The demand for more mainstream financial literacy is on the rise and is fast-becoming a crucial aspect of education. To quote Lizzo, it’s about damn time. As an industry, we’re all too aware that more needs to be done when it comes to teaching future generations about the responsibilities of savings, budgeting and holistic financial planning, writes Aimee Speight, founder of IFA-focused firm Speakeasy Communications.
Any IFA worth their salt knows that the role of a financial advisor goes far beyond just recommending products or services to clients. It’s their responsibility to understand many factors of the client’s life; ambitions, short- and long-term goals, divorce plans or aspirations for their family before curating a financial strategy that will see these plans actualised.
While the UK government is under increasing pressure to be providing greater financial education within the national curriculum, the financial industry c-suites are realising quickly that building fiscal literacy is no longer just something the marketing team nags about or a ‘tick in the box’ value in the brand strategy, but a fundamental social responsibility that is becoming all the more expected.
Now, with the rise of consumer awareness and the ubiquity of demand for financial literacy across the headlines, IFAs need to level up their educational offerings and fast.
The good news is, it doesn’t have to be complicated.
Six suggestions
Provide resources
By providing educational materials to clients such as brochures, guides or even workshops and webinars, advisers can help people understand the basics of finance and manage their money more effectively.
These can also be re-created to suit younger audiences, translating what is perhaps perceived as complex subject matter into digestible information.
Cut the jargon
We all know how the industry dearly cherishes an acronym, but when it comes to clients and indeed, younger audiences, try to keep the language simple.
When you’re working in the financial services every day, it can be easy to lose sight of the woods for the trees and assume everyone knows what Reit or Isa means. Clarity is crucial so prioritise it.
Encourage questions
This one should be obvious but all too often, it isn’t.
Clients should feel comfortable enough to ask you questions. But sometimes it takes a while for a person to feel at ease, so make sure you carve out the time for them to raise any concerns or questions.
Work with your local community
Particularly within international brokerages, many IFAs are expats working with expats; and these communities are often tight-knit. Get networking and see where you can add value to educate local schools, youth clubs or even disadvantaged groups in need of educational support. Not only is this a fantastic way to share resources and give back, but builds credibility and trust in your expertise.
Furthermore, teaching children about finances can also help them develop important life skills, such as budgeting and saving, that will serve them well throughout their lives.
Teach your clients to talk
Research indicates that talking about money is still taboo in many family units; with younger generations turning to social media for advice or dabbling in the ‘gamification’ of investing with digital currencies, while many over 60’s still have no idea what the inheritance tax liabilities will be for their families.
This chasm in communication is nothing new, but as an industry, there is a responsibility to make sure that families are encouraged to talk to each other about financial planning. Teach your clients simple communication strategies, help them bring challenging conversations into the open and above all, encourage them to speak to the people who ultimately matter the most to them
Keep teaching yourself
CPD (Continuing Professional Development) is there for a reason; and not just to get on the right side of the compliance team.
It’s imperative that financial advisers stay up to date with the latest industry developments and changes to regulation, so that they can continue to provide clients with the most appropriate advice. Not only is CPD mandatory in many countries to maintain professional licences and certifications, but in completing this, IFAs demonstrate their commitment to providing high-quality services to their clients and upholding ethical standards in their practice.
There are a number of great conferences throughout the year, at which to build on existing knowledge.
Interaction
These tactics are great for the short term, and implemented consistently, will have a positive compound effect on financial literacy.
But what’s important to consider is how the next generation will interact with financial education.
This is a demographic that has grown up within a digital age, heavily influenced by social media and the ever-growing omnipresence of AI, and has been exposed to financial information from a young age. They are enormously tech-savvy, demanding convenience, accessibility and transparency.
It is predicted that Gen Z, and later, Gen Alpha, will prioritise financial literacy and proactively seek out the resources to better understand finance than perhaps their millennial counterparts. They will likely prefer to use digital platforms and means of communication instead of traditional methods, so the rhetoric of the importance for advisers creating a positive digital footprint continues.
It’s no secret that financial literacy, particularly during volatile markets, is a crucial aspect of society. It is imperative for IFAs and brokerages to play a role in its promotion among existing clients, prospects and within the community.
By providing useful resources, working with communities, and saving the acronyms for the next team meeting, IFAs can help increase overall financial literacy and build trust with their clients. By showing a dedication to their clients’ financial well-being, IFAs can establish themselves as a valuable resource and establish long-lasting relationships, not to mention by promoting financial literacy within the community, leading a more informed and stable financial landscape, benefiting everyone involved.
This article was written for International Adviser by Aimee Speight, founder of IFA-focused firm Speakeasy Communications.
