15 November 2009

High Finance, Low Finance

Most of my time as a financial adviser is spent with investments, pensions, mortgages, and so on. Apart from the fact that I can make a living at doing that, it can be very satisfying helping someone organise their finances to achieve their goals, or have themselves a better life in some way.

That may mean:
• Increasing income from investments
• Helping people to see that they can afford to spend more
• Increasing what will be left to family by reducing the likely Inheritance Tax bill
• Enabling a house move with a new mortgage
• … and so on

But that satisfaction can also be achieved at the other end of the market – those with little in the way of assets. I attended a training course the other day which was about helping people to budget. The process of doing a simple household budget is not always easy for people, and yet it can potentially have an even bigger life impact than advising on investing a sum of money.

The concept of a budget is foreign to many people, perhaps especially to those who need it most – those who have low incomes and many demands on their money.

Wouldn’t it be good if basic finances were taught at school instead of … well, fill in your own subject to drop from the curriculum there. But the point is that it is a key life skill which many never acquire, and so end up in debt, encouraged by those who want to lend to them at high rates.

My two regrets are (a) that those who need help sorting out a budget do not tend to seek advice until things are going wrong, and (b) in spite of the satisfaction available, it is not an area which helps a financial adviser make a living! Nevertheless, I hope to be able to make use of that training course from time to time. There's plenty who need it.

1 comment:

  1. P.S. I have just seen that Ed Balls has announced that some sort of "financial capability" will be a compulsory part of the curriculum from 2011. Good news.
    Peter Lawrence


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