Consumers call for better access to financial guidance
• More than one third (35%) of consumers want improved access to everyday financial guidance
• 69% feel more confident managing their finances online
• One third would put a lump sum into savings, but less than 2% would put it into their pension
Today at TISA’s Annual Conference, new research(1) commissioned by TISA, the financial services membership association, in conjunction with MoneyMagpie, one of the country’s leading consumer finance websites, reveals that more than one third (35%) of people surveyed want better access to everyday financial guidance.
The research confirms that there is a knowledge gap in financial decision-making, with people looking for better access to everyday financial guidance. Of those who want better guidance, 39% are aged 65 -75 and 33% are aged 35 and under.
The need to develop a framework to improve public access to financial guidance in order to help them make sound financial decisions is a key component of a series of policy proposals produced by TISA’s Savings and Investments Policy project(2) (‘TSIP’, ‘the Project’).
Digitalisation of financial products and services is important to consumers with 82% now managing at least some of their finances online, while 69% say the ability to manage their finances online made them feel more confident about keeping on top of their finances.
Significantly, only 17% manage their pensions online, compared to 97% who manage their current accounts and 67% who buy their insurances online. However, the findings show a ‘digital lag’ between people’s interaction with day-to-day financial products and services such as current accounts and long-term financial management of their pension.
To combat this, TSIP has proposed creating a ‘digital identity for UK financial services’ which allows people to view their entire financial portfolio in one online location. This will empower users by removing the administrative barriers to proactive financial management and will make switching providers as simple as a click of a button.
The research confirmed that more than a quarter of consumers would like financial providers to make it easier to switch providers and 21% want better access to credit scores.
TISA believes that enhanced access to guidance and digital services must be supported by better financial education and that they must better understand the importance of savings and the long-term benefits of doing so. When asked what they would do with a lump sum, 2% of respondents said they would put it into their pensions, less than 11% into a Junior ISA, 7% into a Stocks and Shares ISA and 31% into a savings account.
David Dalton-Brown, Director General, TISA, said:
“This research provides further evidence that people are increasingly confident and enthusiastic about manging their finances online. There is a real desire for greater accessibility and flexibility and for there to be fewer barriers to moving money from one provider to another.
“Making greater use of technology will make it easier and more appealing to save; simplify the process around financial advice and reduce costs, which can in turn be passed onto consumers.
“More than one third of respondents want improved access to everyday guidance to help them make informed financial decisions which shows there is a significant guidance and advice gap. There is a need for better guidance and financial education and this is something we warmly welcome. Ultimately the ability to make sound financial decisions based on educated decision-making is a key component of tackling the UK’s savings crisis at both an individual and a national level.
“The Treasury has recently started a consultation on financial advice and this presents a great opportunity to address how we help the public manage their money, including the role that Government should play and how this is delivered.”
Jasmine Birtles, Editor at MoneyMagpie, said:
“The findings clearly show the need for better financial advice and guidance. The lack of basic financial knowledge is being exacerbated by an increasing use of technology. Generation Y are digital natives and financial services firms need to work harder to engage with them and to encourage them to save and invest in an easier, accessible, and simpler way. With advances in technology and use of mobile accounts now doubling online banking transactions, there is a pressing need for technology to make saving fun, convenient and most importantly safe.”
Ends….
For further information please contact:
Alistair Kellie – Telephone: 020 7680 6558/Email Alistair.Kellie@newgatecomms.com
Sara Lyons – Telephone: 020 7680 6543 / Email Sara.Lyons@newgatecomms.com
Nick Morris – Telephone: 020 7680 6557 / nick.morris@newgatecomms.com
Email: TISA@newgatecomms.com
Notes for Editors
TISA is a not-for-profit membership association operating within the financial services industry. The focus of our recommendations and actions is improved outcomes for consumers and UK plc with this approach leading to a stronger UK financial services industry.
TISA’s growing membership comprises over 150 firms involved in the supply and distribution of savings and investment products and services. These members represent many different sectors of the financial services industry, including asset managers, insurance companies, fund managers, distributors, building societies, investment managers, third party administrators, consultants and advisers, software providers, financial advisers, pension providers, banks and stockbrokers.
Having a legacy of focusing predominantly within the tax incentivised products area, TISA has in recent years moved into the broader savings and investments world, extending our standing as trusted adviser over a much greater remit.
TISA has a successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for the public. Effective policy and regulation and the creation of efficient industry infrastructure continues to be the major focus for our members. TISA is unique in that it represents the entire financial services industry, incorporating cross-sector policy, industry and technical expertise. Whilst we maintain a solid partnership with government, the regulators and wider industry, we remain independent and develop neutral views and opinions. This impartiality is reflected in our ability to drive development projects which improve industry performance and consumer outcomes, putting us in the unique position of being able to constantly challenge the status quo to bring about material improvement.
(1) The research was commissioned by TISA in conjunction with MoneyMagpie in October 2015 and surveyed 2,606 people.
(2) The Savings and Investments Policy project is working with a wide range of financial service companies, trade bodies and consumer groups to develop these pan-industry proposals. It is directed by an Executive Committee formed of 16 leading financial services companies including Aviva, AXA Wealth, BNY Mellon, BlackRock, Ernst Young, Henderson, J.P. Morgan Asset Management, L&G, Lloyds Banking, Nationwide, Northern Trust, Old Mutual, Pinsent Masons, RBS, Threadneedle Investments and TISA.