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Advisers using execution-only as gateway to future clients

Nucleus is seeing new advice models emerge where firms deliver an execution-only service with a view to stepping in when investment portfolios reach a certain size.

Speaking at a Perspective roundtable in London last week, Nucleus chief executive David Ferguson said advisers can “capture” prospective clients before they would naturally seek advice.

He said: “There are young relatives of clients coming through who do not need advice because they are saving £50 a month. We are seeing advisers now who want their own execution-only offering, a kind of bucket to catch those customers.

“Once their pot gets to a certain level where it is worth having proper advice, then the adviser has not lost sight of that. We are seeing models like that starting to emerge.”

Tatton Investment Management chief investment officer Lothar Mentel said: “My expectation is that model where customers are only interacting with a screen will only succeed for the small proportion of the financially literate. All the others will want to have somebody in the background they can go back to for reassurance. It is not full advice, it is some new sort of advice hybrid.”

Legal & General retail savings distribution director Paul Measures said: “It is a healthy position to be in. Advisers can interact with clients when they need advice and the self-serve model can be run at a lower cost to the business. There are opportunities there.”

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