The comments by Perceptive Planning’s Phil Billingham follow a recent spate of hiring by UK-based wealth managers including Barclays Wealth Management, which has announced the appointment of six new staff to its Leeds operation overseeing the North East.
Billingham, a chartered wealth manager, spoke to International Adviser about the expansion of wealth management firms in the UK, and particularly in regions such as Yorkshire.
He said: “Investors don’t take advice online in the way people thought we would and actually people want to have a human interaction.
“This is part of a targeted recovery to put advisers into areas where there is a demand for financial advice. There is more demand for financial advice than there is capacity in the UK at the moment.
“I think with the announcement today that Nutmeg is to develop person-to-person advice on the phone rather than be a robo-adviser, there is a recognition that human beings don’t like pushing buttons on a screen. We actually want someone who can advise us over the phone or face to face,” he said.
Online wealth manager Nutmeg announced on Wednesday it is launching an over-the-phone financial advice service to its customers.
“I suspect what we are seeing is a recognition of that and a slow undoing of the retreat from financial advisers. And places like Yorkshire – people need financial advice.”
Barclays has announced that Richard Kirkham, David Firth and Catherine Makin, Richard Lindop, Andrea Charge and Alison Probert have joined its team in Leeds.
Andrew Houston, head of Barclays Wealth Management, said: “All six new members boast a wide range of experience that will really benefit the division, as well as help to support our growing client base across the Yorkshire region.
“We are devoted to providing the best possible service to help families, individuals, charities and entrepreneurs achieve their financial goals, and we believe that this expansion will excel in doing just that.”
But it is not the only organisation to start thinking about expanding its wealth management offering in the UK.
UBS Wealth Management hired Richard Wood from Barclays Wealth to bolster its Leeds office. Brown Shipley also strengthened its Manchester operation with the hire of Paul Smith as client director and wealth adviser.
Billingham said: “Historically, from a financial planning view, Bristol and the South East have been wealthy areas and pretty well served. While, there are some fabulous firms in Yorkshire, there is a lot of wealth in the area as well as in the North of England. There is a lot of investment and industry going into the north, including Leeds and Manchester.
“There has been a concentration on the South East, particularly with a lot of people’s wealth being tied up in property. In terms of new wealth and new wealth creation, the north has got a lot going for it. There is a start of a recognition for that, and that can be only good for everybody.”
IA asked Billingham whether technology such as robo-advisers is dying, with the number of financial advisers being hired across the UK.
He said Nutmeg’s move shows that there is a demand for robo-advisers to start to offer more of a human service than digital-only offerings can provide.
“I think the sector has always been presented as tech or human – and I think it has to be both,” said Billingham. “There is simply not enough advisers to provide advice for those who need it in the UK. We have to be smarter in how we use technology to help people to make decisions.
“It can’t be right that it is easier to go online and take out a loan, than it is to take out an ISA. It makes no sense at all. Technology has huge potential – and I think we are seeing the beginning of that.”
He added: “I would like to see a day when people can check out their ISAs and pensions at the checkout at Tesco. I think we should be looking for that, it is a reasonable expectation. I would like to see an Amazon come in and provide a trusted brand on simple savings – I think that would be a massive advance for the sector.
“The problem is people live complex lives – they get divorced, have multiple families and they get made redundant. At the moment, the technology is not good at dealing with complexity, and I think the human element is so important and understanding the points of complexity in people’s lives.”