They are seeking views as part of the joint Advice Guidance Boundary Review on the proposals to help people make more informed investment and pension decisions.

The three proposals include:

• Further clarifying when firms can give consumers support without giving regulated financial advice.

• An innovative new approach allowing firms to provide support tailored to groups of people in similar circumstances.

• A new form of simplified advice that makes it easier for firms to provide affordable personal recommendations to clients with more straightforward needs and smaller sums to invest.

Bim Afolami economic secretary to the treasury, said: “ The gap between holistic financial advice that is unaffordable for many, and guidance that is free to access but not personal to the consumer, is simply too vast.

“This so-called ‘advice gap’ is excluding people with modest investments, who are looking for support that doesn’t break the bank.

“This just isn’t good enough – we have long needed a middle ground that is affordable and accessible. The policy paper that the government and the FCA have published today will explore how we can achieve exactly that.”

Progressive Change

Ben Hampton, chief executive of Wealth Wizards (part of the Royal London Group), feels this is different to previous attempts to solve the puzzle of the advice gap calling the pace of change ‘progressive’.

He said: “This is the start of new era of how people make financial decisions. We will need to digest the detail however the ability to be more personalised and opinionated outside of regulated financial advice will reshape customer behaviour. The real winners are going to be those who can coherently connect the new and different types of support that will become available.”

Positive Industry Support

Alastair Black, head of savings policy at abrdn, said the firm were pleased to see the government and regulator addressing both sides of the advice gap.

Black stated that the firm will support its adviser business partners in developing the proposals and maximising their chance of success.

He said: “We were also pleased to see the Government mention the need for the simplified advice regime to avoid having to take into account consumer’s wider financial circumstances (allowing the advice to be targeted). If effective, this will maximise the chance of advice firms keeping costs for their clients down and growing capacity which benefits all.”

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Black also pointed out that the long-term goal needs to focus on a commercially viable simplified advice regime to help people in retirement.

He added: “This is where the greatest need is. It doesn’t look like these proposals address that but they feel like a step in the right direction.”

Further Opportunities For Advisers

Andrew Tully, technical services director at Nucleus, suggested that the proposals could encourage millions to save and as their needs become more complex it will create further opportunities for advisers.

He said: “Planning is a key part of how confident someone is about their financial prospects in retirement. Giving more people the chance to access the support they need to make their money work harder is a step in the right direction. We are big supporters of advice and know just how much it can help people achieve good outcomes.

“We believe we should be looking at the advice gap from a different angle and focussing on how we address the planning gap. Having a detailed plan in place leads to significantly higher retirement confidence, so if we can get more people to engage with the planning process, then regulated financial advice, if required, can naturally follow.”

Concerted Effort Needed

Jenny Davidson, commerical proposition director at Quilter, has highlighted that a concerted effort is needed between industry and regulators to really drive change and give firms reassurance through clear advice/guidance boundaries.

As well as a need for regulatory frameworks to be set up specifically for lighter forms of advice or enhanced forms of guidance.

She said: “There is space for more sensible product guidance that is not based on personal information but utilises data on how the majority of people use certain financial products.

“The FCA’s commitment to explore the idea of ‘people like you’ nudges for non-advised savers is a good idea that could be critical to helping people avoid the kinds of choices that could be catastrophic for their later life finances.

“However, forms of ‘personalised guidance’, which has been previously suggested but are not in the FCA’s paper, would likely be a step too far and risk consumers misunderstanding what they are receiving, and a lack of clarity as to who is responsible for the decision.”

Davidson said that the financial advice and wealth management sector needs to work with the FCA to really shape what an effective and commercially viable model of simplified advice looks like.

She added: “While we firmly stand behind the existing distinction between advice and guidance, we welcome a broader scope to better meet the escalating demand for accurate and educational help for consumers.

“We want to work to optimise the use of product guidance and advice, but without blurring the crucial distinction between the two.”

Wealth Wizards conducted research among medium to large-sized advice firms, which revealed that these firms serve an average of 2,000-3,000 customers with assets ranging from £25,000 to £50,000 ($62,337, €56,904). As ongoing clients, these customers require an annual review to evaluate whether the original advice provided is still appropriate.

