Robo-adviser Scalable Capital is launching a low-cost financial advice service which it says will charge clients less than some advisers' hourly fee.
Scalable Capital, which launched in the UK in summer 2016, describes itself as “Europe’s fastest growing digital wealth manager”.
It uses low-cost exchange traded index funds in the construction of its investment portfolios. BlackRock, the world's largest asset manager, took a "significant" minority stake in the business in June 2017.
The new advice service will provide an initial, free consultation which determines whether the Scalable Capital's services might be suitable for the investor. Then the client can go ahead and book a session with an adviser for a fixed fee of £200.
This will include a full fact find and a written report about investments. There will be no ongoing charges.
The move will be seen as an attempt to undercut traditional advisers.
According to figures compiled by adviser directory Unbiased, on average advisers who charge a fixed fee set this at £500 for an initial review and £150 per hour ongoing, though some will charge more than this.
However Simon Miller, chief operating officer and co-founder of Scalable, who has recently been appointed chief executive, said the service is "more a transactional advice appointment".
He added the company would be “upfront” about the fact that this is restricted advice and only on investments.
“It won’t be about tax planning and it won’t look at the whole universe,” he said.
He said Scalable is experiencing increasing demand for its risk-managed investment portfolios from wealthier clients who have more complex financial situations, "who told us they would be keen to use such a service".
"At the same time, we wanted to make sure that our offer was priced such that clients without a high 6-digit-investment would also find it attractive,” he said.
However financial adviser Alan Chaplin, from Systemsync, said the new service “sounds more like what I would describe as a personal shopper service for their products rather than advice”.
