The role played by advisers in ensuring that individuals will be financially supported, often at the most challenging times in their lives, cannot be understated. But advice does not simply help people prepare for the worst.
Financial services can make a positive difference to society and to families – enabling people to access the housing ladder, helping customers to navigate complex financial choices and enabling people to plan for the future and prepare for the present.
The protection sector has long striven to be a force for good in customers’ lives, offering a safety net against the unexpected financial impact of illness, injury and loss.
Financial services can make a positive difference to society and to families‘Inclusive capitalism’ is a phrase that encapsulates positive, purposeful business.
Profit and purpose are not in competition; they are conjoined and mutually reinforcing.
We all need to be change makers, technologists, obsessives about customer service and disruptors, but we also have to reflect on who benefits from that disruption.
Our retail customers – the people served by advisers – include people who are well-off, but also those who, while they are working hard to pay mortgages and raise families, are financially insecure and, ‘just about managing’.
Politicians are no longer talking about the ‘Jams’ – but financial insecurity is still rife.
Our own deadline to breadline research shows that nearly a quarter of UK employees do not save any money from their monthly income and could be particularly financially vulnerable if they were unable to work due to illness or injury.
However, challenges also create openings.
First, the UK and the developed world is long of liabilities; particularly pension and insurance liabilities, but increasingly climate liabilities.
The assets to match those liabilities do not exist in sufficient quantity or quality.
We can however create them, particularly as money is more abundant and cheaper than we have ever seen, with around $13tn (£10tn) globally earning negative nominal returns.
Second, massive advances in technology mean we need to disrupt ourselves, but will also deliver significant opportunities as new technologies become established, such as energy, healthcare and fintech.
Third, we face a set of social or policy challenges and especially an ageing demographic with multiple implications for personal finance, health, social care, housing and the labour market.
These are all solveable.
To focus on technology, this presents a big imperative for the financial services industry.
Technology is not about replacing the vital role of human advice, but advances in artificial intelligence and robotics mean we can disrupt ourselves.
We can grasp the opportunities that new technologies offer in fintech and insurtech to broaden the reach and impact of the vital expertise offered by advisers.
The implications caused by advances in medicine for our society and the financial sector are even bigger.
Over the past 20 years, we have made more progress in medicine than in the last 200.
As genomics and personalised medicine supersedes molecules for the masses, there will be implications for protection.
The rising incidence and ever-increasing awareness of mental health also raises the question of how products should evolve.
In sum, inclusive capitalism, driven by intellectual curiosity and honesty and underpinned by purpose, enables us to use financial power to engage with societal problems and turn policy failures and broken markets into solutions.
Nigel Wilson is group chief executive of Legal & General
