The only thing that is clear about the financial world is that it is not clear at all.
Whether it’s a mortgage you’re looking for, investment guides or simply information on savings accounts – a google search can return millions, if not billions of results. Sourcing unbiased financial information is a common struggle and the evidence proves this: on average, 40% of respondents from our recent survey found that finding unbiased information was a real obstacle.
Two problems: Too much information and product bias
With so much content out there, people are likely to either opt for the simple, uniformed content or be so overwhelmed they would rather not bother at all. There comes a choice paralysis, where rather than make any decision or take informed risks, we choose to do nothing. Many are daunted by the amount of acronyms, caveats and regulations associated with financial decision making, coupled with the fact that rules are changing all the time – it can feel close to impossible to really get on top of your finances.
The other challenge is finding reliable information that is product agnostic. More often than not, providers of information are biased in their guidance, with the underlying objective to sell products. It remains that you may not always be finding the most accurate or transparent knowledge available.
In the real world
Taking the example of getting on the housing ladder – for most this is the biggest spend you’ll ever make on one asset. Purchasing the first home is what people invest life savings into, family inheritance and take years to research before taking the plunge. It’s also one of the biggest long term investments, in terms of loan repayments, that you’ll ever experience. It’s no secret that buying a house is complicated. Research from specialist bank Aldermore found that 52% of first time buyers became ill at some point due to stress, largely due to the proportion of sales that fall through.
So, when looking for a mortgage, naturally one would directly approach loan providers in the first instance however, loan providers will often be motivated by a bottom line sale of their mortgage products. The full picture of purchasing a home includes a whole host of other factors ranging from capital gains tax to exit fees that may not always be disclosed. The lack of access to unbiased information in this situation and countless others ultimately makes the journey to reaching your dreams and goals more challenging.
The means to confident decision making
As mentioned in our previous posts, financial education is key to navigating money management with confidence. It also equips people with the knowledge and tools to help prevent them from being subject to misinformation, guidance that is incomplete and fraud in the most extreme scenarios. Research by Barclays shows that, “employees between 18 and 24 years old are five and a half times more likely to fall victim to a scam than those over the age of 65. Half of Britain’s scam victims are under the age of 34.”
Speaking about financial worries is still a taboo – particularly in the workplace – and being misled or falling victim to scams can be a further knock to confidence and perpetuate the problem.
Particularly through the pandemic, employees have been turning to their employers as a trustworthy source of information for all aspects of their lives. At a time when it’s difficult to predict what’s round the corner, having access to reliable financial information will help relieve the stress and anxiety associated with money management.
Fundamentally, financial education – more specifically unbiased financial education – empowers people to make the right decisions.