In this era of promoting professionalism in financial services, how can insurance companies and investment groups gain the respect of the public and financial advisers alike?Following up my theme of educating kids about finances from my last column, this is a plea to the marketing departments of insurance companies and investment groups. Instead of arranging days at the races, football, cricket, even World Cup survival packs, why do you not direct a proportion of your marketing budget towards a financial boot camp. Marine Federal Credit Union (in the US, of course) runs a regular camp aimed at 12-17-year-olds. It is an innovative and fun way of teaching kids all the day-to-day financial skills that they need to navigate the world once they hit 18 and get treated as adults. How come it has not caught on over here? The Personal Finance Education Group does get sponsorship from various insurance companies and does valuable work in schools but one of you insurance companies/ investment groups must be brave and give them the funding to organise such a boot camp. It has got to be an all-round, win/win situation. It gets the sponsor’s name known and I am convinced that it would be a hit with the mainstream media and much more effective than thinking that advisers can be bought with the freebies I mentioned. Children need warning about sharp practices through education. Yes, these are still happening as we speak. Young people faced with getting car or motorbike insurance for the first time get stung. The annual premium is so expensive that they have to pay it monthly and, bingo, another hefty earner for the garage and the financial institution, who will sell them a loan with monthly repayments to pay the insurance – a double comm-ission whammy. I have seen one recently with 37 per cent APR. Can you believe that it is perfectly legal? If the right building blocks are in place and young people get more financially savvy, perhaps we can get back to a “saving for” rather than “have now pay later” society plus less “rip-off” opportunities for individuals to be faced with. It would be marvellous for the financial institutions to be seen to be taking an active role in this. My next thoughts might cause a bit of a stir. Is university straight after school or a gap year the right thing for us to encourage our kids to do? This is controversial but is it right to encourage another three to four years of hard play and hard study and end up with hard debts or instead start post-A-level with an employer that offers training and qualifications for a future career, leading to a degree equivalent but without the debt at the end of it? In financial services, especially where we are trying to get young people interested in the industry, instead of choosing post-graduates and for their training to start in their mid-20s, get them at 18 and “grow organically”. The current university culture, where there may only be between four to six hours of contact time a week for students with their lecturers and for the rest of the time they are expected to be autonomous, is not suitable for many youngsters. It is a shock to their system and perhaps why many drop out in the first year and feel that they have failed. Perhaps a suitability test would be more appropriate. Now there is a thought – could a university dropout successfully claim back tuition fees on the grounds of unsuitability – not having been assessed properly for the course. This is food for thought. It applies to us with our clients, so why not?
Yvonne Goodwin is associate director at Pearson Jones