I realise the following words may well be the kiss of death in what might otherwise have been a promising career in financial services but in the past few months I have become a bit of a fan of Adam Price.
He has featured in Money Marketing once or twice, most recently as the founder of IFA comparison website VouchedFor but does not yet have the presence of more established personalities in the financial services community.
VouchedFor is a very interesting attempt to encourage consumers to find advisers online by means of ratings given to them by their own clients. It probably won’t fly in its current form but it is still a potentially great idea.
Equally fascinating, for some of us at least, is a recent article that Adam Price wrote for Money Marketing on the subject of a US website – PersonalCapital.com – which aims to act as an online investment aggregator and financial planner.
According to Price, the website “then goes on to capture information about your goals and plans, before making asset allocation recommendations and helping you construct a portfolio of stocks and ETFs. It automatically reports and rebalances your portfolio and it manages the timing of capital gains and losses.”
This service is entirely free, although if clients want a personal service from an independent adviser it is available for a 1 per cent fee.
I have had a good look at the website and it seems easy to navigate and the asset allocation data is simply set out and readily understandable, all crucial aspects of any user’s online experience. My one reservation – a major one – is I am not clear about the remuneration structure if all you want is the advice. Does PersonalCapital.com receive any money for transactions carried out via its website? Are you expected to carry out the initial rebalancing of the portfolio yourself through your own adviser?
Assuming there are credible answers, this is a potentially worthwhile proposition for prospective consumers – although I would balk at paying 1 per cent of my assets for an adviser who deals not just with me but also another 200 clients at the same time. That seems very steep.
Intriguingly, Adam asks whether this form of online advice represents the future in terms of clients’ relationship with advisers. It might do, but it is worth remembering we have been here before.
To understand what I mean, check out the series Money Marketing RDR Invitational conferences being held in the coming weeks.
Each of the four meetings will involve a series of speakers discussing key topics aimed at helping IFAs to prepare for life after December 2012. They hope to “examine each constituent part of an intermediary’s current business explain what needs to change and how to make it happen”.
Each of the seminars will have a session looking at how technology can be used as part of the advice process. Among the speakers trying to convince IFAs to make better use of technology will be Ben Goss, founder and chief executive of Distribution Technology, a firm that provides software to institutions and independent advisers.
What is interesting about Ben Goss is that, a dim and distant 13 years ago, he was trying to create the very kind of website that PersonalCapital is looking to become today. Sort.co.uk aimed to provide independent financial advice to consumers, who paid £20 for a report they could then act on if they wanted to. In other words, it sold advice rather than a product.
The technology was pretty primitive and the reports – one of which I paid for myself – were fairly ordinary but it was a brave attempt. Goss’s current venture seems focused on providing back-office IT functions to IFAs and institutions.
He probably thought, for understandable reasons, there was more money to be made helping financial advisers get to grips with technology – in preference to creating systems that allow consumers to obtain advice directly and, potentially, bypass the need to deal with an IFA.
Adam Price, it seems to me, is trying to reconcile two contrasting visions – online and offline – of advice. It was tried before and did not work. Nor am I convinced PersonalCapital.com has all the answers.
But we are moving closer to a potential for technology to deliver a highly personalised financial advice service to clients in a way that was not possible a decade or so ago – at a tiny fraction of what it would cost if they talk to an IFA. And again, Adam Price is drawing our attention to that potential.
Nic Cicutti can be contacted via firstname.lastname@example.org