In the ever-evolving landscape of finance, trust is paramount. Yet, a recent discovery reveals that a significant proportion of people aged 50 and above have reservations about financial service providers.
Trust in Numbers
According to a survey conducted by LiveMore, 59% of those between the ages of 50 and 79 harbour mistrust towards financial service providers. These aren’t just arbitrary numbers; they’re a window into the perceptions and anxieties of a significant portion of our population.
Interestingly, when diving into the numbers, a disparity emerges between genders. Women within this age range expressed a slightly higher level of distrust at 61%, compared to the 57% of men.
Rising Concerns Among the Elderly
When narrowing the focus to the 70 to 79-year age bracket, the distrust escalates. A staggering 69% of individuals in this age group are sceptical of financial services firms. Such a statistic is particularly alarming given the essential role these services play in managing retirement funds and life savings.
Underlying Issues and Industry Criticisms
It’s worth noting that the sector has faced its fair share of criticisms, particularly from regulatory bodies like the Financial Conduct Authority (FCA). The financial service providers have been under “ongoing scrutiny” for their failure to meet Consumer Duty obligations, a set of guidelines developed to ensure customer satisfaction and protection.
The Real-World Consequences
Beyond the numbers, we encounter very real stories of individuals struggling with financial insecurity. Such challenges often manifest in the form of delayed retirements, looming mental health issues, and anxieties about affording basic necessities, such as heating.
Leon Diamond, the CEO and founder of LiveMore, emphasises the gravity of the situation: “These aren’t just statistics; they’re individuals whose lives are being adversely affected.” He went on to highlight recent FCA criticisms, which shed light on instances where some lifetime mortgage sales fell below the expected standards. The FCA even flagged 400 cases where promotions were misleading and needed adjustments or removal.
The findings from regulatory bodies undeniably cast a shadow over the industry’s reputation, further fuelling the trust deficit. Diamond underscores the significance of Consumer Duty guidelines. They are designed to prioritise the customers, ensuring that they receive value and security.
Regarding lifetime mortgages, Diamond warns of the potential pitfalls of compound interest, making such financial products costly if held for extended periods. He encourages individuals and industry professionals alike to refer to LiveMore’s white paper on Consumer Duty and the later life lending sector.
The financial industry is at a pivotal juncture. As Diamond aptly concludes, “As we look to the future, it is crucial that the 59% statistic falls sharply. We can achieve this if we all adhere to Consumer Duty guidelines and put the customer first.” The path to rebuilding trust and credibility is clear. The onus now lies on the industry to respond and adapt.