In a recent blog, we looked at the FCA’s proposed targeted support framework – a move designed to help large firms and direct-to-consumer platforms guide millions of customers toward better outcomes.
It’s an important and much-needed step. For the first time, firms will be able to give tailored nudges and support to help people make better financial decisions – without crossing into full advice.
But what about those whose needs are too complex for targeted support, yet whose assets may be too modest for traditional advice models to serve profitably?
In other words, what about the UK’s sizeable – and growing – mass affluent? According to FT Adviser, there are 4.5 million people with assets over £100,000. And nearly 70% are slipping through the professional advice net – not because they can’t afford help, but often because advisers can’t afford to help them…
Why advice has priced out the ‘mass middle’
For advice firms, serving the mass affluent has long been a balancing act. The demand is there, but the economics haven’t always stacked up.
Of course, not everyone who could benefit from advice is actively looking for it but, according to Royal London, 3.5 million UK adults with between £10,000 and £50,000 in assets say they’d be open to speaking with a financial adviser.
The big banks are certainly taking notice (again): in 2024, HSBC announced plans to double its UK wealth business by targeting those with around £75,000–£250,000 in deposits.
But what about advice firms themselves?
Despite the opportunity, the technology and operating models of many advice firms – with high fixed costs and plenty of manual admin – often make it difficult to serve smaller clients profitably. It’s a well-known pressure point, not new news.
According to The Lang Cat’s Advice Gap 2024 report, 55% of advisers say they’ve had to turn lower-asset clients away, as the cost and complexity of delivering advice makes smaller portfolios uneconomical (Citywire, 2024). The same research shows minimum asset thresholds jumped 12% to an average of £214,000 – pushing the bar even higher for clients to qualify for advice.
A July 2024 Censuswide / Octopus Money survey tells a similar story: 75% of advisers said serving smaller clients is becoming increasingly challenging. Nearly half (45%) have already pivoted toward higher-asset clients – with another 45% planning to follow.
In short, familiar constraints around legacy tech, manual processes and rising regulatory workloads continue to push up cost-to-serve, leaving firms under pressure to prioritise the clients who generate the greatest return. And while Consumer Duty is designed to raise standards, advisers say the additional admin burden is only adding to that pressure. According to the same Octopus Money research, over a third (35%) of advisers say the reporting requirements have increased the time spent per client – putting further pressure on margins and making it even tougher to support lower-asset clients.
The result? An industry whose ambition is constrained by infrastructure and complexity. One that, despite its best intentions, hasn’t always been designed for those who could benefit most from its advice: the accumulators, early-stage investors and next-generation wealth builders.
The cost-to-serve problem
According to JustFA, it still costs advisers around £800 per client, per year in people hours (adviser, paraplanner and admin time). And this is before other variables and fixed costs are even factored in – it’s easy to see why smaller portfolios don’t stack up commercially. Those numbers might make sense for a £500,000 client – but for someone with £100,000, they don’t.
But technology is finally shifting the cost curve – transforming how firms deliver advice, and who they can profitably serve.
The tech transforming advice
Across the industry, new digital infrastructure is replacing the manual drag of traditional platforms. Modern, API-led systems connect client portals, CRMs, trading engines and custody – in real time. Data flows seamlessly between them, eliminating rekeying, paperwork and delays. Tasks like onboarding, ID verification, suitability reports and account creation can now happen digitally – often in minutes rather than hours. And, in the back-end, once-manual processes such as reconciliations and investment trading and settlements are handled automatically – freeing platform providers to scale up without scaling headcount, dramatically lowering the cost of investment infrastructure in the process.
When technology takes care of the heavy lifting, advice professionals can spend more time where it counts: with clients. The result? Lower costs, greater capacity and the ability to serve more people – profitably and at scale.
A commercial opportunity hiding in plain sight
With the right technology, advisers can finally reach the clients they’ve been turning away – the ones who felt too small, too early or too costly to serve. And in doing so, they’re not just growing their business – they’re helping to close one of the biggest gaps in UK financial services.