Lower value clients should broker trades
Gill Cardy urges advisers to consider new ways to keep smaller clients on their books.
Advisers should consider moving some clients to direct-to-consumer platforms to help lower the cost of advice to less wealthy investors, IFA Centre managing director Gill Cardy has said.
Ms Cardy, who founded the IFA Centre in January, said many advisers felt they had a “moral obligation” to retain clients who cannot afford full advice services.
Instead, she suggested advisers could consider giving clients advice and allowing them to implement trades themselves, reducing costs to the client and allowing the adviser to improve their services to wealthier clients.
Ms Cardy said: “It could be more cost effective to give the client a buy list and have them open an account with Hargreaves Lansdown or another execution-only broker. It may be a better use of the client’s resources than putting them in a wrap platform.
“The question then is whether I have to see that client as often – as an adviser, my time is expensive.”
Ms Cardy added: “Lower value clients are still worth a lot of money collectively, so let’s find a way of serving them instead of leaving them.”
Some advisers have already launched their own execution-only services, such as Kent-based Dennehy Weller & Co, which opened FundExpert.co.uk earlier this year to help guide investors to funds recommended by the firm’s research.