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Hybrid set to emerge with execution-only

’People will manage finances themselves but will invite somebody in to give them expert advice on certain subjects’

Threadneedle says a new hybrid platform is likely to develop, offering an execution-only service that can be supplemented with advice when users require it.

Speaking at the Tax Incentivised Savings Association wraps and platforms seminar in London last week, Threadneedle distribution special projects director David Reed said many people are comfortable managing their own financial affairs and only take advice if they need it.

He said: “Advisers are a strong and important part of the financial landscape but I think the platform market might change from the traditional adviser-led service to one where people are happy to manage financial affairs themselves but will invite somebody in to give them expert advice on certain aspects.”

Reed said the new solution could come about if platforms in the execution-only area fail to achieve scale.

He said: “There has not been the enormous growth in this sector that people were originally expecting, so it begs the question as to how much the execution-only market will grow in the future.”

FinaMetrica chief executive Paul Resnik warned of the problems that consumers face when investing on execution-only platforms.

He said: “It is an immensely difficult task for someone without an in-dept knowledge of investments to select funds and invest correctly without the help of an adviser.”

Evolve Financial Planning director Jason Witcombe says a hybrid platform could offer a cost-effective way for IFAs to service mid-market clients.

He says: “I think it is something that could happen. A lot has been said about how middle-income clients will be serviced after the RDR and one way would be to divide the financial advice services they want to pay for and the services they do not.”

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