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Steve Bee: We’re on the verge of a new advice era

There is a lot of negativity about the value of advice – but two developments are giving Steve Bee hope

There are nowhere near enough advisers in the UK and the small number we do have do not engage with as many people as they ought to.

All the major financial decisions I have made in my life have been made in conjunction with advisers. The same is true of everyone else in my family and my wider group of friends and acquaintances. Indeed, I have been an advocate of advice to many people over the years.

Even when making decisions regarding pensions – a subject I know better than most people – I have relied on the expertise of specialists, happy in the knowledge I am able to count on the skills of such seasoned practitioners to help me achieve my aims.

There is a lot of negativity these days about the value of advice and the cost of its provision. But I am sure those who have benefited from being advised would attest to its value and those lucky enough to be able to afford it would be unlikely to baulk at its cost.

Many of the decisions we make regarding our finances can be both irrevocable and life-changing. Very few of us would be comfortable making such momentous choices unaided.

So we are lucky there are professional people able to help us with advice. But the industry is nowhere near big enough. We need more qualified advisers to enter it.

All of us will face a wide range of complex financial issues in the course of a lifetime but only a few are able to access and afford valuable professional help. This is something that worries me greatly and should be a concern for all of us in this industry.

I want to see a revolution in advice that will enable more people to readily access professional help when they need it and for that assistance to be at an affordable
cost too. Two things give me hope that such an outcome may be possible.

The first is the rise of access to the internet and of so-called robo-advice. Of course, robo-advice on its own is not the answer, as I doubt many would be comfortable making life-changing decisions without human reassurance. But I do feel future robo-powered advice firms will be able to advise far more people at a commoditised cost.

The second point giving me hope is the soon-to-be-completed automatic enrolment reforms. Its completion will result in widespread private pension coverage and the broadening out of access to a wider range of additional financial products through the hub of the workplace.

Employers working alongside professional advisers could be the catalyst for the spread of both financial products and capability.

The timing for the start of a new era of advice in the UK is now.

Steve Bee is director at Jargonfree Benefits

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. A sensible article at last. Spot on Steve B. It is all about (new) Client investment/stock market Education, Education, Education.
    Why doesn’t the PFS /FCA etc have Education days to explain how it all works? Or at least have animated storyboards on their websites?
    I am doing this myself and just completing my second one. It will give new investors / advice ‘engagers’ a chance to read, review and re-read to help them understand the processes and systems surrounding Stockmarkets, Pension & ISA Contributions / Management and how very unlikely it is that they will ‘lose their shirt’ by taking and acting on investment planning and advice

  2. Steve Bee knows what he is talking about indeed! The critical point here is the value that people can derive from advice..and the cost to them from going it alone and even worse doing nothing. Google is simply a fast route to getting information and data—unfortunately people appear to think that because they read something it is a) correct and b) applicable and relevant to their own particular individual circumstances. Even if people are full of information about pensions it doe not necessarily follow that they act upon it!

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