D2C – The future of investment advice

Retail Financial Services

Retail Financial Services


Moderator: Simon Cocker, Simon Cocker Consultancy

Expert: Joe Parkin, iShares by BlackRock

Key findings:

  • JP provided some evidence to suggest that the time is ripe for the growth in this area
    • However there are the 3 elements of regulation, technology and margin pressure creating the “perfect storm”
    • Also the advent of Open Banking next year is seen to be a game changer and will disrupt the top 5 UK banks monopoly of holding 85% of the population’s bank accounts
    • The focus must be on customer outcomes not products
  • There was a feeling across the attendees that have we not been here before? RDR, Pensions Freedoms, MMR etc. were all meant to be big game changers but consumers continue to be inert and not receptive to potentially doing things themselves, especially in the investment space. The top 20% are well served (and usually either advised or savvy enough to be self-select) but what about the mass market?


  •  Three clear themes emerged which everyone felt unless we crack these there we will be continual false dawns
  1. Building consumer trust
  2. Inspiring consumer confidence
  3. Making it simple for the consumer
  • Ironically these themes were cited by the FCA in its Financial Advice Market Review, which was published last year.
  • Whilst there is a desire to move to this place by FS providers, regulation, legacy systems, protecting their current stock (& profits) as well as the business case never has enough clout vs. “carry on doing what they are doing” are seen as major barriers.
  • Hargreaves Lansdowne was cited as an example as an organisation that has broken this mould and given consumer’s confidence, simplicity and therefore seen funds flow in. An empowered workforce operating in an open plan office was thought to be one of the reasons.
  • The non FS participants pointed to their success in inspiring confidence and trust and making it simple by stating you should make everything transparent, try to humanise the data i.e. by bringing digital and people integration together and always add to the overall brand.
  • Another finding was that there were still a lot of people who do not have the knowledge and education on financial matters (“50% of people don’t know what 50% is!”) With this lack of education there will be no confidence and trust however as these people tend to have fewer savings are they the target audience anyhow? Some felt that they potentially could be in future years with the advent of Auto Enrolment.
  • On this theme having a pensions dashboard which showed what customers are on track for may galvanise people into action if they become aware holistically across their pots that their future wealth and income will not achieve their planned retirement/lifestyle goals.
  • In conclusion everyone felt that assisting consumers to invest more whether direct or via well-known brands was positive however until someone can really make it simpler, provide the customer with the knowledge and trust, there won’t be a wholesale change!