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Self-directed makes adviser headway

A third of financial advisers now offer or will consider offering self-directed services to their clients, according to a poll by Cofunds.

A total of 53 per cent said they would not offer them which, although more than half, is lower than the 69 per cent found 12 months ago.

The figures point to a changing adviser landscape. In the post-RDR world, a great amount of focus has been placed on advisers segmenting their client base and finding ways to manage lower-value clients.

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“This self-directed model enables advisers to maintain a relationship and a value exchange with clients with more modest portfolios but, crucially, provides the means to cultivate the high net worth clients of the future,” said Andy Coleman, director of distribution at Cofunds.

There are two ways advisers can use platforms to manage clients. For low-contact or particularly financially savvy clients, some level of direct access in combination with an advised solution might be appropriate. According to the latest Money Management platforms survey, of the 20 platforms that took part, seven adviser-led platforms allow direct access for advised clients.

An alternative option is to set up an adviser-branded direct-to-consumer platform. Usually a white-labelled version of an existing platform, this solution allows the financial adviser to retain their stamp on the service and let direct clients know where they are should they need full financial planning.

A recent report by BNY Mellon and Cass Business School, ‘Challenge and opportunity’, highlights a potential third category: a “financial guidance service”. Although a still relatively underdeveloped area, the report said advisers have underestimated the potential threat of such services to their traditional business model. However, if advisers can harness some of that business, they could create a D2C revenue stream and a pot of potential future customers.