PFS president Sarah Lord looks back at a tumultuous year and highlights the need to showcase the benefits of financial advice
As we hurtle towards Christmas and the end of another year, I have been reflecting on 2021 and what a funny old year it has been. Looking back, 6 January 2021, when the UK went into its third lockdown, now seems a distant memory – which just shows how far we have come. But it’s fair to say we are still not back to ‘normal’, whatever normal is these days.
The recent Advice Gap publication by Open Money has got me thinking about the important role our profession has to play in giving society financial resilience. As we gradually emerge from the pandemic, the need for financial confidence and financial freedom has never been greater; yet there is still a massive advice gap in play and the need to get across the message of the benefit and importance of financial advice and financial planning has never been greater.
However, one of the most difficult things we must do as advisers is demonstrate the value of advice and that the fees are worth paying, when arguably, at the point of sale, financial advice and financial planning is intangible. If you have never received advice, it must be hard for prospective clients to understand the value that paying for it will bring.
It is not like going into an electronic store and looking for a new television, where not only is it tangible but you can touch and feel it and make comparisons between one and another before buying.
Through the great work we do, we empower clients to have confidence in their financial future
Changing the narrative
Interestingly, in the Advice Gap research carried out by Open Money, 33% of respondents gave the view that, to pay for financial advice, they would need to be convinced that it would save them money. While I am sure we all recognise this as a reason given, in my opinion we need to collectively, as a profession, change the narrative from the cost of advice to the benefit of advice. We all know that financial advice and planning can bring benefits in the form of saving money but the real power in what we do is enabling people to have confidence in their financial position, to be able to cope with the financial bumps in the road and not make costly mistakes with their finances.
There are many aspects at play when looking at the advice gap, such as the cost of advice, accessibility to advice, the regulatory landscape, business models and technology considerations, but there is one thing that we as a profession can control and that is continuing to emphasise the benefit of financial planning and advice to all. Through the great work we do, we empower clients to have confidence in their financial future – as a profession we must continue to promote financial advice to wider society so that more individuals have financial freedom and confidence.
Lastly, let me wish you all a peaceful festive period and all the very best for 2022.
Sarah Lord is president of the PFS
