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Vanguard - An Opportunity or a Threat? - Financial Advice Firms Have Their Say
Two recent developments have caught our eye at Time4Advice. Both represent how technology is challenging the way that financial advice is delivered.
Firstly, Vanguard’s much publicised entry into the UK advice market has caused quite a stir. Its initial offering, which is limited to a specific retirement niche, may have gone under the radar if it wasn’t for its low-cost 0.79% advice fee. It remains to be seen how successful Vanguard will be, and whether they will be a challenger to traditional financial advice models, but it seems the die is cast that an era of low-cost advice is unfolding.
Indeed, Schroders Personal Wealth joint venture with Lloyds Banking Group is another offering in which both organisations view the cost of advice as a significant differentiator.
Across in America, Amazon has launched a Healthcare App for employees, with 24/7 access, video consultation, and other well-being services. The jury is out on whether this is the technology giant’s first foray into a broader financial advice offering, but it is yet another example of how technology is driving change.
Firstly, Vanguard’s much publicised entry into the UK advice market has caused quite a stir. Its initial offering, which is limited to a specific retirement niche, may have gone under the radar if it wasn’t for its low-cost 0.79% advice fee. It remains to be seen how successful Vanguard will be, and whether they will be a challenger to traditional financial advice models, but it seems the die is cast that an era of low-cost advice is unfolding.
Indeed, Schroders Personal Wealth joint venture with Lloyds Banking Group is another offering in which both organisations view the cost of advice as a significant differentiator.
Across in America, Amazon has launched a Healthcare App for employees, with 24/7 access, video consultation, and other well-being services. The jury is out on whether this is the technology giant’s first foray into a broader financial advice offering, but it is yet another example of how technology is driving change.
Advice firms have their say on Vanguard and other low-cost disrupters
To get a practitioner view on whether Vanguard is a threat to traditional financial planning firms, we asked two of our clients from well known advice firms; Jon Macintosh, Senior Partner, at Saltus and Gianpaolo Mantini, Founding Partner & Chartered Financial Planner, at Higgins Fairbairn to give their view.
5 Takeaways From The Interviews
1. “Price is what you pay, value is what you get – therefore make it absolutely clear to clients the value being delivered. Financial planning firms need to up their game!”
2. “FinTech on the inside – we want to appear ‘traditional’ at the client-facing side of things but on the inside, everything should be technology. Resulting in a fast turnaround and no wasted cost so advisers are freed up to deliver genuine value.”
3. “No doubt we will lose some of the more financially savvy clients that have limited needs, but they may come back at a later point when they need more complicated advice services.”
4. “Firms should think multi-generational and build relationships not just with their clients but with their client’s children too.”
5. “Advice firms need to ditch their legacy systems and fully embrace modern software, such as CURO, in order to compete and remain profitable.”
2. “FinTech on the inside – we want to appear ‘traditional’ at the client-facing side of things but on the inside, everything should be technology. Resulting in a fast turnaround and no wasted cost so advisers are freed up to deliver genuine value.”
3. “No doubt we will lose some of the more financially savvy clients that have limited needs, but they may come back at a later point when they need more complicated advice services.”
4. “Firms should think multi-generational and build relationships not just with their clients but with their client’s children too.”
5. “Advice firms need to ditch their legacy systems and fully embrace modern software, such as CURO, in order to compete and remain profitable.”
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