The founder of consumer site Candid Money has launched Buckinghamshire-based Candid Financial Advice and has guaranteed a 1 per cent cap on advice charges in response to what he described as “increased appreciation” for lower cost IFAs post-RDR.
Mr Modray also promised to shun hospitality, hidden fees and other incentives from financial providers. He said he was not aware of any other advice firm which had made a similar commitment.
The former head of communications for BestInvest said he had already received a number of enquiries from users of the Candid Money site, who were concerned about the cost of “potentially large accumulated pension pots”.
Mr Modray will run Candid with long-time friend Ian Millward and the firm will train young advisers from next year.
Mr Modray said: “We would like to grow the business and we will be recruiting in time but we are more likely to train up advisers and mould them to fit our approach.”
He jokingly added that advisers partial to “spending a few hours on the golf course each week” will not work for the lean and efficient model that the firm was adopting.
Mr Modray said the firm would keep fees down by using low-cost funds and investment wrappers, suggesting that Alliance Trust Savings and Sippcentre may be the favoured options.
The business aims to target clients with between £100,000 and £5m to invest.
Philip Stevenson, chartered financial planner for Manchester-based Ark Financial Planning, said: “We have no issue with new competitors but it is a little irritating when people focus purely on the cost of advisers.
“When we have surveyed our clients and asked what is important to them, costs came quite low. Clients are more interested in the relationship and availability.”