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 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits record low as popularity suffers in wake of Ukip sex scandal
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Germany sees 'visible rise' in support for far-right extremism in response to perceived 'Islamisation' of the West
iJobs Money & Business
£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...
£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...