Financial Advisers Must do More to Protect Clients in Tough Times

Financial advisers are not doing enough to help their clients prepare for the economic tsunami that is expected to lay waste to a swathe of Britain's workforce.

Braintree, Essex (PRWEB) November 8, 2008 -- Financial advisers are not doing enough to help their clients prepare for the economic tsunami that is expected to lay waste to a swathe of Britain's workforce.

Sara-Ann Burgess, MD Burgesses

Make no mistake, we are in for very turbulent times and many people will suffer the hardship of being out of work

Lenders are doing little to stem the flow of the unemployed. Rather they are contributing to the crisis by refusing to restructure finance in the favour of small and medium-sized businesses that constitute the backbone of the economy

The fact that it took taxpayers' money to bail out the banks and they have responded by snubbing their noses at the government when it has urged a return to higher lending levels makes it all the more galling

For while sales of some protection policies have picked up in recent weeks, the volume is not nearly enough to protect the numbers of people that are expected to be swept away in an unemployment surge.

The European Commission predicts that unemployment in Britain will hit 7.1 per cent - the worst performing country in the 15-nation eurozone area.

"Make no mistake, we are in for very turbulent times and many people will suffer the hardship of being out of work," she said.

"This will lead to severe consequences for some families and in the worst case scenario this could involve them losing the very roof over their heads - but it doesn't have to be this way.

"People need to wake up to the new economic reality. The excesses and easy credit of the last decade or more have gone for the foreseeable future and people need to take the steps to protect themselves for the hard times ahead.

"But because many people have had it so good for so long they have never had to think about what action to take if things suddenly sour. That's when it is vital that financial service intermediaries make their clients aware of what insurance products exist to provide the peace of mind that there will be an income should they be unfortunate to lose their job as we embark upon difficult economic times," she said.

And she slammed the lending community for exacerbating what is already a very serious problem.

"Lenders are doing little to stem the flow of the unemployed. Rather they are contributing to the crisis by refusing to restructure finance in the favour of small and medium-sized businesses that constitute the backbone of the economy," said Burgess.

"The unique aspects of this credit crunch mean that firms are unable to borrow their way through the downturn as has been the case in other recent economic downturns. This will result in major job losses as firms look to lay off staff or cease trading altogether.

"At a time when it is predicted that three million homeowners or more than one fifth of households could end up in negative equity as the value of properties continues to slump this adds up to a national dereliction of duty.

"The fact that it took taxpayers' money to bail out the banks and they have responded by snubbing their noses at the government when it has urged a return to higher lending levels makes it all the more galling," she said.

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