Barclays Aims To Close UK's "Advice Gap"

Editorial Staff

17 July 2020

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.