4 reasons why you should speak to a financial coach

When I started writing this, I started thinking about the similarities between managing our physical health, and our financial health. Human biology is of course incredibly complicated, and there are many areas within it that require training, experience, and specialist knowledge to understand – but the same is true when it comes to our finances.

If you’re like me, you’ll most likely have self-diagnosed yourself when sick with the help of Doctor Google. Your symptoms may well have been pointing to a terrifying tropical disease, but more often than not, a doctor with experience and training could have reassured us at a moment’s notice that we’re highly unlikely to have caught malaria on a trip to Birmingham.

The same is true for self-diagnosing our finances. With so many products out there to save, invest, and protect our money, it’s hard to know what’s going on, but as you’ll see below, a financial expert can help us diagnose our financial health and make sure we get the right treatment!

A expert coach can add up to £48k to your wealth

Yes, you heard that right. According to a study by Royal London, having a financial coach that gives you expert guidance with your finances can provide a 24% boost to pension wealth. Evidence also suggests that fostering an ongoing relationship with a financial advisor leads to better financial outcomes.

In the study, those who reported receiving ongoing advice had a nearly 50% higher average pension wealth than those only advised at the start. Whether you need general, practical advice or a specialist with dedicated expertise, you are likely to find that in the long term, the money you invest in expert guidance will be paid back many times over.

Coaches provide an unbiased assessment on your finances

There are many financial products and investments out there that receive a lot of attention initially, but end up going up and down. I know I’ve certainly been swayed by some investments because they were hot tech stock and their price had been soaring.

It can be easy to make an investment decision driven by emotions, especially feelings of worry or panic, which can undo months or even years of hard work.

It never hurts to run it past an advisor first who can provide a more factual analysis on your finances. After all, they know the nitty-gritty on complex products and can highlight the possible downsides and benefits, so you can make an informed decision where you’re putting your money.

Financial experts can give you a structured life plan

Planning out your life, especially financially, is something that even experts can’t be certain of. You only need to look at the effects of COVID-19 to tell you how unpredictable the economy can be. It’s the advisor’s job to keep up with the changing tax bands, business rates, and world news from a range of sources, which can leave a lot of us scratching our heads.

Advisors have a range of tools that can play out possible scenarios in your life and your finances so that given all the possibilities, you can be better prepared for anything unexpected coming round the corner.

It’s now affordable to speak to an expert

Up until recently, speaking to a financial expert would cost you hundreds, if not thousands of pounds per hour, and even if you could afford this, you’d usually be turned away if you had less than £50k in personal wealth.

At Bippit, we’ve been able to make access to a financial expert 10x less than traditional services so it can be affordable as an employee benefit. Perhaps you want to buy a house one day or want to learn about investing in the stock market. Whatever is on your mind, you can now reap the benefits of speaking to an expert.

So what is Open Banking anyway?

In one sentence…

It’s a set of reforms that allow you to securely share your financial data from your banking transactions, such as your spending habits and regular payments, with authorised providers (such as Bippit) that provide tools to give you more clarity on your finances and save you money.

How and why did it come about?

On 13th January 2018, the reforms came in as part of legislation put forward by the Competition and Markets Authority (CMA) alongside the catchily named “Second Payment Services Directive” (PSD2). The aim was to bring more competition and innovation to financial services, by allowing consumers to have ownership of their financial data. So information on your banking transactions like bills, meal deals and pumpkin-spiced lattes (the bare necessities), you now own, not the big banks!

So how does it work?

The data is connected through what’s called an API (Application Programming Interface). In simple terms, this is a secure web-based tool which allows the authorised provider to access the banking data directly, without you having to tell your password to anyone. Here’s how it works in 3 steps:

• You give the app (authorised provider) access to your financial data
• The API tool gets the data from the bank
• The data is sent directly back to the app you’re using.

Here’s a diagram by medium.com to explain APIs visually:

Awesome, makes sense! What kind of accounts can I connect?

You can connect any account you make payments from, which are current accounts, credit cards, prepaid cards and most high street savings.

With Bippit, you can connect your current account or credit card, and we’ll summarise your spending patterns from the data and display them nice and neatly for you, giving you more clarity on your finances. We can then put you in touch with one of our friendly financial experts who can give you a helping hand with achieving your financial goals in life.

Can you show me how it works?

It’s very simple. Choose your bank, you get taken to your bank and use touch ID access to grant permission…

..Then the API processes this request and connects your account with Bippit. Nice and easy.

Sounds great, but seems like a lot of data to be sharing. Is it secure?

Bippit is regulated by the FCA and we’ll only connect the data needed for the service you’ve signed up to. So if you’ve just connected the one account with us, we’ll only be able to summarise data on that account and nothing else. You always need to give us permission first.

When connecting your accounts with Bippit through Open Banking, you don’t need to enter any passwords. We just direct you to your banking app on your device, which is where you would give permission. We will never share any of your data with third parties and use the latest cybersecurity to ensure your data is safe.

Phew! How do I get started?

Simple! Just talk to your employer about Bippit as a new perk for the business, and you can connect your accounts in minutes. Once you’ve done this, you can set up your financial goals, track your budget, or connect with your advisor to get expert guidance straight away.