Online financial adviser OpenMoney is signing up hundreds of new customers a week as its low cost advice and free guidance services continue to make waves in the advice market.
Anthony Morrow, the firm’s chief executive, told FTAdviser OpenMoney now served 45,000 clients and was growing at a rate of 1,500 new customers every week.
About 75 per cent of the 45,000 consumers using OpenMoney's services have signed up to the firm in the past 12 months, with the rate of new clients picking up substantially around September last year, according to Mr Morrow.
OpenMoney offers a hybrid of technology and human advisers to deliver regulated advice — for a fee — and unregulated guidance for free.
Mr Morrow said the majority of consumers who approached OpenMoney last year for advice were recommended to not invest their funds at the present time, primarily because such consumers had debts, very little cash savings or did not fit the risk profile for investing.
Therefore they were channelled into the free, unregulated guidance service which helped consumers set savings goals, use debt management services and get their affairs in order.
OpenMoney only takes a fee if the consumer invests their assets but despite this, Mr Morrow predicted the firm would begin to make a profit within the next year.
Initial advice is free but customers who invest are charged a percentage of their assets under management. The total cost, including ongoing advice, product and investment portfolio, is no more than 0.53 per cent per year.
Mr Morrow said: “We’re a long way away from the finished article and there’s lots of work to do.
“We want to be the one-stop-shop for all people’s financial issues.”
Last year OpenMoney announced it would branch into the mortgage and protection sector to offer advice to first-time buyers.
According to Mr Morrow this was likely to happen in June or July of this year, and the firm had set its sights on mortgage advice after it found most of its client’s goals involved saving up for a house deposit.
Mr Morrow said: “This way we can continue to help them on that house buying journey and they can stay with OpenMoney throughout the process.”
OpenMoney also tapped into the workplace pension market last year when it acquired JargonFree Benefits, an employee benefits platform which offers employees at small and medium size enterprises access to the same standard of workplace benefits as enjoyed at larger firms.
Mr Morrow added: “We do not view ourselves any differently to a traditional adviser. We have four trainee advisers and three fully qualified staff members, all of whom are working towards chartered.
“It’s just that we use tech as the starting point to what we do, whereas others add tech on at the end.”
He added traditional advisers had no reason to be “threatened” by OpenMoney as it was targeting consumers “no one else is interested in”.