Cofunds is to increase investment into its direct offering over the coming year to help advisers keep smaller pot clients on the books until their assets grow enough to make advice worthwhile.
Stephen Wynne-Jones, head of marketing at Cofunds, told FTAdviser that the service, which enables advisers to use their own branding for portal access to the self-direct Cofunds platform offering, would enable advisers to stay in touch with clients that could become profitable over time.
According to Mr Wynne-Jones, upwards of 300 advice firms have already signed up to the service.
He said: “You often hear people talking about high net worth and low net worth and it’s always a mystery to me why you would badge somebody that way because who is to say a low net worth client today isn’t going to be a high net worth client in five or 10-years’ time.”
Using Cofunds’ direct service does not necessarily preclude the provision of advice alongside it, Mr Wynne-Jones added. He said advisers could for example assess the client’s appetite for risk and then direct the client to a selection of appropriate options on the white-labelled platform.
Recent debates on the advice gap have centred on individuals with less than £50,000 to invest, which several recent research studies have suggested are increasingly being abandoned by advisers due to fees offering poor value for money.
In December a study commissioned by Apfa purported to show that 60,000 lower-value clients had been priced out of the advice market as a result of the Retail Distribution Review.
It followed hot on the heels of a separate study by fund management group Schroders, which revealing that 14 per cent of sampled advisers had formally asked clients to leave their practice in the previous 12 months.
Last year Martin Wheatley, chief executive of the Financial Conduct Authority, said that although the regulator had not quantified the number of people being left without access to advice post-RDR any gap could be partially filled by innovative web-based advice models.
Cofunds head of proposition Sam Christopher said: “A lot of propositional work we will be doing this year is to actually enable intermediaries to offer something to those first-time investors to enable them to grow, so it allows them to retain the relationship with their customer.”
Ms Christopher emphasised the point that, despite having such a complete direct service available, Cofunds will remain a purely intermediated platform and has no plans to follow others into the D2C space.
She continued: “They aren’t pushing the customer away because they have low value; they can keep that customer and grow the customer as they continue to invest year after year in their Isa they will become their future client base.
“We will be doing a lot of work in our team to enhance the [service]. We already have some functionality out there in the market which allows intermediaries to do that today but we will be enhancing those services.
“There will be additional support we will provide to intermediaries to enable, between us, to service that client. But it remains that intermediary’s customer and as and when the customer requires advice they have that relationship there already to go and speak to their intermediary about their pension or other things.”
