Carl Sagan, Grimsby and the 3 reasons for why we’re misguided when we “understand money”

Carl Sagan was one of the first.

Alan Alda (he of M.A.S.H and The West Wing) has an in depth interest in this.

Brian Cox, Neil DeGrasse Tyson and (the relatively unknown but equally brilliant) Hal Sosabowski spend a lot of their time involved in this pursuit of late.

I am of course talking about…

The pursuit of public education in the field of Science

Many of us would have heard Carl Sagan’s “Pale Blue Dot” video or Brian Cox looking thoughtful in various locations across the globe whilst explaining the universe or chatting with Dara Ó Briain about the universe.

I believe the fact that we have individuals committed to helping us understand more about how our world works is great. It also shows that complex concepts can be explained so simply that even an ignoramus like me can understand it!

It’s also incredibly important that Science educators challenge and debunk dangerous myths. The simple fact is that the more we understand about our world the more potential we have to make informed choices (instead of ill informed ones).

Helping all of us understand science is a good thing. It’s supported by among others mainstream media (although mainly via the BBC), Government and academic institutions….and it’s important.

However one thing confuses me. Why don’t we  intelligently invest the same amount we focus on the education of science on helping people understand a subject which has a genuine power (both long and short term) to make a positive impact on loads of our lives..

The pursuit of public education in the field of Money

As a nation we do currently engage in the pursuit of public education in the field of Money but I believe we are like my Dad, before the days of Sat Nav systems, taking the family on a trip to Skegness and he ended up “accidentally” taking us to Grimsby….

Well meaning but ultimately misguided.

Here are the three main reasons why I believe that to be the case…

1. We work on the assumption that more information is a good thing

Great scientific educators do a couple of things really well. They tell simple stories and use relatable analogies. Brian Cox used sandcastles to explain time travel and author Bill Bryson told stories of really ‘eccentric’ scientists (in this book) to bring complex concepts to life.

Now here’s a challenge….

Try finding a simple story or a relatable analogy on the Money Advice Service website.

I believe that the Money Advice Service website serves a specific purpose. It is great for finding information if I’m looking for it. It serves as an incredibly reliable resource for a range of financial topics….

….but it doesn’t excited us. It doesn’t inspire us. It doesn’t make us want to visit.

However more information on any financial subject isn’t really what any of us want.

We live in an information culture after all and therefore we’re not short of access to information. However what’s still relatively rare (and therefore in demand) is…

Translation of this information into concepts we understand. Concepts we care about. Concepts we want to know about.

It’s often argued that money is too complex a subject to be explained simply. Really? More complicated than quantum physics? I really don’t think so! Do you?

If you want to see an example of “money explained simply and powerful”  take a  look at the Wonga model. I don’t like the business they’re in but there’s no denying they have built a business around making the process simple.

2. Our state funded financial education system is run by individuals (on the whole) with mainly bureaucratic or regulatory experience

Individuals who work in regulatory or government organisations tend to be pretty good at what they do. The main responsibility of a regulator is to minimise risk and the main responsibility of a bureaucrat is to ensure processes run smoothly.

However there’s the danger of individuals with these talents running organisations committed to communicating powerful messages.

Regulators and Government organisations (we’re talking the civil servants not the politicians) don’t “Sell”.

They communicate via statement

That’s fine when you’re regulating and running government however when it  comes to engaging people you need to ‘sell’.

You need to engage passionately and with personality (like Cox and Sagan do and did).

You need to do things differently (like DeGrasse Tyson does on his appearances on American chat shows)

You need to (and here’s the kicker) take a few risks…

Interestingly the lions share of the  “executive team” within the Money Advice Service have a breath of experience within both the public and private sector . That’s a positive sign.

However when you’re funded via a regulator and your chief executive has been recruited from the civil service I’d suggest that the natural focus will be on risk mitigation and not on potentially riskier and slightly more succesful ways to “Talk Money” powerfully and passionately.

3. There are mixed messages everywhere

I’m writing this after watching a channel 4 documentary on Pensions.

Whilst it made some fair points it seemed to imply that property is an infallible retirement investment. If you’re reading this it’s likely you understand there’s risks and rewards of both which need to be explored. However this wasn’t the story which was told.

Now I appreciate that the media have no obligation to provide a clear picture. Private media’s job is to sell papers/tv ads/radio ads.

However if we could tell more compelling stories about the power of financial knowledge we would be more likely to be able to communicate more compelling stories in partnership with the press.

