Financial advisers who don’t target the mass-market could struggle to find any clients in the future, Gill Cardy has warned.
The insight consultant at Defaqto and former member of the Financial Advice Market Review expert advisory panel was speaking at the Cisi financial planning conference this morning (4 October).
She said a number of representatives on the new FAMR working group have a consumer focus or represent big providers.
Ms Cardy said: “If you listen to your existing clients too much it is a risk because what will happen in due course is somebody is going to come into the mass market as the new entrant.
“They will find a way to deliver services of value to the mass-market. Then they will move up to the elite clients. This is Nutmeg. This is LV."
It was last year that LV bought a majority stake in robo-advice developer Wealth Wizards, confirming it would launch an automated retirement advice service on an algorithm-based platform, which puts particularly complex cases through to telephone-based advisers.
Nutmeg is set to roll-out its new digital advice service from this autumn.
Ms Cardy said: “Somebody out there is finding an easier and cheaper way to do it. What will happen if Virgin cracks it? Virgin is a big brand everyone wants to work with.
“If Virgin Money cracks how to do this, that is a competitive threat, and what will you do about it, because where are your new clients coming from?
“If Virgin Money has started looking after them really early in their lives, what makes you think that all of a sudden they are going to come and see you just because they hit a magic investment level?”
Virgin Money’s chief executive Jayne-Anne Gadhia is a member of the FCA’s FAMR working group.
Ms Cardy said advisers could spin out part of their company into a separate service or firm to provide mass-market services with some of their advisers or they could dedicate new advisers or paraplanners to that section of the market.
Last month HM Treasury launched a consultation to redefine advice following the publication of the FAMR final report in March.
Following the report’s publication the Financial Conduct Authority has also launched an advice unit to work with companies seeking to use technology to widen access to financial advice.
