Teamspirit have written a blogpost challenging the FSA to create an innovative campaign to make saving cool.
We keep hearing about the pensions time bomb that's about to go off - so I don't think we should leave this to the FSA. All savings marketers should be trying to find innovative ways to encourage people to save throughout the economic cycle. With the savings ratio as high as it is at the moment, now is the time for us to start creating some innovative campaigns to embed the habit so that people continue saving even when the recovery begins.
I'd love to see a bank or building society - maybe one of the smaller ones that is less tied up dealing with the fallout from the credit crisis - make a real play to own savings. There's a great opportunity to run a relatively inexpensive campaign using social media, YouTube and blogs that could increase the savings ratio for good. The organisation that sets the agenda will be the winner.
Showing posts with label financial skills. Show all posts
Showing posts with label financial skills. Show all posts
Saturday, 31 October 2009
Tuesday, 8 September 2009
The impact of life events on financial capability
The FSA has just published a new study showing that, not only do life events such as redundancy, bereavement and child birth change people's ability to make good financial decisions, but that those decisions can be particularly far-reaching.
These are also points at which people are likely to need to make fundamental changes to their finances, and they are points at which they are particularly in need of understanding, support and good advice.
According to the report:
• Having a baby is associated with a reduction in financial capability and a 19% increase in financial problems for an average individual, even when income is accounted for.
• Becoming unemployed decreases financial capability and increases financial problems by 63%, controlling for income changes. If an individual receives Jobseeker’s Allowance, financial problems are increased by 88%.
• Divorcing or separating increases financial problems by 17% on average and causes a decrease in financial capability, even when controlling for income. This impact is stronger for women.
• Retirement increases financial problems by 31%, accounting for income changes.
Some life events have a positive impact on financial capability:
• Those entering work experience a 27% decrease in financial problems and an increase in financial capability, even accounting for the extra income.
• Having an employed partner leads to a 15% decrease in financial problems and an increase in financial capability, with income controlled for.
• Getting married leads to double the improvement in financial capability to that which is experienced annually in the sample as a whole, accounting for the possible increase in income.
• Those above 55 tend to have higher than average financial capability.
Interestingly, being good with money improves your psychological wellbeing.
All this suggests is that retail and private banks with really well thought through life event programmes, with trained sales staff who understand the effects of these events on people's ability to make good financial decisions, will have a real sustainable competitive advantage.
These are also points at which people are likely to need to make fundamental changes to their finances, and they are points at which they are particularly in need of understanding, support and good advice.
According to the report:
• Having a baby is associated with a reduction in financial capability and a 19% increase in financial problems for an average individual, even when income is accounted for.
• Becoming unemployed decreases financial capability and increases financial problems by 63%, controlling for income changes. If an individual receives Jobseeker’s Allowance, financial problems are increased by 88%.
• Divorcing or separating increases financial problems by 17% on average and causes a decrease in financial capability, even when controlling for income. This impact is stronger for women.
• Retirement increases financial problems by 31%, accounting for income changes.
Some life events have a positive impact on financial capability:
• Those entering work experience a 27% decrease in financial problems and an increase in financial capability, even accounting for the extra income.
• Having an employed partner leads to a 15% decrease in financial problems and an increase in financial capability, with income controlled for.
• Getting married leads to double the improvement in financial capability to that which is experienced annually in the sample as a whole, accounting for the possible increase in income.
• Those above 55 tend to have higher than average financial capability.
Interestingly, being good with money improves your psychological wellbeing.
All this suggests is that retail and private banks with really well thought through life event programmes, with trained sales staff who understand the effects of these events on people's ability to make good financial decisions, will have a real sustainable competitive advantage.
Are you experienced?
There might not be many vacancies for financial services marketers available through recruitment consultancies at the moment, but Marketing Week still has plenty. But how many of them are looking for marketers with financial services qualifications? None.
Does it matter? I think so. Financial services marketers are asked to create clear, fair and not misleading collateral pitched at the right level for the target audience. If you aren't qualified in financial services, are you really confident you can do that?
A case in point is an advert in this weekend's press, for the RBS Royal Bond. The bond offers 5.3% per year 'without locking away your capital' and is available for investors with as little at £100. Sounds almost like a fixed rate, instant access savings account, doesn't it? Except that buried in the information paragraph it mentions a bid/offer spread, so it can't be one.
So what actually is it? A savings account? A corporate bond fund? An equity fund? An OEIC? The advert is anything but clear - yet clearly pitched at a mass market investor with very little capital to invest. The kind of audience this is really suitable for would know they needed to know this.
In mis-selling cases, the burden of proof of whether a product was properly sold or not often comes down to the collateral the customer took away. It's imperative that, as marketers, we make absolutely certain we understand the suitability and risks of all the products we sell. It's not compliance's job to check that for us.,
And I don't see how we can be expected to do that while recruiters are only looking for marketing experience.
Does it matter? I think so. Financial services marketers are asked to create clear, fair and not misleading collateral pitched at the right level for the target audience. If you aren't qualified in financial services, are you really confident you can do that?
A case in point is an advert in this weekend's press, for the RBS Royal Bond. The bond offers 5.3% per year 'without locking away your capital' and is available for investors with as little at £100. Sounds almost like a fixed rate, instant access savings account, doesn't it? Except that buried in the information paragraph it mentions a bid/offer spread, so it can't be one.
So what actually is it? A savings account? A corporate bond fund? An equity fund? An OEIC? The advert is anything but clear - yet clearly pitched at a mass market investor with very little capital to invest. The kind of audience this is really suitable for would know they needed to know this.
In mis-selling cases, the burden of proof of whether a product was properly sold or not often comes down to the collateral the customer took away. It's imperative that, as marketers, we make absolutely certain we understand the suitability and risks of all the products we sell. It's not compliance's job to check that for us.,
And I don't see how we can be expected to do that while recruiters are only looking for marketing experience.
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