Since the start of 2013 some self-select (sometimes known as execution-only) financial product sites have reported record numbers of people starting their own ISA or General Investment Accounts without the need to take advice.
We think this is a trend that will continue to grow.
More and more we are all getting used to buying things online so why should insurance, savings, investments and pensions be any different?
Well, certain types of insurance and savings products can reasonably be described as ‘simple’; certainly simple enough that the average man or women can work out whether it is what they need and to apply for it.
Price comparison sites also assist in is task.
We would argue of course that pensions and investments are somewhat more complex and probably more people need advice in selecting what is most suitable for them.
But of course we believe that ‘advice’ and ‘implementation’ are two entirely different things.
For example we might advise you to invest the maximum into your stocks and shares ISA for this tax year and explain what investment funds you should select and why to match your attitude towards investment risk and reward.
But we honestly believe that armed with that advice there is no reason at all why you can’t sit in front of your computer and arrange a suitable ISA contract.
Of course we also accept that this is not something everyone will want to do which is why we, like many advisers, also offer an implementation service for our advised clients.
It really does come down to time, inclination and knowledge and confidence.
If you don’t have all of those you may well choose an intermediary to implement the plan as well as providing the advice.
But remember advice brings with it some really valuable benefits.
Not only is there a very robust set of regulatory protections available to you but you will have some comeback if that advice turns out not to be suitable.
If you self-select then you take all the responsibility for ‘advice’ yourself.
Also don’t be misled into believing that self-select is always cheaper than going through an adviser; it doesn’t have to be that way at all.
Whilst an adviser will charge you for the advice part of the package, it does not follow that the implementation part will be more expensive than the self-select route.
We agree with at least one industry view which suggested earlier this year that they could see the UK consumer of financial services using their available budget in a very sensible fashion – by paying for advice and then electing to buy the required investment or pension products via self-select.
This might then combine the real strengths of the way the market is evolving; specialist professional and independent advice coupled with transactional purchase on-line.
That sounds like a good future to me.
