By FINTECH Books Contributor, Neil Darke
Online financial advice should include peoples’ overall wellbeing and not just their finances. This shift in attitude has the potential to deliver huge benefits to individuals, employers and society.
Studies have shown the most important role a financial adviser can play is actually as a behaviour coach – helping clients remain positive, focused and maintaining a long-term perspective – rather than just as a financial expert. We also know personal finance is deeply emotional.
The two are intrinsically linked. Money is having an increasingly negative affect on people’s mental health. Depression and anxiety are rising in the UK, and money is the biggest cause of anxiety UK across all age groups, especially among young adults.It doesn’t stop there. Money issues are now the most common cause of divorce and relationship breakdowns.
Mental health is also having an increasingly serious impact in the workplace, costing UK businesses an estimated £26bn per year. Research has shown emotional wellbeing and loving relationships are the most important contributors to individuals’ overall life satisfaction – they’re far more important than what people earn.
So, how should financial advice adapt to society’s ever-changing needs?
People should look for a coach – someone who can help empower them, rather than an adviser, who’ll spoonfeed them and just tell them what to do.
The coach or the online tools people use should explicitly include behavioural economics in their design, to help ‘debug’ our behavioural biases, which have huge impact on our financial outcomes.
Individuals’ financial mental health and the building of a healthier relationship with money should also be included.
The future of financial advice is about clients’ wellbeing – not just their wealth.