Spotlight on... the hybrid advice evolution
Why the financial advice landscape demands a new approach
The financial services industry stands at a critical juncture. For decades, the traditional advice model has served wealthy individuals exceptionally well, providing holistic, face-to-face guidance. However, for the vast majority of the population, professional financial advice remains out of reach, creating a significant "advice gap" that technology alone has historically struggled to fill.
We believe that hybrid advice, the intelligent blend of digital efficiency and human expertise, is no longer just an option. It is the necessary evolution required to deliver transformational change.
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The advice gap is widening
The numbers paint a stark picture of the current landscape. While demand for financial guidance is growing, the supply of advice is constrained.
- A shortage of advisers – there are approximately 43,000 regulated advisers in the UK, a number that has remained relatively stable while the population grows.
- An ageing workforce - over 50% of these advisers are aged 50 or above, suggesting the shortage may worsen in the coming years.
- The affordability barrier - high operational costs mean many firms cannot profitably serve clients with less than £50,000 in investable assets.
This has created a two-tier system. The "affordable advice gap" affects approximately 12% of UK adults who would pay for advice if it were cheaper, while a further 39% fall into the "free advice gap," relying solely on guidance or self-direction.
Why "robo" wasn't enough
In the past, "robo-advice" was heralded as the solution. However, these early digital-only propositions often struggled to gain mass adoption because they missed a fundamental truth about human psychology - money is emotional.
While digital algorithms are excellent for simple tasks like ISA investments, complex life stages such as planning for retirement, require reassurance. Consumers need to know that if their situation becomes complicated, a human expert is there to help.
This is why the industry is moving toward an omnichannel approach – or as we like to call it a multichannel, modular approach. It is not about replacing the adviser; it’s about optimising where the adviser adds value.
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.png?width=650&name=Web%20page%20images%20(13).png "The hybrid imperative - efficiency meets empathy")
The hybrid imperative - efficiency meets empathy
Hybrid advice offers a practical solution to the productivity puzzle. By automating the data gathering, fact-finding, and report generation stages of the journey, firms can reduce the time spent on administrative tasks by significant margins.
This shift delivers three critical outcomes:
- Expanded access - by lowering the cost to serve, firms can profitably advise mass-market customers who were previously uneconomical to reach.
- Consumer choice - an omnichannel or multichannel model empowers customers to choose how they engage. They can self-serve through digital channels for simple needs and seamlessly switch to human advisers for complex decision-making.
- Adviser focus - technology liberates advisers to focus on high-value activities such as building relationships, explaining complex recommendations, and providing the "human touch" that builds trust.
The path forward
The future of financial planning is not binary. It is not digital versus human. It’s a spectrum where technology and empathy work in tandem.
As we have seen in our work with partners like AIB life, integrating these capabilities into a single ecosystem allows for a differentiated customer proposition that can handle large volumes while maintaining the personal connection customers value.
For firms looking to double their market share or secure their future in a digital-first world, the question is no longer if they should adopt hybrid advice, but how quickly they can implement it.
