SFE Insight | ‘Nobody has ever woken up in the morning and thought: ‘I need a financial plan’

Noel Butwell – Chairman, 1825

As the world begins the steady steps to recovery from the disruption of Covid-19 with the welcome rollout of vaccines, we have an opportunity to reflect on the landscape for both savers and investors. One key topic within that landscape that my colleagues and I at 1825, the financial planning and advice business of Standard Life Aberdeen, continue to see gather momentum is ‘financial wellness’.

Financial wellness is a term that some would be quick to define as having a healthy bank balance or outperforming investment fund. In our view however, financial wellness represents engaging with individuals from every background to increase understanding and confidence, enhance financial capability and empower good financial decision making: ultimately, it’s about giving people peace of mind that their finances are in the best possible shape. Accelerated by the pandemic, three groups have emerged where harnessing financial wellness is essential from our perspective: those at risk of being forgotten about in the churn of change, those whose future has been brought into focus, and employers who want to do more  to educate, engage and empower their people.

When lockdown hit in the UK in March 2020, the normal mediums of interaction between us were instantly disrupted and transformed. While home working has become commonplace and platforms such as Zoom and Teams have allowed businesses to repivot, it has become increasingly easy for people to disappear from everyday engagement, to feel isolated and worried about what the future will look like for them and their loved ones. For 1825, conversations on financial wellness can help with that re-engagement and through a wider lens, support good mental health. The interactions we have with individuals are underpinned by understanding the hurdles they are facing, personally, financially and professionally, and providing support during, what are for many, unsettling and uncertain times.

Turning to the second of the three groups, even within the financial services community, there is a recognition that nobody has ever woken up in the morning and thought: ‘I need a financial plan’. However, alongside the seismic changes to the way we work, live, travel and spend, the question of identifying how we best arrange our finances both to maximise our own enjoyment of life and to support family and friends, has been brought into focus. As a central pillar of financial wellness, equipping people with the information they need and options available to them is of significant importance for the team at 1825. Additionally, with the rise of environmental, social and governance considerations in financial planning and investing, we foresee financial wellness being only further defined by a more sustainable outlook for the future – in our actions alone and as groups.

Finally, financial wellness is a topic which has an important place on the agenda of businesses large and small. In 1825’s experience, talking financial wellness has had as much resonance with staff at a major investment bank as those of a small distillery, particularly when it comes to supporting people to plan their financial future with confidence. It lies with employers to partner, listen and interpret the financial wellness needs of their employees and we are pleased to see continued positive moves in this space.

In summary, 1825 and those we partner with are aware that the pursuit of financial wellness is not a destination, but a journey. Taking those steady steps to recovery in tandem with a financial wellness-led approach will deliver better outcomes to individuals, their families and employers well into the future.