Table of Contents
Executive Summary
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- The market
- Use of mobile devices for managing finances and shopping continues to increase
- Banks continue to close branches
- Savings inequality highlights the need to democratise advice
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- Figure 1: Value of savings and investments, by age, October 2019
- FCA continues to assess the advice market
- FCA to introduce the Directory
- Opportunities for advisers arising from a changing pensions landscape
- Companies and brands
- High-street banks use robo-advice to appeal to the mass market
- Potential for automation: from retirement planning to insurance
- The Money Advice Service adds an official WhatsApp contact channel
- The consumer
- Only half have received professional advice
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- Figure 2: Use of financial advice for different products, by products arranged or amended in the last three years, December 2019
- Online channels are as popular as phone services
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- Figure 3: Use of financial advice, by channel, December 2019
- Consumers more likely to turn to banks/building societies for advice…
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- Figure 4: Use of financial advice, by source and channel, December 2019
- Website-based chat is more appealing than video chat/messaging apps
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- Figure 5: Online channel consideration, December 2019
- A majority don’t know how much online advice should cost
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- Figure 6: Perceived cost of online advice, December 2019
- Price and quality are the main purchase drivers of advice
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- Figure 7: Purchase drivers of financial advice, December 2019
- Awareness of Open Banking remains low
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- Figure 8: Awareness of Open Banking, December 2019
- Half would be willing to share data with an adviser via Open Banking
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- Figure 9: Willingness to use Open Banking for financial advice, by product, December 2019
- What we think
Issues and Insights
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- Charging the right price at the right time
- The facts
- The implications
- Open Banking: a perfect ground for online advice to build on
- The facts
- The implications
The Market – What You Need to Know
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- Use of mobile devices for managing finances and shopping continues to increase
- Banks continue to close branches
- Savings inequality highlights the need to democratise advice
- FCA continues to assess the advice market
- FCA to introduce the Directory
- Opportunities for advisers arising from a changing pensions landscape
Market Drivers
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- Use of mobile devices for managing finances continues to increase
- Banks continue to close branches
- Savings inequality highlights the need to democratise advice
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- Figure 10: Value of savings and investments, by age, October 2019
The Regulatory Environment
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- FCA continues to assess the advice market
- Review of the impact of RDR and FAMR
- Second Assessing Suitability Review
- FCA to introduce the Directory
- Opportunities for advisers arising from a changing pensions landscape
- New rules on “wake-up” pension packs take effect
- Pensions Schemes Bill paves the way for delayed Pensions Dashboards
Companies and Brands – What You Need to Know
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- High-street banks use robo-advice to appeal to the mass market
- Vast potential for automation beyond investing
- The Money Advice Service adds an official WhatsApp contact channel
Competitive Strategies and Innovation
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- High-street banks use robo-advice to appeal to the mass market…
- Using automated services as a first step towards investing…
- ...or to cover all customer bases
- …but some established providers opt to focus on existing client base
- Automation has potential in retirement planning…
- …and insurance
- Online mortgage brokers bet on free and convenient services
- The Money Advice Service adds an official WhatsApp contact channel
- LBG continues to expand its remote advice service
The Consumer – What You Need to Know
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- Only half have received professional advice
- Online channels are as popular as phone services
- Website-based chat is more appealing than video chat/messaging apps
- A majority don’t know how much online advice should cost
- Price and quality are the main purchase drivers of advice
- Half would be willing to share data with an adviser via Open Banking
Product Engagement and Use of Advice
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- Insurance and savings are the most common products to arrange
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- Figure 11: Products arranged or amended in the last three years, December 2019
- Only half have received professional advice…
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- Figure 12: Use of financial advice for different products, December 2019
- …most commonly for ‘complex’ products
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- Figure 13: Use of financial advice for different products, by products arranged or amended in the last three years, December 2019
- Mortgages are an opportunity for early engagement with advice…
- …and investments hint at the potential of automation
Channels Used for Financial Advice
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- Face to face still the most popular way of receiving advice…
- …and online is as common as telephone
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- Figure 14: Use of financial advice, by channel, December 2019
- Banks/building societies benefit from extensive presence in the high street
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- Figure 15: Use of financial advice, by source and channel, December 2019
- Online channels more relevant for other sources of advice
- Opportunity for employers to step up…
- …and face fewer barriers in terms of existing preference for traditional channels
Online Channel Consideration
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- The appeal of website-based chat
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- Figure 16: Online channel consideration, December 2019
- An important minority are generally open to automated advice
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- Figure 17: Automated channels consideration – CHAID analysis, December 2020
Expectations of Online Financial Advice Costs
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- A majority don’t know how much online advice should cost
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- Figure 18: Perceived cost of online advice, December 2019
- People with experience of advice are more open to paying more for it
- People still perceive automated services as inferior
Purchase Drivers of Financial Advice
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- Price and quality are the main drivers
- Convenience and innovation are not at the top of people’s minds
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- Figure 19: Purchase drivers of financial advice, December 2019
- Ethical credentials are more relevant than environmental ones
- Potential to explore sustainability themes in the investment market
- Under-25s more likely to focus on fewer aspects
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- Figure 20: Repertoire of purchase drivers of financial advice, December 2019
Financial Advice and Open Banking
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- The potential of Open Banking
- Awareness remains low…
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- Figure 21: Awareness of Open Banking, December 2019
- …but is higher among men and young people
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- Figure 22: Awareness of Open Banking, by age and gender, December 2019
- Half would be willing to share data with an adviser via Open Banking
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- Figure 23: Willingness to use Open Banking for financial advice, by product, December 2019
- Willingness to share data is higher among younger generations…
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- Figure 24: Willingness to use Open Banking for financial advice, by age, December 2019
- …and those who are aware of Open Banking
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- Figure 25: Willingness to use Open Banking for financial advice, by awareness of Open Banking, December 2019
- Affluent consumers more willing to share information from a variety of products
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- Figure 26: Repertoire of products people would share with an adviser via Open Banking, December 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 27: Online channel consideration – CHAID – table output, December 2019
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- Figure 28: Awareness of Open Banking – CHAID – table output, December 2019
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