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Mountain climbing and financial fitness

7 Apr 2021

Written by Simon Rogerson

There aren’t many companies in the world I’d choose to be friends with. One of them, however, is Patagonia. And like most great companies, there’s an interesting story behind how it began. In 1953 a 14-year-old boy called Yvon Chouinard started climbing. As he got older, climbing became his way of life and he travelled the world seeking out new challenges.

One problem he kept coming back to, however, was the damage his equipment was doing to the rockfaces he was climbing. So he started making his own equipment. He’d climb during the day and make the equipment at night, selling it to other climbers. This was the start of the ‘do no harm’ ethos that would sit behind Patagonia. The company’s growth since these early days has been exceptional and it’s gone on to become one of the world’s leading environmentally friendly clothing brands.

At its heart, Patagonia is a ‘good’ company. It cares as much about how it behaves as what it does. This, to me, will be the biggest determinant of a company’s success over the coming decades. The world we live in is changing. The historic approach – where companies define their success through the single lens of profit – is dying. It’s being replaced by a model whereby companies prioritise the interests of all their stakeholders – their employees, their customers, their community, the environment and their shareholders. The most valuable companies of the future will all behave, like Patagonia, in a way that is refreshingly human.

In this new world, a company’s responsibility to its employees will be fundamentally different, stretching far beyond simply paying them a wage. In the future, the best companies will wake up caring about their employees’ wellness across all dimensions – physical, mental and financial.

That responsibility has become even more important when you consider the situation we find ourselves in today, with huge numbers of people adapting to significant upheaval in their lives due to the pandemic. Many have lost their job or had to find a new one, along with changes to their income or living expenses. Some have been fortunate and will have more disposable income than normal, wondering what they should be doing with it, while others will be struggling to make ends meet.

Money: #1 cause of stress

Even before the pandemic, the number one cause of stress in the UK was money. In fact, research carried out by the financial services regulator found that 9 in 10 businesses think money worries impact the performance of their employees. That’s probably not surprising given that there are an estimated 18 million adults in the UK who would benefit from financial advice but can’t currently get access to it. And these worries and problems span all age groups. Those at the start of their careers worry about their student debt, getting on the housing ladder or starting a family. And those in their 40s or 50s are concerned about the cost of supporting their children or whether their pension pot will be sufficient to fund them in retirement. The last point is particularly worrying given that 1.9 million people – equivalent to 16% of the working population – retire into poverty every single year.

It’s easy to argue that education around financial literacy is the responsibility of schools and the national curriculum but I think responsibility should also sit with employers. Education is always most effective if it’s delivered when we most need it. Problems which are largely theoretical at school suddenly become reality as soon as we start earning a wage and having to support ourselves.

Is coaching the solution?

We’ve spent years thinking about how we could try and solve this problem and I’m delighted to announce that we’re moving one step closer, with the acquisition of a financial coaching business called Hatch. This business, which will be rebranded Octopus Moneycoach, will be working with employers to take financial coaching to the mass market, in partnership with financial advisers.

Our ambition is to help make financial advice accessible to all, combining smart financial planning software with friendly financial coaches. It will fill the enormous gap that exists between robo-advice and traditional advice, appealing to those who’d benefit from a human relationship to help make financial decisions, but who don’t yet have sufficient assets or complex needs that merit a more traditional financial adviser.

How employers can help

The business is already working with forward-thinking employers like MoneySuperMarket, Sony Interactive Entertainment, Epson, and Experian. Through a low-cost, monthly payment every employee of these businesses receives their own financial coach to help them get on top of their finances.

The business model (and the leadership) of the business won’t be changing. Octopus will be the fuel to the rocket, investing at least £10 million into the business in the near term, growing the number of coaches from 30 to more than 200 in relatively short order.

Our mission at Octopus is simple – ‘to invest in the people, ideas and industries that will change the world.’ This is a perfect example of this mission at work. Success in this instance will be looking back in a decade or so knowing that we’ve removed a big cause of people’s stress and helped them to live the lives they want. 


Simon's blog

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