Earlier this year, Edelman’s annual trust barometer recorded record-low levels of trust in government, business, charities and lawmakers.
Financial services holds the unenviable position of the least-trusted sector globally and, in recent weeks, trust in the financial advice segment will have dropped even further as coverage of outdated practices has dominated the press.
The problem the industry faces is proving these practices do not permeate throughout and are the exception rather than the rule. It is more important than ever that we all back a common cause and promote financial advice.
Last month Pimfa launched a financial and mental wellbeing campaign that aims to do just that, seeking to change the public’s perception of the industry and to highlight the value financial advice can add. This task cannot be underestimated. According to the FCA, of the 25 per cent of UK adults who are likely to need financial advice, just 6 per cent have taken it in the past 12 months.
Our research shows unadvised investors miss out substantially. But this is about more than that. The piece of mind a financial adviser can add is invaluable especially since we are in a time of increasing anxiety, particularly around finances.
Money preys on people’s minds and can drastically impact their wellbeing. And, while the impact of debt is substantial, money issues are not limited to that. Figures from Pimfa show 94 per cent of UK employees are suffering from money worries and 59 per cent rank it as their biggest cause of stress and anxiety.
There is a vicious circle when it comes to money and mental health: concerns about money can lead to mental health problems and that in turn can make the money issues more problematic.
Unfortunately, both money and mental health remain topics we don’t like to talk about. However, without discussing your money issues they can build up, weigh on you and cause more challenges. This is where financial advice comes in.
Our research shows that people with a financial plan in place feel significantly more positive than those without. Around 64 per cent of individuals with a plan felt positive about their financial security, compared to just 23 per cent of those without a plan.
These are the things we need to remember and promote to society, and Pimfa’s campaign serves as a strong rallying cry. We, of course, cannot ignore challenges that remain within the industry. And in 2020 we need to make sure we are acknowledging them and setting plans in place to fix them.
Ultimately, I firmly believe everyone in the industry is seeking the same goal: to deliver valued and accessible advice.
Andy Thompson is chief executive officer at Quilter Financial Planning