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Clear horizons

Over the years, the Government’s various crusades within the wonderful world of financial services have inspired a range of emotions in me – although rarely has optimism been one of them.

Thus, as editor of a personal finance magazine, initiatives such as the stakeholder pension or indeed any other attempt to encourage the less well-off to save more would usually fill me with dread. For, while one felt duty-bound to support these initiatives, one could not help feeling they were doomed to failure because the trouble with the less well-off is they tend not to have a lot of money.

Meanwhile, in my parallel existence as a diary columnist of sorts, these same initiatives would inspire a less than charitable amusement – essentially for the same reason. Truly, as the poet said, the road to hell is paved with good intentions.

However, the new Moneymadeclear service, which is being trialled by the FSA and HM Treasury in the North of England and which aims “to help people tackle their money worries and make informed financial decisions with confidence” is committing that cruellest of acts. It is raising the hopes of a confirmed cynic.

Not that they have not tried to appeal to my nastier side with a name that, for starters, is yet further proof that bureaucrats should not be allowed anywhere near the christening of projects, services or, well, anything really.

Better still, the Treasury’s involvement in launching something called Moneymadeclear the week before a Budget that added yet more layers of complexity to what, not so long ago, were heralded as simplified pensions and savings regimes shows a beautiful lack of self-awareness. Just who do they think has contributed most to the current state of Moneynotveryclearatall?

Nevertheless, the logic is hard to resist. As Chris Pond, the FSA’s director of financial capability, says: “Improving people’s ability to make financial decisions is in everybody’s interests. If people know what they want and how to get it, the financial services market becomes less one-sided and a lot more efficient.”

Predictably enough, the FSA and the Treasury have been careful to couch all their communications on the subject in terms of “generic” financial advice but perhaps this is at least a step along the way to their accepting that not every financial advice practitioner is inherently a baby-eating pirate.

Even better, according to Aifa, IFAs are consistently the most trusted of all financial services institutions. Avoiding the obvious but cheap shot, I shall move swiftly on to add that the same research also finds this trust in advisers has increased in the past five years.

Oh happy day – except Aifa might get a bit of an argument from the Resolution Foundation, an independent research and policy organisation whose stated goal is “to improve the well-being of low-earners in today’s mixed economy”.

The Foundation’s own research suggests only a fifth of “the general public” would use an IFA today compared with a third two years ago. More worrying still, 45 per cent of people today still rely on friends and family for financial advice and, equally worrying, that figure has not really changed from 2007.

Feel free to believe which-ever piece of research you prefer and, technically, I suppose, the two are not mutually exclusive. Advisers obviously have work to do but perhaps they also have something of an opportunity.

Certainly, it is natural for any business to direct the bulk of its efforts towards the potential big wins – in financial advice terms, those people for whom day-to-day living expenses v money spent on investments, pensions and protection is less of an either/ or question.

But there are a growing number of organisations, in many areas of business, that are benefitting from focusing on what is known in the world of marketing as “the long tail”, the strategy of selling a lot of a little to the many rather than a little of a lot to the few.

No, this is not the most cun-ning of plans for every adviser but, equally, these are not the times to be dismissing potential business avenues without investigating them properly first, especially as the technology to enable such a strategy to be conducted effectively is growing ever more accessible.

Julian Marr is editorial director of marketing-hub.co.uk

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