Online financial adviser OpenMoney has shaken up the financial advice market with its low cost advice and free guidance, and is signing up literally hundreds of new customers a week; the company now serves 45,000 clients, and that number is swelling by 1,500 every week.
OpenMoney offers a hybrid of technology and human advisers to deliver regulated advice — for a fee — and unregulated guidance for free.
Anthony Morrow, the firm’s chief executive, told FTAdviser that 75% of its customers have signed up in the past 12 months, with the rate of new clients picking up substantially around September last year.
Mr Morrow said the majority of consumers who approached OpenMoney last year for advice were steered away from investing their funds at that time, primarily because they had debts, very little cash savings or did not fit the risk profile for investing.
They were therefore channeled into the free, unregulated guidance service and helped to set savings goals, use debt management services and get their affairs in order.
OpenMoney only levies a fee if a consumer invests but despite this, Mr Morrow predicted the firm would begin to make a profit within the next year; this is in stark contrasts to the rump of automated investment platforms – robo advisers – where losses have continued to mount.
We want to be the one-stop-shop for all people’s financial issues
A client receives initial advice for free but customers who invest are charged a percentage of their assets under management; ongoing advice, and a product and investment portfolio will cost no more than 0.53% p.a.
Mr Morrow told FTAdviser: ‘We’re a long way away from the finished article and there’s lots of work to do. We want to be the one-stop-shop for all people’s financial issues.
Last year OpenMoney announced it would enter the mortgage and protection sector to offer advice to first-time buyers; the firm set its sights on mortgage advice after it found most of its client’s goals involved saving up for a house deposit and that could happen as soon as June or July of this year.
Mr Morrow said: ‘This way we can continue to help them on that house buying journey and they can stay with OpenMoney throughout the process.’
Last year OpenMoney acquired JargonFree Benefits, an employee benefits platform which offers employees at small and medium size enterprises access to the same standard of workplace benefits as enjoyed at larger firms, which took it into the workplace pension market.
Mr Morrow added: ‘We do not view ourselves any differently to a traditional adviser. We have four trainee advisers and three fully qualified staff members, all of whom are working towards chartered.
‘It’s just that we use tech as the starting point to what we do, whereas others add tech on at the end.’ He added traditional advisers had no reason to be ‘threatened’ by OpenMoney as it was targeting consumers ‘no one else is interested in’.