Firing lineAug 7 2020

Young people building wealth 'effectively ignored' by industry

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Young people building wealth 'effectively ignored' by industry

It is just one of the many ways lockdown has affected her working life.

For Ms Tomlinson, who set up regulated introducer Rainchq two years ago after completing her MBA, the second quarter of this year has been very busy.

Coronavirus has brought to the fore the importance of financial resilience and saving for a rainy day.

When I walk into a room I still present as a black woman but I never think of that as a disadvantage

“People are thinking, ‘what do I want my post-pandemic life to look like and how do I make sure I have a stable future?’ Finance is a part of that,” she says

Social media platforms, particularly Instagram, have been very useful in “bringing alive” Rainchq’s brand — where Ms Tomlinson has seen engagement converted into leads.

For her, this increased level of engagement is confirmation that she was right to set up her business, which aims to tackle the problem of certain groups of people being underserved, having had first-hand experience of this herself.

Young people are being ignored

Ms Tomlinson says: “If you are a young person with high net worth, you might be a target for some of the banks. But if you are a young person building wealth, but not yet at the stage where you have acquired a certain amount of wealth, then you are effectively ignored by the industry.

“I considered myself someone who fitted into that category as someone who was underserved and thought I cannot be the only one.” 

As she explored this challenge further, she also came across many women who had not had a positive experience with financial advice.

Already a mother to one child, while on maternity leave for her second, Ms Tomlinson decided she would not return to her investment job, but instead would pursue her business dream.

She adds: “It’s testament to the hypothesis that if you give women access to good quality advice with a person they can relate to and you surround it with a package of support and resources that enables them to pick-and-mix, there is definitely a certain kind of magic that is created from that.”

Three pillars of service

Rainchq customers are predominantly – though not limited to – women, while the model comprises three pillars. The first is financial education, in the form of written and audio content, to demystify finance and investing.

The second is financial advice. All Rainchq customers receive two 90-minute sessions with a qualified IFA; she partners with St James’s Place Wealth Management.

“I was very intentional about who I wanted to work with on this,” Ms Tomlinson says.

“The industry is not particularly well represented by women, so it is really important for me to find someone who women can be comfortable with about having personal private conversations about their life ambitions and about their financial goals.”

Ms Tomlinson acknowledged there was “much talk” about SJP’s business model but she said the partnership was with a particular “outstanding” adviser, rather than with SJP itself, adding the feedback had been “unanimously” positive and that she makes sure clients have their “eyes wide open” about costs.

The third part of the Rainchq service is events, where customers attend sessions designed to complement the financial education element and where they get access to subject matter experts.

As more young people build wealth and working patterns change, Ms Tomlinson says traditional advisers will need to adapt to stay connected to the next generation.

The shift towards more digital processes — accelerated by the lockdown — is also taking place at a time when the number of millennials facing different financial challenges compared with the previous generation is increasing.

But as much as the robo-model has made strides in the industry, Ms Tomlinson believes strongly in the “human touch”.

She says: “How do you ensure people get access to that human advice in a way that wraps around their lifestyle; so thinking about how to use technology to facilitate that is one of the biggest opportunities.

“The ‘job for life’ that our parents had is no longer relevant to many of us. We are trying to carve out a different lifestyle than our parents had, so financial advice almost has to have a different emphasis.

“Financial advisers have to be more discerning about how they seek out [that] next generation.”

As the owner of a financial services company who is a black female, she is well aware of the weight of representation that she carries in an industry that is traditionally white and male, particularly at a time of a racial awakening in society, but it is something she embraces.

And although her experience in the industry has overall been positive, she still felt she needed to work harder, be better and have a higher level of qualification in order to prove her credibility.

Value of diverse thinking

Ms Tomlinson says: “Regardless of my credentials, when I walk into a room I still present as a black woman but I never think of that as a disadvantage. I treat this as my unique selling point.

“So when I walk into this room, I am bringing the full weight of my being, because I think it is important that people recognise the value of diversity and value of diverse thinking, to avoid these group-think situations that can steer us down the road to the financial crisis, or credit crunch we saw in 2007.

“When I speak at forums, there are so many black women that work in finance and what they need is to be given a voice and a platform.

“Having a seat at the table from a leadership perspective makes a difference to the way strategy is designed and policy developed, so I take every opportunity to be that voice and to champion that diversity in entrepreneurship and this industry at large.”

Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser