Google has given people access to instant answers to questions that, in the past, would have required a trip to the library or a talk with an expert. While this is no bad thing, it does have unintended consequences.
Take, for example, in the medical profession where patients are going to doctors with incorrect pre-diagnoses because they have been googling their symptoms online first.
People do this because they naturally have an interest in their own health and wellbeing. So doesn’t the same apply to their finances?
As financial planners, we need to harness this interest and, in doing so, address the advice gap. We will all be familiar with situations where clients come to us with a very specific view of what they think is the best financial solution for them.
Although it can then be a challenge to convince them that there are more appropriate solutions out there, we must not lose sight of the fact it is good these clients have actually engaged with financial planning in the first place and at least tried to come to their own conclusions.
One of the best ways to pique this interest, particularly among younger generations, will be in utilising social media.
A financial planner should see social media not necessarily as a medium for doing business but, instead, for educating people about advice and how it might benefit them. Younger people need to make the right choices as early as possible with their savings and investments and the best way to get this message through to them will be via the platforms they use on a daily – or in some cases hourly – basis.
That said, financial planners need to realise that simply setting up a Twitter, Instagram or LinkedIn account does not instantly mean younger clients will be clamouring to get advice.
Quality content is king and followers will rarely be interested in a post from a planner that serves no purpose other than self-promotion.
The content needs to have a wider informative purpose or, better yet, engage the audience in debate. The crucial thing here is to make sure it is accessible and user-friendly.
Similarly, many people do not actually understand what a financial planner’s role is, so social media can help to illustrate what we do.
What works best are bite-sized, informative and educational posts that point out the various merits and methods of tackling subjects, for example how best to save for a property or how to plan ahead for retirement.
These posts can help to get people talking and reveal just how useful advice can be.
The advice gap is driven by a huge number of different and interconnecting reasons, but one is likely to be the intergenerational wealth gap that younger generations are experiencing.
Having less disposable income to play with can lead to people being less concerned with using the wealth they have wisely.
The financial planning community needs to create more awareness around wealth management.
While I do not want a situation where every client is second-guessing my advice, a healthy interest and understanding of how to manage money is the first step in addressing the advice gap.
Gabriela Strug is financial planner at Quilter Private Client Advisers