Risk is some-thing not confined to investment. It is with all of us 24 hours a day, seven days a week. The risk that concerns me most is not investment risk, it is the risk of living longer than your money.
This leads me to the Money Marketing campaign, Pave the Way to Save, a bold and much needed initiative.
It is well accepted that we live in an age of celebrity and although we know that people seem to align with them, there is no sign of Beckham or Jordan leading a savings culture out of the proverbial woods.
When I heard that Mr Bean was telling people to spend their savings, I felt like giving Rowan Atkinson a piece of my mind. Then I noted it was Charlie Bean of the Bank of England. It is infuriating when someone like him gives advice to people. He has no connection with or personal knowledge of the pressures these people face on a daily basis. Through this column, I would like to offer Mr Bean the opportunity to join me at a pro bono clinic to find out first hand just what the average member of the public has to cope with when making financial decisions.
Outsourcing is often used as a way of introducing a fresh approach to current problems. This is probably why the civil service has such issues.
They pay next to nothing for their pensions and yet that absence of risk is not translated into lower salaries than the private sector. Those protected from real-life economies are ill-prepared to provide strategic guidance, so we need people forced into self-provision to lead the discussion, not those in comfortable ignorance.
Perhaps what we really need is a version of Alcoholics Anonymous, where people can throw off their profligate spending habits. This treatment would not work immediately. Like all worthwhile things in life it takes time, but it is worth it in the end.
Perhaps one of the reasons there is a lack of engagement with the advice sector is the mechanical way we tend to fact-find. We need to engage with clients – the up and coming younger generation would be happy to key in their data and this is something that should be encouraged. We need budget tools that are activity-based rather than numbers-based as people do not plan by price tag, even though they should. We also need to get them to involve their partner as, all too often, people leave it to each other. This lack of engagement means that time often destroys any strategy that should have been deployed.
Saving has to become the popular and smart thing to do. Savers need encourage-ment as many will need to make sacrifices if they are to progress. We must support them on this diffi-cult but rewarding journey.
My mother, who recently passed away, always favoured saving first and spending second. Perhaps that succinct wisdom is the simple message we need to communicate. She also reached the grand old age of 90. Her saving habits meant that longevity risk was a problem for others and not for her or my late father. I shall miss her company and wise counsel.
Robert Reid is managing director of Syndaxi Chartered Financial Planners