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Phone-based advice firm targeting small pensions gets £1.3m capital injection

A telephone-based advice firm targeting clients with small pension pots has received a £1.3m investment to develop its online capability.

Profile Financial Solutions, which launched in 2013, offers fully regulated, independent advice over the telephone.

It specialises in pensions advice and its clients have an average pension pot of £35,000. 

The firm operates a percentage-based charging structure with an initial charge of between 1 per cent and 4.5 per cent. Clients with up to £30,000 are charged 4.5 per cent, which reduces on a sliding scale to 1 per cent for those with £50,000.

The fee for ongoing advice is 0.3 per cent.

Venture capital fund Smedvig Capital last week made a £1.3m growth capital investment in the business.

Profile Financial Solutions says the investment will allow it to move to a larger office and develop online capability such as a secure online portal for clients, and better use of technology in its annual review process.

Chief executive Ian Floyed says: “We set up with the aim of providing advice to lower net worth clients who were orphaned as a result of the RDR.

“Very few advisers would look at clients with the size of pension pot that we do so we felt there was a big, unserved market there which will become even bigger as a result of the pension reforms coming into force in April.”

The firm currently manages £125m of pension assets on behalf of its 3,000 customers. It has 11 advisers and is in the process of recruiting more staff.

Floyed says: “Using telephone rather than face-to-face delivery is one of the biggest differentiators in keeping our costs down. We also have very efficient processes – this sort of model would not work if you were only doing one pension review a month.”

He says the pension reforms will increase demand for the firm’s services, but it is impossible to predict by how much.

He says: “We know it is going to rain but we have no idea how hard and for how long.”

The firm expects to receive a lot of enquiries through the Money Advice Service’s at-retirement adviser directory. Providers of the Government’s guidance service Pension Wise will direct clients who wish to receive regulated advice to the directory, which is currently taking registrations.

Floyed says: “We hope to feature fairly strongly on the MAS directory.

“I can see clients with modest pensions getting caught in a vicious circle of going to their provider and the guidance service for help and not being given what they want, but also being turned away by most IFAs. The MAS directory is trying to anticipate those kind of problems by matching clients with relevant advisers.

“We have put in place some call handling capability to assist us in case demand is really high.”

Floyed previously founded telephone and online-based conveyancing firm myhomemove in 2001.

He says: “We took what a solicitor does on the high street and turned it into a telephone and online service and that worked really well. What we are doing for the advice profession is almost exactly the same.”

Adviser views


Phil Billingham, chartered financial planner, Perceptive Planning

It is great that firms are looking to offer this service and that consumers will be able to access fully qualified advisers, with all the expertise and protection that comes with that, at what seems like a fair rate.

If this model works, we should see others coming into this market which would benefit consumers and the advice profession as a whole.


Chris Daems, director, Principal Financial Solutions

There’s a definite need for a service which caters to individuals with smaller pension pots.

However, my concern is that it may not be profitable to deliver a sustainable enough review service at 0.3 per cent of smaller pots. This could mean that while Profile’s clients may get initial advice the model may not adequately provide a service on an ongoing basis.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Sorry Tessa but the fees are quotes in percentage terms, and like Rory I can’t work that out!

  2. @Chris Daems, but if the advice is an annuity or triviality (although I know this goes in a month, you get my point), which many sub £30k funds will be then there is no ongoing advice, hence no ongoing 0.3% so I am not sure why they are mentioning ongoing costs/fees at all.
    Drawdown will still be mainly for £100k plus funds (yes some between 50 and 100 and there are reasons for smaller pots), but most advice will be an annuity or full encashment over a max of 2 or 3 years perhaps.
    Good luck to Profile with this, not a market for me I think, but someone needed to do it and I wish them well.

  3. Hrmm, just looked at the % and 4.5% on first £30k works out at £1,350 which if the advice were an annuity for full advice would be an awful lot and whilst that is about the minimum needed to charge for regulated advice on drawdown, the fee could prove to be one of those self defeating things the FCA don’t like. Will they be charging 4.5% of £30k if the advice is an annuity rather than drawdown I wonder?

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