How To Level Up Your Money: Brian Byrnes On Financial Confidence

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:18] Brian Byrnes:

There’s some very interesting things about financial confidence and also about people’s kind of incomes as well. When we kind of cross-referenced uh people’s net worth and wealth over time, financial confidence was far, far more important than their income. So people who self-describe themselves as being financially confident typically had twice the net worth as people who described themselves as less financially confident. And that was across all income levels. So it wasn’t a case of people who earn loads were more financially confident. Across all income levels, if you described yourself as being financially confident, you were twice as well off as people who are less financially confident. From a savings and investing investing perspective. So as I say, income less important, confidence really important. When you dig into it a little bit deeper, then what makes people financially confident? Yeah, how much time they spend on their finances. Again, kind of controlling for everything else in terms of their income or whatever it might be, the more time you actually spend on your finances, the more confident you kind of become over time. And then that feeds into your wealth over time as well. So you could really map out those things as something as basic as spending half an hour on your on your finances a week really adds up over time to how financially secure and resilient you are.

[1:35] Sammie Ellard-King:

Would like reading books and things like that match into your financial confidence?

[1:40] Brian Byrnes:

Yeah, absolutely. It’s you can completely understand for people, it’s kind of this self-fulfilling thing. If you’re not confident about your finances, the easiest and most understandable thing in the world to do is just to bury your head about it. Yeah. And we do see it, generally speaking, about pensions and retirement, for example. Yeah. The easiest thing to do with pensions because people feel that they’re more complex than they actually are. Easiest thing to do with retirement is just to forget about it and not think about it and bury your head in the sand about it. And that translates to wider kind of personal finance as well. It’s it’s it’s quite difficult to break that cycle, but it is doable if you’re able to dedicate half an hour a week to whatever it might be, listening to this podcast, going onto the Moneybox uh Learn Hub and just reading about what an ISA it is, what a pension it is, all that sort of stuff. It all adds up uh over time and it makes a massive difference to how you feel about your money and how much money you have at the end of the day.

[2:32] Sammie Ellard-King:

100%, man. Like one of the big things I’m sort of saying to people at the moment is like, just do baby steps, like really baby steps. Like today, learn what a Cash ISA is and don’t do anything else. Yeah, just understand that and what it does and feel comfortable with it. And maybe tomorrow you can might come back and look at another topic or you know, how do I invest? How do I set a savings plan up? What does compound interest look like? And just attacking these small things in say over a 10-week period, by the end of that 10 weeks, you’re gonna feel a lot better about it rather than just being like, I need to learn all of this, and then going, I’m not gonna do any of it. And that’s what most people do. So I think breaking it down into ways that people can easily understand it, you know, Money Box Learn Hub, channels like ours, videos, YouTube videos that are just solely attached to that one single topic, and they could even just be one minute long. Because uh the mad thing is what I will say to people is that it’s not actually that complicated once you just understand it, it’s just basically a pathway it’s laid out, and you just need to sort of pick it up and learn it, and then everybody can be alright and kind of make their decisions from there. Um, but that’s so interesting. What a cool bit of data to do, though. I think what do you think feel like came out of that for you as a brand? Did you action anything from that? Like we need to perhaps go and target these areas or these things.

[3:58] Brian Byrnes:

I think two things came out of it. We talk about financial confidence a lot internally now. So when we’re designing uh products or we’re designing product journeys, we will always talk about optimizing or maximizing customers’ confidence throughout that journey. How do we make people feel really confident that they’ve made the right financial uh decision? I also take that into the work that I do kind of from a policy perspective. So when I’m going talking with FCA or Treasury or whoever it might be, I highlight the importance of kind of financial confidence and just say, look, people need to feel confident in these financial products that we’ve got out there. That is what will maximize their financial uh resilience and security kind of over time. So that um piece of research has just really struck home for us in terms of internally how we design uh products and journeys and also how we talk externally and advocate for our customers as well.

