Financial planning and self-directed investing can go hand in hand

Sally Plant

Sally Plant

"We should set out our service offering, explaining how this is attractive for the consumer. This will dictate how successful we are." 

Shute adds: "We shouldn’t feel we have to become a social media icon; I am sure many successful practices will continue to not go down this route. But if we want to speak to the younger generation, we need to be where they are hanging out."

But how do we hang out with them? And what is the partnership based on?

Using a brokerage strategy can work well; many have found the likes of Boring Money or VouchedFor a roaring success. 

Many businesses are not comfortable with this fee-paying approach, perhaps as it increases the underlying costs of the business, which could in turn inflate fees for the end consumer. The quality of the client lead is unknown and therefore this could be risky.  

Individual partnerships with financial information platforms, Instagram 'influencers' or self-directed investment companies would be timely, to identify the right partner and then maintain the relationship, particularly if there is no money changing hands and the reciprocal offer for leads is pro-bono or filmed general advice for platforms.

Building relationships early

So, what is the answer?

Laura Pomfret, founder of financial information provider Financielle, says: "We try to build a relationship with our online community, giving them basic-level financial information and providing context at the same time, so that they may make informed choices when it comes to their finances. 

"Trust is massive when it comes to money and having a safe space to learn and grow is extremely important. There is a natural pathway between information brands such as Financielle and professional advisers where an individual will be ready for advice and eager to have a personalised financial planning experience."

Do we need to embrace this client group now? I would argue that this is an essential part of the succession planning process. Clients requiring a simple plan are perfect for junior planners.  

Planners can create a plan for the client to then manage their own investments, or if a self-directed investor already uses a platform and knowledge source that they are confident with and are enjoying, the planner can incorporate this within the wider plan.

As the client’s wealth and complexity increases, the relationship with the planner will continue to grow and 10 years later, this young self-directed investor/consumer could be a significant client for your business.   

Sally Plant is head of financial planning at the Chartered Institute for Securities & Investment