People with investments worth less than £100,000 will struggle to find face-to-face advice from January 2013 (Read Will your IFA dump you?) but they may be able to get cheap advice by other means. Some advisory firms that are able to harness the power of technology are finding that the marginal cost of digital technology is enabling them to create new online advice propositions targeting the potential financial advice orphans.
A lot of the expense of providing face-to-face financial advice comes from travelling to meet clients and collecting details for the 'fact find’' through a face-to-face interview. If a company can cut out the travel time and get clients to do the leg work for the fact find in advance, then in theory the cost of advice should be less.
Here are some of the new offerings:
www.money-guidance.co.uk intends to allow site users to take advantage of regulated, low-cost advice (involving a flat fee of no more than £100 + VAT per annum), as well as to gain access to WRAPs/Platforms with no adviser premium payable.
www.moneyontoast.com offers a 20 minute appointment with an adviser for £35. You choose a time slot that's convenient for you and whether you'd prefer an appointment by phone, Skype or by Webex (video conferencing software). Prior to your appointment you complete a fact find questionnaire.
www.moneyvista.com will enable you to build a personal financial plan - for a limited period for free, though you cannot buy products through the site. The site has been built by financial experts both from within the Royal London Group and also from throughout the financial services industry.
www.nutmeg.co.uk is an investment management service that creates an actively managed discretionary portfolio of collective investment vehicles - primarily exchange traded funds (ETFs) - based on an online risk-profile. Its annual fees start at 1 per cent and can go as low as 0.3 per cent of your assets under management.
There will always be those who question whether an online plan can ever replicate a proper face-to-face advice. The obvious downside is you cannot have the same kind of personal relationship.
