Barrett also highlighted how writing a business case for developing new services to serve those in the advice gap is challenging.
“Some 90 per cent of firms have less than five advisers, if you gave those firms some capital to deploy their businesses, what's the return on that investment if they started targeting people with low value to investments?
“Or are they going to make their business more efficient? Making these services commercially viable is very challenging. And the regulatory framework there needs to help around that. But I don't think that's a problem necessarily, the regulator is ever going to solve. It's a real challenge,” he added.
Advisers were also asked if they thought their businesses would be impacted if large providers began offering targeted support services to clients.
The large majority of respondents said it would have no real impact however 20 per cent said they saw this as a threat and would worry that providers were trying to “steal” their clients.
Speaking as part of a panel discussion, Jamie Jenkins, director of policy and communications at Royal London, believed that providers did have a part to play in offering targeted support.
Jenkins said: “So a customer is told by us that saving 8 per cent into their pension is not enough, they say ‘ok, how much should I save?’ we say, 'we can’t tell you that'.
"Or we send out a warning to a customer who is taking 10 per cent out of their retirement, to let them know they may run out of money. They ask ‘ok, what’s a reasonable amount to take out?’ but again we can’t tell them that.
“Are advisers clamouring to answer those sorts of questions and charging a fee in doing so? I don’t think so, they are not complex needs to which most of us could give a reasonable answer that could help people.
"That is where targeted support will start to become helpful and I do see this happening in the next few years.”
alina.khan@ft.com
