The Advice Gap: Learning From Other Industries

The Advice Gap intrigues me, and I’m very aware it preoccupies our industry. I'm not well versed in advice industry lore, but a fact I always find illuminating is that the percentage of the UK population that receives financial advice, ~8%, is coincidentally close to the percentage of the population that send their children to private schools, 7%. To me, this raises the simple question: Should we just accept the reality and rename the "advice gap" as the "Affordability Gap"?

But this got me thinking: Do private schools talk about an education gap? And then I wondered: How can we, in the financial advice industry, learn from other industries facing similar client-servicing gaps?

Retail’s Success with Personalisation

Retail has faced two major challenges regarding consumer gaps: the growing gap between those who shop in-person and online, justifying in-person shopping in an age of online convenience, and differentiating online beyond just price. Both challenges are centred on creating a unique experience, much like the challenge advisers face in standing out amid a sea of online content and finfluencers and D2C investment platforms.

Takeaway 1: Enhance the In-Person Experience

Brick-and-mortar retailers have responded by offering unique, in-person experiences that can’t be replicated online—like Ikea’s showroom walkthroughs and bookstores hosting author readings to bike shops doing bike fittings and nurturing riding groups. As advisers, consider how you can offer experiences that go beyond standard meetings. Host client events, workshops, or seminars that provide valuable insights and foster a sense of community. This not only strengthens relationships but adds value and opens up your network.

Takeaway 2: Leverage Personalisation Online

Online retailers have also succeeded by investing in data analytics and AI-driven personalisation, offering tailored recommendations that create a more engaging online experience – ever clicked on a “People who bought this also bought this?”. Advisers can apply this by using client data to offer personalised financial advice. AI will usher in the ability to better use CRM systems to track client preferences, life events, and financial goals, and tailor your communications and recommendations accordingly with minimal touch from yourselves. This approach makes clients feel valued and differentiates your service from generic retail investment platforms.

Learning from Education: Empowering Clients Through Self-Service

The education sector has transformed the accessibility gap by making learning accessible through online platforms and Massive Open Online Courses (MOOCs) - here’s MIT’s free resources, FutureLearn is another good one, or the education platform Udemy. But you don't have to provide full courses to do this; different professions are using different platforms - my wife follows a chef on Substack and is now registered for a course of theirs. These platforms empower individuals to take control of their learning journey at little to no cost while letting the expert distil and package up their expertise reaching new markets.

Takeaway 3: Offer Digital Education Tools

Advisers can adopt a similar strategy by providing subscription-based self-service tools and educational resources. Use online portals where clients can access financial literacy content, educational videos, and planning tools. These platforms can serve as a gateway for clients to engage more deeply with your services when ready, effectively bridging the gap between needing and affording advice.

Bringing It Back to Advice

There isn't a single silver bullet to solving the advice/affordability gap, and some of these techniques aren't right for solving our specific issues, but we can still learn from others. The advice gap will take a combination of methods and technology if advisers are willing to invest the effort. But looking at the takeaways above it's not hard to envision a way of servicing a new segment of clients in a light-touch manner:

1. Host seminars tailored to local business owners' needs, say pension planning.
2. Invite them to subscribe to your online "Business Owner Advice course" - pre-made content and resources.
3. Personalise regular ongoing content and information sent to them using CRM + existing resources you have.
4. Then, if the adviser wants to, provide an avenue for them to take steps you outlined in the course via an adviser-branded low-cost platform.

Building this type of pipeline does take time, and it's probably not something the MD of a firm would do, but as a project for a junior member of staff, it's a great way of building ownership over a client segment and increasing engagement.

While technology and strategies from other industries can enhance your practice, the core of solving the advice gap lies in what advisers do best: providing personal, empathetic, and tailored advice. For me solving the ‘gap’ is about showcasing your professionalism and using technology to increase access to it in a manner that matches client needs with your resources. As a provider, our focus is on enabling you to focus on the advice, grow your business and not get caught by admin drag.

There's a secondary benefit to broaching the advice gap; if we can streamline serving clients with fewer assets and more straightforward needs, we can iterate on these efficiencies and experiences to use with our existing client base.

I know not every adviser is concerned about solving the advice gap, but for those who are and see an opportunity or just see the benefits of efficiency to grow their business, the technology and integrations available today present a brilliant opportunity.

Thanks.

Harry Webster

P1 Investment Services

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