The ones who tell better, more relatable, more simple stories are the presenters of property programs who do engage with peoples lives but only influence individuals who now assume that “Bricks and Mortar” are the only way to go when in reality we know that whilst property is usually part of the puzzle it”s never the full picture.

So, we receive mixed messages (ones from the media, ones from the government and others from the financial planning community)….but that’s a good thing right?

Not for most people….it makes really important financial decisions way too confusing and therefore easier to either defer or ignore.

In Conclusion

I actually think the concept behind the money advice service is a great idea.

(I know there are issues with names and meanings but I’m going to leave them to one side for now)

I’m also committed to playing my part in helping people understand the world of money in my own little way(by getting actively involved in the Institute of financial planning’s “Financial Planning Week”)

However does it represent good value?

Their  2012/13 annual report states that 2.1 million people used the service at a net cost of 77.1 million.

That’s a cost of £36.71 per individual ‘helped’….

…that seems quite expensive and I’m convinced we can do much much better.

By doing simple things,

By Telling Stories,

and by engaging the media, the profession and government.

What do you think?

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20 thoughts on “Carl Sagan, Grimsby and the 3 reasons for why we’re misguided when we “understand money”

  • In my experience, there are very few people with marketing experience running marketing departments, in financial services. At the most senior levels, anyway. Most institutions simply outsource creative content and lack a real understanding of how it all works, no real theory or methodology. There are people who do, but they don’t tend to end up with sufficient control to do it all properly.

    Reply
    • Hi Phil,

      I think you’re right and I know that happened with MAS.

      The latest tender, a contract worth £14 million (and responsible for the ask MA) went to a firm called Inferno Creative.

      However these adverts inspire anyone you know to take better control of their finances?……nope me neither!

      Maybe the “ask MA” concept is really clever and actually does the job of ensuring individuals take control of their money in a more meaningful way and I just don’t get it!

      But if I don’t get it….how many people are in the same boat?

      Reply
  • Interesting article Chris. I do think the communication/marketing has to be on a much larger scale. FCA and Government could do so much more in terms of educating (FCA) and incentivising (Govt) people to save money. Wouldn’t it be good to have government/Money Advice Service ad just after any Wonga ad to tell people the importance of saving for that emergency fund and the advantages of doing so. We know it used to happy long before credit cards came into the play. My grandparents saved up to buy a car by putting a few pennies (yes it was pennies!) away each week until they could afford to pay in full. This could take them years to do. They were doing their own financial planning.

    Reply
    • Thanks Susan,

      I agree that we’ve got a lot to learn from our Grandparents in relation to saving for our financial futures. Whilst the demographics are massively different now the point remains that our Nan’s and Grandad’s had potentially better financial habits than the current generations (and now I sound like my Grandad!).

      However the point I disagree with is that we need to communicate on a much larger scale….

      If we’re communicating a message which isn’t working should we communicate the message on a larger scale….or change the message?

      I’d suggest the latter….what do you think?

      Reply
  • I cannot understand why some people in our industry want others to do their work – pensions education, savings etc.

    As Susan said above people have been doing financial planning for ever and the story of grandparents using different jars on the mantelpiece to save for different things is perhaps the best example of how easy it is to create a powerful story.

    I have always used a simple tale to encourage savings which is to break a pound into ten parts and to suggest that if one part were put aside that the client’s lifestyle would probably not be too badly changed. They always agree and off you go !

    There is a limit to the number of people you can serve and if you tackle all of the topics properly you will have no need of outside help.

    Most marketing people are theorists anyway and we are fond of saying that no one knows our clients like we do so just do your job thoroughly.

    Reply
    • Hi Phil,

      Firstly….I don’t expect anyone to educate and inform my clients. That’s my job.

      However the role of the Money Advice Service isn’t to educate clients of financial planners or IFA’s….but to provide support to all the individuals who don’t get (or choose not to) get access to advice.

      Also the numbers don’t stack up. If you assume that there are 30,000 financial advisers in the UK (the latest numbers say it’s just under that) and the each have 200 clients they look after regularly and consistently they still only equates to about 10% of the UK population receiving advice….so there is a huge gap.

      If every adviser just did their job thoroughly would that solve the problem of financial education….absolutely not.

      It would be a drop in the ocean!

      The people I’m talking about aren’t the ones’ who are lucky enough to be working with a professional but count among the individuals in our society who need our help the most.

      As we know many financially savvy people tend to seek advice…many who aren’t don’t.

