If I were you, I would take the concierge's advice
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Paul Gratton and Rob Clifford’s new venture If I Were You is hoping to tap into the trend for peer reviews seen in the popularity of sites such as TripAdvisor and Amazon.
The pair describe IfIWereYou.co.uk as a “financial concierge”, offering guidance on unregulated products and putting consumers in touch with brokers or IFAs for regulated products such as mortgages, pensions and investments.
The premise behind the name is that, with the damaged reputation of the financial services industry, consumers are looking for help to guide them through buying financial products.
Gratton says most people would ideally like to have a member of their family or a close friend with the knowledge to help them make these decisions and once advice has been sought from one of these trusted sour-ces, the conversation tends to begin with: “If I were you,
I would…”
The service is seeking to replicate this relationship with its customer agents and by creating an online community in which consumers can rate their experience of dealing with different providers and advisers.
Gratton and Clifford foun-ded broker franchise business Mortgageforce in 2000. Clifford left his role as chief executive of Mortgageforce to become UK managing director of Virgin Money in December 2008, where he was to develop the firm’s mortgage proposition but left Virgin in May this year.
Gratton is former chief executive of Egg and also set up First Direct for HSBC (then Midland Bank). He bought Glasgow-based telephone brokerage MoneyQuest UK in March 2008 but placed it into administration in July last year. He then transferred the customer base and staff minus some of its previous management to new firm MoneyQuest Mortgage Brokers the following week.
The MoneyQuest move may have raised some eyebrows in the industry but Gratton insists he took on all the liabilities for the customers when they transferred to the new business.
He says that like his previous ventures First Direct and Egg, IfIWereYou.co.uk was borne out of a change in consumer attitudes.
With First Direct, it was consumers’ irritation with queuing at their bank on the back of branch closure programmes which started the move to telephone-based banking and with Egg it was low interest rates on instant access accounts which meant that customers had to put their money away in notice accounts to get any kind of decent rate.
Gratton says this, combined with consumers’ adoption of the internet, provided the opportunity for online banking which could offer better savings rates to customers as there was no expensive branch network to pay for.
Gratton says his newest venture has grown out of consumers’ awareness of price thr-ough the growth of comparison sites such as Moneysupermarket.com but also their lack of trust in the financial services industry after the banking crisis, which he says “has never before been so low”.
He says that since the launch of price comparison sites, consumers have returned from being completely focused on price to once again looking at value and service, hence the rise of consumer review sites.
He says: “We are now seeing a strong pushback from price to value. People are much more conscious of the value they are getting and are making real trade-offs. If they are paying more than the lowest price, they want to know what they are getting in addition to just-ify the extra cost.
“What people believe is that if they are going to have to engage with the financial services industry, they want to be fully briefed so that they are not going to get conned or done over.”
The new service will provide each user with a dedicated customer agent who will be the main point of contact. They will provide guidance on unregulated products over the internet or by phone and refer clients to an adviser for any regulated products such as mortgages, pensions and investments.
The agent will stay in touch with the customer throughout the process to ensure they are happy with the advice and service. Customers will have a range of payment options, including subscription, commission reb-ates or fees for advice. There will also be a customer loyalty sch-eme, which will give users some form of tangible credit that they can redeem against services although Gratton will not reveal details at this stage.
The service soft launches this week with mortgages the only product currently on offer thr-ough referrals to MoneyQuest.
Pension fund consolidation and investments are set to be offered in the first quarter of next year. Gratton is keen on offering exchange-traded funds through referrals to advisers as he believes they offer good value compared with more expensive actively managed investments.
Another area which IfIWereYou.co.uk will look into is ways of widening access to annuity purchase through the open market option. Gratton is talking to platform providers to incorporate this into the service alth-ough he will not name names at present.
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