Usually, the fee for ongoing review is less than £500 per annum. However, conducting an annual review for these clients requires manual efforts, and 95% of it involves admin, a paraplanner and an adviser, taking about 5-6 hours in total. On average, this process costs firms approximately £850-£900 per customer.

As roughly 50% or more of these lower-value clients opt for an annual review, businesses could be losing millions of pounds every year on this process alone. Between 40% to 70% of reviews conducted by firms reveal no change in the customer’s circumstances, which means that little or no adjustments to the previously given advice are required.

In cases where no change is required, Wealth Wizards analysed the current processes used by advice firms and found that 46% of the input needed for the ongoing suitability process could be eliminated.

Strategies

Mark Kiddell, chief commercial officer at Wealth Wizards, said: “It’s evident from our research that offering an annual review to lower value customers with no changes in their circumstances is incurring significant costs for businesses, amounting to millions of pounds. It’s not surprising to hear that firms are exploring ways to handle their obligations under the Consumer Duty regulations and considering strategies to manage their lower-value clients.

“However, it’s important to remember that these clients are also valuable, and they deserve the right level of service. That’s why we believe that implementing digital processes for the ‘no change’ cases could save businesses millions while ensuring that these clients receive compliant and appropriate service. It’s crucial to strike a balance between serving this segment of the customer base and efficiently managing costs.

“As the advice market consolidates, medium to large firms understand that serving lower-value customers profitably is crucial for the future of the industry. These customers are potential high net worth clients of the future and represent a valuable revenue stream for businesses.”

The advice tech firm has named Ben Hampton as chief executive, effective 1 January 2023.

Founder and current chief executive Andrew Firth will continue as chairman.

Hampton joined Wealth Wizards as chief product officer in February this year from abrdn, where he led its digital retirement advice business.

Janus Henderson

The asset manager has appointed Michelle Dunstan as chief responsibility officer.

Dunstan joins Janus Henderson from AllianceBernstein, where she has spent the last eighteen years in a variety of roles, including as global equities portfolio manager and senior research analyst, and most recently as chief responsibility officer.

Indosuez Wealth Management

The global wealth management arm of Crédit Agricole Group has two bankers and a portfolio manager.

Sandy Chen has joined as managing director and senior banker, Mark Chester Ng joins as executive director and senior banker, and lastly, Sarah Lee joins as director and senior portfolio manager of asset management.

Chen was senior vice president at UOB Private Banking, where she managed ultra-high-net-worth clients in Singapore and China. Ng was at J Safra Sarasin, where he expanded the ultra-high-net-worth segment targeted at entrepreneurs, business owners and their families in southeast Asia.

Lee was at BNP Paribas Wealth Management, where she led the global equities portfolio with a focus on thematic and sustainable mandates.

JP Morgan Private Bank

The private bank has appointed Ulysses Lau as head of investments and engagement for Asia.

Lau will continue to be based in Hong Kong and will report to Kam Shing Kwang, chief executive for JP Morgan Private Bank in Asia.

Most recently, he was the head of investments and advice for Hong Kong and the Philippines, where he led his team in providing portfolio management and advisory services for clients with investments across asset classes.

Lau succeeds Diana Robinson, who will relocate from Hong Kong to London and assume a similar role, leading the investment adviser team for the firm’s UK, Ireland and Channel Islands business.

Evelyn Partners

The wealth management and professional services group has named Laura Hayward as a private client tax partner, subject to regulatory approvals.

Joining Evelyn Partners from BDO, Hayward focuses on advisory services to high net worth individuals, their families, businesses and trust structures.

Russell-Cooke

The law firm has named partner Nicole Gallop Mildon to its private client practice.

Gallop Mildon applies her specialist expertise to all aspects of private wealth including estate planning, wills, probate and incapacity.

Originally from Belgium and a fluent French speaker, much of her work has a cross-border element, particularly relating to France or other French speaking countries. She specialises in advising on French property issues and transaction structuring, especially in relation to effective tax planning.

DWS

Paul Kelly has been named as global head of the asset manager’s alternatives operation.

He will join DWS from Blackstone, where he was a senior managing director and chief operating officer of the credit division.

AAB Wealth

The advice firm has hire Tom La Dell as a financial planner based in Leeds.

He has more than 16 years’ experience in financial planning and has previously held positions at BHP and Hentons.

Artorius Wealth

The wealth manager has hired Jonathan Brown as senior adviser.