      Reply
  • I think we have just made things too complex and the financial education I have seen gets bogged down in that.
    Financial education seems to rush off into pensions, APRs and ISAs, ignoring the basic messages.
    People need to understand the savings dilemma – if you save money, you will have less now but you will have more in the future. It doesnt really matter what vehicle you use to save money. If you dont make a note of your expenditure, you’ll never be able to budget properly.
    I think this is because there is a general cultural difficulty with dealing with the long term; many people seem to struggle to grasp the fact that if they take an action now, it will have consequences in five or ten years time.
    My view is that this is a result of the culture of dependency and blame we have developed in the UK. If you make a mistake which has long term personal consequences, it is the norm in society to seek somebody else to blame. Politicians want people to rely on them, so they encourage this.
    The implicit message of this society is that if you dont save now, it will be ok, because you will be able to blame somebody else in the future, and be compensated as a result. The acceptance of the lifetime allowance charge for pensions is symptomatic of this.
    In a dependence and blame culture, the savings dilemma will fall on deaf ears. The culture needs to be tackled before the public at large will begin to save.

    Reply
    • Hi Phil,

      I agree with many of the points you raise….

      The first step is to take people away from ‘product’ and into ‘habit’.

      I also agree with the fact that before we move forward we need to ensure that as a society we need to understand why we would delay gratification.

      However the issues is that “spend spend spend” is more attractive. The majority of marketing messages and the more powerful emotional (as opposed to logical) side of our brains tell us that ‘spend spend spend’ is good and therefore it takes a certain mindset to understand the implications of not doing that….

      I take a different approach to you in relation to the culture of dependency in the UK. Maybe I’m naive (and I appreciate there will be exceptions) but I actually think that on the whole we’re a nation of decent people working hard and not expecting to rely on the state too much…..

      ….if that is the case maybe a compelling conversation about saving won’t fall on deaf ears but be accepted with open arms!

      Reply
  • Hi Chris

    I think in terms of communicating on a larger scale we really need to ask the question “What problem are we trying to solve?” Is it educating consumers or is it gaining trust within the industry so clients engage with us? It maybe neither of these or both its worth asking the question.

    I agree with Phil W that this is cultural so therefore needs to be embedded within society as it indeed was in our grandparents day. I personally think that how we shift that message has to start from an early age, in primary or early secondary school. In my school (back in the day!). Good old TSB as it was then used to allow us to have a proper bank in year 6 situated in our classroom where we took turns in being the cashiers and children would come and pay in their savings. A brilliant system I think. I’ve still got the account today!

    The problem certainly isn’t an easy one to solve.

    Reply
    • Thanks Susan,

      You’re right….identifying the problem is fundamental and in the case of the money advice service it is pretty clear what their aims are in their remit (you can find the details on the “about us” page on the website….

      Phil W’s point is absolutely right about the cultural shift and I love the “Bank in the Classroom” idea….

      I’d also agree that the problem isn’t an easy one to solve….but it’s a worthwhile problem to tackle isn’t it?

      Reply
  • I cannot understand why some people in our industry want others to do their work – pensions education, savings etc.

    As Susan said above people have been doing financial planning for ever and the story of grandparents using different jars on the mantelpiece to save for different things is perhaps the best example of how easy it is to create a powerful story.

    I have always used a simple tale to encourage savings which is to break a pound into ten parts and to suggest that if one part were put aside that the client’s lifestyle would probably not be too badly changed. They always agree and off you go !

    There is a limit to the number of people you can serve and if you tackle all of the topics properly you will have no need of outside help.

    Most marketing people are theorists anyway and we are fond of saying that no one knows our clients like we do so just do your job thoroughly.

    Reply
    • Hi Phil,

      Firstly….I don’t expect anyone to educate and inform my clients. That’s my job.

      However the role of the Money Advice Service isn’t to educate clients of financial planners or IFA’s….but to provide support to all the individuals who don’t get (or choose not to) get access to advice.

      Also the numbers don’t stack up. If you assume that there are 30,000 financial advisers in the UK (the latest numbers say it’s just under that) and the each have 200 clients they look after regularly and consistently they still only equates to about 10% of the UK population receiving advice….so there is a huge gap.

      If every adviser just did their job thoroughly would that solve the problem of financial education….absolutely not.

      It would be a drop in the ocean!

      The people I’m talking about aren’t the ones’ who are lucky enough to be working with a professional but count among the individuals in our society who need our help the most.

      As we know many financially savvy people tend to seek advice…many who aren’t don’t.

