New age of distribution dawns with paid-for online advice

The launch of a website offering independent financial advice on pensions is being hailed as the dawn of a “new age” of distribution to the mass market.

Churchouse Financial Planning next week unveils planmypension.co.uk, an online service offering "straightforward and uncomplicated" advice on pensions and annuities in return for a fee of 1% of the amount invested.

Advisers predict their existing client-facing roles will not change but say the future of paid-for advice for the masses could be online, alongside existing execution-only services.

"People are underestimating the future reach of the Internet but this is where it is at now, "Martin Bamford of Informed Choice says. "It doesn't have to be an ‘either or' situation. It won't replace existing advice practices, but complement them."

Danny Cox, head of advice at Hargreaves Lansdown, which boasts an online execution-only offering called Vantage, adds: "There is a lot to be said for the web being the future of distribution to the mass market.

"With our own online execution-only services, we can provide a lot of support and information to help customers make their decision, and it works really well for a lot of products. I don't think the service is compromised, it's just different, and I think advisers will see the value of using online portals as a way for the financial services to engage with consumers."

Planmypension.co.uk is the brainchild of Keith Churchouse, director of Guildford-based Churchouse Financial Planning.

He admits the site is a scaled-back version of his first foray into online advice in 2006 (www.advicemadesimple.com) which offered holistic independent advice online.

"I have always been convinced online financial advice is the way forward for both our own business and for a significant and growing segment of the UK retail personal finance space," he says.

"The market is in its infancy but we are going to be market leaders in this arena and prove it can work. It will not usurp the existing personal relationship between an adviser and his client and, in my opinion, this market will continue to grow."

In order to receive advice, Churchouse clients complete a short online fact find, submitting additional questions should they wish. They will pay a fee of 1% on the amount invested and then receive full advice via email. Churchouse will also receive trail commission of up to 0.5% where available.

"Having worked on these systems and concepts for four years now, we are beginning to really apply our development work in a way which will see a proliferation of these types of websites," Churchouse says. "The development has not been without significant cost, both in terms of time and funding, but the resources employed are now bearing fruit."