The digital revolution has brought unprecedented opportunity to communicate but financial services seem more remote than ever to the UK public.
Years ago, there was a strong correlation in the minds of the UK general public between financial matters and bicycle clips.
In the days when milkmen delivered dairy products daily to the doorsteps of millions of citizens, most households 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 and their everyday financial needs, such as insuring their lives, sorting out debts and saving for a married life. The agents themselves came from the communities they served and were, in many cases, trusted family friends of their many customers. They did a good job of looking out for those families as lifetime events flowed through their lives, including weddings, the death of a relative and all the other financial challenges that continually confront each of us.
Those days, though, are long gone. To our modern mindset, they appear quaint – naive even. The insurance agents themselves 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 ‘financial advice’ is and why so few have access to it, while commentators and others call for children in schools to be ‘educated’ in financial matters from as young an age as possible. But all the while, we seem to live in a world where financial services and financial capability seem more remote than ever to the general public. A different world.
That should not be the case. Today, we have unprecedented opportunity to communicate through technology. The average citizen has access to more computing power in the phones in their pockets than most global corporations had at their disposal two decades ago.
We have something of a revolution going on in UK workplaces
The financial services industry has not done a particularly good job of engaging with the digital revolution that has swept through our modern lives. Technology has been used to streamline processes and further reduce inefficiencies, of course, but not to reach out and provide financial information and capability to people.
That job has largely been left to the Government and, in my view, it has done a good job of providing unbiased and useful information to the public. I am and always have been a supporter of the work done by the Money Advice Service. Its website is full of useful information and practical tools to help people understand and get to grips with everyday financial issues.
It seems to me that the workplace, rather than the doorstep, is more likely to be seen as the source of financial information in the future. We have something of a revolution going on in UK workplaces with the implementation of the pension auto-enrolment reforms. Every company, big and small, is now providing a funded workplace pension for their employees and other workers.
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 the state second pension and its replacement with tangible pension savings in the second decade of the 21st century will, one day, be seen as a pivotal point in the spread of financial capability in the UK.
Steve Bee is director at Jargonfree Benefit