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.
“The number of people in the UK aged 65 or over is projected to rise by nearly half in the next 20 years, and most of them will need financial services. Older people want what everyone else does: to get the financial products and services they need at a fair price; and to have open and transparent dealings with providers.
“Yet their needs and aspirations are likely to be different from younger generations, and the problems they encounter are different, too.
“Older people are likely to find themselves victims of age discrimination. This is not permitted in most service industries, but financial services are exempt. Firms can use age as a risk factor in pricing financial products, or even refuse to provide products to certain age groups.
“So at an age when they have more leisure time to visit friends and family, or take a holiday, older consumers find they cannot get travel or car insurance, or that it is exorbitantly priced: 97% of annual travel insurance policies impose an upper age limit for new customers.
“Premiums rise steadily with age, although this doesn’t necessarily reflect the cost of serving older age groups. The insurance industry can no longer take gender into account when setting prices, so we question whether it should be allowed to discriminate against older people.
“The industry should think about how it serves its older customers. Products designed for older people are complicated and, in many cases, there is no experience of ‘learning by doing’.
“It is therefore imperative that the industry explains products simply, and takes account of the particular needs of older consumers, which might include, for example, using larger font sizes, or more interactive contact through face-to-face meetings or online video chats, like Skype.”
