Damian Fantato  

Tube advertising spree highlights need for advice

Damian Fantato

Damian Fantato

Anyone who travels around London during the height of the tax year end will notice a strange phenomenon.

Stranger even than the bizarre proliferation of adverts for erectile dysfunction cures that have started cropping up.

The adverts on London Underground trains, which are normally taken up by clinics pushing their cures for baldness and companies selling vitamins for pregnant women, have been replaced by robo-advisers, pushing their services in a bid to get would-be investors to open an Isa before the end of the tax year.

This is strange for several reasons, but mainly because it seems unlikely that your average punter on the tube will have a spare £20,000 sitting around, waiting for a home.

But also because Isas are already the most popular financial product in the UK – the most recent figures available from HM Revenue & Customs showed that in 2015 to 2016 there were more than 22m Isa holders in the country. That is one for every three people.

Perhaps this goes some way to showing that, fundamentally, a lot of these companies provide the same service with a different wrapper.

Of course, there are differences here and there: perhaps costs that are a few basis points higher or lower, and slightly different minimum investment levels.

But fundamentally we are talking about an Isa that invests in various risk-rated buckets of exchange-traded funds.

Should this cause advisers to stay up at night? Probably not: the value they can add goes far beyond simply setting up an Isa once a year.

But the annual advertising splurge demonstrates the opportunity that private equity and other investors see in this market. If nothing else, this should prove the extent of the advice gap and the opportunity to fill it.