Robo-adviceApr 24 2017

MoneySupermarket founder launches advice service

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MoneySupermarket founder launches advice service

The cofounder of MoneySupermarket has helped build a financial advice service which he claimed could revolutionise the industry.

Duncan Cameron, who was behind the FTSE 250 comparison website, is the cofounder of online advice service Evestor, which aims to offer savers and investors advice at a “fair price”.

Mr Cameron worked on the idea with Evestor chief executive Anthony Morrow, who was also the founding shareholder of financial advisory group Paradigm. 

Mr Morrow said the service offers financial advice, regardless of whether clients have “£1 or £1m spare”.

While the advice is provided through an automated system online, which takes around 15 minutes to compile an investor's details, the firm also has a team of professional advisers on hand to assure investors they are doing the right thing. These can be accessed online or over the telephone.

 If they are trying to differentiate themselves on cost, then a race to the bottom just isn’t enough. Dan Farrow

Speaking to FTAdviser, Mr Morrow said the main competitors for this service were traditional advice firms, adding Evestor clients have the option to do everything online. 

He argued that the current system of offering guidance, instead of advice, to investors in the lower wealth bracket was the “reverse of what it should be”, adding these are the types of clients that need advice most.

Mr Morrow also said Evestor has none of the hidden extras, which he claimed clients are often forced to pay out when buying traditional advice.

The firm aims to offer advice for a fraction of the cost of other adviser businesses and online investment platforms, with fees ranging from 0.44 per cent to 0.48 per cent per year. 

The so-called ‘all-in’ fee will not exceed 0.5 per cent per year and there will be no initial fees.  

This comes as the Financial Conduct Authority accused advisers of not being value for money and stated the asset management industry is failing when it comes to price competition.

It proposed that funds have an ‘all-in’ fee to tackle "opaque" price structures.

Evestor portfolios contain up to 12 funds, and give investors the chance to tap into funds run by asset management giants such as Vanguard, Fidelity and Blackrock.

A balanced portfolio would have 61 per cent exposure to equities, 28 per cent to fixed interest, 5 per cent to property, and 6 per cent to cash.

Mr Cameron said: “Evestor has the potential to revolutionise savings and investment advice for the benefit of everyone.”

The company also plans to roll out a money management app and a retirement planning service.

Dan Farrow, director of SBN Wealth Management, said Evestor sounded relatively similar to other digital wealth managers, such as Hargreaves Lansdown and Nutmeg.

“If they are trying to differentiate themselves on cost, then a race to the bottom just isn’t enough because they won’t get assets under management quick enough to make money.”

He also argued that many advisers could offer a better service to clients with a marginal increase in the overall cost.

katherine.denham@ft.com