There are some trends and fashions from the 80s and 90s that no one wants to see return. Acid wash jeans and big plastic earrings all have their place in history and should probably stay there; however, old-fashioned financial advice is one area in which it would appear that the lessons of history have been learnt.
What was it like in the ‘olden days’?
Before the rise in popularity of IFAs, anyone seeking advice on managing or investing their money turned to their financial institution. People of a certain age will remember the weekly bank agent’s visit to collect their savings, enter the amount into their savings book and often offer a bit of money management advice over a cup of tea. The key here was personalised financial advice from the bank, given to customers who were not about to invest millions of pounds.
As the years went by, however, this sort of face-to-face banking became the preserve of the ultra-rich whose investments and savings portfolios would cover the banks’ overheads and net them a tidy profit.
The man from the Pru was made redundant and individuals with more moderate incomes had to turn to independent financial advisers, perhaps using software from a provider such as https://www.intelliflo.com/account-management, who could put together personal financial plans using their back office systems for IFAs.
Once again, IFA fees sometimes meant that customers with low sums to invest were priced out. Although the government and organisations such as Moneywise sought to bridge the gap for small-time investors, it still wasn’t cost effective to offer one-to-one advice.
Why are things changing now?
With the pension freedoms reforms that recently came into force, it would appear that there has been a rise in the number of people looking for advice on how to make their savings go further. Many pensioners heeded the cautionary publicity warning them against taking their pension pot and blowing the lot on a Ferrari; however, they still wanted something more than an annuity in an attempt to get more from the cash they had squirreled away over their entire working life.
Financial organisations have been unable to ignore this demand and many notable names, such as Aviva and Standard Life, have announced the return of the ‘man from the Pru’.