Advice gap doesn’t exist – ‘it’s all there if you need it’
There is no such thing as an advice gap in the market despite what the headlines would have us believe, says financial planning firm founder Duncan Hannay-Robertson.
The founder of Cambridge-based financial planning firm Hannay Robertson believes the current market takes care of both the DIY investor and the advice seeker, arguing that “in the main, it’s all there if you need it.”
He says: “All markets move with supply and demand; the world is imperfect and always will be. As demand moves, so do markets and the gap gets filled. It always has done and always will. That’s how evolution works.”
Decade of the consumer
Hannay-Robertson, whose firm took part in the CISI Financial Planning Week earlier this month, believes that while the last decade was all about the adviser, this decade is most definitely the decade of the consumer.
“Not every consumer requires the services of a financial adviser and those that do are able to find the advice they need,” he says. ”It’s about investing the time to work out and understand whether they are able to take care of their own finances.”
Hannay-Robertson uses the analogy of a medical injury to describe the different levels of service available in the financial advice market.
He explains: “If you injure yourself, the first thing you need to ask yourself is whether you can treat that injury yourself. If you don’t believe you can, then you ask yourself whether you need to see a nurse, your GP or require the services of a surgeon. This can be applied to financial advice; a firm like ours would be akin to calling upon a surgeon and I’m a firm believer that not everyone requires that level of service.”
Over complication by the industry
Rather than a lack of advice in the market for those who cannot afford or are unwilling to pay for a financial adviser, Hannay-Robertson believes the real issue facing the market is the industry overcomplicating matters with a suite of options that consumers struggle to understand.
He argues that greater simplicity around funds would make it easier for investors to look after their own finances and cites Vanguard’s risk-rated, low-cost funds as a good example.
“Most companies fail to offer simple, risk-rated funds that the consumer can understand,” he says. “Fund managers get involved and make things over-complicated and off putting for the DIY investor. If you don’t have much in the way of money to invest, the last thing you want to do is pay 1% to an adviser.”
Hannay Robertson says the first step for many is to sit down and think about what it is they want to achieve.
“Often in life we find ourselves working hard, but without much thought as to what it is we really want to achieve and by when. Very few people have firm goals and dates in mind,” he says.
One hour financial plan
Hannay Robertson, which was set up in 2012, follows a three-step approach for its initial meeting with clients; the first step discovers what is meaningful to the client; the second discovers when they want to achieve their goals by; and the third step determines their resources and income.
It is an approach that has “staggering results,” says Hannay-Robertson, leaving clients with much greater clarity in just one hour.
As such, he believes initiatives like CISI Financial Planning Week are a great way of encouraging consumers to think more closely about their future and the need for some sort of financial plan.
“My mission is that everyone should have a financial roadmap and that can be done just sitting with an adviser for an hour. When a client comes to see me, I work out whether they can fulfill their own needs and offer them all the help I can without necessarily seeking to take them on as a client,” he explains.
Hannay-Robertson, whose firm services clients at the higher end of the market with assets of £750,000 upwards, says clients who desperately feel they need the support of a financial adviser but do not meet the firm’s requirements, are referred on to a local adviser with whom Hannay Robertson has a good and trusted relationship.
“What I want is that people walk out the door with the solution; I wouldn’t leave anyone adrift at sea,” he says.
Naturally, such an approach often leads to the firm receiving enquiries from people in difficult financial situations seeking help and advice, without the intention of becoming a client.
“You end up doing lots of pro bono work whether you want to or not, as it’s simply too difficult not to become involved when you see some dreadful cases where people are in very difficult situations,” he says.
However, he describes offering assistance as “giving something back” and believes the industry as a whole has a duty to impart experience and expertise where possible.
Visit the Hannay-Robertson website