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.
We're seeing about 70 per cent of people that go through the journey actually invest in the end.Nick Johnson, NatWest and Coutts“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.”
What they [clients] do love is the fact that a digital wealth manager is able to bring alive the risk versus reward through graphics.Laura Newman, NatWest's private client advice and investment services headNatWest 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.
We were the first bank to realise robo wouldn’t cut through. We were also the first to pivot.NatWest and Coutts’ digital investing head, Nick JohnsonNatWest’s private client advice and investment services head, Laura Newman, said early feedback on the hybrid advice service centres around the combination of human and digital.
“They absolutely love the human overlay. But what they do love is the fact that a digital wealth manager is able to bring alive the risk versus reward through graphics within that particular journey.
"The graphics show volatility, so the client has an understanding of what volatility actually means year-on-year, and gives them confidence not to knee-jerk react in volatile markets.”
NatWest was the first bank to launch a fully automated service, according to Johnson. Now, the bank’s digital investing head reckons it is once again ahead of its peers having already tested its hybrid advice offering with thousands of customers.
“We were the first bank to realise robo wouldn’t cut through. We were also the first to pivot. I don’t see many banks or fintechs focusing on hybrid advice,” said Johnson.
ruby.hinchliffe@ft.com
