M&G Wealth, the new wealth management arm of M&G, has signed a contract with the Australian fintech Ignition Advice to bring a low-cost, hybrid digital advisory service to market this year.
The new service, due to be rolled out by the end of 2021, combines digital technology with human advice and is aimed at customers who cannot afford traditional financial planning.
M&G Wealth says it will target existing clients first before making it available to a wider audience.
The company says the “streamlined” offering will reduce the time and expense involved in consulting and help those with lower amounts of money save or invest.
The service will be provided through M & G Wealth’s existing advisors, the company said.
Ignition Advice, headquartered in Sydney, announced its move to the UK this month and is setting up teams in London and Edinburgh in 2017 following its Dublin presence. It specializes in helping large companies develop digital products and services directly for customers.
Richard Caldicott, Deputy CEO of M&G Wealth Advice, said: “There is no doubt that a large number of investors would benefit greatly from financial advice but find it inaccessible and too costly. This is the root of the advisory gap and that is what we are fully focused on. ”
Terry Donohoe, CEO Europe, Ignition Advice, said, “Our experiences in Australia and the Republic of Ireland have shown us the value of this model for consumers and the potential it has to democratize financial advice. We are excited to bring our proven technology to the UK market with M&G Wealth Advice. “
Technology expert Ian McKenna, founder of the Financial Technology Research Center, said, “This morning’s announcement is meaningful to Ignition Wealth, M&G and the wider marketplace. Clearly, for an Australian fintech, attracting such a renowned UK client is a great way to get into the market.
“For M&G, too, adding a low-cost hybrid automated offering to their existing traditional limited advisory team is a great way to support hundreds of thousands of former prospects who are about to retire and need help but have a fortune to fill them up traditional advice is uneconomical.
“In a broader market context, this shows that while automated decumulation advice has taken some time to develop, it is now becoming an increasingly competitive sector. We expect a number of other organizations currently in stealth mode to go public before the end of the year. “
Analysis of financial planning today: The next battlefield in wealth management is likely to be in the emerging hybrid digital / human advisory sector. Customers seem keen to manage their finances digitally most of the time, but want the peace of mind of a helpful human being, either via video or audio, when they need additional help. Most robo-advisors seem to be moving in the hybrid direction and others are developing hybrid options as well. Robo-only advice seems to be yesterday’s news, with great disappointment in the robo-advice sector and its sheer lack of traction. All of this is unlikely to worry professional financial planners, whose human-first approach is expensive but is sought after by clients with some cash to invest. That is unlikely to change, but planners need to be careful that the new hybrid services destroy their traditional customer base. You may, of course, be tempted to join the hybrid onslaught and some have already dipped a toe in this area. As always, service will be the focus.