Adviser puts robo service on ice

Adviser puts robo service on ice

An adviser has put his robo-advice service on hold, but has insisted such services could have a bright future.

Al Rush, principal at Rutland-based Echelon Wealthcare, has been operating Fiver a Day since 2015 but has since put the service on hold - though existing clients can still access their investments.

He said one of the reasons was because he has been dedicating so much of his time towards the British Steel Pension Scheme fiasco.

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Mr Rush said: "It is an advised robo service and because I had that much going on with Port Talbot I wasn't able to do it any justice.

"I don't want it to come back unless I am totally happy with it. I could bring it back and it would be fine, but it wouldn't be what I wanted it to be."

One of the areas where Mr Rush said he was looking to improve the service was in how vulnerable clients were serviced, something he said his experiences helping steelworkers with their pensions had emphasised.

Since last year Mr Rush has been organising free counselling to members of the British Steel Pension Scheme who may have been given bad advice to transfer their savings.

Mr Rush said: "That made me think a lot more about vulnerability."

He added that it would be unlikely Fiver a Day would make a comeback this year but he insisted advisers were right to be considering similar services.

Mr Rush said: "We should look at it as adding another string to our bow. Clients will increasingly look for this so lets get on board early."

In its two years of operation the number of clients Fiver attracted were in the 'three figure range', according to Mr Rush, though he did not want to say how much had been invested through the service.

He said the key distinction between Fiver a Day and a larger robo-adviser like Nutmeg was that he was able to talk to his clients and hold their hand through the process.

Mr Rush said: "Around 25 per cent of the people who came to Fiver were people I had a personal interaction with."

The regulator, which has been encouraging the market entry of new, cheaper forms of advice, uncovered problems with robo services in a recent study.

In a report published in May, it stated some robo-advice firms were failing to properly disclose prices and services, and crucially, the regulator flagged risks clients were not receiving suitable advice.

As a result, the FCA has required many of the robo-advisers which took part in the study to make "significant changes" to their businesses.

Mr Rush's business had taken part in the FCA's review, with seven cases deemed suitable and three unclear.

He said at the time he was satisfied with the outcome but there was work to do.