Nutmeg 

Nutmeg insists raw data beats adviser annual reviews

Nutmeg insists raw data beats adviser annual reviews

Nutmeg’s chief investment officer has said he could use data to understand his clients better than an adviser carrying out an annual review.

Shaun Port was speaking at the Marketforce Future of Life and Pensions conference in London today (13 June).

He expressed scepticism about the regulator's Financial Advice Market Review process - which is aimed at making financial advice more accessible to those who need it but have limited means - saying the Financial Conduct Authority needed to address the issues of data and personalisation, which it does not do in the Famr.

Mr Port said: “The key challenge will be how the regulator incorporates data and personalisation.

“We can know people better using data than face to face.

“You can understand a lot more about consumers' behaviour rather than just an annual review, particularly around risk appetite.”

Mr Port added that using data could help companies to stay close to their clients and stop them being disintermediated.

Speaking at the same event, Jason Whyte, a director at EY's insurance sector team, said the there was value in providing advice but some companies risked losing out.

He said: "The cost of building and administering products will trend towards zero.

"While the regulator is watching vertical integration it is probably incumbant on providers to ask how to add value to the customer relationship.

"Most providers I know have a strategy that includes looking at D2C and investing in advice."

He pointed out that it would soon be easier for advisers to offer products than providers to offer advice. 

Mr Port was not the only figure to criticise the Famr process at today’s event, with Aviva’s chief executive Andy Briggs saying it was “not good enough”.

Christopher Hill, the chief executive of Hargreaves Lansdown, called on the government to “hit the reset button” for the Famr process.

He said the market was becoming more complicated but rules were stymieing his company's attempts to help its customers.

Mr Hill said: “I don't think it is working. I would push the reset button. It is an old fashioned approach.

“The fact is long term savings is becoming increasingly complicated. We have six different types of Isa out there, it is a low yield environment and you have pension freedoms.

“When I listen to our help desk and they talk aboit the annual allowance, the lifetime allowance and the money purchase allowance, it is getting so complicated.”

He said Hargreaves Lansdown clients sometimes ask the company for help which it cannot provide because it would be advice.

Mr Hill said: “We have got to be able to do something that's more guidance based.

"Where we are right now has completely lost sight of the process.”

damian.fantato@ft.com