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.”
- Investors should prepare “to take advantage of the fallout" from US Federal Reserve’s inevitable rate rise
- Penury in the UK: A third of Britons used to being totally skint
- Relaxing retirement? We want to work, say pensioners
- Adult children living the ‘life of Riley' by staying at home with their parents
- Til debt do us part: families sitting on a funeral 'time bomb'
- Unilever’s sales boost represents good news for investors
- Alliance Trust lands another blow in battle with hedge fund
- Tesco results: can 'Drastic Dave' save the supermarket giant?
- UK unemployment falls to pre-crisis levels
- Up to 45% of over-40s would consider buy-to-let to boost their retirement income