Japanese food, Online Advice and why ‘the fear’ is getting in the way.

I’m lucky in a huge variety of ways.

I’ve got a family I’m massively proud of, a “day job” which gives me the opportunity to provide clarity, confidence and security to our clients lives and, especially relatively recently, I get to talk to (and increasingly work with) interesting people involved in my profession who are doing some really interesting things.

Last night I was lucky enough to be sitting in a Japanese restaurant with some of the people I consider to be top of my “Interesting people” list (Yes I’ve got a list….don’t judge me!).

I wasn’t feeling on top form.  I’d had a long day, a late night the night before and it’d been a really busy week.  However I couldn’t miss the opportunity of sharing a table with people I’ve got a lot of respect and admiration for.

Guys like Pete Matthew, Dennis Hall, Andy Hart and Abraham Okunsanya as well as a couple of the most inspirational women (and we really do need more of them in the world of money…but I’ll save that subject for another time) I know, Hannah Foxley and Tina Weeks.

I respect everyone around that table for a different reasons..but suffice to say each of them are “making their mark” in a unique and individual way each and every day.

We were talking about a range of different subjects including  me trying (and failing) to convince everyone that cravats are the future of fashion and all of us trying to answer the question “What was your first  kiss?” (I genuinely couldn’t remember – which is worrying!).

However there were a couple of aspects of our conversations which particularly interested me….

The subject of online financial guidance (or simplified advice) and ensuring individuals engage and connect with their money.

It’s a subject which isn’t only being spoken about in Japanese restaurants. The conversation is also happening online (there’s a great article about the pro’s and con’s of a certain aspect here) and I for one have spoken to or emailed with a bunch of different  people who are currently  building propositions in different aspects of this market.

Now I’m no expert!  But let me give you my take….

There is no question in my mind that in the future most of us will protect our families, save for our financial futures and invest our money online.

I don’t see that as a threat to current financial advisers or planners. The commercial reality is that humans (and especially highly qualified professionals) aren’t cheap when compared to systems and our clients know this.

They could do a lot of what we do themselves but don’t feel they have the time, expertise and most importantly discipline to do the job. Many of my private clients just need a sounding  board, or a guiding  hand, and even sometimes a push in the right direction. They want all of  these things to have a human face.

I believe that  the market for these clients won’t  change fundamentally.

However this raises a couple of questions….

How do you help the individuals with their financial needs who can’t afford “the human touch”?

and, for me more importantly,

“How do you provide the sounding board, the guiding hand, and even the push (or nudge) online?”

If I’m honest I haven’t got a clear answer yet. However (and I’m pretty sure on this)….making the process easy is key.

I’m not a fan of what Wonga do as a business. I think they do more harm than good (both short and long term) to their ‘customers’ financial lives.

However one of the reasons Wonga have been so popular is that they have done something incredibly powerful…

They have made money simple.

Now….Imagine if we could build a simple online proposition to help people plan, save and invest in order to achieve financial security instead of getting into a spiral of debt.

Imagine then if we could make it fun!

Hargreaves Lansdown and AJ Bell have proven that online models work. However I believe there’s a huge gap for a compelling financial planning (and not product) proposition.

Obviously there’s the ‘fear’. Fear of spending money on technology that doesn’t work. Fear of liability. Fear of regulation.

However if the financial institutions don’t get involved there’s plenty of people who work in and around the London technology sector who will (and don’t have the same ‘fears’ of people who work in the financial sector).

That could be a good thing! Maybe we need individuals without certain preconceptions and fears to build something truly innovative in this area. The right answer might be that the tech guys and the planning guys collaborate to build something powerful.

At this stage I don’t know what the future in this world holds.

All I know is that it’s going to be a really exciting place to explore.

Money, ‘the talk’ and why kids are great teachers.

As a kid, and like most children, I was naturally inquisitive. I asked questions, wanted to understand more about the world, and work out in my own way what I thought and felt about the world.

I had a number of influences including my parents, my friends and my teachers but sometimes when I asked an adult certain questions.  The answer was either…

“Go ask your mum/dad/teacher (i.e. anyone else but me)”

or

“Don’t ask those questions”

or

“I want to tell you…but you wouldn’t understand”

All these answers effectively meant the same thing.  For various reasons they didn’t want to answer the question.

Normally these questions which elicited this response were usually around one of two subjects. Sex and Money.

These subjects were considered taboo.  For adults.  Not considered appropriate for children.

