NatWest's hybrid service ‘advising two new clients a day’

NatWest's hybrid service ‘advising two new clients a day’
Photographer: Chris Ratcliffe/Bloomberg

NatWest has said it is “advising two new customers a day” via its hybrid advice service which rolled out less than a year ago to customers of its affluent banking service Premier.

The service delivers financial advice via an algorithm, with a layer of human help delivered by QCF Level 4 qualified wealth managers who respond to factual questions - such as ‘how much can you put in an Isa?’ - but do not give advice.

If a client wants full financial planning, they are then referred to a NatWest wealth manager who will then give them advice.

NatWest’s Premier clients total 390,000, but the bank said there is a significant opportunity in its wider retail client base where it intends to roll out its hybrid advice service over this year.

“If you want customers to get advice that have got lower levels of cash, then it needs to be a very, very scalable solution,” NatWest and Coutts’ digital investing head, Nick Johnson, told FTAdviser.

“Being able to advise two new customers a day has been pretty transformational for our ability to offer advice to customers. So that's one big, big measure of success.”

Johnson also said the drop out from the hybrid advice journey is “much reduced” compared to the digital-only journey it launched a few years ago which experienced little uptake, according to the bank.

Clients would drop out of the automated journey because they did not understand it, or have much of a desire to finish it.

“We expect some people to not complete the journey because investing isn't right for everyone. So if 100 per cent of people went through it, that’d be a bit worrying,” Johnson explained.

“But we're seeing about 70 per cent of people that go through the [new hybrid] journey and actually invest in the end.”

NatWest is yet to break down the exact uptake of its hybrid advice service.

To qualify for NatWest Premier, the user base which currently has access to the advice service, customers have to have either a sole income of at least £100,000, a joint income of £120,000 paid into a NatWest bank account, a minimum outstanding mortgage borrowings with the bank of £500,000, or savings or investments of at least £100,000 held with the bank.

The Premier service gives customers access to a cash optimiser, and once they have paid down any debt and loans, the service offers an Isa and a general investment account.

Currently, there is no pension option, though Johnson hinted this could be on the bank’s product development horizon.

The bank’s hybrid advice service, which is directed at customers with less than £1mn in net assets, costs £10 a month, while underlying funds sit at 50 basis points and the platform fee sits at 15 basis points - bringing the overall cost to 75 basis points.