GETTING THE WORD OUT THERE
Posted on:
29
Sep
2011
by James Cholmondley Farmer
IF EVER THERE WAS A MOMENT TO GET PERSONAL FINANCE BACK ONTO THE PUBLIC AGENDA, THIS IS SURELY IT. SUE WHITBREAD TALKS TO IFA MAGAZINE.
With consumer debt levels now topping 100% of gross domestic product, and with investment returns for many savers down around the minus numbers, even in nominal terms, it takes a lot of drive and imagination to get the public’s enthusiasm pumping.
Which is exactly what the Bristol-based Institute for Financial Planning aims to do with this year’s Financial Planning Week (21st to 27th November). For eight glorious days, the IFP says, the press, the internet and the airwaves will be jumping with free information designed to get the personal finance agenda back on the kitchen table where it belongs.
The fact that this will undoubtedly bring in new business for IFAs and financial planners can be taken pretty much for granted, of course. But, according to communications director Sue Whitbread, that’s only half the point. Much more important, she says, is simply to get the word out to the public about the ways in which people can sharpen up their financial planning, learn budgeting skills, take a long look at their life situations – oh, and choose some investments too.
“Next big ambition? To get Financial Planning Week onto the national TV channels.”
People need to be encouraged to make wills and to learn about powers of attorney. They need telling about the importance of life assurance. And they need help with choosing the right sorts of bank accounts, and with determining their own safe levels of debt.
Often that means taking a hard look at their budgets – something that many will be reluctant to do. They need encouraging to step back and consider how their own lives are changing (children, school, health, age and dependency), and how their financial priorities might need to change as a result. And sometimes, of course, people need direct help with getting out of financial difficulty.
All of this falls within a financial planner’s remit to one extent or another. But, for many, the cost and complexity of getting professional advice is too much of a deterrent. Financial Planning Week aims to bridge the gap by providing these reluctant planners with enough basic information to make a start. For many, the information supplied through Financial Planning Week will be enough to see them on their way; for others, however, it will point up the places where there’s really no substitute for professional advice. Which is where the industry’s own opportunity comes into play.
Highlights of the web-based programme will include pages of top tips, listing easy ways for readers to sort out their finances and kick start their plans. Plus a downloadable DIY financial planning guide written by a specialist in the field; tips on debt planning; information on choosing a savings instrument; and budget planners and calculators of all kinds.
Next big ambition? To get Financial Planning Week onto the national TV channels, says Ms Whitbread. “We’ve had TV news slots lined up in the past, but time and again the studios have come back to us at the last minute and told us that something else has come up so there isn’t room to fit us in.” Come on, news schedulers, you can do better than this.
Plenty To Do
Let’s get the ball rolling with a few statistics. The average UK citizen has about £110,000 of wealth, including his home, according to government figures, but he owes around £33,000 if you include his mortgage. He has around £4,350 worth of credit card debts, overdrafts and so forth (January 2011) – a figure which broadly doubles among those households which have unsecured loans. In a good year, of course, the average Brit saves 7% of his disposable income, but unfortunately this isn’t a very good year, for reasons we don’t need to explain. It’s always been hugely sensitive to the economic climate. In 2008 the ratio dropped to just 2%.
Only one in three adults currently has an ISA, but only 26% of these are worth more than £15,000 and 31% are below £3,000 in value. (Source: Cimetric, 2011.) The average 56 year old man has a pension pot of only £52,800, according to the Office for National Statistics – enough to provide an annuity of maybe £50 a week. And his female counterpart has only £9,100 in the pot. With only 5 million people now contributing to an employer pension scheme, things are probably going to get worse before NEST brings an improvement. It can’t come soon enough.
The Programme
So that’s the size of the mountain that Financial Planning Week has to climb. For those eight days, Ms Whitbread says, the IFP’s 2,000 members will be out there organising seminars, writing press articles, mailing their clients and generally making as much noise as possible. Booklets, videos and other material will be distributed. Helplines will be ringing, and free advice dispensed.
Underpinning everything will be the Financial Planning Week website, which is being heavily revamped for this year’s event, and which will be going live in its new format in a few weeks. Like last year’s site, it’ll feature tutorials, links, downloads and reference tools intended to help the public find its way through the financial jungle.
Life Planning
We’re not just talking about investments here, obviously – although those are of course central to the theme. Nor are we even focusing on the importance of using tax allowances and making the optimum use of tax-efficient schemes like pensions, ISAs, trusts and long-term savings plans.
A Force to Be Reckoned With
The Bristol-based IFP, which celebrates its 25th anniversary this year, has around 2,000 members – not just customer-facing IFAs but, perhaps more importantly, financial planners and paraplanners. These are the people faced with the critical task of making sure that their customers’ financial arrangements meet their personal needs. And that they actually realise what those needs are. It’s no good being all gung-ho about a high-risk strategy, she says, if you’re thinking about retirement and you’re likely to need that cash in the next few years. Often you have to sit down with a client and explain that he hasn’t properly thought his requirements through.
All this means, inevitably, that the IFP’s members are accustomed to getting up close and personal with their clients’ individual financial arrangements. And, she says, they could teach some IFAs a thing or two about qualifications. “Our members are practically desperate to learn more,” says Ms Whitbread, “and they’re always retraining.”
Level 6 is nothing very exceptional for a financial planner these days, she says. (That’s broadly equivalent to a bachelor’s degree from a university.) Indeed, the fuss from IFAs about being told to make Level 4 seems really quite strange by comparison.
