The financial services industry can be a confusing maze for consumers. At the heart of it all, you’ve got distributors (the salespeople), manufacturers (the product creators), regulators (the watchdogs), and their suppliers (everyone from tech providers to marketers). What do they all have in common? They want you, the consumer, to buy more of their products. Essentially, they want you to hand over your hard-earned money throughout your lifetime, a strategy we can broadly call financial capital strategy.
The Great Sales Disguise
The industry labels this process as “advice,” making it sound like they’re offering a valuable service tailored to your needs. But here’s the reality: what is often called “advice” is simply sales in disguise. The goal isn’t necessarily to solve your financial problems but rather to sell financial products—be it pensions, investment plans, or insurance. When you hear “advice,” you might be expecting a plan crafted for your unique circumstances. Instead, what you’re often getting is a sales pitch for products that grow the industry’s financial capital, not necessarily your wealth. Let’s face it, you are simply saving money you’ve already made.
What’s Missing? Your Human Capital
Total wealth isn’t just about your savings, investments, or pensions. It’s about financial capital PLUS human capital. Human capital is the present value of your future earnings—your ability to generate income through your skills, experience, and expertise. Yet, this concept is often left out of the conversation, particularly by those entrenched in the financial services industry. Why? Because it doesn’t fit neatly into a product they can sell.
Independent financial planners, particularly those without ties to product providers, recognise this gap. They focus on human capital development, helping you maximise your earning potential and create a plan that addresses your broader life goals—not just your investable assets. These planners are problem-solvers, not product-sellers, and this approach often leads to better outcomes for you.
Levelling the Playing Field
The Financial Conduct Authority (FCA) recently announced it will consult on targeted support for pension savers, with a focus on simplifying advice. The idea is to make “advice” more accessible. But here’s where we need clarity: is this support truly aimed at helping you make the best decisions for your financial future, or is it another attempt to funnel you into buying products?
Ask yourself, is this consultation aimed at simplifying advice, or is it simplifying sales?
Consumers deserve transparency and honesty. The industry needs to be clear about when it’s providing advice versus sales (a tailored recommendation typically tied to a product). The difference is crucial because genuine financial advice should have your best interests at heart, without a product sale being the end goal.
Real Advice vs. Sales: Know the Difference
True financial planning goes beyond pushing products. It involves creating a holistic plan that considers your total wealth—financial and human capital combined—while addressing your unique circumstances, life goals, and potential challenges. This is where independent financial planners shine. They craft solutions tailored to your needs, not the needs of the financial industry.
The Real Story Behind Bridging the “Advice” Gap
The Financial Conduct Authority (FCA) has a challenging mandate: it’s tasked by the Government to help grow the financial services industry while also regulating its conduct. Here’s the problem: you can’t effectively protect consumers while trying to grow an industry that profits from selling them more products. It’s a clear conflict of interest.
When the FCA talks about bridging the “advice gap,” what they’re really aiming for is to get more people buying financial products—often the very people who aren’t currently in the market for them. Simplifying advice sounds helpful, but in practice, it’s about making it easier to sell with fewer consumer protections in place.
Consumers aren’t confused about what’s being sold to them—they’re sceptical because they recognise when a sales pitch is disguised as advice. Instead of pushing for more simplified sales, we should be pushing for honest, unbiased guidance that truly serves the best interests of consumers.
The focus needs to shift from selling more products to helping people achieve true financial well-being. This means valuing human capital as much as financial capital, crafting plans that enhance lives rather than merely boosting industry profits.
It’s time to demand real transparency and fairness. Let’s ensure that when someone says “advice,” it genuinely is advice—not just another tactic to sell you something you may not need.
The Financial Services Translation Guide: What They Say vs. What It Really Means
Ever feel like the financial services industry is speaking a different language? You’re not alone. The jargon often used can be confusing, making it hard to know what you’re really being offered. Let’s cut through the noise with a quick translation guide to help you understand what’s really going on.
| Industry Term | What It Really Means |
|---|---|
| Advice | Sales |
| Adviser | Salesperson |
| Financial Advice | Financial Sales |
| Financial Adviser | Financial Seller |
| Regulated Financial Advice | Regulated Financial Sales |
| Targeted Advice | Targeted Sales |
| Simplified Advice | Simplified Sales |
| The Advice Gap | The Sales Gap |
| Holistic Advice | Product-Driven Sales Pitch |
| Wealth Management | Asset Selling |
| Investment Guidance | Product Promotion |
| Client Solutions | Sales Strategies |
| Financial Planning | Selling Investment Products |
| Consumer Duty | Sales Obligation with New Rules |
| Pensions Support | Pensions Product Push |
Why This Matters
The industry often uses terms that sound helpful and consumer-focused, but they’re often designed to sell you something rather than solve your problems. When someone offers you “advice,” ask yourself: are they genuinely acting in your best interest, or are they simply trying to sell a product?
The Benefits of Independent Planning
Unlike the product-driven approach of the industry, independent financial planners focus on your entire wealth picture, including human capital (your ability to earn) and financial capital. They craft tailored plans that put your needs first, without the pressure to buy products.
By understanding the true meaning behind the jargon, you can make better decisions and find the support you actually need. Choose advisers who prioritise your goals and values, not their sales targets.
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