I get the pleasure of speaking to a lot of people in my job and asking them some taxing questions about the future of the industry, but sometimes it really pays to get out of our financial services bubble and understand issues that may lie further afield.
I recently attended a house party with some friends and a fair few strangers, and when these new acquaintances found out I was a financial journalist specialising in mortgages my evening turned into a Q&A around the current trends in the mortgage market.
While I did not mind discussing this with people – it was quite enjoyable sharing information about my job – I was quite struck by how much I had to explain and how little the concept of professional financial advice was discussed.
One interaction stood out in particular as I spoke with someone who was in the process of buying a first home but who had not sought out any professional financial advice, and I was asked about the intricacies of property purchase.
I do not think I have felt that out of my depth in a good long time as I struggled to come up with something productive to say beyond, "Interest rates seem to be quite stable at the moment”.
It was over the course of this conversation that I realised the best financial advice most young people have received is from Renton in Trainspotting, advising that they can “choose fixed-interest mortgage repayments”.
It really made me wonder why this was, as refusing to seek professional advice on something like a house purchase can only be a product of a disconnect between the buyer and the financial adviser.
To me this felt very much a manifestation of a point made by Xian Chan, HSBC UK head of investments and wealth solutions, who, in a recent interview with FT Adviser, argued that financial advice is seen as the purview of the rich and successful, a perception that alienates younger and less affluent people.
The idea of needing a financial adviser is so out of the realm of most young people’s understanding as to be irrelevant, being as they are without a small fortune or a senior position.
People are obviously aware that something as substantial as a house purchase needs advice to ensure the best deal possible, but this perception around professional advice instils some kind of paralysis within younger people.
This is an issue that desperately needs to be addressed in order to make sure all people, no matter how young or naive, get the top quality financial advice they need.
One way to tackle this issue, in my opinion, would be for the industry to promote itself, let younger people know exactly what they do and precisely how crucial they are, especially in life’s big moments like a house purchase.
Boosting the profile of the financial advice industry will be key to addressing this issue and gaining the confidence and trust of younger people.