[4:51] Sammie Ellard-King:

Yeah, and I know you all you as a brand and many others struggle, including myself, about giving proper financial advice to people because there is a line that not many people understand where it is, and there’s obviously compliance issues on one side from a financial institution or financial brand perspective. I know the FCA are actually looking at this right now, you’re actively having these types of conversations too, to be able to be able to give decent amounts of financial education. Well, the financial education that we would want to see from brands like yourselves, how are you getting on there and what do we need to know about that? Do you think?

[5:31] Brian Byrnes:

Yeah, there’s there’s quite a big difference between kind of financial advice and that sitting down with a financial advisor, and they will learn everything there is about your financial situation, and then they will make a recommendation on what you should do. What we need to do as financial educators or people who are not advisors, we can tell people about this is what an ISA is, this is what a pension is, but we’re not allowed, quite rightly, tell people this is what you should do because we don’t know enough about your kind of financial situation. So there’s that line between kind of advice and guidance. People think because I work for Moneybox and we’re not a financial advice firm, that I have a negative view on financial advice, which is not the case at all. I worked in that industry for a decade. I have seen how powerful financial advice is for helping people hit their financial goals, for making them feel confident about their finances. It tees you up to be successful in all areas of your life. The problem is nowhere near enough people are getting financial advice today. As I mentioned or can afford it, we have made it so inaccessible uh for the vast majority of people. Only about 8% of the population get financial advice today. So that means 92% of people are either figuring it out for themselves, they are dialing into things like this, listening to kind of podcasts, educating themselves, or listening to people kind of like Money Box and getting that kind of education. What the FCA is looking at now, and this could be one of the biggest changes to our industry in a decade, is allowing people like Moneybox and other providers to be able to be a more helpful and more forceful in what we help people with in terms of uh say product suggestions or whatever it might be. You might be a Moneybox customer, Sammie, and I might know exactly what the next best step for you is on your kind of financial plan or your financial goals. The way the the regulations are written right now, I can’t tell you what that is, even if I’m very sure that, say, for example, you want to buy a house, so you should be looking at a lifetime ISA. Yeah. So basically, you can’t say it. And what this regulation is basically looking at doing is just freeing providers up to be able to be more helpful and give people more uh financial support without being fully fledged kind of financial advisors.

[7:43] Sammie Ellard-King:

Which makes sense as long as you’re toeing the line, right? Absolutely, you know, there’s you’re not gonna be like go and buy the S&P 500 tomorrow, John. You’re gonna be like, hey John, you’ve done all of these things and perhaps maybe start to look at uh Cash Isa for your emergency fund or something along those lines. Um you could be getting much better rates over here if you did this. Yeah, and those types of decisions are just very like black and white for most people, it just seems obvious, but obviously there’s restrictions and regulations in place. I’m so glad they’re looking at it because I feel like if brands like you and others like you do it right, then that’s just gonna help an enormous amount of people practically overnight.

[8:25] Brian Byrnes:

Yeah. And and without getting too kind of technical and compliant-y about it, there’s something out there now called consumer duty, and everything the financial services firms have to do now, everything is measured on customer outcomes. So, are enough of your customers getting good outcomes from using your products? So if we’re able to be more helpful and talk to people a bit more, this is what you should be doing with various different products, we will still have to measure that to within an inch of its life and make sure that the customers that are using our products are getting good financial outcomes from what we uh put in front of them. So if we can be freed up, as I say, to help people earlier on in their journeys, because as we talked about, financial advice is so difficult to get. Somebody that’s 23 or 24, just starting on their first job, they’re lucky enough to have a couple of hundred quid left at the end of the month, maybe. They just want to be helped in terms of like, where do I need to put this? Should I put it into a stocks and shares ISA? I’ve kind of heard about that. I might want to buy a house. Should I be thinking about a lifetime ISA? No financial advice firm is gonna be able to help them today. So what we’re saying to the regulator is let people like Moneybox and companies like us just help those people kind of at those very early stages in their financial journey. Yeah, love that, man. Love that. I think uh yeah.

[9:36] Sammie Ellard-King:

When do you think that’s gonna be something that they look at?

