The sector’s biggest challenge is to convince the public that they should save and not spend. The public would argue that they should have the choice as to where they spend their money. Perhaps we should focus on ensuring that choice does not evaporate on retirement.
Before this can come about, we need to improve our image and this will become more important than simply harping on about the benefits of independent advice. If providers want to invest in distribution, they should focus on perceptions before promotions.
I seriously feel that the FSA is wasting money and resources on publishing its plethora of booklets and leaflets. Just as Margaret Thatcher secured a rebate on EU fees, we should be approaching the regulator requesting the same style of rebate based on our success re pro bono and community projects.
There is also an opportunity in rolling out a fuller benefits packages and not simply stopping at pensions and risk benefits. By providing voluntary benefits such as discounts on consumer goods, we can align consumers’ current attitudes with spending alongside long-term saving. By collating data on their spending habits, we can then make far more in the way of bespoke comment about the lifestyle they would prefer and the one they will end up with if they do not save for their future.
In the past, we have focused on the benefits lost if savings is deferred for five years or more. If we reverse this calculation and tell them how much cheaper it would be if they started saving now, we could create a suggestion of a bargain and few consumers can resist that.
To aid us in this exercise, we need the Government to finally tell the electorate that state benefits are not available for all. Deferring this simply creates a form of planning blight. We need to completely overhaul the public’s thinking in this areas if we are to succeed. This needs a fresh look and a realistic approach and the campaign needs to be addictive but not patronising.
As we near Christmas, can I remind my male readers not to follow the example of a former work colleague who bought a mountain bike for his wife. What’s wrong with that, you might ask? Well, she had just given birth and the card suggested that the gift could get her back in shape.
Image is important but in moderation.
Robert Reid is director of Syndaxi Financial Planning