Financial advice for older consumers: What IFAs need to know
By Kirsten Hastings, 23 Feb 16
Older consumers are a diverse population, with different beliefs, behaviours and needs, all of which affect the way in which they interact with money and financial services, according to a new discussion paper from the Financial Conduct Authority. So, what do IFAs need to take into account to meet their needs? Click through the pictures below to find out.
“Retail banking is undergoing rapid change, driven by evolving consumer demographics, habits and preferences, insight provided by behavioural economics, and by the widespread availability of new opportunities to engage through emerging technologies that provide a wider variety of channels for insights and communications.
“With the spread of smart devices and the rise of mobile and digital banking services, it is necessary to constantly test, learn, evolve and adapt communications to respond to changing consumer behaviour and the needs of the UK population. In doing so, there is a balance to strike between providing the right needs-based support and avoiding making wholesale or stereotypical assumptions about capability, or circumstances, based on people’s age.
“Consumers expect communications to be succinct and delivered to them immediately when required/at point of purchase/decision across all age groups.
- Nearly 2.3 million customers aged over 70 are now registered to use internet banking; more than 600,000 of these people are 80+.
- There have been over 457,000 downloads of banking apps which allow users to safely pay bills, transfer money and read account statements by customers aged 60 or over. Nearly 20,000 of these customers are 80+.
- More than 300,000 customers of UK banks aged 60+ have signed up to receive text alerts from their bank, which can help customers avoid fees when breaching borrowing limits.
“A fresh look at the ‘gap’ in retail investment advice from a view of enabling banks to re-enter the advice space is important. The pensions reforms not only increase consumer need for investment advice but present a clear opportunity for greater consumer engagement by the industry.
“Financial products and services constantly evolve to cater to the demands of their target markets. An ageing UK population may very well lead to further opportunities to engage with older consumers; not everyone will want to harness new services, but it’s vital that no one feels excluded from easy-to-use technology, and that banks continue to give all the support they can to those who want to learn how to join.”
