Since he stopped being a financial adviser two years ago, Jason Butler’s personal experiences have reinforced his view that there is a very bright future for the role of advice in providing services to younger clients. Is your firm seizing the opportunity?
What type of financial adviser are you?
Do you see yourself as a technical specialist, solving single issue problems for people such as equity release, financing a property purchase, arranging life assurance or deciding what to do with defined pension benefits?
Or are you a ‘wealth manager’, helping people chose and maintain a suitable investment strategy and associated tax wrappers? Perhaps your clients are still working and accumulating wealth or they might be retired and living off their assets.
New car, caviar, four star daydream?
Whatever type of advice service you provide and whoever your clients are, money is merely a means to enable them to live the life they want. But money constantly tops the list of things that people say causes them the most stress and anxiety in their life. Money is also one of the main causes of relationship conflict and divorce.
In my experience, few people are interested in the technical aspects of personal finances. Most are, however, interested in what money can do for them and how it makes them feel emotionally.
Are your clients living their ideal lifestyle or are they just drifting along and letting circumstances and events dictate their happiness? Few people are really clear what would make them truly fulfilled.
The means to an end
Helping clients to take stock of their current lifestyle, identifying what’s important and whether they are using money in a way which is aligned with those values is a very valuable service. Some financial advisers do this well. Many do not.
Since I stopped being a financial adviser nearly two years ago, I’ve focused on researching, writing and speaking about personal and financial well-being. I am engaged by employers around the UK to give financial well-being presentations to groups of their employees.
I focus on the psychological aspects of money and how to develop habits and behaviours which maximise happiness and overall life satisfaction.
I touch on the importance of doing a job that you enjoy and that suits your personality, skills and experience. I explain the importance of being in control of your spending and how this can affect happiness. I also make the point that having some form of long-term plan, based on one or more lifetime financial projections, helps people to make day to day financial decisions in context.
The advice gap
Feedback from employees is that they welcome the insights I give them but they still want someone to help them clarify their life values, articulate their financial goals, get financially organised and make good decisions.
The problem is finding an adviser who they trust and can afford and who is more interested in them than their money.
It seems there is massive untapped demand for some form of financial coaching and planning service that is less about financial products and more about the lifestyle context in which daily decisions are made.
People happily pay £50 per month or more for a smart phone, a product which didn’t exist over ten years ago. So why can’t they buy a simple financial planning service for the same amount?
By focusing on advising only people with large investment portfolios and charging them a percentage fee means firms are restricting their market greatly. They are not building a connection with younger people, who will be inheriting trillions of pounds of wealth over the coming decades.
Are you missing an opportunity?
I think financial advice firms are missing a big opportunity to help millions of people to improve their financial well-being through a subscription-based service that leverages the efficiency of technology and the empathy of real people.
By using next generation digital collaboration tools like online fact finds, financial portals, financial planning tools and video conferencing technology, firms can deliver an enjoyable, personalised and valuable service at a price people are willing and able to pay. This would also enable firms to deliver the service in a safe, consistent and profitable way.
With many people now facing the prospect of living to 100 years of age, they need help more than ever with making good financial decisions. They will be younger for much longer, probably have several careers and life transitions, and increasingly need to balance a range of competing priorities.
Employees all around the UK are telling me they want help with their personal finances. Will your firm step up to the challenge and help them?
Jason Butler is an expert on financial well-being His latest book – Squeezing the orange: Simple ways to live a full life – is out now