Paul Boston, the co-founder of Novia Financial, has set up a financial advice firm with the aim to fill the advice gap.
Boston has co-founded Hundreds and Thousands, which will provide advice to clients with less complex financial needs than the average IFA client.
The firm said it will look to serve “lower-value” clients of advice firms for whom it is not commercially viable to serve, but who the firm does not want to lose.
If the clients’ circumstances change, or they require a more complex solution, the company will pass them back to the original adviser.
The business will provide clients with advice, platform services, discretionary fund management and access to underlying funds, and it will charge 150 basis point per annum.
Boston said: “Too many clients that our industry views as ‘low value’ are being locked out of the financial advice process, even though they are the ones who, arguably, require it most.
“Hundreds and Thousands has been set up to cater to the needs and objectives of these less wealthy clients.
“The beauty of our service is the ease with which transfers can be made to us and, when the client’s wealth grows and they become part of the adviser’s target market, we transfer them back.”
The advice gap refers to the gap between those who want to access financial advice and those who get it.
It is seen as one of the lasting impacts of the Retail Distribution Review.
More than 70 per cent of advisers say the advice gap has expanded in the past five years, according to research from Intelliflo at the end of last year.
According to Intelliflo's 2022 Advisory Business Impact poll, 73 per cent of advisers believe the gap expanded over the past five years, and more than half thought it was “a lot wider.” About two thirds (62 per cent) thought it grew even more during the pandemic.
Intelliflo had polled 147 advisers in early October last year and found although more people were seeking advice in the past 12 months, the profile of those reaching out did not seem to have changed.
Most advisers (84 per cent) said they hadn't noticed a shift in the ethnic background, income level (80 per cent), or the number of women (89 per cent) onboarded as clients.
sally.hickey@ft.com
