PIMFA
Avoiding Stress-related Errors
The pressured environment of the wealth management sector can be a breeding ground for stress. Long hours, demanding clients, and high-stakes cases take a toll on mental wellbeing. However, the consequences of ignoring this issue go far beyond employee health. Stress in the workplace is a major source of errors and omissions, leading to increased risk of professional indemnity claims and financial loss.
By taking steps to manage stress and prioritise employee wellbeing, wealth management firms can not only create a happier and healthier workforce but also improve their colleague retention rates, risk profile and, potentially, their bottom line.
 High levels of stress in the workplace
Work-related stress, depression or anxiety is defined as a harmful reaction people have to undue pressures and demands placed on them at work.
Unfortunately, stress in the workplace isn’t uncommon. According to Health and Safety Executive (HSE) data, an
Employees in the professional services sector are particularly prone to stress. Working environments can be high-pressure, with long hours and large workloads. Lack of recognition, inadequate support, discrimination, and even the commute to work are all sources of potential stress.
The benefits of a mentally healthy workforce
By prioritising employee mental health, wealth management firms can create a safer and more productive work environment. This translates to several benefits:
- Reduced risk of claims: addressing stress can significantly reduce the risk of errors, missed red flags, and communication breakdowns, leading to fewer professional indemnity insurance (PII) claims and potentially lower insurance premiums.
- Improved client service: a happy and healthy workforce is a productive one. Mentally healthy employees are better able to focus, manage complex tasks effectively, and provide superior legal representation to clients.
- Enhanced employee retention: high turnover rates are expensive for firms. Investing in mental health can create a more positive work environment, leading to increased employee satisfaction and retention. Having a stable workforce can also help to eliminate continuity issues and minimise project disruption.
By contrast, failure to manage work-related stress can be detrimental for employees’ wellbeing and performance. For wealth management firms, this could lead to claims or regulatory issues.
Managing stress to reduce risks
Given these consequences, as part of the insurance renewal process, insurers will be keen to understand to how firms are managing workplace stress and prioritising employees’ wellbeing.
Key strategies to manage workplace stress include:
- Establish a clear policy on stress, and physical and mental health
- Give employees support in their day-to-day work
- Ensure workloads are manageable
- Provide a safe environment for people to raise concerns, and address them promptly
- Train managers to recognise the signs and symptoms of stress, and to manage conflict within teams
- Encourage employees to take regular breaks and make use of their holiday
 A comprehensive approach to wellbeing
Not all workplace stress is work-related. To ensure employees are adequately supported to manage stress, firms may consider investing in comprehensive employee benefit packages. These typically provide mental health support via an Employee Assistance Programme (EAP), often at no cost to employees.
An EAP can be a vital resource for employees to use if feeling overwhelmed and stressed. Access to counselling services can also help and offers support across a broad range of topics.
Other benefits that could help manage stress include:
- Salary exchange – in return for cycle-to-work schemes, season ticket loans, and increased employer pension contributions
- Flexible working – reviewing working patterns may save employees money and valuable time, helping to relieve stress
- Buy/sell annual leave – this can give employees more regular breaks to reduce burnout, or additional salary
- Firms should ensure all benefits are accessible and visible to employees. This will ensure help can reach those in need at an early stage and prompt faster recovery.
For more information, please contact:
Lucie Gosling-Myers, Senior Client Development Manager, Lockton
E: lucie.gosling-myers@lockton.com
Laura Skaanild, Head of Global Financial Institutions, Lockton
