Cut out the middle man
You could soon be making decisions about investments at the click of a mouse, reports Stephen Pritchard
Sunday 22 February 1998
Some financial advice is very good, but "advisers" are often either "tied", selling products from just one company, or influenced by commission. Putting more information into the hands of investors is one way to ensure advice measures up. For example, if companies selling unit trusts put performance statistics on their websites, clients can compare them with other companies' figures.
For the more experienced investor, the internet can cut out the inconvenience of going to an adviser, especially for those who hold a fund or set of funds with a particular investment house. Adding to or shifting money between investments should be easy - make the decision and carry out the transaction. Some houses already offer this and more are bringing it on line.
One very comprehensive site is run by Fidelity Investments. As well as the usual information about the company and its products, its pages contain details on fund prices. Fidelity's WebXpress allows customers to view details of their funds, check their values and deal on line. There are clever graphics, too: for example, the system displays investment holdings by industry sector as a pie chart on screen.
Last month, the company added a "top-up" facility on line for its Peps and unit trusts. Anyone who has money with Fidelity can add to his or her investments using the website and a Delta or Switch card. The only limit is the money available in the current account and, for Peps, the ceiling on investments.
Richard Wastcoat, Fidelity's executive director, says the logical conclusion is to let new customers take out new investments over the internet. The main hurdle is an Inland Revenue demand for a written signature for a new Pep.
Mr Wastcoat believes pressure is growing on financial services companies, on both sides of the Atlantic, to let investors manage their money when and where they please. Clients, he says, want more than just "static data", such as unit prices.
Not everyone wants to be so involved in their finances. Mr Wastcoat believes it is younger investors who take a hands-on approach. For investors who prefer a conventional adviser, many have set up on the internet, as individuals or via umbrella groups such as DBS.
But advisers maintain that the internet is a shop window, rather than a counter. Brian Spence, managing director of Ethical Financial, points out that some 1,500 people visit its website weekly, but it is hard to know how many mouse clicks translate into business.
He believes clients still prefer to see an adviser face to face. "The nature of our business is that it is personal," he says. "People who come to us want an IFA to review their finances." Spence sees the internet more as a means of communication between client and adviser than a sales tool.
But not everyone wants a long-term relationship with an adviser, as the success of direct financial products reveals. Instead, there could be a separate market for one-off help with finding a good deal, especially in busy areas such as life assurance or mortgages. Something similar already exists in the US, where tax advisers offer opinions via e-mail for a small fee.
It is not hard to imagine paying an insurance or pension specialist pounds 15 or 20 to trawl through the direct market and unearth the five best deals. It cuts out the commission - and possible bias - of traditional brokers, saves a lot of time, yet leaves the final choice of policy with the client. It's not here yet but it could come sooner than some might like.
q Fidelity (UK site): www. fidelity.co.uk; Fidelity (international site): www. fid-intl.com.
Ethical Financial: www.ethical financial.co.uk.
Lists of financial advisers are available via MoneyWorld: www.moneyworld.co.uk; and MoneyWeb: www.moneyweb. co.uk.
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Why this father didn’t hide his daughter’s heroin overdose in her obituary
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
- 5 The most powerful passports in the world
Nepal earthquake in pictures: Photos show devastation caused by 7.8 magnitude earthquake
Smartphones are making children borderline autistic, says psychiatrist
Nepal earthquake: The race is on to help thousands trapped under rubble around Kathmandu, while remote villages face a long wait for help
Royal baby: Live updates as superbug closes ward at St Mary's Hospital where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
Rupert Murdoch berated Sun journalists for not doing enough to attack Ed Miliband and stop him winning the general election
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...