When I was about eight, I had my heart set on a toy caravan from Harrods. Calling it a toy caravan probably doesn’t do it justice – this was no plastic pink trailer hooked to a Barbie VW Golf. It was a luxury life-sized playhouse – essentially a scaled-down replica of a real mobile home, bursting with carefully observed detail.
Its L-shaped sofa, upholstered in a thick creamy damask, made a huge impression on me. The sofa curved around a table covered with a white cloth, which was set with a child-sized four-place dinner service in cream porcelain.
I wanted this caravan so badly. I begged my dad for it because he could usually be persuaded to buy things my mum considered a waste of money. But this time I had no chance – it had a £2,000 price tag. That’s expensive for a playhouse even now. But allowing for inflation – I just used an online calculator to work it out – it’s around £8,500 today.
I remember my mum – always to the point – saying something like, ‘It’s only for rich kids,’ and moving me on. I think I was placated by a high-end doll from the German brand Gotz in the end. But as you can tell, I never forgot that caravan.
Once I’d started work and was putting money aside, something like that wouldn’t have been beyond my means. But as an adult, I’d set my sights on buying the real thing. I liked the idea of a caravan being a weekend bolt hole and one of my friends was always raving about his parents’ caravan on the Essex coast.
I was looking through brochures to get an idea of caravan prices when another friend – who now works for the FCA – talked me out of it. “Wouldn’t it be better for you to save for a house deposit?” he asked tactfully. And then we moved onto talking about the football.
But Andy’s comment had been enough to get me reconsidering. I was 20-something, single and still living with my parents. Grudgingly, I realised Andy was right and that buying a caravan wasn’t a great financial move for the future. What if I found a partner and we wanted to buy a house together?
So I binned the brochures and my imaginary future became my financial focus. Within a couple of years that had become a reality and I was grateful to Andy for prompting me to reassess my priorities.
The caravan fixation is way behind me now, but I’m seeing all the issues it threw up – affordability, aspirations versus priorities, quality and value for money – crop up in the advice world.
I’ve been told that with the cost of providing advice increasing, advisers have had to position their businesses higher up the wealth spectrum to be profitable. As someone who has spent over two decades learning about the good advisers do for clients and its potential to change lives, that doesn’t sit well with me. I want as many people as possible to understand its value and not find the costs prohibitive.
We had Financial Planning Week earlier this year where the theme was debunking the myths around financial advice – one of the most common being that it is ‘only for the rich’. How can the advice community put the work into that with a straight face if the myth is really a commercial truth?
There’s also lots of discussion and activity around broadening the appeal of financial advice as a career to younger people and people from all sorts of backgrounds. But what’s the point of all that if the client base stays within the same rigid parameters?
Having said that – and going back to my childhood – we have to accept that we can’t all afford the Harrods caravan. It’s not always what we need anyway. All it took was one comment from a critical friend to point me in the right financial direction. But friends don’t always get it right, so a financial adviser would obviously have been better.
I don’t want to say too much about a feature I’ve worked on for our upcoming magazine as that will spoil it before publication. But while researching that, I’ve been hearing that client segmentation and providing different types of service for different types of client will become increasingly important due to the Consumer Duty’s focus on client needs and value for money.
As clients move through life, the need for ‘full fat’ financial planning may change into a need for ‘lighter touch’ services where reviews happen less regularly, for example. So it makes sense for advice firms to have services that can cater for those needs, perhaps making greater use of technology to bring the costs down.
But there’s still a section of the advice community that sees anything short of full-fat independent financial advice as inferior or letting the client down, so they don’t want to offer anything else.
I can see where they are coming from. But if that’s never going to be financially possible for some consumers – or if it stops being within reach – shouldn’t there be something else?
Imagine if all the car manufacturers only made luxury cars like Aston Martins and Bentleys. Those that could afford it would get quality to go with the price tag. But would there be enough car owners to buy them in the future if people couldn’t learn how to drive in a Mini or Fiat?
I love hearing about advice firms who are doing things a bit differently – setting up subscription-based services such as Helena Wardle’s Money Means. Or, carefully researching state benefits for elderly clients – like Bluebell Financial Management’s Carolyn Matravers – to ensure clients are getting everything they are entitled to. That can help them remain a commercially viable client.
I’m hoping that the FCA’s advice guidance boundary review will give the creative thinkers in the advice profession the scope to bring us the ‘something else’ I mentioned earlier. Let’s throw open the doors and not leave some people outside looking in.
