Tuesday, 22 November 2011

How do you change the world?

When I started this campaign I had no idea that the IFP was starting a Financial Planning Week (follow on twitter @IFP_UK and use the hashtag #fpw2011). This event has been incredible encouraging and generated a lot of press comment and acting as a showcase of how financial advisers operate today. Well done to all those involved. But what I haven’t seen are other financial adviser trade bodies (and I can name a few) getting involved, my challenge to them is that this campaign involves all of us and the more we all go out and talk about this the more likely we are to get our message out to a wider audience. So that is our challenge let’s get others involved and get this campaign going beyond a week to a complete change of mind-set.

Away from this I have followed a number of tweets and articles but I want to focus on two from Jeff Prestridge on the website (follow on twitter @jeffprestridge):

My financial epiphany: How a friend convinced me sensible financial planning can pay

This article / blog brilliantly summarised why you should consider financial planning – I think what was interesting was that only 46% of people have a financial plan and of those only a few use a financial planner to achieve those goals.

There were two comments which summarise to me what people think of financial advisers:

‘I know a man who can look after this money…’

‘Never trust them’

Whether tongue in cheek or real it shows a lack of understanding of why you should consider a financial adviser / planner and this leads onto the second article / blog.

Don’t forget who were the biggest promoters of the failing Fidelity China Fund – and what they earned

Firstly before I launch into this I like Hargreaves Lansdown and admire what they have achieved where others have failed. However, I think there is a danger that they can become a victim of their own success. Let me give you a true story of a friend who recently received an unsolicited letter from Hargreaves promising free sweets (well a nice pen) if they moved their money to them. Very tempted because they had a poor performing pension they completed the paperwork – now consider this:
  1. I was asked if I thought Hargreaves Lansdown were a good firm, my answer was yes. I have my investments with them
  2.  I asked them if they knew where they wanted to invest their money, what they wanted to achieve etc and they said no
  3.  I asked them what they were going to do – easy was the response they would take “advice” from Hargreaves Investment Times
Now Hargreaves Lansdown will say that Investment Times is not advice but I understand that fund houses go to Hargreaves for new fund launches because of the influence they have on their clients and that they know that they can get tens of millions into a new fund launch. So if my friend does take their “advice” and the fund underperforms who do they blame? Well actually they only have themselves to blame despite feeling that Hargreaves has influenced their decision.

You see the premise is that the 300,000 clients that Hargreaves has are financially astute and have a financial plan in place. This may be the case and many may have a financial plan but I suspect there are many who don’t. In fact if you have a look at their financial report and accounts the average case size is only £40,000 which to me suggests that there are many people who are not financial astute with small sums invested and therefore turn to the “advice” provided by Hargreaves.

What worries me is that Friends Life and others are now launching products direct to the public and with a growing middle market of unadvised people I am worried we are facing a future time bomb of disgruntled investors looking for someone to blame for their mistakes.

The FSA, ABI etc etc are busy trying to tidy up the industry and missing this unexploded bomb, where they need to start is by getting people to understand the importance of saving and this is where financial planning comes into being.

What we should be doing is getting people like the FSA, ABI, Government, Journalists, IFA trade bodies and consumers together and explaining why financial planning is important.

My one hidden agenda is that I want to go to schools, colleges and universities and talk to students about the importance of budgeting and financial planning because if we get people to understand it young then we can create a generational change. Once we do that, then people can make decisions on whether they achieve those goals through the likes of Hargreaves or by going to a financial planner.

So back to the question I started with but slightly changed – ‘how do we change people to see the importance of financial planning?’ – one small step at a time.

As I said in my last blog I will be emailing trade bodies, government and really anyone who will listen but please tweet the message increase the followers of the IFP, my followers and anyone else who supports this campaign. And just in case I have no connection with the IFP, in fact I haven’t even met them I just think they are doing a brilliant job.

Follow me on Twitter so please spread the word and lets change the world.


  1. An excellent article which I totally agree with. We are definitely of like mind in wanting to educate the public about the benefits/necessity of good financial planning (I'm Pete Matthew of

    Just one suggestion - we need to know who you are and a bit about you; there's no bio information on here. Perhaps an About Me post?

    Keep up the good work.

  2. Thank you - I will disclose who I am, but at the moment I want to see if there is a drive to do this. My motivation as I have said is to go out and educate people both in financial management and financial planning as well as investing. Please retweet my messages on twitter and post this on to contacts. If there is a desire then yes I will say who I am.