Successful partnership gets generic financial advice where it’s needed

6 January 2006

National charity Citizens Advice is looking for support to help it extend a successful pilot project testing out how independent financial advisers can work with Citizens Advice Bureaux to provide free generic financial advice to people on low and middle incomes.

An evaluation has found that more than three-quarters (77%) of the 244 people seen under the pilot scheme rated the service very good, and eight out of ten (79%) went on to act on the advice they had been given.

Endowment mortgages accounted for the largest single number of enquiries (24%), with requests for pensions advice coming a close second (22%).  Other issues on which advice was sought included debt, financial planning, equity release, inheritance, relationship breakdown and mis-selling of financial products.  Many clients simply needed help with translating gobbledegook in the communications they had from financial firms.

Citizens Advice Director of Policy Teresa Perchard said: “The pilot has demonstrated beyond doubt that there is a real need for generic financial advice among people on low to middle incomes that current provision has failed to meet. It has also demonstrated the success of independent financial advisers working pro-bono in partnership withCitizens Advice Bureaux and their clients to meet this need.  We have been very heartened by the commitment and enthusiasm for the scheme we have seen from so many IFAs, and we would like to say an especial thanks to those IFAs who donated their time to work with us to give free advice to our clients, and to their professional body – the Personal Finance Society – who supported the project throughout.

“The response of clients involved in the pilot shows not only that they are very happy with the advice they have been given, but also that they go away and act on it.  This has got to be good news when we want to encourage more of the population to take financial planning seriously, but we have to provide financial advice to lower income groups that is accessible, affordable and relevant.  Extending this pilot project is a way of doing just that.  We are now looking for partners who want to help us make this a reality.”

The pilot, in which eight Citizens Advice Bureaux and IFAs tested out three ways of improving access to generic financial advice for people on low and middle incomes, ran for eight months from January 2005. 

Most of the clients who received generic financial advice as part of the pilot were owner occupiers (83%), but the majority were reliant on pension income, benefits, or a mixture of earnings and benefits.  Some 63% were over 60 and almost a quarter (22%) had a disability.  Very few had had any contact with independent financial advisers before.

The generic financial advice they were offered included helping them identify and understand their financial needs and plan their finances; setting out priorities for action appropriate to their needs; agreeing the steps they could take to address their priorities and informing them of other sources of information and advice. Those wanting to find out about specific products were referred to a list of qualified independent financial advisers in their area.

The pilot scheme was managed by a steering group including representatives of Citizens Advice, the Treasury, the Department for Work and Pensions, the Financial Services Authority, the Personal Finance Society and various financial institutions and trade bodies.  Financial support was provided by Barclays Bank, the Personal Finance Society and a charitable trust.  The Personal Finance Society provided a list of volunteers from its IFA membership.

Personal Finance Society Director Robert Reid said: ‘We are delighted that the pilot has shown the trust which can be developed between financial advisers and the public once initial reluctance to engage is overcome.  As a professional body, PFS believes that it would be desirable for its members to consider seriously engaging in pro bono work as has been the practice of other professions.” 

Peter Kelly, Head of Financial Inclusion at Barclays, said: “Barclays is a long standing supporter of Citizens Advice and we recognise the important role that it undertakes. We were delighted to support this successful pilot which has confirmed that the CAB service working with professional financial advisers meets a real need."

As well as high levels of client satisfaction, the bureaux advisers and IFAs involved were overwhelmingly positive about the scheme.  Several IFAs said they valued being able to put something back into the community and being able to use their skills to make a contribution.

Cases dealt with included:

A married man in his sixties with a £12,000 endowment mortgage taken out in 1997 with a projected shortfall of £30,000-£40,000 when it matures in 2008.  He was not warned that the value of the endowment could fall. He said he found the service invaluable.  He is pursuing a claim with the help of the IFA and is confident of a good outcome.

A man due to retire who needed advice on his pension options.  He had difficulty understanding letters from his pension provider, was unsure how an IFA could help and could not afford to use one in any case.  He found the advice he received through the project very useful.

An 80 year old man with early onset Alzheimer’s Disease who when trying to phone his pension provider got an automated menu with 19 different options.  The IFA was able to make the calls on his behalf and translate complex and unclear information for him.

A pensioner with two adult sons and grandchildren who needed advice on wills, probate and inheritance tax after his wife died.  He was given advice on a range of issues including making a will, investments and his mortgage which he found very useful and acted on.  He is now in touch with an IFA and his bank for further help.

Notes to editors:

Bureaux taking part in the pilots were:

Wolverhampton; Diss; Kerrier; Caerphilly; Gateshead; Medway, Knowsley and Boothferry. 

Participating IFAs were:

Kerrier
Paul Herd, Plymouth

Diss
Mike Moss, Moss and Roberts, Long Stratton, Norfolk

Knowsley
Amy Stockdale, Campbell Insurance Services  Ltd, Liverpool

Medway
Jonathan Dalby and Alan Mycock, Rochester, Kent

Caerphilly
Richard Barningham, RM Financial Advice, Cardiff
Hazel Godsall, Monmouth
Julie Lord, Cardiff
David Roberts, Caerphilly

Boothferry
Gordon Townened, Bebbington Brumby Financial Management, Huddersfield

Gateshead
Yvonne Goodwin, Pearson Jones PLC, Leeds
Owen Temple, Antony Corner
Jocelyn Harwood, Eldon Financial Planning Limited, Bishop Auckland

Notes to editors
  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see New windowwww.adviceguide.org.uk
  3. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2010 to March 2011. For full 2010/2011 service statistics see: www.citizensadvice.org.uk/press_statistics
  4. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
  5. Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.