HSBC has launched a stand-alone investment advice at a 30 per cent discount to its full Premier Financial Advice service, following a successful trial period earlier this year.
The service is designed to provide advice for customers who are looking to invest single lump sums of between £15,000 and £100,000. Customers qualify by having £50,000 or more of savings or investments – the point at which they normally move to its Premier and Wealth banking services.
The bank added that if the service is a success, it plans to make it more widely available later this year.
Pricing feature | HSBC Premier Financial Advice | Stand-alone Investment Advice |
Report-only fee (Incl VAT) | £420 | £294 |
Report & Implementation fee | ||
Minimum charge | £960 | £672 |
% charge | 2.75% | 1.93% |
The launch was backed by research from YouGov, conducted in April among 2,079 adults, which found that, of investments made to date in 2016, two thirds were arranged without any financial consultation.
More than half of respondents planning to make an investment during the remainder of the year are also unlikely to seek any advice, with almost a quarter of those asked feeling that it was too expensive.
One in five adults in the UK has £15,000 or more to invest, but despite this HSBC argued that there is currently a gap in the advice market where customers who have smaller amounts of money cannot access the appropriate advice.
The Treasury and Financial Conduct Authority commissioned the Financial Advice Market Review specifically to tackle the so-called advice gap, with its final report recommending various measures to encourage mass-market savers and regulated advisers to reconnect, following their post-RDR split.
Caroline Connellan, head of UK wealth and premier banking at HSBC, said full financial advice is a core offering and right for many customers, but others want quicker, lower cost advice for relatively simple needs.
“With many people keeping their long-term savings in cash, it seems there is a real need for advice – and it’s why we’re excited to introduce the Stand-alone Investment Advice.”
Adviser view
Greg Heath, managing director at Derbyshire Booth Financial Management, pointed out that the annual management charge for the premier service is 2.75 per cent.
“Why pay that price when a fully qualified IFA with 25 years experience, who has access to the whole of the investment market and delivers a personal service, can do a better job for 0.75 to 1 per cent lower in charges?
“This illustrates the difference between IFAs and banks who need to pay for complex and bureaucratic management systems, and hence pay over the top for an average service.”
peter.walker@ft.com
