The national advisory arm of AIM-listed Lighthouse Group said it has increased its customer base by targeting ‘Middle Britain’, a sector of the population which has seen traditional paths to advice withdrawn following the implementation of the RDR.
Malcolm Streatfield, CEO of Lighthouse Group, said: “We are operating in a different marketplace to the one we worked in as recently as a year ago. Middle Britain is concerned about the future of its finances, with many in this group having significant savings.
“They want to make sure their hard-earned cash is working for them but they need expert and well-informed financial advice which has been and is being withdrawn from institutions to which they would by instinct turn to.”
Filling the void
Wealth managers at an RDR roundtable hosted by Portfolio Adviser last year, suggested workplace financial advice could be a way to fill the advice vacuum and predicted enterprising firms would take up the mantle.
Research from Deloitte has claimed 5.5m people could become advice orphans in the aftermath of RDR, while JP Morgan said individuals with £50,000 worth of investable assets would be the cut-off point for most financial advice firms.
In steps Lighthouse Financial Advice.
Andy Gadd, head of research for the firm, said: “What we have done at Lighthouse Group is look at affinity partnerships. We can provide initial consultations just to discuss different aspects of financial planning. We have different levels of charging depending on what clients are looking for: transactional-based, added services, or on-going reviews.”
Affinity groups are special interest groups such as the Union of Shop, Distributive and Allied Workers (USDAW), BA Clubs, the Association of School and College Leaders, UNISON the The Royal College of Midwives and Royal College of Nursing.
Building trust
Gadd added: “Like many groups of people IFAs have had bad publicity because of the actions of a few rotten apples in the past. If nobody you know has a relationship with an IFA it is hard to believe they are trustworthy. We give seminars for these groups and if someone is interested they can speak to us on a one-to-one basis. By going through these workplace associations we gain that level of trust.”
In the year ended 31 December 2012 Lighthouse Group reported earnings of £1.5m. It secured affinity contracts with BA Clubs, the Royal College of Nursing and the Allied Bakers Union during that financial year.
Its affinity contract with USDAW was signed in March this year and the parent group invested £900,000 into the financial advisory business during 2012.
In its preliminary results posted on 20 March the group said the continued growth of Lighthouse Financial Advice was a priority and added that it aimed to double the number of advisers in that division over the next two years.
Would you think about tapping into advice in the workplace? Do you offer transaction-based advice? Let us know in the comments box below…
