Financial advice for those with £20,000 to invest. Hargreaves Lansdown aims to bring minimum down from £50,000.
- 30 April 2013
Hargreaves Lansdown is aiming to provide financial advice to clients with £20,000 to invest dramatically reducing the minimum assets required from £50,000.
HL’s chief executive Ian Gorham, speaking at the stock exchange this morning, said the firm was reacting to the fact that many IFAs are increasing the minimum assets required before they will advise clients. It also comes as the number of bank based sales advisers plummet due to regulatory reforms which banned fund managers from paying commission on pensions and mutual funds.
The latest player to pull out of giving advice is Aviva, which provided advisers to Coventry Building Society, as reported by trade website Money Marketing. Big players such as HSBC, Santander and Barclays have either axed their mass market advice sales forces or dramatically scaled them back.
Hargreaves Lansdown has more than 100 financial advisers, in addition to its brokerage and fund platform.
Asked about the growing advice gap, Gorham said he thinks the market will divide loosely into two types of people.
Some will go self directed for the first time but others may struggle to get over the initial hurdles and become self-directed. Hargreaves Lansdown research shows that just over 39 per cent of people who downloaded the Hargreaves Lansdown Sipp brochure but who didn’t invest say they simply did not get around to it. Nearly 26 per cent said they were unsure where to invest. Sixteen per cent said they felt they needed advice.
The firm is aiming to reach these people particularly with telephone based advice.
“There are more people saying I can’t find my financial adviser anymore, it wasn’t a great service anyway. My friend uses Hargreaves Lansdown and says it great. I want to invest in an Isa. Can you explain or send a brochure. That is a change. Some people will be self directed for the first time. Some people won’t be able to get over the hurdle in order to become self directed so one of the things we are working on is whether we reduce the viable level at which we can advise people. We are working ataround £50,000 in assets. We would like to get that down to £20,000, doing more things like telephone advice which is more scalable and more deliverable to people with that sort of level of assets. The initial response to that has been very positive,” Gorham said.
“It is difficult to measure but I spend some time sitting on the help desk and it has given me a flavour of what people are asking about. The number of people coming to our help desk asking what is an Isa is much greater than it was. It used to be how much is the allowance this year.”
- Scams on the rise following new pension freedoms
- Driving in inappropriate footwear could invalidate your car insurance
- Five stocks you shouldn't 'sell in May'
- Ryanair finds it pays to be nice as profits soar 66% on customer service drive
- Five funds to weather the bond market storm
- Right to Buy extended to 1.3m housing association tenants, but Shelter warns of trouble ahead
- Personal allowance to rise with minimum wage
- Watchdog investigates as thousands of vulnerable customers are switched to pre-paid meters
- Regulator looks to fine three men £80m over sales of 'death bonds'
- Government pledges no income tax rises for five years, plus other Queen's Speech news