How do we incentivise people to be wealthier?


#1

Physical fitness, from diets to exercise trackers, is part of our everyday conversation today. If we are not doing it ourselves, we certainly know friends, family and colleagues who desperately need to achieve their daily “10,000 steps” or check their calories.

Increasingly, mental health has also become part of that conversation, and rightly so.

Fitness for mind, body and wallet

But what about your financial fitness? When was the last time you exercised your choice to switch tariffs on your utility bills, or stretched your paycheck to squeeze in a little saving towards those badly-needed home improvements?

Finance chat, if it is talked about at all, is usually about spending or borrowing money, but that’s a bit like boasting about your increasing cholesterol count - not healthy!

I found this article about nudges for health incentives interesting and it made me wonder what nudges would help to “incentivise people to be wealthier?”

Is there something beyond better rates or easier transfers that would help? Maybe, as the article suggests, it should be the threat of some kind of forfeit, like losing a preferential interest rate instead? Do you think that would help you?


#2

That article is quite amusing, as the bank’s choice of an apple watch is pretty much pushing the clients into a rather pricey and unrewarding ecosystem…
Anyway, I think it’s a really fine line between showing people that there ARE good offers out there (and be blunt about them, ie straightaway disclose what’s in it for both sides), but nagging them into it will probably just result in a knee-jerk reflex on their part.
From what I’ve seen, the most efficient is peer marketing (once again, always being very clear whether incentives are paid to the recommender), as it puts a human face on what could otherwise be a scary con (though obviously cons tend to propagate via individuals, see all the MLMs out there).
So yes, probably more transparency would help, and simulation tools that are not too maths-heavy (still amazed at the prevalence of folk with an inbuilt fear of numbers in the UK), and that can be used without the fear of endless spamming (just say no to the usual ‘‘thanks for giving loads of details for your assessment, now give us your email to get the results’’ scam).
From what I’ve seen, Dozens is pretty much set up like that anyway, so…


#3

Well i feel it can all start from early age my grandson left school and really did not know at 18b what
he wanted to do so i said earn some money you are still young hes a section manager in a store
but he could be so much more i think at the moment he wants lots out of life hope that will be his incentive


#4

Very true - peer support and confirmation is very useful but also of potentially questionable value.

I think brands (not just finance ones), that already have consumer trust, have a role to play to have a healthier conversation about consumption vs savings - but you are absolutely right @tor that pushing consumers into an expensive ‘ecosystem’ in order to take part is also not right.

Interesting to notice that in many cases the messages about taking care of your health and wealth are presented as in opposition to each other - you can be “healthier if you spend money on this product / service” or that you have to give up things in order to make savings.


#5

yeah, absolutely, when in reality, anything that has a price when it comes to health tends to be counter-productive (ie, no incentive for the system to teach you bad habits, as then you could do it on your own and the monetization stops there). As for recommendations, I think that one of the positives of the fake news mess we’re in is that people not only have learned (well, some at least) to check sources, and that includes people in their network, for some form of veracity.


#6

If you go to the supermarket, it’s fairly easy to find out what is good and what is bad for you, there’s labels with the nutritional information on it.
It’s a little harder to figure out what’s good and bad in finance.
The same sort of labeling as food might help: how does an interest rate or a fund return compare to it’s peers and to the benchmark.
If you go to your building society and they offer you (random number) 1.75% on a 3-year bond, it would be helpful to know how that compares, and if you were told it was a 1st quartile rate (top 25% of similar products) you might invest but if you were told it was a 3rd quartile rate you might not.
And you should be told whether it beats inflation or not (but how you measure inflation is another issue, as governments keep changing the metric to “lower” inflation)


#7

Absolutely! But that’s only been true for a few years now. There was a long struggle with producers and retailers in order to create a manageable system that was fair, transparent and informative.

Even now, not everyone reads these labels or knows to look out for the ‘traffic lights system’ so as well as the labelling there is a social conversation about health in the way there isn’t one (in the UK) about wealth.

There are some finance rating tools, but do we know when to look for them or what they mean, and do we (as consumers) really know what is good for us?


#8

And even the traffic light system can be seriously deceptive, as it (for obvious reasons) is just a reflection of the product itself, not how it would fit with the rest of your nutrition. With finances (and things like open banking), the potential is there to really be able to see how something would complement your goals and what you already have invested in.


