Improving the wellbeing of your clients
This article first appeared in Wealth Adviser on the 23rd June 2021
During World Wellbeing Week, June 21 to June 30, Nick Eatock, CEO at intelliflo, highlights the crucial role advisers play in supporting clients’ financial security and boosting their general wellbeing.
The last week of June marks the third annual World Wellbeing Week, which aims to raise awareness of the impact our mental and physical health as well as emotional, social and environmental factors have on our general wellbeing. Given the challenges many have faced over the last 18 months, there has never been a better time to focus on your wellbeing and that of your family, friends, colleagues and clients.
The state of our finances is an important aspect of our wellbeing. Whether you can meet your financial obligations, how secure you feel about your financial future and having enough money to do the things that you want, all play a significant role in our overall happiness.
Unfortunately, this is also a factor that has been sorely tested in recent months. While some have seen financial gains due to lockdowns and restricted spending opportunities, others have been negatively impacted by reduced income and redundancy. According to Bank of England figures, although 28% of households managed to increase their savings as a result of Covid-19, 20% were forced to dip into their emergency funds.(1) Similarly, the FCA Financial Lives Survey 2020 states that over a third of adults (38%) have seen their financial situation worsen because of the pandemic.(2)
At the start of the crisis, those in retirement were faced with significant stock market volatility, affecting their pensions income. The Organisation for Economic Co-operation and Development (OECD) estimates that pension assets declined by 10% in the first quarter of 2020 due to widespread investment losses.(3) Workers have also suffered from the impact of Covid-19, with younger people most affected overall, but the over-50s now more at risk. According to the Office for National Statistics, this age group experienced the highest rate of redundancy between December 2020 and February 2021, and represents over a quarter of those furloughed, with three in ten believing there is at least a 50% chance they will lose their job when the scheme ends.(4)
Perhaps unsurprisingly given the economic uncertainty caused by the pandemic, the Employer’s Guide to Financial Wellbeing 2020-21 finds that money remains the biggest cause of anxiety among UK employees. A quarter (26%) of respondents worry about money on an ongoing basis, compared to 22% who are concerned about their career, 18% health and 14% relationships. And it observes that poor financial wellbeing is not just limited to those on low incomes. A third (33%) of C-suite executives and one in three (30%) managers have poor financial wellbeing, with similar levels of financial anxiety between those with salaries of £10,000 to £30,000 (27%) and those with over £90,000 (24%).(5)
The impact of poor financial wellbeing can extend to other aspects of our lives. Money and Mental Health Policy Institute research highlights the link between financial wellbeing and mental health; almost one in nine (86%) people surveyed said their poor financial situation negatively impacted their mental health.(6)
Advisers are, of course, ideally placed to help improve clients’ financial wellbeing by working to secure their financial future and help ensure they have the funds to fulfil their goals. An adviser’s ability to take a holistic view of a client’s financial affairs can be extremely useful when it comes to supporting their financial wellbeing. By using open banking to combine data from current accounts, savings and credit cards with investment and pensions information, you can get a more rounded view of the client’s financial situation and identify changes in their circumstances that could affect the overall plan. Technology, like Comentis’ cognitive assessment engine, can also make the task of identifying financial vulnerability easier and ensure you act with appropriate levels of care.
Hopefully, the impact of the pandemic will spur people on to seek professional advice to strengthen their finances. A recent intelliflo poll found that nearly half (48%) of advisers have seen an increase in clients over the last year and more than half (53%) expect more people will seek advice in the coming year. World Wellbeing Week serves to remind us of the detrimental impact money worries can have on other parts of our lives and the important role advisers play in supporting their clients’ overall wellbeing by improving their financial security.