Fostering Financial Superheroes: Jonathan Flint discusses the role employers can play in fostering financial wellness
On a very entertaining Zoom call this week a client confessed at the end of the meeting that she had discovered she had developed a very mild superpower during lockdown; to the delight of her many friends, she makes perfect mojitos. This sparked a general discussion with confessions from others on the call regarding their own very mild superpowers which ranged from baking the perfect Victoria sponge (a great skill to possess) to chef-level barbecue culinary skills (enviable) and finally pitch-perfect Karaoke powers (another highly regarded natural gift). When it came to my turn I meekly owned up to a far less entertaining mild talent…..I’m pretty adept at flat-packed furniture assembly. Despite manufacturers’ attempts to bamboozle with impenetrable instructions, for me, flatpacks are fret free. Sad but true, but a tough talent to monetise meaningfully.
I have yet to meet anyone who possesses a natural superpower, however mild, to understand and plan their personal finances. Getting anywhere near proficient at managing one’s own money matters takes years of practice and usually requires the support of a trusted financial adviser.
As we start to emerge from the wreckage of the first lockdown, for which none of us could have been fully financially prepared, managing cashflow and debt will be preying on the minds of the many. The FCA warned lenders only last week that it expected financial institutions to act more responsibly to customers at a time when virus relief measures such as three-month repayment holidays come to an end.
It is widely recognised that personal debt levels are set to spiral at the end of the furlough scheme. And these debt levels may be compounded further. Andrew Hagger, a highly regarded personal finance commentator, points out the customers of high street banks could face annual overdraft charges as high as 49.9 per cent as a regulatory shake-up of borrowing costs delayed by Covid-19 comes into effect in August. Lenders know they have communication challenges ahead, sadly with increasing customer defaults on loans, credit cards and mortgages. It is important comms teams get ahead of the curve detailing all the advisory support being offered to customers so when the inevitable media and regulatory questions start coming in later in the year, they can highlight all the positive steps they have made to assist those in difficulty.
It’s going to take more than just tweaks and nudges by the regulator during this very tough time to address the nation’s financial wellness and long-term money education needs.
We all need guidance and not just in a crisis but making advice available to all is a national challenge that can’t just be left to financial advisers. According to Aegon, three out of four employees don’t have any access to financial education in the workplace and more than two-thirds (67%) of employees said they would find face-to-face counselling and support around debt management useful.
So for those of us who are not gifted with superhero financial planning skills, the workplace must be the best place to start a conversation about financial fitness. Progressive employers will already be considering their employee engagement strategies around money wellness during the Covid 19 era. Perhaps an agenda point for your next Teams catch-up call?