Many investors don’t get the right quality of financial advice or know where to find it. This shortfall, and resulting inequality, is why we recently became one of the seven founder members of the Digital Advice Group (DAG) – an initiative set up so consumers can better access digital advice opportunities and forge a better path for their money.
According to the financial website, Boring Money, there are 6.3m investors in the UK who express a preference for a digital advice solution. The benefits are clear: lower costs, ease of access and convenience are all important for those who want a more modern approach to managing their investments.
Yet awareness is low. While we can gauge that there is appetite for the freedom and potential financial advantages that digital advice offers, many investors are still not clear that it exists as a choice. The traditional means of accessing financial advice – and the opaque charges associated with a traditional service – have persisted for so long that many consumers have been put off from getting advice, even if it better serves their interests.
The Digital Advice Group aims to open up new pathways for investors who have either been left behind or are looking for something different. The initiative is already gaining industry traction, having received wide coverage in FT Adviser, Professional Adviser and International Adviser – publications which closely monitor the changes and innovations in the financial advice landscape.
Gaining a clearer perspective
At Netwealth we believe that good quality advice at a fair price can transform a family’s future. Several studies point to the value of financial advice, including this report by the International Longevity Centre (ILC), which shows that those who didn’t receive advice over a six-year timeframe were £43,245 worse off, on average, a few years later compared to those who did.
Yet while we can see a correlation between the value of financial advice and boosting your investment pot, access and cost are key, along with the clarity of what is on offer. These were topics we addressed earlier this year when we highlighted the overall benefits of transparency, both when investing and when getting advice.
Indeed, being transparent to help investors stay in control and plan ahead more effectively is one of our founding principles. A lack of transparency throughout the wealth management industry, along with other factors such as excessive fees, persuaded Tom Salter and I to set up Netwealth in the first place: we became convinced that there was no wealth manager in the market that could appropriately meet our financial needs and those of our families.
We also believe in the importance of advocating for investors by highlighting critical consumer issues to organisations such as the Financial Conduct Authority. It therefore fits well to expand our client-focused path and play an active role in the Digital Advice Group.
Beyond digital: how a hybrid approach offers more
While we are sometimes described as a digital-first wealth manager, offering industry-leading control and freedom for investors, a more accurate depiction is that we aim to provide the best of both worlds – human expertise that is enhanced by powerful modern technology, offering clients greater control, transparency and lower costs, while always retaining the critical human element.
Our interface and modern planning tools help you gain a clearer picture of your finances over time; for example by modelling for various scenarios such as tax rates, risk level, contributions and withdrawals.
Sometimes, however, clients have more complicated needs – such as navigating pension or inheritance tax issues and that is when a more personalised approach is likely to be valuable. In these circumstances, we encourage you to get in touch with one of our expert advisers who can give you the advice you need, in whichever way best suits you.
Please note, the value of your investments can go down as well as up.
Our advisers offer restricted advice that relates to Netwealth’s products and services and does not consider the whole market. Netwealth does not provide tax or legal advice and does not advise on transfers of pensions with safeguarded benefits.