by Matthew Connell, Director of Policy and Public Affairs, CII
Dr Matthew Connell examines the best methods to improve financial resilience in later life.
Anyone who has worked in a client-facing role will be familiar with this scenario: they are talking to an elderly client who is unsure of what they need to ask for or even how to navigate the client verification process. In the background, a helpful voice is prompting them with information and helping them frame their questions.
Is this financial abuse? Is the elderly person being exploited? Or are they being given vital help, without which they would not be able to manage their finances? What is the legal and regulatory situation? How can the client’s data be protected, while still facilitating their request?
A wrong move, such as not treating the security implications seriously enough, or not being sufficiently helpful to the client, will result in a serious loss of trust between the client and financial services professionals.
This is only the most basic challenge facing the profession as it learns how to serve an increasingly ageing population. Overcoming each of these challenges requires a strong act of imagination and empathy on the part of professionals to achieve a good outcome for their client.
The kind of knowledge and skills that are needed to service an ageing population rely not so much on technical knowledge about insurance and financial services, but rather on empathy and an awareness of how other people live their lives.
This kind of insight is at the heart of the Chartered Insurance Institute’s Insuring Futures initiative. It aims to build a picture of the risks people face in their lives, and how the services provided by financial advisers, insurers and the wider community are relevant to these. The first phase of Insuring Futures looked at the lives of women in the UK and how their financial futures were affected by the career choices and caring responsibilities they took on, as well as how they were saving for retirement and how family life affected their ability to save and protect themselves.
The next stage of Insuring Futures will look at the ageing population. It will look at how people build and maintain independence throughout their lives. This means looking not only at financial independence, but also health and mental and social wellbeing.
For many people, retirement can be a time of unparalleled independence – they may have enough savings to afford not to work for the first time, giving them a huge amount of leisure time that they can use to encounter new challenges and experiences, deepen bonds with their family and widen their social circle.
Of course, levels of independence are closely linked to health, but changes in health can also be managed to preserve independence. For example, as we encounter losses in mobility or even in cognitive ability as our lives go on, there are many ways that we can access help or reshape our environment to preserve our independence and increase our quality of life.
Usually, we build this independence in a tactical and unstructured way. We embark on a career based on opportunities that present themselves when we leave education, we amass assets such as houses and pension pots along the way, riding the ups and downs of different markets, and pick up caring responsibilities too. All the time, we are bombarded by advice and expectations around health and mental wellbeing that are sometimes sound and sometimes deeply misleading.
Our work on insightful leadership will look at what people can do during every decade of their adult lives to build and maintain their independence, and look at the kind of conversations people need to have with their families, friends and mentors to create more resilience throughout their lives, right into later life.
The work will build on the insights from Insuring Women’s Futures, and it will be supported by work with focus groups to better understand the diverse needs of people in retirement and later life. These insights will form the basis of a conversation with members, which will lead to guidance and support for professionals in:
• How we design products and communications for older people that resonate with the way they live their lives
• How professionals can structure conversations with clients that are more relevant to the risks and aims they have
• How advisers can advise their clients’ whole family, rather than just the individual, as they grow older and their plans become more entwined with the needs of that family
The CII will be working with experienced insurance and financial services professionals, charities, policymakers and researchers throughout the process, and looking to produce guidance that puts consumers and professionals in direct touch with each other in innovative and engaging ways.