#9

I’ve recently lost 4 stone (since May) after both parents suddenly found out they had dodgy tickers and the likelihood of me then inheriting it…high!

Thng is I’ve done it via the Keto diet, which is a high fat, relatively high calorie diet I probably never hit my step count either, on current thinking I wouldn’t be rewarded even though I am unquestionably healthier now, I have a nurse testing me that proves so!

It’s so difficult to reward on these rigid basis currently suggested, unless you are allowing the end user to set a goal and achieve it.


#10

yeah, and the step count can be rigged in so many ways to boot…


#11

I think ‘what is good for us’ depends on the lifestyle of the individual. One reason I think it’s all been slow is that there is not a one size fits all for these issues. Some people are looking for health goals, some people are looking for financial gains, some are looking to see where they can give back to society and most people want to be able to do those things, whether it be one or two or all of them, without having to think too much about it when it comes to the usual day to day. So, for an individual to try and address their needs through the products / solutions that are out there today has become a bit of a struggle as there (generally speaking) aren’t targeted solutions for different lifestyles.

I think, from what I can see, Dozens has set out a good base to build something that can cater to different lifestyles…


#12

totally agree with you there - the point is that we need ways of doing things that fit easily into our lives, but that might nudge us, in a positive, personalised and beneficial way, to change small behaviours over time to the overall benefit of our financial health.


#13

It’s true, supermarket labelling has got a lot better - but it is still easy to be overwhelmed by misinformation and a multitude of false health claims - like “low fat” products that are high in sugar. It is also hard to know the impact of the many preservatives and flavour enhancers listed in the small print on your short and long term health - or to know if a high fat product contains ‘good fat’ or ‘bad fat.’ It can be a minefield. The safest and healthiest way to eat is to buy fresh meat and vegetables direct from a local farmer - food that doesn’t need the ingredients labelling! It is more expensive but healthier, tastier and ultimately more rewarding - and your money goes back into the local economy rather than to chief executives and shareholders. Sorry if this turned into a rant!


#14

Interesting thought. What is the financial equivalent I wonder?

Like with food, if you are very actively involved with your finances, you can make personalised and informed decisions, but you have to dedicate a lot of time to staying up to date. While we would all benefit from growing our own fruit & veg and visiting local farmers, we can’t always afford that time, so we buy from supermarkets and rely on them for some guidance (or at least to provide options we can select between that include more ethical and ‘healthy’ choices).


#15

Surely the best thing you can do is provide a comprehensive information hub. Encouraging savings investments and budgeting. Rich, goal orientated information.

I don’t believe you can push people down the road of saving. You can incentivise and inform people when they’re ready to move themselves though.


#16

Good question. I’d be interested to learn if there is one. Somewhere where I know I could get reliably good financial products (without hype) would be attractive, even if I had to pay higher fees (like in a farmers market) to get them.

It’s quite an interesting parallel - between shopping in supermarkets and buying financial products. Both offer a lot of choice, a lot of special offers (that are often hard to fathom) - and it is hard to know what is best to buy unless you put in hours of research. Time which most of us don’t have.


#17

Absolutely, unbiased information (that is formatted to be useful, and not utterly baffling to most) is really the key. Having that will allow people an informed choice, and even if they don’t choose to invest at that specific time, they’ll remember that the company was not pushy and useful to them


#18

This is an excellent point. When I was starting in the world of investment it was a struggle. Some of the best tools I used initially were cartoon esque videos on YouTube explaining certain terminology and funds…I have moved on from this now though :thinking::smirk::face_with_raised_eyebrow:

In my opinion, the best thing Dozens can do is grow its forum and stimulate discussion. This will be the optimal platform for people to learn. Inspiration from another person’s success is always a good incentive!

Giving a savings “pot” an identity (name, goal, picture etc) would also go a long way I think. Make it more personal. I am married with kids…I would have a “Lamborghini” pot, all to myself! :blue_car:

As has already been mentioned though, people cannot be pushed… Show them success and give them the tools…you can lead a horse to water…:horse_racing::sunglasses:


#19

How about getting some investors and financiers in to do ama’s?

I’d like an AMA with Shaun Port from Nutmeg, he seems to be a really friendly chap and his answers to questions are always succinct and insightful. Could make a bit of a series of it.


#20

Will balances in current, savings and bond accounts be covered by FCA Deposit and Savings Protection up to £85,000?