The pandemic has created huge opportunities for families to save more but we must not forget there are thousands of people who have been hit financially and they need help, Jonathan Sandell has said.
Speaking to FTAdviser In Focus, the investment propositions director for Scottish Widows said while lockdown has given some people more time to save more and to explore how to manage their savings, it has also exacerbated financial inequalities, both in terms of monetary value and education.
He said: "As we have seen, some real change has made the national consciousness more aware of investing and stock trading, and inevitably this has encouraged more young people to get involved in their finances.
"But there is a whole group of people under the age of 30 where one in five have either lost their jobs or been furloughed and it has not been an easy experience.
"So we are in an interesting period where an additional £200bn or so has gone into cash savings, but where there is a whole group of other people who are less fortunate."
Part of the problem is the lack of financial education and understanding, which could hinder younger people's ability to set more aside into long-term savings.
He added: "Financial literacy in the UK is not high. One in three adults struggle to work out basic change from a shopping trip."
Sandell said it was important that people should start small, making basic rules of thumb about managing finances, such as having emergency savings and paying down debt.
"Improvements in digital technology have helped to make things much more accessible," he said, which would help people to understand more and to engage more with their finances.
But in terms of education, families have a huge role to play, he added.
Sandell suggested advisers could use technology to "engage as much as possible across the generations" and to encourage their own (often older, wealthier) clients to share details of the financial adviser with the children and to develop that relationship.
"Also, they could explore conversations with the client about how they can ensure their own needs are taken care of when they are less able to support themselves."
He said advisers could be the "central catalyst" to help families unburden themselves and have an open, honest conversation about how to provide financial support.
"By not talking about money, it can cause much bigger issues," he added.
He also encouraged advisers to develop professional connections to help develop a cross-generational financial plan. "There are many avenues advisers can use to broaden a conversation across the generations," Sandell added.
To view the full Fireside Chat, click on the image above.
Simoney Kyriakou is senior editor at FTAdviser
