Independent financial adviser Informed Choice will launch an execution-only offering in early 2013 to complement its existing advice business and accommodate lower-value clients who choose the direct approach post-Retail Distribution Review.
Execution-only platform IC Direct will target a wholly new client base distinct from parent company Informed Choice, which caters for clients with an average of £300,000 to invest. In contrast, IC Direct is built with those in mind who have £20,000 to £30,000.
Martin Bamford (pictured), managing director and chartered financial planner at Informed Choice, said: “We don’t believe any of our existing clients will move to an execution-only service.
“We do get a lot of enquiries from people with smaller amounts to invest so it will be nice to be able to cater to those people as well.”
Set to run in partnership with an as-yet unnamed large UK investment manager, IC Direct will aim to give clients a more transparent charging structure than other existing execution-only platforms, Mr Bamford said.
He said: “With the introduction of the RDR on 31 December bringing the cost of advice sharply into focus, some investors will choose the DIY approach to investing in an attempt to cut costs.
“Some online DIY investment options are a lower-cost option than seeking investment advice from an IFA.”
However, he added that cost savings tend to occur up-front with discounted initial fees and that making a clear cost comparison is difficult due to “overly complex charging structures”.