[9:39] Brian Byrnes:

Uh over the course of the next year. I’d be hopeful of being able to have something in customers’ hands, making them feel more supportive, more confident towards the back end of next year. Yeah. Hopefully.

[9:48] Sammie Ellard-King:

Yeah, yeah. I think you know, there’s um Anna Bradings having like very good chats with them about us as well and how much we can actually talk to these people. I I don’t really want to be crossing over into the realms of advice or telling people what to do with their money, but how much can we educate and how how helpful can we be? Because at the moment there is very much a grey line, and many people in this industry do cross it. I tried to stick right behind it, um, but we don’t know where that is, and so I think it’s a bit of clarity for that on how much we can help as well. Because we built platforms now and podcasts like this to be able to have conversations with brilliant people like yourselves and brands like you, and I think it’s just a shame if we don’t know where we stand. Um, yeah, so yeah, long hopefully they sort us both out, and then we’ll just be sorting people out there.

[10:40] Brian Byrnes:

Yeah, and they they’ve done a really good job so far engaging with the industry and listening to the research that we’ve done, as I say, advocating for our customers and this. So, yeah, fingers crossed for for next year, it would be a major change, and customers would see a very, in my eyes, very, very positive kind of impact on how they’re supported by the financial services companies that they use.

[11:00] Sammie Ellard-King:

Yes, wicked. Well, listen out for that, people. I’m sure Moneybox will be telling you what to do when that happens. So, um for someone listening to this, obviously, we’ve been speaking about financial confidence a lot, and it’s like it seems like it is a bit of a buzzword sometimes. It’s used in a lot of phrases, a lot of PR, and you know, a lot of brands use it. What does it actually mean and for you? And if someone’s not financially confident or perhaps feels like there’s some gaps in their resume as such when it comes to learning about this, what can they do to kind of boost their confidence?

[11:34] Brian Byrnes:

So we talked about it a little bit earlier, but because of my role, I will often get asked for like money hacks or tips or whatever it might be. It’s been looking for exactly buying it. And like what I I get the feeling when people are like asking me about that stuff, they’re looking for stock tips or like a crypto coin or whatever, whatever it might be in order to kind of get rich kind of quickly. Unfortunately, or or forcibly, whichever way you look at it, my tip is a bit more boring, but a lot more practical than that. Okay. And that’s just dedicating 30 minutes a week. We talked about it, like dedicating 30 minutes a week to your finances. And that can be, as we say, listening to this podcast. It can be understanding what an ISA is, it can be understanding what a pension is, it can be making sure you’re getting the best savings rate uh on on your savings. Half an hour a week adds up so quickly. Yeah. Like if you get into that habit of it, I still do it today. I will carve out 30 minutes of the weekend. It doesn’t have to be something that’s kind of stressful. You can make it enjoyable for yourself by saying, right, I’m carving out this 30 minutes. I’m gonna sit down with a coffee, and this is what I’m gonna do this week. I’m gonna listen to Sammie’s podcast. I’m gonna go have a look and see what the best savings rate on the market is. I’m gonna track down that old pension that I have no idea kind of where it is, as up to 26 hours over the course of a year. And if you do that, if you do that uh religiously relentlessly, you will become much more financially confident uh very, very quickly.

[12:56] Sammie Ellard-King:

I’m pretty sure you could pause, I know you still do it to this day, but for the average person, that’s probably enough.

[13:02] Brian Byrnes:

Yeah. More than more than enough. And the hard part about it is just getting started because as we’ve talked about, everything to do with personal finances can feel very complicated and overwhelming. But as soon as you scratch beneath the surface, you’re like, this actually isn’t that difficult. I just need to do a little bit of education, a little bit of research, and over the course of say a year, you’ll feel much more financially confident. Yeah. And you just like my whole ambition and how I got into like financial advice is for as many people as possible, trying to get rid of that nagging doubt about money that we all have. That thing that keeps people awake at night of should I be doing more with my savings? Like, should I be paying off that credit card? Should that be my primary thing that I’m doing? Oh, I don’t have enough save for retirement. As I say, you can kind of do that for yourself a little bit by just dedicating the time, uh, the time to do it.