David Fox, co-head of retail agency at Colliers International, said unless the post-lockdown rush to the stores was converted into pounds at the tills, the High Street would be irreparably damaged by Covid-19.
Given that people have been changing their spending patterns — and that the most likely consumers returning to stores tend to be the younger generation and therefore those with the least spending power — Mr Fox warned the initial adrenaline rush of shopper activity might be nothing more than a brief respite.
He said: “Consumption is the greatest driver of our economy — the last three months have brought into ever sharper focus the need to understand how we prefer to spend, and the differing dynamics of spending patterns in the wider demographic.”
A country on the brink of Brexit needs to think harder about what will drive our economy in the future. Germany has manufacturing; France has pharmaceuticals; South Korea has technology.
If we rely on the consumer to spend in order to keep our economy buoyant, we are at risk of failing to take seriously our greatest export: the services sector.
Financial services has been a staple of the UK economic engine for decades; unless there is a significant commitment by government to provide more apprenticeships, improve entry points for fintech startups and foster a regulatory regime that encourages and enhances entrepreneurship, the future for our economy looks troubled.
Innovation and adaptability are keywords in financial services, as evidenced by the numbers of advisory businesses thinking how to meet their clients’ needs during the Covid-19 lockdown, and how this enforced change has shaped the way they might do business in the future.
Diary of an Adviser in this week’s Financial Adviser issue, is a case in point, where adopting virtual meeting technology has freed advisers up to meet more clients.
FTAdviser’s latest podcast, on how technology is helping to democratise investing, heard from experts who claim fintech development is key — along with education — to getting a younger, less affluent, generation, investing.
Michael Kent, from digital money transfer firm Azimo, said: “The wealth tech sector has an opportunity to reduce the cost of giving good investment service to more people, and younger people are used to organising their finances on apps, so this could be a way forward.”
This innovation needs to be supported by the government and by the Financial Conduct Authority. The FCA’s Digital Sandbox has already provided some measurable support for such developments, but more needs to be done to get more people saving, rather than spending.
While we are on the subject of saving, Chloe Cheung’s report on the lack of interest in insurance — despite the in-your-face tactics of promoters on social media during the height of the coronavirus pandemic — paints an alarming picture.
As her report states, people surveyed by Quilter Financial Planning do not understand protection products or how beneficial these can be.
Charlotte Nixon, proposition director at Quilter Financial Planning, says: “When I speak to people outside of our industry, they just don’t really understand what products are available, the different features, what one will pay out for what.”
If protection, pension schemes, investment products and basic savings plans are to be attractive to more people, the industry needs to adopt different technology and adapt to new ways of educating a whole new generation of potential clients.
This is not simply to help keep people out of debt and get them into a good savings habit; it is a win-win situation for financial services itself — as companies develop these ideas, this makes the UK services sector even more marketable globally.
And at a time when our economy needs a standout contributor to GDP over and above the fickle consumer, this sort of evolution can only be a good thing for the UK.
Simoney Kyriakou is editor of Financial Adviser
