Online investment manager Nutmeg is aiming to ‘open up the market’ for financial advice by trialling a fixed-fee service which it says will come at ‘a fraction of the cost’ of using a traditional financial advisor.
It comes at a time when the robo advisor has been looking to further develop its online presence in the face of mounting losses (more); the firm said it would offer an initial chat to customers free of charge and then charge a fixed-fee of £350 for ‘tailored recommendations’ through qualified financial advice.
the way financial advice is given is going to radically change
In announcing its latest development the company added: ‘Like all developments at Nutmeg, the financial advice pilot will be an evolving service that incorporates the feedback of customers to develop and enhance as investors’ needs change’.
Nutmeg’s Head of Financial Advice Lisa Caplan said: ‘We’re assessing the same financial circumstances that a traditional financial adviser would, but by using technology we’re giving people the freedom to do it at a time that suits them at a fraction of the cost they would face from an IFA.’
She added: ‘It is little wonder the UK is facing such an enormous savings gap when financial advice has been so slow to adapt to changing customer needs.
We’ll only be able to solve the advice gap with greater digitisation
‘In the next few years, the way financial advice is given is going to radically change. People are used to interacting with technology to make so many aspects of their life easier – financial advice is no different. We’ll only be able to solve the advice gap with greater digitisation.’
A study earlier this year by Boring Money found more than half of D2C platform and robo advice bosses believe assets in the UK DIY investing space will rocket by more than £100bn over the next five years (more).
The firm’s research, conducted with the CEOs and directors of 17 D2C platforms and robo advisors found 10 of them (59%) expected growth in the UK space to grow by more than £100bn, while one-third (36%) believed the sector would see more modest growth of between £40bn and £100bn.
See ‘Investment platforms set to attract £100bn over the next five years’ on sister site DIY Investor.
The total market in the UK is currently estimated to be in the region of £209bn; robo advisors currently have around £2.3bn under management, with Nutmeg holding around half of those assets.