The financial advice industry needs to shift its mindset in order to evolve, says Sam Tate, an adviser who has made it his business to build trust in the industry.
Through his financial planning firm New World Financial Group, Tate reaches out to younger investors and those who are at the early stages of accumulating wealth to educate them and lure them into the world of financial planning.
He says it is his responsibility as a finance professional to help more people, especially those that have not traditionally benefited from financial advice.
Besides, failing to adapt to the new world of financial clients could spell bad news for traditional firms, he adds.
Tate says: "In our opinion, as someone who believes that financial education within the country is weak/non-existent, we're the financial professionals and we've got a responsibility to educate people, and not just the people that can afford, in a traditional sense, to pay for our services.
"So we decided to reimagine what our product is essentially, and therefore how we would get paid for that and how we would target clients."
New World was set up in 2019 and launched to market in 2021. It currently has two advisers, a small paraplanning team and outsources most of its other business.
In its first two years of existence it has build up a client base of 150 from scratch, representing a mix of young people and more established higher rate tax payers.
The firm runs a subscription-based model alongside a fee-based model, saying the former appealed particularly to young professionals "who are earning good money and need direction in terms of their decision-making [such as] where to point their money, but also what decisions might be prioritised over others."
Within the subscription-based model it has three tiers, starting at £50 a month for a 12-month contract for just the financial plan and guidance around asset allocation, but no implementation.
At a cost of £100 a month clients get financial planning and investment management, while the premium service at £150 a month offers additional tax planning and other services geared towards higher rate tax payers.
Although financial planning without product advice technically is not regulated at the moment, the firm still treats it as such, in part to appease professional indemnity insurers whose questionnaires, Tate says, are "outdated" in this respect.
New World also runs a financial health check, which it targets at businesses and their employees and it offers information and education for free online.
Different needs
Tate says he believes young people are not receptive to traditional advice with a strong focus on implementing investments because they can easily access the investments and platforms themselves online.
"I think that the financial advice industry needs to shift the mindset in order to evolve," he adds. "And that's something that we're trying to obviously lead on.
