Almost a year ago Michael Gove ignited a fierce debate during the Brexit campaign, insisting that Britain had had “enough of experts”.
Whatever your political views, that appears to ring true when it comes to the world of financial advice.
When people are deciding what to do with their hard-earned money, they have several options: seeking out the support of people they know; talking to their bank, paying an expert independent financial advisor (IFA), or – they can go online.
Our research from earlier this year confirms the latter is the most popular, by some stretch.
The report shows that even the wealthiest investors prioritise seeking financial advice online before doing anything else.
Contrary to what you might expect from the most affluent, many haven’t had the time to visit an IFA for at least a year.
Similar behaviour can be seen when people are making initial decisions about their health and career choices; the natural ports of call for help are often our friends and family – and again, the internet.
It’s no surprise that people with health concerns go online for advice first. In our view, this must be driven by the demand for immediate information and the potential of ready answers.
With little imagination, it’s easy to see how that could go disastrously wrong: not all advice is equal.
The internet can be a bit of Wild West when it comes to advice. You might stumble across some excellent information, but you could also fall prey to poor – or even nefarious – information, if you look in the wrong place.
The same can be said about financial advice.
Unadvised investors can stand to become vastly over – or under – exposed to risk, not achieving the goals they set for themselves, or losing more money than they were willing to accept.
We hear a lot about the advice gap in this country, and rightly so. Traditionally this gap has been based on cost. But, as our aforementioned research attests, this is about more than money.
It’s also about time and access.
The wealth management industry should recognise that it can play a vital role in making sure that investors make online investment decisions backed by genuine expertise and rigour.
Rise of the robots
The industry has experienced a significant, technology-driven overhaul in recent years.
The rise of new, agile start-ups has rapidly grown the market and gone a fair distance towards disrupting large incumbents.
But the rise of robo-advisers has done little to help consumers access advice and close the knowledge gap.
The reason for this is that many robo-advisers – despite what the name may suggest – merely offer guidance. They automate certain elements of the investment process, but you choose your own risk level, and will ultimately be left to your own devices if the decisions take a wrong turn.
Technology is being used to reduce fees and improve user-experience when making investments, and those are both to be applauded – they help more people grow their wealth.
But we mustn’t stop there.
We need to use technology to help provide access to good, regulated advice online, and introduce new solutions that help ease the most common concerns associated with investing.
We can create big public awareness campaigns on the value of advice; we can plaster the facts across billboards all over the country, but people would still go online when they need information.
Because it’s easy, and because it’s free.
What’s the answer?
The answer is to couple expert support with financial education, and take it online, so it can be found quickly. It’s the same reason IFAs ended up on the high street or in the Yellow Pages.
We need to bring advice to you, rather than expecting you to come to us.
As an industry, by finding new ways to make regulated investment advice digital – and accessible on-the-go – we can support people’s key financial decisions exactly when and where they are looking for help.
Trained, experienced, regulated advisers offering expert support have been a bedrock of the investment industry for decades. But like in so many other industries, the rapid growth of internet services is changing this dynamic fundamentally.
The internet might make investing easier, it might make it cheaper; but without caution, you could end up worse off in the long-term.