Putting off ‘the talk’ about Sex is understandable.  We want our kids to be kids for as long as possible.  We want their innocence to be preserved.  We want to ensure that we answer the questions when the time is right…

But one thing’s for sure….It may be gradual.  It may be mum, dad or gran. It may start from comments in the playground, when puberty starts to kick in or sparked by a new addition to the family but regardless of how it’s done and when it starts….

….”The talk” will happen.

We all know that eventually we need to do this.  Having “the sex talk” is the responsible thing to do if we want our children to sort the good information from the bad, have an informed perspective, and have healthy happy personal relationships.

However whilst the sex talk is considered responsible parenting…”the money talk” doesn’t seem to be.

Generally speaking many of us don’t talk to our kids about money.

Maybe it’s because we don’t want them to worry about money. Maybe it’s because we want to be heroes and heroines to our children and to admit that sometimes we struggle financially is to admit failure.  Maybe it’s because we don’t feel we know enough about how to manage money ourselves to start to  impart our knowledge to our children.

However I want my daughters not only to have an informed view on sex and relationships.  But also a healthy relationship with money and it’s my responsibility to be open enough to answer these questions.

I want my girls to have happy, exciting and fulfilling  lives.  Being wealthy won’t necessarily do that but having a healthy relationship with money will certainly make it easier.

Quite recently I decided to give my elder daughter Charlotte the opportunity to ask me some money related questions.  I asked her to choose the questions herself from what she understood and heard about anything financial.

I  recorded Charlottes questions and, last week, published the first part of these recordings on my podcast (you can find Episode 9 of Common Sense Money containing the first part of Charlottes interview – here or available in Itunes here).

Listening back to the interview I realised something.  Although I was teaching Charlotte…she was also teaching me.  Not in a contrived deliberate way.  But just by being Charlotte.

Explaining anything to children isn’t the easiest thing to do.  It involves being clear but not skimping on the details.  Explaining simply but not patronising.

Most kids will tell you if you’re not being clear, or being patronising, or being deliberately vague if given the chance.  For me this meant that I had to raise my game and think really clearly about the explanations I give and the questions I asked.

So, in my opinion, helping our children understand more about money is an obligation we have as parents.  For many of us, ‘the money talk’ is as uncomfortable as ‘the sex talk’ however I’d suggest almost as important.

However this is just my opinion….what do you think?

Would a ‘Financial Weight Watchers’ work?

There are certain companies I admire.

I admire Lush for making our high streets smell amazing again (I know the shops aren’t for everybody…but I love ’em!) and their ethical approach to business.

I admire Google for the impact they have on all of our lives and although their tax affairs are potentially controversial and their advertising can sometimes be slightly annoying they do far more good than harm and make all of our lives far far easier.

I also admire Weight Watchers. Now whilst Google and Lush are firms which receive great publicity, Weight Watchers in my opinion are underrated both in their commercial success and in their ability to do good…

Ok so the profits of Weight Watchers this year are down to $48.8 million (from $54.4 million) however one of the reasons this may be is the transition from people going to their face to face meetings and utilising their online proposition.  Whichever way you look it circa $50 million in profit for a diet firm is pretty good going….however there’s a problem with this assumption.

Weight Watchers isn’t a ‘diet’ company.

Weight Watchers is a personal development, coaching and support company.

Ok, so Weight Watchers has the ‘points system’, their own products and various other innovations which might fool us into thinking of it as a Diet.

But, if you ask someone who either attends Weight Watcher meetings they will tell you a different story. Many of them will tell you that the reason they attend is so they are held accountable, have the support of others going through a similar journey and the discipline regular meetings provides.

Whilst Weight Watchers have ancillary products like food and drink their main product is the membership.

This is unlike some other diet companies where the ‘product’ is usually either the food, drink or tablet which will provide weight loss for their customers but do nothing (or very little) about helping people develop positive long term habits and behaviours.

This is where I believe that Weight Watchers has their proposition right.  They understand that, regardless of how logical we believe we are, most of us struggle with doing what we know what is good for us, be it physically, mentally or financially.

Not because we don’t know what to do.  Many of us know we should eat better, eat less and exercise more (or in the case of our mental wellbeing think better, worry less and learn more).

However what we fail to remember is that a lot of the time we don’t take action on what we know but, more often than not, on how we feel.

Weight Watchers understand this and have built a program designed to support, encourage and take aware the ‘fear’ of knowing what to do (by in the form of their ‘points system’ providing a track to run on).

Now, I appreciate that Weight Watchers aren’t perfect.  I’ve heard stories of pushy product sales at meetings, nightmares with trying to cancel memberships and general customer related fails…but, like any company it makes mistakes.