      Reply
  • I think we have just made things too complex and the financial education I have seen gets bogged down in that.
    Financial education seems to rush off into pensions, APRs and ISAs, ignoring the basic messages.
    People need to understand the savings dilemma – if you save money, you will have less now but you will have more in the future. It doesnt really matter what vehicle you use to save money. If you dont make a note of your expenditure, you’ll never be able to budget properly.
    I think this is because there is a general cultural difficulty with dealing with the long term; many people seem to struggle to grasp the fact that if they take an action now, it will have consequences in five or ten years time.
    My view is that this is a result of the culture of dependency and blame we have developed in the UK. If you make a mistake which has long term personal consequences, it is the norm in society to seek somebody else to blame. Politicians want people to rely on them, so they encourage this.
    The implicit message of this society is that if you dont save now, it will be ok, because you will be able to blame somebody else in the future, and be compensated as a result. The acceptance of the lifetime allowance charge for pensions is symptomatic of this.
    In a dependence and blame culture, the savings dilemma will fall on deaf ears. The culture needs to be tackled before the public at large will begin to save.

    Reply
    • Hi Phil,

      I agree with many of the points you raise….

      The first step is to take people away from ‘product’ and into ‘habit’.

      I also agree with the fact that before we move forward we need to ensure that as a society we need to understand why we would delay gratification.

      However the issues is that “spend spend spend” is more attractive. The majority of marketing messages and the more powerful emotional (as opposed to logical) side of our brains tell us that ‘spend spend spend’ is good and therefore it takes a certain mindset to understand the implications of not doing that….

      I take a different approach to you in relation to the culture of dependency in the UK. Maybe I’m naive (and I appreciate there will be exceptions) but I actually think that on the whole we’re a nation of decent people working hard and not expecting to rely on the state too much…..

      ….if that is the case maybe a compelling conversation about saving won’t fall on deaf ears but be accepted with open arms!

      Reply
  • In my experience, there are very few people with marketing experience running marketing departments, in financial services. At the most senior levels, anyway. Most institutions simply outsource creative content and lack a real understanding of how it all works, no real theory or methodology. There are people who do, but they don’t tend to end up with sufficient control to do it all properly.

    Reply
    • Hi Phil,

      I think you’re right and I know that happened with MAS.

      The latest tender, a contract worth £14 million (and responsible for the ask MA) went to a firm called Inferno Creative.

      However these adverts inspire anyone you know to take better control of their finances?……nope me neither!

      Maybe the “ask MA” concept is really clever and actually does the job of ensuring individuals take control of their money in a more meaningful way and I just don’t get it!

      But if I don’t get it….how many people are in the same boat?

      Reply
  • Hi Chris

    I think in terms of communicating on a larger scale we really need to ask the question “What problem are we trying to solve?” Is it educating consumers or is it gaining trust within the industry so clients engage with us? It maybe neither of these or both its worth asking the question.

    I agree with Phil W that this is cultural so therefore needs to be embedded within society as it indeed was in our grandparents day. I personally think that how we shift that message has to start from an early age, in primary or early secondary school. In my school (back in the day!). Good old TSB as it was then used to allow us to have a proper bank in year 6 situated in our classroom where we took turns in being the cashiers and children would come and pay in their savings. A brilliant system I think. I’ve still got the account today!

    The problem certainly isn’t an easy one to solve.

    Reply
    • Thanks Susan,

      You’re right….identifying the problem is fundamental and in the case of the money advice service it is pretty clear what their aims are in their remit (you can find the details on the “about us” page on the website….

      Phil W’s point is absolutely right about the cultural shift and I love the “Bank in the Classroom” idea….

      I’d also agree that the problem isn’t an easy one to solve….but it’s a worthwhile problem to tackle isn’t it?

      Reply
  • Interesting article Chris. I do think the communication/marketing has to be on a much larger scale. FCA and Government could do so much more in terms of educating (FCA) and incentivising (Govt) people to save money. Wouldn’t it be good to have government/Money Advice Service ad just after any Wonga ad to tell people the importance of saving for that emergency fund and the advantages of doing so. We know it used to happy long before credit cards came into the play. My grandparents saved up to buy a car by putting a few pennies (yes it was pennies!) away each week until they could afford to pay in full. This could take them years to do. They were doing their own financial planning.

    Reply
    • Thanks Susan,

      I agree that we’ve got a lot to learn from our Grandparents in relation to saving for our financial futures. Whilst the demographics are massively different now the point remains that our Nan’s and Grandad’s had potentially better financial habits than the current generations (and now I sound like my Grandad!).

      However the point I disagree with is that we need to communicate on a much larger scale….

      If we’re communicating a message which isn’t working should we communicate the message on a larger scale….or change the message?

      I’d suggest the latter….what do you think?

      Reply

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