Race is on to roll out simplified advice to the masses

Competition to provide the mass market with simplified and restricted advice services is heating up, as adviser firms seek to combat the perception that the retail distribution review (RDR) will price out the majority of people from advice.

IFA networks Lighthouse Group and Sesame Bankhall have both launched basic advice services, while Rhyl-based firm Buckles has launched a simplified advice pilot.

Smaller firms have also entered the space. Surrey-based Churchouse Financial Planning has been offering the low-cost, online simplified service planmypension.co.uk since 2007.

Lighthouse announced its plans after signing an exclusive deal with Unison to provide advice to the union’s 1.3 million members. The service will be based on an online decision tree and make use of Lighthouse’s Brighton-based call centre.

Challenging the banks

Malcolm Streatfield (pictured) , Lighthouse Group joint chief executive, said that it was important for advisers to challenge the banks by trying to cater for the mass market.

‘This is a big challenge for IFAs. We shouldn’t leave this space to the big banks,’ he said.

‘Our starting point is opening it up to our affiliated business relationships, particularly those people with modest incomes,’ he said.

‘Clients can do it independently up to a point and a lot of it can be delivered by technology. They fill in the fact-find and establish their needs then they send that to us and we advise.’

Buckles is piloting a basic advice proposition as a precursor to launching a simplified advice model.