on a local bank for their best deal.
For generation Xers (age 30 to 43) the issues are likely to relate to getting the best deal on a home mortgage product. Especially if they have been in the property market for a few years, it is vital to re-assess whether the mortgage deal offered a few years ago is still as competitive as it once was. For example, a client who set up their mortgage several years ago may be proud of the fact they negotiated a 0.5 per cent discount, unaware that in recent years discounts have been increased to 0.7 per cent.
Furthermore, many existing mortgage clients are not conversant with the benefits of having a free redraw facility which can make it worthwhile to have salary credited directly to a mortgage account.
For those nearing or at retirement, mortgages may play a key part in retirement planning. Many retirees have heard remotely of reverse mortgages – very few would understand the way different products operate or have any notion of the increasing trend of retaining modest levels of debt in retirement by using a reverse mortgage product.
A mortgage professional combines professional expertise with access to many different lenders and hundreds of home loan products, thus providing an efficient and cost-effective method of reviewing, negotiating and organising home loan options or consolidating debt.
It's all about options and employers making it easy for employees to explore their options. There’s nothing quite as easy as havin
 |
It’s all about options and employers making it easy for employees to explore their options.
Deborah Blakey, Senior Manager
dblakey@moorestephens.com.au
Deborah Blakey, Senior Manager
dblakey@moorestephens.com.au
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