Prior to the Retail Distribution Review they had much larger active customer bases. These need to be reactivated.
Yes, the same issue remains, how do you advise a demographic that can’t afford the fees? Advisers cannot afford to dwell on this question for too long, however – they need to explore cost-efficient ways of digitising their existing advice service, so they can compete with hybrid robos hell bent on swallowing as many of their customers as possible.
IFAs still have time to beat the robots at their own game.
It is expensive for robos to simultaneously build their client bases and introduce human advisers into the mix. It takes time and money to launch new services and target new clients like HENRYs (High Earners, Not Rich Yet) with simple, cost-effective digital solutions.
Advisers who manage to digitise their services are in a perfect position to capture this market to ensure their future survival – but they must innovate now, before it’s too late.
Lester Petch is chief executive of FinchTech