The financial advice sector in the UK should be more like general practitioners, in that things are explained in a more straightforward way, the chief executive of the Octopus Group has said.
Speaking to FTAdviser, Simon Rogerson said financial advice can sometimes come in too complex a form for people to understand.
"[Clients] are not looking for an explanation of macroeconomic factors or interest rates, or what the FTSE is doing, because that is not relevant to them," he said.
“Financial advice should be more like the UK’s GP system,” he said, explaining that the environment and way advice and help is given is the most important thing.
“What I want in a GP is empathy and understanding….as I’m going to tell them something that is embarrassing or stressing me out.
“Don’t tell me the Latin name for this disease, just tell me [what is] wrong with me.”
Simple, easy to understand advice and coaching can help what Rogerson sees as the "fundamental lack of trust" in financial services that he said has plagued the industry since 2008.
"Most financial services companies have outsourced their conscience to the regulator," he said, quoting the billions paid by the industry in fines since the great financial crash.
"Why is this industry not trusted? Well there you go...it has not behaved itself."
Octopus Money Coach
This simplicity is key to Octopus Money Coach, the company bought by Octopus Group in 2021.
The company, originally called Hatch, was created in 2017 after its founders were building an independent review site for financial advice and noticed the number of potential customers being priced out of being able to receive advice.
“Unless you have £100,000 - £150,000 in investable assets, the chance is you are not going to be right for financial advisers,” Rogerson said.
Through tie-ins with companies, the coaching service provides assistance to employees around financial planning and suggestions around goals, and aims to “transform” one million lives through its service.
The company’s marketing literature is careful to separate financial coaching and financial advice, as the latter is a regulated activity where the former is not.
The service is currently advertising a £299 annual flat fee which provides a dedicated, UK-based coach offering one to one sessions, a financial plan and “personalised action tracker”.
Key to the viability of this business model is technology, Rogerson said.
“The technology does a lot of heavy lifting that would otherwise have to be done by employees which would be costly.
“The empathy and understanding comes from a person, so you need coaches, but that coach must be able to look after hundreds of clients, not 50, otherwise you’d end up charging way too much money.”
The way this coaching reaches people is also important to Octopus.
