September is synonymous with being back to school. And this matters for the advice sector.
Why? Because a new academic year means fresh opportunities to support and engage with the education system and – by doing so – to help address two of our sector’s key long-term considerations: the advice gap and future talent development.
Learning the hard way
Schools matter when it comes to the advice gap because of the part they play in influencing one of its drivers: poor financial literacy.
This is a widespread, significant problem, highlighted recently by our new Savings Ladder report, which found two-in-five UK adults had what would be classed as ‘poor’ financial literacy when measured against a key international standard.
Engaging with schools gives us a chance to promote accessibility and demonstrate opportunity for those not planning on entering higher education
One reason why financial illiteracy levels are so high is because there is patchy inclusion of financial education in classrooms. Indeed, the standard received by British children was recently described by the Education Committee as ‘insufficient’.
If we can address this, we will, in time, reduce the number of adults starting out with a weak grasp of the financial fundamentals and – as a result – increase the financial wellbeing and resilience of the population.
We’re also likely to see the advice gap shrink as the number of those seeking advice rises. Our research also found individuals with higher financial literacy are more likely to be using, or to have used, a financial adviser than those with a weak grasp of financial basics.
Let’s not let this year’s report card on our industry’s engagement with their work read ‘must try harder’
This is likely a reflection of those with greater financial literacy also having higher wealth, but also those with greater financial literacy being more likely to recognise where they’d benefit from further support. After all, you don’t know what you don’t know.
Class action
Improving the standard and inclusion of financial education in schools is, ultimately, a policy issue. But there’s a role for advisers here.
As the new academic year gets underway, we, as a sector, have a responsibility to highlight the opportunity for improving standards of financial education and to advocate for change.
We’d like to see the government integrate financial education into relatable subjects in England, with greater consistency across the home nations. We’d also welcome discussion around a new GCSE and sixth-form qualification that focuses on financial skills.
Schools can make a real difference to the financial wellbeing of our population, and our industry’s long-term resilience and success
This is yet another ‘change’ for the government to consider but a critical one that could have significant, long-term results.
Attracting the next generation of advisers
In addition to being where they receive financial education, schools – particularly at secondary level – are often where young people get their first understanding of what career paths are available.
In addition to advocating for better financial education, the advice industry needs to be doing all it can to use schools to shout about what an exciting, fulfilling pathway a career in the sector can be, making sure it’s front of mind for those considering their next steps.
There’s limited scope for policy here but plenty for direct action from organisations.
Two-in-five UK adults had what would be classed as ‘poor’ financial literacy when measured against a key international standard
For example, we can share our time, resources and direct experience to help support schools’ career education initiatives. This is something Abrdn has been involved in through our partnership with Investment 20/20 – hosting insight days for pupils from Edinburgh schools that give them a window into what the advice industry, and financial services more broadly, might offer them.
By looking beyond universities for career outreach, we can also help boost the diversity of the sector – a step that creates more resilient and successful businesses by increasing a breadth of perspective and experience.
Engaging with schools gives us a chance to promote accessibility and demonstrate opportunity for those who aren’t planning on entering higher education; something that is close to my heart as someone who entered this industry straight from my state school.
What all of this is really about is something we all know the value of too well: early engagement leading to better outcomes.
Schools can make a real difference when it comes to the financial wellbeing of our population, and our industry’s long-term resilience and success.
Let’s not let this year’s report card on our industry’s engagement with their work read ‘must try harder’.
Noel Butwell is chief executive officer at Abrdn Adviser
ZZZZZzzzzzz….
Schools are for education not training… there is a lifetime of that ahead… nowhere more so than retail FS!
I have written here MM passim… the last entities allowed into schools to talk about money and taxes (oops) should be fund managers, no, sorry, banks. There is, apparently, a dearth of advisors which is dwindling to boot… who has got time to do all this goodiness?
There is bound to be a lot of resistance, too, from staff at schools – non class traitors – who may have poitical, personal loss experiences, or other things to do anyway – E.g. Aberdeen’s investment trust scandal of years ago.
More recently, pupils may question why the spouter cannot even spell correctly! Joke? Well. to gain advantage over competitiors (LLLooooLLL) to make us richer (charges) and them poorer – fine words for the great & good.
Until any being is able to – 1. read and understand company accounts; 2. Understand how the hugely bloated fund management machines continue to exist; 3. There is a big, wide world out there of product (not told by any bank or FM), then it will all be for nothing – a bit like the night before Christmas – interesting but pointless.
Maybe someone at ‘no vowels’ can explain to me how there has been one FU after another, and that with old Standard Life’s huge and uncluttered balance sheet to play with? Schools? There have been more truants at Abrdn that St Trinians!
(See Vodafone + Chris Gent complete failure with GEC & the late, great Lord Weinstock) – £4bn cash into £7Bn debt in 3 years as a near analogy)