View more on these topics

Do the knowledge

Prior to getting married, a cynical but wise man told me that the three most important words a married man can repeat in times of difficulty with his spouse are: “You were right.” This level of compliance is possibly best described as a tactical withdrawal. Often, this will occur when the male is totally unaware as to the reasons for his difficulty. However, this level of ignorance is not healthy in any relationship and honesty is more effective in the long run, provided you can take the heat.

This lack of awareness in not restricted to male and female relationships, it extends to things of a financial nature. The FSA’s efforts in starting up money guidance are likely to finally convince some in the Treasury and elsewhere that financial guidance is no easier to deliver than financial advice.

That is why the theme for my presidency at the Personal Finance Society was the value of advice. I felt we had to get this point across. Raising my profile was not important and could not take us forward. The pro bono service with the Citizens Advice Bureau is proving to be even more effective in phase two but we need more well qualified advisers to take part. Some will argue that there is nothing in it for them and that is because they have never had the experience of taking part.

As we become a more professional sector, more of us will effectively be selling time, so giving that away is a truly valuable donation which can only increase our standing in the world of professionals. The clinics are currently all during the day but we are thinking of running some after hours which may allow more of you to take part.

I also hope to convince the FSA that group education need not be restricted to the workplace. Any grouping which facilitates the message about being smart with money is the way forward for us all.

This lack of awareness was brought into focus when the recent economic problems surfaced. There is no doubt that the credit crunch is not fully understood by the general public or even many in our sector.

Recent headlines reported that experts did not understand what was moving the price of oil. Perhaps the first thing to do is to stop calling them experts.

Sentiment is now a far more important factor than many fundamentals and that needs to be factored into risk assessment. We need to test the impact of loss and the feeling it engenders.

Risk is a personal thing. For the younger person, it is more important to guard against the risk of long-term disability than worry about whether an Isa investment is too high risk.

If we are to educate our clients, we need to do it in the round. Random information leads to random acts.

Education is not restricted to those with no wealth, it extends to all clients, particularly those who will inherit wealth. They need education and they need it now. We cannot assume that they understand the source of money and or wealth.

I remember a neighbour’s child being scolded with: “Do you thing money grows on trees?” “No,” said the girl, “you collect it at the bank.” How it arrived at the bank was lost on her.

Understanding money and realising how long it needs to last are essential life skills that we must encourage at all levels.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com