The financial advice market is no longer a simple choice between doing it yourself and paying for a full-service adviser. According to Ortec Finance, the sector is moving towards an “advice continuum”, and that shift could change who gets holistic advice, who gets something lighter, and who makes that decision.
Only a few years ago, clients effectively had two routes: execution-only transactions or comprehensive financial advice. Ortec Finance argues that the market now spans a much broader spectrum. At one end sit simple execution-only trades. At the other is full wealth planning, sometimes with discretionary management. In between, guidance, targeted support and simplified advice have emerged as recognised services, and a client’s needs are increasingly determining whether a person, or a platform, serves them.
This is splitting the industry into two broad groups. Ortec Finance expects independent financial advisers to keep focusing on clients who need holistic, end-to-end support, typically those with substantial wealth, complex tax affairs or complicated family circumstances. Larger institutions, by contrast, are likely to adopt an à la carte model, offering each client the service deemed most relevant. Ortec Finance notes that this choice will often be made by the institution rather than the client, which raises questions about whether that arrangement serves consumers well.
Regulation has historically pushed firms towards holistic advice, with advisers building a complete picture of a client’s circumstances before making a recommendation. That model suits wealthier clients, but it has left a far larger population underserved because their assets do not justify the cost of providing the service.
The most significant consequence, Ortec Finance suggests, is the return of the banks. NatWest’s acquisition of Evelyn Partners stands out as the clearest sign of this trend. After the Retail Distribution Review (RDR), many banks walked away from advice because the risk of getting it wrong outweighed the potential revenue. With targeted support and simplified advice reshaping the economics, offering some form of advice has become commercially viable again.
As a result, Ortec Finance believes fewer people will receive holistic advice than today. So-called ‘everyday millionaires’ will still benefit from full planning, while most consumers are more likely to be served through simplified advice or targeted support from banks and large insurers.
Banks are expected to adopt a hub-and-spoke structure similar to private banking, with a central relationship manager, who may not be regulated, supported by specialist teams for areas such as protection and pensions. Ortec Finance stresses that this only works if technology and CRM systems connect every touchpoint, ensuring whoever speaks to the client next understands their full situation.
Regulatory scrutiny appears to be heading in the same direction, with a focus on matching service sophistication to client needs and Consumer Duty outcomes. The harder challenge, Ortec Finance argues, is scale. Advice firms often serve a few hundred clients, while banks serve millions. How institutions evidence good outcomes across that volume, to the standard expected of a small advisory firm, may shape the next phase of the advice market and create new demand for WealthTech and RegTech solutions.
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