An advice gap exists in the UK, having started in the wake of the 2013 retail distribution review (RDR). This resulted in advisers making their charges transparent for consumers – and putting people with low wealth off seeking advice. The gap widened in the wake of the new Pension Freedom changes in 2015, which gave individuals more flexibility about taking income from their DC pension pots – and resulted in people needing more advice and guidance to help guide their decisions.

Recognising this widening advice gap, fintech company EValue is today launching its digital advice and guidance platform, which has the potential to reduce the length of professional advice by 70-90%.  

A survey carried out by the Financial Conduct Authority (FCA) last year found that there are 18.2 million people who might have a need for advice but haven’t yet taken it – representing 36% of the UK population. Basic financial education is lacking: 34% of workers have a workplace pension but don’t know anything about it, whilst 79% of adultswished they’d learnt about finances at school. At the same time, the number of organisations offering financial education to employees has fallen from 41% in 2017 to 36% in 2018.

Paul McNamara, CEO of EValue, comments, “The advice gap has never been greater or more dangerous – particularly for those approaching retirement. Over a third of the population might have a need for advice but haven’t yet taken it. Whether it’s due to high advice costs or not meeting advisers’ criteria, these people are calling out for help. Otherwise, they risk making the wrong decisions and potentially running out of money in retirement.”

Cost is a major contributor to the pensions gap, as high fees deter people from seeking financial advice – whilst advisers refuse to speak with those that have less than quarter of a million in savings and investments. This is leaving many people abandoned, without knowing where to turn for advice – and that’s where technology plays a crucial role.

To combat this, EValue’s technology will support accessible and personalised journeys that give people the confidence and motivation to make better informed financial decisions around pensions, savings and investing.

EValue’s digital advice and guidance platform delivers partial or fully automated advice and guidance processes. It combines EValue technology, including APIs, tools and a stochastic asset model, with third-party technology, like ID&V and data integration, and services from a network of providers. The combination of these parts will support end-to-end digital advice and guidance processes.

To support the digital advice and guidance platform, EValue has founded the EV Ecosystem – a network of top service and technology providers working together.

"To truly innovate, you need an ecosystem of businesses working to one common goal," adds Paul. "We want to see more people receive advice and, in turn, start making better financial decisions to secure their futures. This network – and the technology – will help our clients ramp up their pace of development and speed up their time to market."