Clearly, the best time to learn is at the start of their career, when the skills can be ingrained. This is the case for consumers too.
The case for financial education in schools has gathered some pace, but not all schools have been able to embrace it. Ironically, this is often due to staff lacking the necessary knowledge; but other methods may soon be at hand.
“There’s lots of people willing to give their time and do pro-bono work, and it’s brilliant the PFS now gives CPD points for that,” says Mr Budd.
“The trouble is everyone’s doing their own thing, so I’m working on some central pool of information that people can use to deliver financial education that I think needs to include behavioural and wellbeing elements to money, not just, ‘what is a pension?’”
All well and good
The term ‘money coach’ can conjure impressions of something slightly tacky, but many believe something akin to this could be where the advised role is heading.
As Mr Budd notes: “The next generation aren’t going to continue paying 1 per cent a year for a model portfolio.”
In fact, some have suggested it could mark the next pivotal shift in the profession’s evolution – despite the relatively low penetration of behavioural science techniques across the profession thus far.
Research suggests there is a demand for it, too. A survey conducted by Opinium on behalf of Scottish Widows, encompassing 2,000 UK adults and more than 200 independent financial advisers, found that younger people are looking for a different kind of advice compared with their older counterparts.
The research found that 23 per cent of 18 to 34-year-olds would like advisers to map out real-life scenarios for situations such as marriage, divorce and starting a family (see Chart 1). This percentage was four times higher than for older cohorts.
Given younger groups represent advisers’ target market for the future, the need for intermediaries to adapt is clear. The research also found that only 45 per cent of the advisers surveyed currently offer these type of scenario exercises, although just over a quarter said they are in the works.
Mr Bowen-Nielsen says: “Shortly after the RDR we had lots of years of focus on getting the skills in place and becoming compliant, and I think the industry lost its way a little bit. But it was for good reason: we needed to get the rogue elements out of the industry.
“What people are realising now is what a difference an adviser makes compared with robo-advice or people going on the internet, or reading a magazine. That’s the human connection to help clients understand what they really want, rather than just offering a transactional service.”
