View more on these topics

Tony Wickenden: Do not let clients be taken from under your nose

Tony WickendenDo not fall into the trap of letting clients access robos for simpler aspects of financial planning

From time to time, I like to look at the increasing importance of advisers focusing on the hard stuff – the more complex areas of financial planning. I am also very interested in the value of advice. There are few in the financial planning world unaware of the pressure on the cost of advice coming from the continued media focus on it, as well as increased regulation and the impact of robo solutions.

Robos do face their own problems. As with any new initiative, the financial dynamics can be challenging. The demand for capital at launch needs to be balanced with high margins in the future. I imagine some robos are having to run the rule over the cash flow implications of spending a lot to acquire a client that only invests in a low margin product (e.g. an Isa) before leaving a couple of years later.

Simon Collins: Do robo firms know their clients?

As if the financial pressures were not enough, the recent FCA review of automated advice has found there is room for improvement.

That said, it would be a brave person who predicts robo solutions will not make more inroads into the relatively easy areas of financial planning.  And if there is success in these areas, who is to say that recognition, loyalty and trust could not be created for the brands delivering that? These disruptors might well then look to bolt on the more profitable regulated advice capability.

Some reading this will already recongnise the scenario whereby clients see an adviser for more complex (higher cost) financial planning and use robos for the simpler aspects.

But the threat here is that clients may develop some loyalty to the digital brand. When it comes to needing help with those more complex areas again, that provider may well have developed their own solution to capitalise on that trust and recognition.

There is also the threat posed by the fact the next generation of clients will prefer to engage with a lower cost platform when they first need help with their financial matters. Provided they develop the necessary expertise, that provider is then in prime position to sweep up the more complex advice needs when they arise through the likes of inheritance or business sale, for example.

Ian McKenna: FCA must name and shame badly behaving robos

Let’s not underestimate the difficulty in doing this or the well-earned power of some current incumbents in the traditional advice market. But the future risk needs to be recognised and strategies developed to defend against it.

Forward-thinking advice firms have a terrific opportunity to develop or deploy (through purchase or subscription) their own digital solutions to enhance their existing offerings.

OK, the fees generated from such models will be lower than full fat advice fees but the adviser who can carry out the low cost, easier transactions while continuing to offer high value , expert face-to-face services will be best placed to succeed.

To have a chance of the prize, there will be a need for investment of both time and money. A classic cost/benefit consideration but one that cannot be ignored.

Tony Wickenden is joint managing director of Technical Connection. You can find him Tweeting @tecconn

Recommended

Hourglass-Clock-Time-Race-Measure-700x450.jpg
2

Are you ready for the Insurance Distribution Directive?

Firms must change initial disclosure documents before the 1 October deadline This year has already been a challenging one for advisers, but with the delayed implementation of the Insurance Distribution Directive taking effect on 1 October, further regulatory change is just around the corner. New rules introduced by the IDD include upfront disclosures that firms […]

arnie ppi
1

Lloyds prepares for PPI claims rush ahead of deadline

Lloyds is reportedly planning to bolster its provision for payment protection insurance costs as consumers move to lodge complaints before the August 2019 deadline. According to The Times, analysts at UBS understand Lloyds could add £410m to its provision for April to June. Lloyds has incurred £18.8bn of PPI costs and increased its provision by […]

2

PI fears grow as historic DB transfer liabilities haunt market

Advisers are fearful restrictions in professional indemnity insurance cover are spreading in response to defined benefit transfer risks. Financial planners have told Money Marketing that insurers are continuing to take a sceptical view of any DB transfer business amid a slew of negative headlines around British Steel and other well-documented DB scheme failures. Some have […]

FCA proposes new rules for P2P lenders

The Financial Conduct Authority has opened a consultation on new rules for loan-based crowdfunding platforms as a first step to fix “increasingly complex” business models. The regulator today issued an update on its review of the loan-based and investment-based crowdfunding market. The updates are the first since a sector review in December 2016 and ask for responses […]

Pension savings-2015

Pension tax relief: parked (for the moment)

The national news agenda has been dominated by pension issues this month. For those that missed it (and there cannot have been many given that this was the lead story in spoken and written media), the Chancellor announced a decision to make no decision on pension tax relief in his 16 March 2016 Budget speech. To […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com