When did we all start using the word “research” for “sending out a marketing survey”?

Private wealth manager “research” finds that people need help with… wait for it… wait for it… managing their private wealth…

Shocker. https://t.co/6SOUy2Relt

— Mike Harrison (@HigherEdActuary) July 25, 2024

Mike is right in tone and import. Here is the story.

One in five (20 per cent) people aged between 40 and 60 (midlifers) have concerns about their future retirement finances that are affecting their ability to do their job, according to research by Hymans Robertson Personal Wealth (HRPW).

Its study of midlifers found that many were worried about how they were going to finance their retirement, which HRPW said underscored the need for midlife financial health checks.

Nearly half (41 per cent) of 40-60 year olds were not confident that they will achieve their retirement plans.

However, 15 per cent admitted that, rather than taking action to alleviate these concerns, they “have their head in the sand” or have no approach to planning their finances.

More than a third (35 per cent) of respondents said that worrying about their retirement finances as having a negative impact on their mental health, while 27 per cent revealed they were losing sleep due to their concerns.

Furthermore, over a fifth (22 per cent) were avoiding social situations and interactions, and 18 per cent said it was causing ‘friction’ with their partner.

HRPW managing partner, Julie Hammerton, stated the research highlighted that worrying about future finances was having a negative impact on mental health, as well as physical and social wellbeing of many workers at the ‘midlife’ stage.

“Our research shows that this really is the ‘sandwich’ generation: A quarter said they were bearing the financial responsibilities for both their children and elderly parents,” Hammerton continued.

“This is also the generation that’s been squeezed on retirement savings, as most were born too late to benefit from generous defined benefit (DB) pensions and born too early to fully benefit from auto-enrolment. A significant number of those we surveyed know they’re not on track, as 41 per cent are not confident they’ll achieve their retirement plans.

“As a society, and as employers, if we wait until someone has the lightbulb moment that they don’t have enough to live off in retirement, by then it’s often too late. We need to intervene earlier, to give people time to course correct. Ideally this should be earlier than the midlife point.

“There are different ways in which midlife financial health checks could be delivered in the workplace, ranging from interactive webinars through to one-to-one guidance and financial coaching. The key thing is having access to an expert who can not only help people prepare for the future but also reduce the impact of stress on their ability to work today.”

There are some phrases here I have never heard before “course correct“, “live off“, “squeezed on” and “midlifers“. These are presumably marketing terms but they are not the phrases used by the people who are apparently having palpitations about their later life finances.

The sandwich generation may be struggling to finance the generation below and that above but it was ever thus. These are people who are struggling to pay their bills and their taxes and on top of that put money aside for the future.

These are choices that previous generations did not have. While the grandparents of today may be reliant on mid lifers, they  are often financially self-sufficient, not out of choice, but because they saved as a matter of course (presumably “course correct”).

They neither got nor needed one to one guidance or financial coaching, they took few financial decisions relating to retirement and appear to have survived.

We are faced with two choices as a society. We can either accept  that having things done for us is probably the best way of achieving financial self sufficiency in later age or we follow the route advocated by Hymans Robertson and “course correct” people (ideally earlier than mid-life).

Of course, we will end up doing both and people may end up being worried not just that they aren’t doing the right thing but that they don’t know what they don’t know.

This kind of insecurity is a key weapon in marketing mass affluent financial planning but what becomes clear is that the knowledge asymmetry means that advisers are desperately needed.

As Michael says – “shocker“.

This is a good way to market advice and foster insecurity – creating advice’s burning platform. But it is no  way to market pensions.