Embark: Advisers are no longer worried about our D2C push

Jackie Leiper, the group's CEO, said the advice industry's shift towards higher net-worth clients had left a gap for other firms to fill with technology-enabled advice services. This in turn could help the advice profession as it is bringing in the clients of the future.

Embark, which is owned by Lloyds Bank, is in the process of launching a robo-advice service for its bank customers.

This will offer simple investment products and 'ready made' investments and pensions, the journeys for which have already been built and tested with consumers.

"Essentially it will do analysis of the customer needs, we can see all their incomings and outgoings on their bank accounts. It will provide a personalised recommendation that will help them assess their risk appetite. However, beyond that, we are clear we think it will have to be some sort of form of human assisted solution, hybrid solution," said Leiper. 

"So, if you like, the development later this year, that's us just getting going with something that gives us a bit of a proof of concept to build on."

Embark has no intentions of replacing what an adviser would do with their high end client. And whether it will actually hire qualified advisers or rely on trained customer service assistants to provide help beyond the technology has not yet been decided.

Lloyds also runs a joint venture with Schroders Personal Wealth, in which it has a 51 per cent stake, and which gives advice to affluent customers.

But Leiper has no concerns that advisers might feel ambushed by the group's push into their space.

She said: "Advisers are serving the high net worth populations very well. There's quite a big gap in the mass affluent, mass market propositions. And adviser firms I'm speaking to are saying 'actually we're no longer worried about you launching direct to consumer products'.

"I think of conversations I was having 10 years ago, advisers would have said 'oh if you're launching a direct consumer proposition you're in competition with me', and I'm going 'you know, to be clear, it's consumer propositions which probably got an average ticket value of £10,000, you're nowhere near those customers'.

"So actually, we're almost bringing customers into the world of investing and saving and almost feeding the intermediary market and the advice market's future."

Going 'too digital'

Leiper said one of the things that attracted Lloyds to Embark was its focus on technology, "they're sort of nimble, agile, that sort of entrepreneurial way of developing tech".

Embark is still run autonomously from the rest of the group and she is keen to keep it agile and keep its focus on digital first, albeit "with a human touch" as she warns there is a way of going "too far down the digital-only route".

She said the platform space was very competitive and margins were low, which was driving some firms down a digital-only path in their customer service. 

"I think a lot of firms are going down the digital-only route. I'm hearing a lot of things from advisers saying, 'I've got business on such and such a platform and they don't have anyone you can speak to', so it's purely an email type customer service function that isn't a call centre, that isn't a chat facility.

"Now that sort of service is fine if it's all very straightforward stuff. But actually, this is quite a complex business, you know, and quite often there are situations that are not always that straightforward."

Repositioning the brand

Last month the group consolidated its adviser platforms and rebranded them as the Scottish Widows Platform. This came as part of a £150mn investment into the platform from owner Lloyds Banking Group. 

The former Zurich platform, Advance by Embark, has not been part of this rebrand but will be folded into the new platform later this year.

Part of the reason for the move was to end confusion in the market over which brand did what, said Leiper.

Following the change, Embark will live on as the name of the white labelling platform business the group runs for its partners, while all adviser business will fall under Scottish Widows and all direct to consumer business will be carried out via the bank brands.

Advisers have not always taken well to the Scottish Widows brand due to ongoing issues with clients in its legacy books. But Leiper said research had suggested "advisers feel that the Scottish Widows brand is more recognisable and is more trusted than the Embark brand from an end consumer perspective."

She acknowledged there were still issues in that side of the business, especially around so-called orphaned clients and advisers trying to move clients into new products. "We have had some challenges in one of our legacy propositions and we would recognise those challenges. There's been a lot of work there to improve this service," she said.

The group's vision is to "become the easiest platform for advisers to do business on," said Leiper.

"Advisers are quite time poor. They're quite impatient if they have challenges and issues. So part of the functionality that we've been developing is integrating into adviser back office systems...building that sort of two way integration so that we are downloading information into the adviser system, so bulk valuations for example, but equally they can start the new business applications on their side of the fence and we can upload that into our system."

And it's more user friendly and easily adaptable when it comes to its design elements, such as page layouts and button functions.

The platform market overall has developed rapidly over the past few years, said Leiper. Whereas five years ago it started to become difficult to do general investment business if it wasn't on a platform, now advisers are looking for access to the full suite of products, including traditionally off-platform products such as annuities.

"That's definitely one of the things I'm thinking about, how do we bring our annuities proposition onto the platform so it becomes just part of what we offer."

carmen.reichman@ft.com