What real financial wellness requires

Recently, “financial wellness” seems to have replaced the “robo advisor” as a fashion statement worn by countless companies that want to appear attractive for venture capital financing or media coverage.

From what I see, many of these services are tedious in bold claims, but lack substance.

I am disappointed that the phrase was hijacked because I believe it is a critical service that should become a utility to help millions of consumers. Real financial wellbeing requires two key components: financial literacy and the ability to deliver actionable insights.

The first is relatively easy to deliver and is what most pretenders focus on. The latter requires hard work and all real data so that you can help deliver personalized analytics that enable your customers to make really better decisions.

A new offering from Homebuyer Hub Standard Life to support their occupational retirees is a great example of what those willing to go the extra mile can do. This is provided from your company pension scheme.

The service is provided as a digital coach who provides data-driven, personalized guidance and brings together everything a potential buyer needs when purchasing their first home. That is what the consumer needsfrom the deposit to the doorstep.

For people in the financial services industry, an understanding of the mortgage market and the home buying process can be taken for granted. For the overwhelming majority of the rest of the population, it is a very alien process that consumers really need someone to guide them through the process.

The content includes stamp duty, the true cost of buying a home, the Help to Buy loan program and buying guides for the various home buying processes in England, Northern Ireland, Scotland and Wales. Users can determine their own journey through the app or follow the integrated coaching process. This starts with making a checklist of all the things the user needs to do further down the line, there is also a knowledge library. To start the detailed process, the user sets a savings goal for their deposit.

By collecting income data and the amount of the deposit, the system quickly identifies the purchase price that a borrower is likely to be able to afford. The system can include standard and help buy mortgages. Instructions are also provided here, including a full breakdown of all the costs and monies that buyers will require in the process.

This involves recording the type and location of the property you want, although this doesn’t really validate whether there is enough money available to buy that type of home in that area.Users can also set up a savings plan to save on their deposit.

During the review, I was accompanied by our youngest team member who recently joined us from outside the industry. Having also just bought his first home, he said he found this service invaluable.

Overall, I really like this service, although I would like further improvements, such as using Open Banking to pre-populate much of the data, particularly on income spending and savings.

However, this first version of the tool already provides valuable insights. This should be a huge benefit for Standard Life Systems members looking to purchase their first home.

This service is a great example of the type of support system members should expect from their pension funds. Occupational pensions will be the cornerstone of long-term savings for the vast majority of consumers. Around 10 million people are now saving through company pension schemes who previously had no long-term savings.

They provide an ideal platform for building a comprehensive financial plan, provided that clients receive explicit personal insights that will help them make better decisions. The retirement providers and counselors offering such services are ideally positioned to capitalize on the broader digital counseling revolution that is certainly on the way.

Ian McKenna is the director of the Financial Technology Research Center

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