TechnologyMay 6 2022

Fintech firm promises advisers ‘ten times their clients’

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Fintech firm promises advisers ‘ten times their clients’
Photo by cottonbro [Pexels]

The software provider’s solution includes customer relationship management and back-office systems, its own custody, tax wrappers - including a Sipp, Gia, and Isa - as well as the ability to make transfers and payments.

Debbie Dry, the firm’s head of business development, previously spent 10 years on the board of Succession, the Aviva-acquired advice firm consolidator.

We’re building in longevity to advice businesses.Debbie Dry

Now she has turned her hand to bridging the advice gap, which has been growing since the introduction of the Retail Distribution Review in 2013 which made it less cost effective for advisers to serve clients with smaller pots of assets. 

Generally, the larger the firm, the higher the threshold of assets clients must hold in order for them to be applicable for advice.

“There’s some really good tech out there, but there’s not a lot of tech specifically built for our sector,” Dry told FTAdviser.

“JustFA is one piece of tech pulling all the providers together. Advisers are doing a good job of bodging services together; but they have to employ administrators to do this and it takes a while.

  Debbie Dry, JustFA's business development head and a former Succession board member

“This is a readymade out-of-the-box solution. People out of exams can use this to set up their business.”

If I can engage with a client at 25, with lighter touch and tech driving it, I don’t have to fight with the market to engage with that client at 55.Debbie Dry

The fintech firm has built its own proprietary technology, which then wraps around customised investment platform provider Seccl and uses its regulatory permissions.

Dry estimated advice firms can currently service around 100-250 clients per advisers. With JustFA, she envisions each adviser being able to serve more like 1,000-1,200 clients.

“This brings massive advantages to the industry,” Dry explained. “If I can engage with a client at 25, with lighter touch and tech driving it, I don’t have to fight with the market to engage with that client at 55. We’re building in longevity to advice businesses. I can’t see why all advice firms wouldn’t have this.”

Others in the industry are also focusing on digital advice propositions to capture younger clients.

Chartered financial planner Helena Wardle is developing a subscription-based advice model which will allow clients to switch automated and person-led advice as and when it suits them.

Meanwhile, advice firm First Wealth believes the opportunity borne out of robo-advisers was “evidence-based” advice, so it is currently building a data-led financial planning service.

Learning from Moneyfarm

John Driscoll, who is also working on JustFA’s offering, previously worked with Moneyfarm, the M&G-backed digital investment app.

At Moneyfarm, Driscoll helped the team to try and take its proposition to the IFA market. They found two key challenges when approaching IFAs.

One was that advisers wanted to keep control of the client and their relationship with the client. And two, advisers wanted to be able to run their own portfolios on Moneyfarm’s technology.

Moneyfarm had its own portfolios, and a partnership between itself and advisers would have likely taken the shape of Wealthify’s model, where the fintech firm wholly owns the client until they need advice.

“JustFA overcame both these objections,” said Driscoll. “It’s built tech which facilitates rather than gives advice. Advisers can host their own portfolios and keep ownership of the client.”

JustFA has no intention to compete with advisers on advice, hence its focus on being a facilitator.

Currently, it is working with advice firms of around six advisers with some £200mn-£300mn in assets under management.

On its website, JustFA cites clients such as H&D Wealth, Lowland Financial, GPFM Financial Planners.

On the hunt for investment

JustFA piloted its service in March 2021, before launching to the IFA market in October 2021. It has, so far, onboarded around 10 firms. Around a further 20 are currently going through due diligence.

The company has raised £4mn of investment so far, but it is hoping to close further backing in a round later this year. Dry said it is looking for over £10mn.

In order to attract early adopters, JustFA has agreed to absorb their costs and said it will not charge them to use the service. This will remain and the firm will not have fees implemented later on, the fintech company said. 

“The more people we can get onboard, the more that’s likely to drive up the value of JustFA and we can put that money into development,” Dry explained.

For those firms who will pay, the service includes a one-off set-up cost of £10,000, spread over £1,000 a month for the first 10 months.

JustFA is keen to expand the service over the next few years. Dry hinted at plans to add Junior Isa, annuities, mortgages, and protection products.

ruby.hinchliffe@ft.com