As you may or may not know, I deal with a lot of companies in the Financial Services industry and talk to a fair few on Twitter. The industry is changing, or as I like to put it "maturing" into something that will eventually restore faith with consumers. Obviously, you'll still get the odd rogue adviser but on the whole the industry could be going through an incredible transition to a better place.
However with lots of talk about advisers offering "life planning" or "holistic" approaches, I can't help but raise an objection.
To me, the word "life" means the entire life. However, it's used more frequently to describe the "rest of your life". In my view, working with a late forty-year old, helping them plan their future is hardly "life planning". They've already spent a fair few years on this planet. Life expectancy is up, but you've missed forty years!
I really understand, and appreciate the concept of financial "life planning" and I think this is great. It's easy to explain to a client, and easy to quantify the results as you review their progress. However, I can't help but feel IFAs are excluding a particular section of the population. A section that I feel could be securing their future.
Where's the real financial life planning?
Your life doesn't start at forty, no matter what the Hallmark cards tell you!
Something needs to be done about educating and influencing the younger population. Here's my spin on things.
In secondary school and college, I wasn't taught how to look after my money. I worked a lot of hours compared to my friends, and had money – albeit not a lot by today's standards. However, all I could think to use it for was to buy the latest Darkness album (great story here, do ask me about it!) or head out with my mates for the day buying useless and ridiculous gadgets (lava lamp anyone?). Needless to say, I wasted that money!
In college it was worse, because I suddenly had access to Beer. Beer, cars and cheap lads' holidays!
Nonetheless, I do feel now that if I had some of the insight I have now on finances, I could have better prepared myself for events later in life. But how would I have known?
I don't know of a single website that's geared up to educating the young on how to nurture their money, or plan for their future. I don't know a single IFA that actively approaches that market to provide education. In fact, I don't honestly know how a younger person would know what to do with their money (other than from their parents or the banks ..I'm not sure which is worse!).
It's easy to see why IFAs don't do it. There's no money in the advice or products that a younger person would need at that point. Great; so your pay-cheque that month doesn't go up, but how are you planning to get clients for your business in twenty years' time?
Enough of the rambling, this is what I'm saying.
At a young age, education could also be seen as advertising. I would love it if an IFA would hold an evening at their offices where they invite young people and teach them about what's to come. Open their eyes to protection (not that sort!), saving for a deposit on a mortgage and identifying the lifestyle they want in retirement. Sure, it might go on for an hour, or two, but you would have got their brains ticking, and their horizons broadened.
Okay, so no immediate business will come of it. I'm not trying to sell you a golden goose, but in the future when they have that well paid job and flashy car, who do you think they would remember? Surely there's value in identifying your potential clientele early?
Education would go a long way to help the younger population's outlook on money. All I'm saying is that it would be a wonderful change to see a firm identifying that and making a small contribution to education in their locality.
As a side note (and when I have a little more time) I would love to build a website aimed squarely at that market – providing ways and tools to see whether what they think their future holds is right. Combine that with guest posts from IFAs around the UK, and I think we'd be on to a winner. Get in touch if you're interested.
p.s. The great Mark Polson mentioned that he knows of a few IFAs that do take part in education in their locality. I'm not aware of any locally hence why I have used sweeping statements above!