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Jason Butler: Advice firms should run triage arms for financial health checks

It is nearly three years since I hung up my financial planner boots and joined the world outside of financial services. Over that time, I have presented financial wellbeing talks across the UK to a range of people.

What has surprised me is how financially disorganised some seem to be. Few have all their documents digitally or physically organised, and key financial dates are seldom known or understood.

A minority know what they are earning on savings or even what accounts they own. Many haven’t a clue what interest they are paying on their mortgage or other borrowing. State pension entitlement is usually hazy. And as for knowing the fund selection of their workplace pension or the associated charges, dream on.

If that was not bad enough, only a few have ever learnt how to create and manage a monthly budget. This means their capacity to become debt free and build wealth can be much harder than it needs to be.

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Perhaps we should not be surprised when personal finance education has only recently (and half-heartedly) been added to the curriculum of state schools. And with borrowing so easy, together with relentless marketing encouraging spending right this minute, is it any wonder?

There are a lot of people out there who seem to need and, when they understand the importance and value, want help getting financially organised. But this does not necessarily mean they want or need personal advice or ongoing management straight away.

It might be a good move for a regulated advice firm to set up a separate triage arm or to do so in collaboration with several other advice firms.

The triage arm would offer people simple, affordable and valuable help as a precursor to any regulated service. This help might take the form of:

  1. Getting their financial information organised;
  2. Helping them understand what they have and flagging up any areas of concern; and
  3. Helping them review and improve their weekly, monthly and yearly budget.

I do not think this service should stray into providing non-regulated lifetime cashflow planning or money coaching, because that is not perceived a problem that needs solving by the typical person. It also risks straying into that grey area between unregulated help and regulated advice. That type of service can be offered as the next level up for those who want it, once they have got organised and budgeted.

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Citizens Advice Bureau and Step Change provide excellent help and support to people experiencing financial difficulties. But they have neither the time nor the money to help those not in financial distress but who could really benefit from taking stock of where they are.

My non-scientific poll of attendees at my talks, as to what they might be prepared to pay for this service, suggests that, if it saved them time, worry and eventually money, they would happily pay between £200 to £400.

The budgeting process alone should identify savings that make the service pay for itself. And that is before things like saving money on insurance and mobile phones, and maximising state benefits and tax reliefs. Employers could even offer to facilitate payment of it via tax efficient salary sacrifice under the £500 tax-free annual advice allowance, thereby reducing the net cost to the employee by between 30 to 50 per cent.

At the very least, your firm could offer this service as a foundation for friends, relatives and colleagues of your existing clients, who do not want, need or can afford your core financial planning service.

You never know. The triage business could become bigger and more profitable than your existing advice business.

Jason Butler is an expert in financial wellbeing @jbthewealthman 


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. So as I understand the proposal:

    The triage arm would offer people simple, affordable and valuable help as a precursor to any regulated service. This help might take the form of:
    1.Getting their financial information organised;
    2.Helping them understand what they have and flagging up any areas of concern; and
    3.Helping them review and improve their weekly, monthly and yearly budget.

    Step 1 is what any IFA would consider to be Fact-finding
    Step 2 is discussion of the situation and identifying need areas
    Step 3 is cash flow modelling.

    And this would command a fee of between £200-£400????

    Yet another article totally out of touch with reality and diluting the value of Advice!

    • Neil Liversidge 28th August 2018 at 4:44 pm

      I’m glad you said it, Nick, because that was my reaction too. Just in case I was being overly negative I convened one of our in-office ‘brains-trust’ conferences. We ripped it to bits. No wonder Jason Butler ‘hung up his boots’ if that’s his idea of a viable business model. I could spend an hour writing an essay on why it’s a load of tripe but it honestly is not worth the time I’ve already spent on it, let alone any more.

  2. i think most of us are doing this now with prospects…..but for free!
    maybe if there was a direct government subsidy we could look into this!!

  3. Nick, I am fully aware of the costs and risks of running a regulated advice business, which I did for 17 years. My suggestion was not intended to dilute the value of advice, far from it, I want more people to get the right help, at the right time at the right cost. I have presented financial wellbeing talks to lots of employees around the UK and this gives me a unique insight into the average person’s money issues and challenges. Most don’t feel comfortable approaching regulated financial advisers as a) they don’t know what value can be obtained, b) they don’t think they can afford it, and c) they are frightened of looking silly or stupid. The triage service I suggest is a technology driven solution, supported by virtual human support (not expensive advisers) that helps a) people get their info organised on their own terms and pace (not the same as fact finding), b) gradually understand what their basic money priorities are (and should be), and c) a monthly & yearly spending budget is NOT the same as lifestime cashflow modelling. Few people can think longer than 3 years, let alone a lifetime. This type of service is a primer for more substantive regulated advice. Not all will progress to that but many will, once they have trust and understanding. Surely there is a business to be created from answering the question ‘How could we build a profitable simplified money help service (not personalised advice or products) for between £200-400 pa?’ Uber, AirB & B, ITunes and many other disruptive businesses looked at solving a real problem not being addressed by encumbants.

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