I, like many of you I am sure, get really frustrated at how stories relevant to financial planning are portrayed in the news. It can make our job as trusted advisers that bit more difficult as, ‘if it was on the 6 o’clock news, it must be right’, right?
There have been a few examples very recently, but one that sticks in my mind was newsreader Huw Edwards telling us all a few years back that we would all be able to pass down £1,000,000 to the next generation of our families free of inheritance tax (IHT). I have attended so many meetings since that proclamation where clients have been surprised to learn that this isn’t, I quote, “how the rules apply to them”.
It is a difficult thing for us as a profession to manage, as we have little or no control over how news editors will convey headlines, particularly when politics is at play – it’s not “fake news” as such, rather, it’s “not quite accurate news”.
However, I guess that brings our client skills to the fore and, on the flipside, if it is in the news, there is at least an awareness of financial planning and topics of conversation to enrich discussions. For example, the imminent increase in auto-enrolment contribution levels have been heralded as a “pay cut” for many employees. This is factually correct, of course – take-home pay may reduce, but there is an upside in an increased long-term investment in a retirement plan, which doesn’t seem to have been equally trumpeted.
Another example being a celebrity who married on his death bed may well have done so to ensure no immediate IHT was suffered on his passing, but that doesn’t guarantee complete avoidance of the tax in the long run, does it?
Perhaps it is just my natural inclination to be balanced in my approach, which confirms that news journalism would never have been the career for me, yet I yearn for both sides of the story when this is merited – that way, surely everyone can make a balanced decision?
Until that emerges, we will have to continue correcting misconceptions and telling the clients that the news isn’t always “quite accurate”.
George Houston is technical director at Mattioli Woods