There has also been a step change in our comfort with digital channels; 49 per cent of all investors say they would feel comfortable receiving help on investing via video chat, up from 25 per cent back in 2019. It is not a surprise to confirm that consumers are more receptive to alternatives to in-person than they were pre-pandemic.
Scepticism over ongoing fees and the need to pay for an annual review is also likely to motivate some people to consider alternatives to existing advice offerings.
Almost a third (31 per cent) of advised investors we surveyed said they would prefer a fixed-fee charging model, increasing to 50 per cent of investors who are without an adviser today.
What’s in a name?
In the same way that no robo-adviser ever liked being called a robo-adviser, no one likes the term 'digital advice', which admittedly covers a multitude of different business models.
Some have modest minimum investments: £1,500 at Moneyfarm, £500 with Nutmeg or even as little as £1 to open an account at Open Money or Multiply. Others, like Standard Life and Vanguard, have a more sizeable £50,000 minimum.
Similarly, some digital advisers are designed predominantly to help younger savers, while others are aiming for the at-retirement brigade.
The common denominator is that they give – or can give – regulated advice to a mainstream consumer with pretty standard requirements, at a time and a place to suit them, often at an all-in cost of less than 1 per cent a year.
The main differentiator between them is the amount of contact you get with a real human being along the way. Some offer a single named contact, while others have a pool of these helpful humans and access comes at different points in the journey.
Does it matter what we call it? Personally I never get very worked up about a group name. It takes me back to boring conferences where people would spend a day arguing about the difference between a wrap and a fund supermarket. I would always rather focus on what these propositions can do to help customers than agonise over the need to put in a neatly defined box.
What’s next?
After years of not much in the middle, we suddenly find ourselves with more advice options than ever before. There is a huge amount of work to do to help consumers know that they even have viable options before they come to research and shop around.
