New Products
Barclays Aims To Close UK's "Advice Gap"

For years now, the UK and certain other countries have witnessed the phenomenon of the "advice gap", caused so critics say by financial advice becoming more expensive and therefore less profitable for firms to provide for the mass public.
Barclays has launched
a new digital advice service to fill the UK’s “advice gap” – a
term signifying how a chunk of the population are not getting
wealth guidance because they don’t hold enough money to be
profitable clients. The “gap” is a long-standing complaint, and
one made arguably worse by rising regulatory burdens since
2008.
The UK bank’s service is called Barclays Plan & Invest. It will
create a “personalised investment plan” tailored to a customer’s
goals, with Barclays running the investments for clients.
Barclays has partnered with Scalable Capital for the service,
which will give clients access to the bank’s pick of active and
passive funds through a managed portfolio.
“Over the last few months, we’ve seen a rise in the number of people wanting to invest for the first time and it feels more important than ever that we give people the right tools and advice to plan for their financial future,” Dirk Klee, chief executive of wealth management and investments at Barclays, said.
The bank said its business model differs from those offered by a
number of robo-advice providers; it will adapt investment plans
to market changes or clients’ circumstances. The bank will also
check with clients at least once a year to ensure that
investments remain fit for purpose and that they are making the
most of any tax allowances.
Policymakers have drawn attention to the “advice gap” problem for
more than a decade. In the run-up to the UK’s Retail Distribution
Reform of financial advice, and shortly thereafter, a number of
wealth managers hiked investment minimums because some clients
were not as profitable to serve as before. The irony of the
situation is that retail/mass-affluent clients affected are most
in need of providing for long-term savings, given the pressures
on State-run pension programmes.
Initially, the new service will be piloted with Barclays current
account customers who have at least £5,000 to invest and will be
accessed through Online Banking, with dedicated support over the
phone. The bank will continue to develop the service over the
coming months, with plans to launch the Barclays app later this
summer.
The bank cited new research revealing that over half of Brits (56
per cent) think they don’t have access to the expert support they
would need to start investing, with 71 per cent thinking that
they don’t have the skills or expertise to invest on their own.