Monthly Archives: August 2017

How Employee Benefits can help you build a better and more sustainable business
August 2017

MetLife have recently released the findings of the UK Employee Benefit Trends Study 2017 and it makes very interesting reading.

Employee benefits can help employers build stronger businesses as well as provide real value to the employees that work for them.  In the face of uncertainty, the findings of MetLife’s report are an invaluable guide to clearer decision-making around optimising benefits as part of a wider engagement and people strategy.

The focus for this year’s report is wellness — not just the value gained from helping employees take responsibility for their own health, but also the benefits and services employers can offer to help them manage stress, gain a greater sense of financial control and, in turn, bring their whole selves to work.  We know that less stressed employees are more productive and creative.

The conclusion of their findings is that more rounded employees will surely develop into stronger businesses.

The key areas of best practice include the following:

  1. Commit to bringing more certainty to your employees.   Fundamentally, those employers who offer stability to their employees will ultimately benefit.
  2. Give financial wellness prominence in your benefits strategy.  Physical and mental wellness programmes can help in boosting productivity.
  3. Good communication and a continuous commitment.   This is essential and issuing a range of different and diverse communication is most effective.
  4. Meet employee needs on personalisation.  Thanks to technology and the range of different methods in which we can communicate, delivering flexible, customisable benefits at work is now looking like a must have, rather than a nice to have.

However, every challenge brings opportunities and enlightened employers should use this moment in time to look closely and with urgency at how they can strengthen their organisations to make them fit for the future.

In an uncertain world, the value of certainty increases: whether that’s the peace of mind that comes with knowing we are protected should the worst happen or the knowledge that we are in control of our finances.

It is time for a new approach to Employee Benefits – one that starts with the workforce and is driven by employee needs.

If you require advice and guidance on how an Employee Benefits package can assist you and your business, please get in touch with us.

Staff need to be enrolled before they can opt out
August 2017

As outlined in in The Pension Regulator’s latest compliance and enforcement bulletin, during their inspections they’ve been carrying out across the country they came across a number of instances where employers had agreed to opt staff out of a workplace pension before they’d been enrolled.

If employers do this, it means they are not complying with their duties in the correct way and may risk a fine if they appear to be making the decision to opt out on behalf of their staff.  Eligible staff need to be enrolled first – they can only opt out if they wish to after being enrolled.

Employers need to follow all the steps in The Pension Regulators  Duties Checker, including setting up a scheme, putting eligible staff into it and writing to them, before they can choose whether to stay in or opt out.

If you require advice on your workplace pension, please get in touch with us.

Investment round up – 2017 half-year report
August 2017

The first six months of 2017 have presented investors with an interesting half year.

Think about the first six months of 2017 in the UK.  There were several serious terrorist attacks, Article 50 was triggered to start the formal Brexit process, the Budget less than perfectly executed and, to round matters off, a snap election was called which delivered no overall majority to the winners.  A challenging half year, to put it mildly.  So, what happened to the UK stock market over the period?

As the table above shows, the answer in terms of the Footsie index, was a rise of just under 2½%.  That number hides a rollercoaster ride with three distinct cycles.  For all the movement, by the end of June the index was at much the same level as it was in mid-January.  It is a reminder that at times short term “noise” in investment markets can be so deafening that what has happened over the longer term gets drowned out.

There is another lesson from the table worth noting.  Although the two US indices, the Dow Jones and S&P 500, both show returns of around 8%, you would have been better off with European shares, as represented by the Euro Stoxx 50 index.  The reason is simple: in the first half of 2017 the dollar fell by about 5% against the pound, while the euro rose nearly 3% against the pound.  When looking at indices, never forget the currency.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as long-term investment and should fit in with your overall attitude to risk and financial circumstances.



China becomes an emerging market as MSCI finally opens up
August 2017

China-listed shares are finally to be included in the leading emerging markets index.

As we as highlighted in May, China has the world’s second largest equity market, but at present shares listed on the Chinese stock exchanges don’t figure in the MSCI Emerging Markets Index.  The MSCI index is the most important equity index for emerging markets, with an estimated $1,600 billion of funds using it as a benchmark.  While the index already has a 28% China weighting, this relates to Chinese companies listed on stock exchanges outside China, notably Hong Kong and in the United States.

For each of the last three years, MSCI has reviewed whether conditions in the Chinese stock markets were appropriate to warrant including shares listed on them in the emerging markets index.  In 2014, 2015 and 2016 the answer was no.  Various technical reasons were given and each time the Chinese authorities made adjustments in the hope that next year MSCI would change its mind.  Last month, the answer finally switched to yes.

Look out for May 2018

The change will not happen overnight: adding such a large market to an index in a single move would be too disruptive.  Instead, MSCI has set out a gradual approach.  In May next year, MSCI will add shares in the largest 222 listed Chinese companies to its index, with an initial 5% weighting.  The weighting is expected to rise over time until it reaches the full 100%, at which point Chinese-listed shares will represent about 15% of the MSCI Emerging Markets Index and total Chinese content, including the existing non-China listings, will approach 45%.  Other smaller Chinese listed companies may also be added in the future, further raising the Chinese exposure of the index.

MSCI’s decision has been widely seen as a coming of age for investment in China and, on some estimates, could produce $500 billion of inflows over the next five to ten years.  If you want to increase your exposure to China ahead of that predicted rush, there are a variety of options available.  Please get in touch with us if you would like to discuss these.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.