Leading Tech Analyst Comments on M&G’s Appointment of Ignition Wealth to Develop a New Hybrid Advice Proposition
- Wealth Management
- 27.05.2021 12:50 pm
Ian McKenna, founder of AdviserSoftware.com and the Financial Technology Research Centre, comments on M&G’s appointment of Ignition Wealth to develop a new hybrid advice proposition: “This morning‘s announcement about M&G committing to a hybrid digital advice proposition is a significant win, not just for the two organisations, but for the whole digital advice, advice tech and fintech sector. M&G are the company that used to be known as Prudential, one of the most emblematic brands in UK personal finance. For an Australian Fintech to win such a prestigious UK customer is clearly a great way for them to enter the market. Equally for M&G complementing their existing traditional restricted advice team with a low-cost hybrid automated proposition is a great way to support hundreds of thousands of former potential customers who will be approaching retirement and need help but have a level of assets that will make full blown traditional advice uneconomic.
“In a wider market context this demonstrates that a real revolution is going on in the UK personal finance sector, driven by Fintech. Traditional advice, delivered by highly qualified and heavily regulated individuals has increasingly become unaffordable in the UK to anyone who is not wealthy. This deal and others recently shows that major financial services firms are recognising that technology can enable the delivery of significantly lower cost services to make advice affordable again for the majority of the British population. Potentially tens of millions can benefit. The hardest challenge for emerging robo and automated advisers has been the cost of customer acquisition. M&G already have millions of customers who could benefit from this service in the future so they avoid that massive expense and should be able to scale far more quickly. Humans will still have an important role to play in the delivery of the advice, but it will increasingly be driven by the technology, which in addition to being cheaper can bring greater regulatory certainty. As the big guns like M&G enter this the market will be revolutionised.
“Whilst it has taken time for automated at retirement advice to be developed it is now becoming an increasingly competitive sector. We expect to see a number of other organisations currently in stealth mode go public before the end of the year. This is becoming a highly competitive sector add will make financial advice affordable for millions more people over the next couple of years.”