Financial resilience is currently a hot topic right across the spectrum of the financial services industry. From the world’s top 10 banks right through to the individual consumer, the name of the game now is getting ourselves into a position where a crisis no longer means the end of our individual financial road.
While Pimfa has long argued for increased financial capability throughout the population and has wholeheartedly supported diversity and inclusion within our industry, much still needs to be achieved.
Employer and client pledges
This is why we are fully supporting two key pledges within the Insuring Women’s Futures Initiative.
Contained within this work – three years in the making – is the Inclusive Employer Financial Lives Pledge, and we are recommending that our members join us in signing it.
In addition to a headline commitment to flexible working, the pledge is designed to encourage signatories to ensure that, at every critical point in an employees’ financial journey, they will be invited to critically review both the immediate and long-term ramifications of their decision at each juncture. The work of the group highlights in stark terms the moments that matter in a women’s life that impacts on their and their families financial future.
Their Inclusive Customer Financial Lives Pledge is something that advisers can use to the benefit of both their clients and themselves.
Engaging with clients throughout their financial journey
Whether engaging with existing clients or new ones, attention to and focus on the specific details of their financial journey is critical to that client’s security, financial and mental wellbeing in later life.
Further, it offers opportunities for the adviser to engage with families and children, at least where long-term and intergenerational finances are concerned. Advisers may well end up ‘inheriting’ the children of their existing clients as a result of this type of continuous engagement.
While financial advisers will already embed this practice within their everyday dealings with clients, the signing of the pledge is an important signal to clients.
A quote from a recent Wisdom Council Yes She Can report highlights this: “Once you’ve made your purchase (of a long-term product like a pension) that’s it, your experience is over. It’s like switching a light switch on and off again – there is nothing in between.”
The report highlights 10 things that matter to women when they engage with their favourite brands and a gender-positive message, such as through the inclusive customer pledge, is likely to engender greater engagement with female and prospective female clients.
Proactive approaches to better educate clients and improve inclusive customer approaches within the sector will produce better client outcomes, with the potential added bonus of increased trust in the personal finance, insurance and wider financial services sectors.
At the launch of their Insuring Women’s Futures manifesto on 19 November, which is a collaboration between key industry figures under the guidance of the CII, recommendations for changes to policy were recommended, which chime with Pimfa’s asks of government; promoting a culture of savings and investment, diversity and inclusion, financial capability and wellbeing.
Forecasts for the National Insurance Fund
The government actuary’s department recently forecast that the National Insurance Fund will be exhausted by 2035-36. This will severely affect anyone without a decent sized pension pot of their own and the deadline is only 15 years away.
The key to solving this is a robust culture of savings and investment, one of the main strands of the mission of Pimfa and underpinned by the Pimfa manifesto, launched in 2018. This culture needs to be supported and promoted by government, the relevant regulatory bodies and the industry at large, along with well-designed and delivered financial capability to make society at large aware of the potential cliff-edge they face resulting from not saving enough, or even at all.
We have also drawn attention to this in our recently launched financial and mental wellbeing campaign, raising awareness of the issue and opening up the financial conversation whilst highlighting the value of the industry in ensuring individual wellbeing and safeguarding financial futures.
In support of the Yes She Can initiative, JK Rowling said that “We have the power to imagine better”. As an industry, we need to put that imagination to work.
Liz Field is chief executive of Pimfa
