The digital advice director at Nationwide has questioned whether the "advice gap" exists, claiming there are “more than enough” advisers.
In recent years the Financial Conduct Authority reported it had seen a decline in the number of financial advisers offering professional advice - from around 26,000 in 2011 to 24,000 in 2014.
Speaking at a roundtable event hosted by technology provider EValue, Nationwide's Chris Williams said: “The advice gap would suggest there are too few advisers out there for the customers seeking advice, but it doesn’t feel that way.”
But Mr Williams argued there is a huge savings gap and too few people with protection cover.
He said: “The protection gap hardly ever gets mentioned because as an industry we are obsessed with investments and portfolios.
“We are not giving people access to the simple solutions that they need.”
Looking back at the time of the Retail Distribution Review in 2012, the Nationwide director said it became clear advisers had far too many clients to be able to deliver a service efficiently or appropriately.
He said advisers were left with two options: to hire a whole raft of advisers, which would have bankrupted a lot of companies, or restrict the number of customers.
This, he said, led many financial firms to put up a gate to only serve wealthier clients, leaving the core of the business “completely and utterly under served”.
“Firms have, by and large reacted to RDR by looking after a fewer number of clients, which would naturally lead one to believe that there is an advice gap if customers were actively seeking advisers.”
But Mr Williams argued the problem is “more fundamental” than that, because now customers are generally unaware of what they need and where to turn.
“We need to help customers address simple needs first such as creating emergency funds, paying off debt and ensuring they are appropriately protected before having an investment conversation.”
He argued that reducing the supply of customers back in 2012 was “misguided” because it stored up problems later down the line, which he claimed we are now starting to see the signs of.
The digital advice director also said moving away from the ‘core’ part of the market was “lazy” because it implied business models are fixed, particularly around the costs associated with the advice.
Mr Williams argued the advice process from a customer perspective has not changed much in the past 40 years, saying advisers still spend hours “interrogating” clients on every aspect of their finances during their initial meeting.
“The need for robo-advice is not to disintermediate advisers or an evangelical desire to reduce the cost of investment - it is a desire to improve business models to serve more customers.
“But it is not about buying an off-the-shelf product, or white labelling another person’s robo-advice service.