Sam Dunn: Pay-as-you-learn - it all adds up

The FSA wants to offer free and impartial financial advice in the workplace. Its plan deserves to succeed
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The Independent Online

Try to find a reason to be cheerful about the UK's financial services industry and you'll usually end up thinking of haystacks and needles. But an ambitious plan to roll out a new national financial advice service in our workplaces might prove to be just the good news we need.

Advisers trained by the Financial Services Authority (FSA), the City regulator, will be coming to offices up and down the country to offer basic financial advice to groups of employees.

The advisers will talk about whatever you and your colleagues are most concerned about, be it pensions, buying a house, personal debts, endowment policies or just sorting out your savings.

There's no advertising, marketing or product sales involved, but if, after the seminar, an individual wants to take things further, they can contact the company for which the adviser works - or, of course, choose a different one.

So where's the catch?

Astonishingly, there doesn't appear to be one. The service will cost you nothing except an hour of your work time.

Although your company loses an hour of work from each employee, it can promote the advice session as a staff perk - with repeat visits.

The financial adviser won't offer any branded products during the talk. His "return" is based on possible sales as a result of any follow-up business.

But, as the FSA points out, the true benefit of the scheme - should it be a success - will come in the form of a more financially savvy population better able to deal with the complexities of their personal finances.

It's all part of the National Strategy for Financial Capability, otherwise known as Fincap, a grand project orchestrated by the FSA to raise the level of financial awareness among Britons. The watchdog currently has several teams working on different "points of entry" for financial advice and education: the groups targeted include schoolchildren, families, young adults and workers. The challenge is to be able to reach those in each category, and influence their way of thinking.

In schools, we're already seeing a move towards GCSE maths incorporating practical lessons in personal finance to help youngsters get an idea of the cost of credit and overdrafts, and how compound interest works. Progress is slow, however, we're only at consultation stage, with a view to full inclusion by 2010.

But after last year's pilot scheme, in which eight companies took part, the FSA is trying to inject some urgency into its plans for the workplace. It is in talks with about 100 interested companies; with some hard graft from members of business lobby group the CBI, and from the TUC and Chartered Institute of Personnel and Development, it is hoping to whip up interest in both the private and public sector.

So far, the FSA has a pool of about 90 trained advisers drawn from a number of financial services companies, including major banks such as Halifax. But that figure reflects just how far there is to go. There are some two million companies in the UK - and 300,000 new ones are incorporated each year. That's a lot of offices to visit, and advisers to find and train.

Aware that it's early days, the FSA has set its own targets, for which it has a budget of £10m. In the 12 months to April 2007, it wants to reach 200,000 employees; the aim is for four million staff to have received some sort of workplace advice by 2012.

Vernon Everitt, the FSA director in charge of rolling out the workplace advice scheme, says he is not looking for "a quick win". Instead, if this plan is to have any impact, he wants to see a "leap of faith" from those companies willing to put forward their staff to be trained as Fincap workplace financial advisers.

The long-term rewards should be obvious, Mr Everitt stresses: a nation of better-educated consumers using banks and lenders to actively buy products, as opposed to suspicious customers who resent being sold them instead.

In fact, it looks like a win-win situation for the public and the industry, which currently has a poor image.

The FSA initiative will complement the paid-for financial advice industry, and likely act as a spur for many to go on and visit an independent financial adviser for the first time. At its most basic, it should prompt customers who've never properly thought of their financial future to take some action

Help Fincap get off the ground by calling the FSA today - and you could help yourself.

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