A new ‘low cost’ advice firm called Hundreds and Thousands has been launched by the former founder of Novia, Paul Boston, to bridge the advice gap for both advisers and consumers.
The firm will charge less than 150 basis points per annum for a restricted advice service, aiming at ‘advice gap’ clients – those with modest savings who cannot afford a full Financial Planning service.
However, it will also offer a full independent service for those with bigger portfolios or more complex Financial Planning needs.
It will also refer back to advisers any clients they have referred to Hundreds and Thousands who have taken the restricted service and whose portfolios have grown in size and now need Financial Planning help.
The firm is officially called HT Money but will trade as Hundreds and Thousands. Its overall aim is to provide financial advice to lower-value clients with less complex needs. HT Money says these clients normally fall outside current advisers’ target market and slip into the “advice gap.” Unusually, the firm is targeting both consumers and advisers, encouraging advisers to pass on ‘advice gap’ clients.
The firm is based in Barnsley but many of its advisers and support staff are home based. Funding for the firm is provided by the founding shareholders.
The firm currently has about 12 people working on the project in various capacities. They will be split into “advice pods”. Each pod will include a Level 4 adviser, a Level 4 Paraplanner, an account manager and an administrator. As new commercial relationships are established the number of ‘pods’ is set to increase to deal.
H&T says: “Many advisers are currently facing a dilemma, which has been accentuated by the requirements of the FCA’s Consumer Duty “What do I do with my lower-value clients? They are unprofitable now, but they may become high-value clients. I don’t want to lose these clients, but it is not commercially viable for either party to retain them.”
HT says if and when clients’ circumstances change and they need a more complex solution it will pass them back to the originating adviser.
The vertically integrated business will provide clients with initial and ongoing advice, platform services, discretionary fund management and underlying funds for less than 150bps per annum. It aims to streamline the advice process by utilising AI to guide the client through disclosure documents and the principles of recommendation so that they are “better informed” when speaking with their adviser.
Hundreds and Thousands offers two main services to consumers. The ‘Streamlined Service’ is mainly aimed at those with smaller amounts and uses ISAs, pensions and General Investment Accounts offered via sister firm LP10 to provide a ‘restricted financial advice’ proposition. It is limited to three investment tax wrappers from one provider but says thousands of funds are available. The Streamlined Services comes without an initial fee.
The firm also offers a full Independent Financial Advice service itself covering the whole market. It charges a fee with details of the fees available on request. This is more suited to those with complex Financial Planning needs who want face to face advice, it says.
Company co-founder Paul Boston was a founder and director at wealth management platform Novia Financial and Copia Capital management and more recently a director at Wychfield Associates.
He said: “Too many clients that our industry views as ‘low value’ are being locked out of the financial advice process, even though they are the ones who, arguably, require it most.
“Hundreds and Thousands has been set up to cater to the needs and objectives of these less wealthy clients. The beauty of our service is the ease with which transfers can be made to us and, when the client’s wealth grows and they become part of the adviser’s target market, we transfer them back.“
