Financial Planning Week – Thought for the Day

26 November 2013

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I was shocked to see the results of the IFP’s survey, which stated that just 4% of people have a comprehensive financial plan in place. Furthermore, only 14% of people usually seek help or advice from a professional adviser when making financial planning decisions. I have recently taken the exams you need to become qualified as a financial adviser. It’s been a great way for me to keep up to date with the industry but it has also made me aware of the thousands of ways that financial advice can help people. It’s clear to me there is still a significant requirement to improve awareness about the benefits of obtaining advice when making important financial decisions. Of course not everyone is in a position where they need investment advice, but there is still significant need out there.

The Retail Distribution Review, which came into effect on 31 December last year, put the role of financial advisers into the spotlight. With fee transparency being one of the major goals of the RDR, the value of financial advisers was brought to centre stage. RDR resulted in some great developments, including broadening the range of products that advisers now make available to a client. Consequently, there is increased pressure on but also opportunity for advisers to prove their value to clients.

It’s down to us, the financial services providers, to work with advisers and help them solve their clients’ needs. We regularly hold seminars and workshops across the UK to support and inform advisers about what’s happening in our market and the right ways to use our products as part of a holistic portfolio. I know that often our solutions can solve client needs more effectively and deliver better tax planning. It’s important that advisers feel empowered to make a meaningful difference in helping people and by making the effort to see people I hope we make that easier.

Financial services is a complex market. The number of products available is regularly increasing and the jargon that often surrounds these products can make it difficult for investors to understand what exactly is on offer to them. That’s something at we look to counter at Octopus by offering a straight-talking approach to customers. Navigating your way through the sea of products can be challenging, even for those with a background in financial services, and yet now more than ever people need to be fully aware of the market out there.

Financial planning is no longer just the preserve of the wealthy. It is now a mainstream requirement for many people. Take inheritance tax, for example. Figures released on Sunday state that the number of estates to be caught in the inheritance tax net will double from 21,000 in 2012-13 to 42,000 in 2016-17, meaning that more and more people should be thinking about their IHT liability. And yet only 26% of people have an up-to-date Will, suggesting that there are still many people who do not think about how their current financial situation can impact them and their families in the future.

55% of people usually make their own financial planning decisions. It’s up to us the financial services providers, and advisers, to show people the real value in seeking financial advice, and how we can all help investors to understand the choices available to them.

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