Brown was previously a managing director running the UBS UK regional business.

Old Mill

The wealth group has promoted financial planners Jon Orchard and Julia Banwell, and director of tax Stephen Martin to partners.

In November 2021, Old Mill moved from an LLP to Ltd structure creating a much simpler business model and making it easier to introduce new partners.

At the time, the firm confirmed an initial list of 18 partners, but said its intention was to create opportunities for more people to become partners in the near future.

The trio are the first to successfully apply under the new structure.

Parent company Royal London is already using Turo Wellbeing to create a series of personalised journeys to help their customers improve their financial wellbeing and retirement prospects, through a guidance-only pathway.

The Turo Wellbeing journey starts with a set of questions that review nine different areas of wellbeing.

The solution’s aim is to encourage customers to ‘play’ with the resources and take action to improve their financial wellbeing, such as saving enough for their desired retirement lifestyle.

Mark Kiddell, chief commercial officer at Wealth Wizards, said: “Having control over our finances and a clear plan to achieve our financial goals is essential for financial wellbeing and has a direct correlation with our mental and physical wellbeing.

“We know from experience that consumers want easily accessible financial help and support, whether that’s guided outcomes, digital advice with some human oversight, or fully fledged regulated advice.

“At a time of financial and economic turbulence, we’re aiming to help as many people as possible manage their money more effectively for themselves and their families during the current cost of living crisis and beyond.”

In March 2021, insurance giant Royal London bought fintech firm Wealth Wizards from LV= for an undisclosed sum.

The digital financial advice firm has made some changes to its management team.

Mark Kiddell will become chief commercial officer, while Ben Hampton will take on the role of chief product officer.

Kiddell was previously at Mercer, where he worked as growth enablement and operations leader for over three years.

Hampton joins from Abrdn, where he launched and ran the company’s digital retirement advice arm.

Sanlam UK

Group chief executive Jonathan Polin will leave Sanlam UK.

He will take on the position of chief executive at a different company created from the wealth management arm of Sanlam UK, which was sold to Oaktree Capital Management in September 2021.

Polin will be joined by Haig Bathgate as head of investments, who will join from 7IM after the deal completes in April.

Nicola Fraser remains chief financial officer, with Niral Parekh joining as chief operating officer and Christopher Kraft coming-in as chief commercial officer.

Parekh was previously head of retail asset and wealth management at Capco and head of product proposition and director of corporate strategy at Tilney Group.

Kraft was chief operating officer at True Potential, having spent almost a decade at Perella Weinberg Partners.

Their roles will also officially start in early April once change in control has been confirmed by the regulator. They will be supported by a senior management team with specialisms across the different business areas.

JO Hambro

The asset manager has hired Ben Morris as head of product EUKA.

He joins from Abrdn where he most recently served as head of equities, product strategy and specialists.

Saltus

The UK firm has named Alex Spreckley as managing director of financial planning, as the company looks to develop its financial advice proposition.

He was previously head of wealth management at Handelsbanken Wealth and Asset Management.

LGL Group

The fund and family office solution provider has made a series of leadership changes.

Zena Couppey has been promoted to chief executive after joining the business in 2020 as chief commercial officer.

Mike Newton has also been promoted, taking on the role of chief operating officer. He joined in 2021.

Lastly, Stephen McKenna will succeed Couppey as chief commercial officer, based in Luxembourg.

McKenna was previously group head of alternative assets and ESG.

Praxis IFM

The global financial services firm has made two senior hires.

Alexandra McInnes becomes group chief operating and risk officer and James Barber-Lomax as head of pensions.

McInnes was most recently a director at PwC’s advisory business in Guernsey, while Barber-Lomax has been at Praxis IFM for eight years.

Natixis Investment Managers

Mabrouk Chetouane has taken on the role of head of global market strategy and solutions, international at the investment firm and will be based in Paris.

He joins from BFT Investment Managers, where he was head of research and strategy.

The Advisers Association

The Australian trade body has appointed Bill Belmers as chair of the association.

He has been a board member since 2019 and vice chair since 2020.

Belmers is still a practising adviser with 23 years’ experience and is the funder and managing director of Queensland-based SEQ Advice.

Raymond James

Benjamin Smith has become a financial planner at the wealth manager’s Exeter branch.

He was previously at Mercer UK, where he held a similar role.