However I think the principal of teaching people good, healthy habits and providing them with a framework to have the ability to do this is a good thing.  I think the fact that they make a profit, employ people and contribute to the economy in many countries is a good thing.  I think the fact that, whilst it would be impossible to help all their customers, they make a positive impact to many of their customers lives has got to be positive

 

But the question is….could the same model work in financial services? (A financial weight watchers)

 

I’m regularly asked to comment on new financial services ‘products’.  Some good, some bad and some indifferent.

However most of these ‘products’ are a way to invest when what we could really really do with is a ‘product’ which helped all of us what I believe we could do with is what weight watchers do for people trying to become healthier by losing weight…but for our money:-

A supportive environment, a framework to take away the fear of managing money, regular guidance and encouragement.

This means when it comes to the world of money this means  budgeting better, spending less and saving more.

I’d like to think that people would be happy to pay a few quid a month for help as long as they could see value in the services provided.  A route forward to provide a genuine framework to long term wealth and the support and encouragement to help them along that journey.  Something which could ensure they are genuinely getting their moneys worth…

I know there are issues with this approach but I sometimes think that we ignore the fact that all of our current solutions and innovations do little to support and encourage individuals as well as helping develop good financial habits.

I also appreciate that we do need somewhere to put our money.  However do we need so many?  and do we have to make it so confusing?

So…I’m interested in your thoughts and the answers to the following questions

Is there space for commercially successful financial ‘weight watchers’?

Do we need to look at more innovative approaches to help people manage their money?

or

Should we all be satisfied with the status quo?

Would you pay a few pounds a month to help you ensure that you could achieve your longer term goals?

I look forward to hearing your thoughts….

Martin Lewis, Trust and the financial services Quagmire.

Trust is an interesting thing.  It takes time to earn, needs to be maintained and can be destroyed really easily.

A couple of weeks ago there was an article reporting from the Future of Financial Services conference stating that Martin Lewis was talking about trust in financial services and, according to the article, made the following comment….

“The reason financial services companies are not trusted is because they are not trustworthy.  If you want to become trusted become trustworthy.”

Now, i wasn’t at the future of financial services conference and therefore can’t comment on the context of the comment.  I’m also basing this article on a degree of speculation having not attended the conference.  But I believe that the comments Martin made are absolutely right….and very wrong!

Martin is right that there are a number of financial services companies out there who have sullied the reputation of financial services.  They don’t deserve to be trusted due to the fact that they have shown themselves (sometimes time and time again) to be undeserving of any form of trust.

To rebuild that confidence takes time and Martin is right again when he says that this trust needs to be earned by being trustworthy.

However, and especially with large corporate firms with massive budgets, there is a potential that these companies decide not to generate trust by being trustworthy but find that a ‘quicker fix’ might be to ‘market’ themselves back into the public’s trust.

However this fabricated trust is ordinarily built on quicksand.  All it takes is another story of dishonesty and root and branch deception for the reputation of not only these firms, but the financial services industry as a whole to sink into another quagmire (and when I say that I mean a difficult and precarious situation and not that character from Family Guy!).

Again, Martin is right that the only long term sustainable way for the financial services industry to regain consumer trust is to for these firms to change their attitudes to their customers, not by changing their marketing techniques or increase their ‘consumer education’ spending.

The shame in this, and where I think Martin is wrong is that there are plenty of fantastically trustworthy people who work in financial services, especially within small and medium sized financial planning practices.

Individuals who believe in transparency, fairness and are committed to ensure that the client receives a fantastic service.  Individuals who have worked hard to build relationships of trust and understand that their reputations are not based on their marketing spend but by having the right values within their businesses.

Within these businesses they understand their relationship of client trust underpins everything they do.  Individuals who work hard to change their clients lives and, on many occasions, helping them live the life of their dreams.

Where I believe Martin is wrong is that these companies do deserve trust exactly because they are ethical, honest and trustworthy.

To make a comment which potentially taints all financial businesses with the same brush, in my opinion, isn’t particularly fair to the individuals who make a committed effort to be a positive force in the world of financial services.

Now I appreciate that making this point in a speech might be considered more difficult and less powerful than just procliaming ‘financial services are untrustworthy’.  However, as I’m sure Martin knows…any profession, including journalism, have a wide range of individuals and businesses each working with a different set of values.  Some will be trustworthy, some won’t.

They key factor is how the trustworthy in any profession or industry prove they are and rise above the noise.  I’m not sure I know the definitive way to do this….do you?