Spotlight on Advice

In the wake of last week’s budget, it is interesting to see how debate and comment is swiftly moving on. For a couple of days it was all about digesting the details – the liberation of pensions and expanding of ISAs. Then things moved on to what that meant, and what new options would be available to retirees. And now that is giving way to a realisation that with so much choice on offer, people need help. 

And so that brings us back to the question of advice; where do people go to get advice? What does advice look like? How is it provided and what does it cost? These questions were interesting before the budget, with the growing “advice gap” being created by banks pulling out of the market and Advisers focusing on high net worth individuals. With the budget well and truly throwing the cat amongst the pigeons, the demand for advice must surely increase. Will the banks come back into the market to meet this demand? Possibly, but given what a hash they made of it last time, let’s hope not. Will Advisers offer their services to small pot holders? Doubtful, given the profit margin on their new business models. The harsh reality is the advice gap is not their concern.

So where does that leave us? My view is those of us who do want to deal with everyday people - the normal, mass market that holds an average of £50,000 in a pension pot or simply wants to use this year’s ISA allowance - need to find a new, modern way to supply our advice. And in my view that lies with the internet.  That doesn’t mean it has to be automated, it just needs to be delivered over the web – in some way. That will help keep costs down and allow us to reach the maximum audience. 

If there is a way to combine some of the unique benefits of face-to-face financial advice with a distribution method that the next generation of savers and pensioners feel comfortable with, then surely that is the future of financial advice.