Jason Butler: Advice firms should run triage arms for financial health checks

By Jason Butler

Aug 29, 2018

It is nearly three years since I hung up my financial planner boots and joined the world outside of financial services. Over that time, I have presented financial wellbeing talks across the UK to a range of people.

What has surprised me is how financially disorganised some seem to be. Few have all their documents digitally or physically organised, and key financial dates are seldom known or understood.

A minority know what they are earning on savings or even what accounts they own. Many haven’t a clue what interest they are paying on their mortgage or other borrowing. State pension entitlement is usually hazy. And as for knowing the fund selection of their workplace pension or the associated charges, dream on.

If that was not bad enough, only a few have ever learnt how to create and manage a monthly budget. This means their capacity to become debt free and build wealth can be much harder than it needs to be.

Perhaps we should not be surprised when personal finance education has only recently (and half-heartedly) been added to the curriculum of state schools. And with borrowing so easy, together with relentless marketing encouraging spending right this minute, is it any wonder?

There are a lot of people out there who seem to need and, when they understand the importance and value, want help getting financially organised. But this does not necessarily mean they want or need personal advice or ongoing management straight away.

It might be a good move for a regulated advice firm to set up a separate triage arm or to do so in collaboration with several other advice firms.

The triage arm would offer people simple, affordable and valuable help as a precursor to any regulated service. This help might take the form of:

  1. Getting their financial information organised;
  2. Helping them understand what they have and flagging up any areas of concern; and
  3. Helping them review and improve their weekly, monthly and yearly budget.

I do not think this service should stray into providing non-regulated lifetime cashflow planning or money coaching, because that is not perceived a problem that needs solving by the typical person. It also risks straying into that grey area between unregulated help and regulated advice. That type of service can be offered as the next level up for those who want it, once they have got organised and budgeted.

Citizens Advice Bureau and Step Change provide excellent help and support to people experiencing financial difficulties. But they have neither the time nor the money to help those not in financial distress but who could really benefit from taking stock of where they are.

My non-scientific poll of attendees at my talks, as to what they might be prepared to pay for this service, suggests that, if it saved them time, worry and eventually money, they would happily pay between £200 to £400.

The budgeting process alone should identify savings that make the service pay for itself. And that is before things like saving money on insurance and mobile phones, and maximising state benefits and tax reliefs. Employers could even offer to facilitate payment of it via tax efficient salary sacrifice under the £500 tax-free annual advice allowance, thereby reducing the net cost to the employee by between 30 to 50 per cent.

At the very least, your firm could offer this service as a foundation for friends, relatives and colleagues of your existing clients, who do not want, need or can afford your core financial planning service.

You never know. The triage business could become bigger and more profitable than your existing advice business.

Jason Butler is an expert in financial wellbeing @jbthewealthman 

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