Ten years on since the financial crisis, there has already been a great deal of focus and contemplation on how financial services have changed over the past decade.
For many consumers, banks are still distrusted, not helped by mis-selling scandals or paltry returns on savings accounts.
There has been a notable shift in not only how we interact with our finances through technology, but there’s also been a shift in consumer attitudes too.
For most customers, the best price will always triumph. However, others are factoring in the reputation of companies and where these organisations are investing their savings, pensions and investments.
During Good Money Week, it is an appropriate time for the industry to encourage and raise the profile of ethical and sustainable investments. The size of the sustainable market in the UK is around £150bn.
While much of this is dominated by institutional investments, there is a growing market for retail investors too.
As well as ethical funds and cash Isas, there are platforms that allow customers to invest in companies that are raising finance for renewable energy and community housing projects.
Importantly, some of these are eligible to be held within the Innovative Finance Isa, adding tax advantages to ordinary investors.
Providing tax relief on social investments is an important step, but it doesn’t help if people don’t understand the products in the first place
There is clearly progress and appetite, but much of the industry is behind the curve in addressing the demands of consumers. Part of this is down to how products are communicated to customers.
According to our own figures, 51 per cent of the UK’s adult population (some 19.5m) are investing positively or are interested in doing so, yet only 39 per cent of our customers are women.
Additionally, Good Money Week’s own research has found that 58 per cent of women do not think financial institutions understand them and their needs.
Providing tax relief on social investments is an important step, but it doesn’t help if people don’t understand the products in the first place. More must be done to encourage these potential investors and tap this large – and growing – market.
Removing jargon and adopting language that customers can understand is one step. Improving diversity is vital too.
Having more women working in financial services not only will challenge the status quo, but it will have a better understanding to what a product should look like and how it can be created. This is about understanding the motivations of the investor, not simply a number on what it returns.
Good Money Week is a great initiative for looking at investing as a means of supporting an issue that an investor values.
In an investment marketplace which is seeing its values change in line with the new generation, tackling these issues are going to become an increasingly important factor in people’s decisions to invest.
Good Money Week will hopefully encourage more people to look at the alternatives so that ethical savings and investment products become mainstream options.