Years ago there was a strong correlation in the mind of the general public between financial matters and bicycle clips. In the days when milkmen delivered milk and dairy products daily to the doorsteps of millions and bakers delivered bread and cakes, most households also had a regular visitor whose job it was to spread the word of financial capability and provide access to savings and protection products.
The insurance agents were there for ordinary families’ everyday financial needs. The agents themselves came from the communities they served and were, in many cases, trusted family friends of their customers. They did a good job of looking out for those families as lifetime events flowed through their lives: weddings, children, the death of a relative, retirement.
Those days are long gone, though. To our modern mindset they appear quaint; naive even. The insurance agents came to be seen as nothing other than a costly way of distributing financial products to the masses and they went the way of all such inefficiencies. But gone with them is the general access people once had to simple and relevant financial assistance.
Today, the loose-knit body we refer to as the financial services industry anguishes over just what “advice” is and why so few have access to it, while calling for children to be educated in financial matters from as young an age as possible. But at the same time we seem to live in a world where financial services and capability are more remote than ever to the general public. Quite a different world.
That should not be the case. We have an unprecedented opportunity to communicate through technology, with the average citizen having access to more computing power in their phones than most global corporations had at their disposal two decades ago. We are online.
But the industry itself has not done a particularly good job in using it to reach out and provide financial information and capability to the public. That job has largely been left to the government and, in my view, it has done a good job. I have always been a supporter of the work done by the Money Advice Service. Indeed, its website is full of useful information and practical tools to help people get to grips with everyday financial issues.
It seems to me the workplace, rather than the doorstep, is more likely to be seen as the source of general financial information in the future. We have something of a revolution going on in UK workplaces at the moment with the implementation of automatic enrolment.
That in itself should stir wider interest in financial issues as it develops. I believe people are far more likely to relate to a pension based on their own savings pot than one based on state provision. The demise of an unfunded state second pension and its replacement by a funded workplace pension will one day be seen as having been a pivotal point in the spread of financial capability in the UK.
Steve Bee is director at Jargonfree Benefits