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Covid as catalyst for financial discussions

8 November 2020

Two fifths of people (40%) have discussed financial planning with their family or friends in the past year, as the ‘taboo’ around discussing the subject disappears, according to research from AKG and Canada Life.

The research found that the Covid-19 pandemic may have served as a catalyst for financial discussions, with 29% of respondents having a discussion in the last month.

However, the findings also showed that 57% of people had not seen a financial adviser in the last five years.

Canada Life urged advisers to adapt and understand the requirements of potential new customers, with the majority of advisers’ business models currently focused on retirees classed as ‘financially mature and stress free’, accounting for just 21% of the market.

The research showed that over a quarter (27%) of respondents didn’t see financial advice as a service they should pay for, while 43% of consumers favoured a DIY approach and 20% were concerned about being targeted by pushy sales techniques.

Of those who did receive financial advice, 55% said the greatest benefit was “peace of mind” provided by their relationship with an adviser. This was followed by “access to ongoing support” (48%) and “ideas on finances and investments” (42%).

The research also found that navigating retirement effectively is still a leading concern, with 39% of respondents saying they would consider paying for advice at this time.

Andrew Tully, technical director, Canada Life, said: “These results have provided an interesting snapshot on the potential clients for advisers today and crucially, tomorrow. With future customers looking to a DIY approach to financial planning the onus is now on advisers to highlight not only the great service they provide but also the priceless ‘peace of mind’ they can offer.

“I’m not surprised to see retirement planning emerge as a key concern for potential customers. The combination of pension freedoms and auto-enrolment creates a significant pool of opportunity for advisers as millions face more complicated questions around how much to save, when to retire and how to pass on wealth to the next generation.”

Matt Ward, communications director, AKG, added: “Evidently discussing finances is not taboo, rather it is prevalent, and for some it has evidently been necessitated by COVID-19. But the big question for the industry is: how do we convert more of this interest and these discussions with friends and family into meaningful engagement with financial advisers where these relationships are not in place?

“From a pure marketing and key messaging perspective it seems clear that the industry could do a better job of communicating the benefits and value of financial advice. And the consumer research shows that there is definitely some ammunition there to be used from their key supporters.”

Professional Paraplanner