The chief executive of Octopus Money has said the business is interested in working with financial advisers - either by taking smaller clients it is uneconomic for them to serve off their hands or by partnering with them to build a guidance proposition.
Ruth Handcock said she knew of many advisers who wanted to operate in the guidance and coaching space but were prevented from doing so by a lack of expertise and a lack of affordable technology.
She said: "Working in the guidance space isn’t just about the boundary, it is about building technology that allows us to operate in the mass-market space. Adviser technology is all designed with a complex client in mind. Our technology is designed with a simpler client in mind.
"I hear a lot of people who would love to operate in this space but finding the skills, expertise and technology to do so, for something that will be low margin, is quite difficult so I think that’s a bigger barrier than the advice-guidance boundary.
"We are open to bringing in smaller clients that advisers feel they cannot serve brilliantly within their current model, and consumer duty is encouraging people to re-evaluate that.
"Whether it's taking smaller customers off their hands, who they cannot help now that consumer duty is embedded, or it's partnering with them to work with the beneficiaries of their existing clients. There are different models and different ways will work for different firms."
We are open to bringing in smaller clients that advisers feel they cannot serve brilliantly within their current model, and consumer duty is encouraging people to re-evaluate that.Ruth Handcock, Octopus MoneyOctopus Money, which was launched earlier this year, offers advice and financial guidance as a workplace benefit, with 200,000 employees having access to its services.
Handcock said take up of its services in the companies it works with tends to be around 40 per cent, with the vast majority of these needing guidance rather than financial advice.
She said: "We find the needs of most of our clients are not that complex. Where advisers are phenomenal is where people have complex tax needs or investment needs.
"Where we find people whose needs are substantially complex, we can offer financial advice."
Last month Octopus Money bought troubled robo-adviser Openmoney which had been founded in 2016 but had recently been through a period of "significant" restructuring with expected redundancies.
The acquisition brought 13,000 direct-to-consumer clients to Octopus Money, whose migration onto its systems began last week.
Despite this, Handcock said that "for now" Octopus Money was focusing on growing through the workplace market rather than by launching a D2C proposition.
She said: "We feel that financial coaching is best done through workplaces because people in their leisure time don’t choose to engage with something long-term and you find it in all walks of life.
"Starting to invest is exactly the same. When it is long-term, people can put it off.
"If it is in your work week, you treat it as a meeting just as you would with any other meeting which is in your work calendar. That’s the magic of doing this through the workplace. Our customers are in a headspace. They're thinking 'My employer is saying they want me to do this because it will help me be more productive'."
"We see more and more employers understanding that their employees’ wellbeing has three parts: physical health, mental health and financial health."
Addressing Openmoney's struggles, Handcock said: "They had a different acquisition channel from us. Having worked in that space for a number of years, I have seen a lot of firms try and acquire D2C customers and it is hard to get the cost of client acquisition below the lifetime value of the client."
damian.fantato@ft.com
