Financial advice is big business; by some estimates “wealth management” is a £19 billion industry in the UK alone. But the quality of financial advice varies greatly, and finding a high quality Independent Financial Advisor can be a difficult process. VouchedFor is setting out to solve this problem with its financial advice marketplace and review site. Today, the UK startup has announced a seed round of £150,000 (~$235k) from an impressive list of angel investors to help it forge ahead with the task.
Its new backers include Doug Monro, former COO of Zoopla and MD of Gumtree, and currently founder of Adzuna; Matt Cooper, Chairman of Octopus Investments and former CEO of Capital One Europe; Mark Hawkins and Matt Denman, founders of HD Decisions, which provides technology to a number of financial comparison sites such as MoneySupermarket and Confused.com; and unnamed individuals associated with Samos Investments but investing in an independent capacity.
VouchedFor lets users find, rate and review Independent Financial Advisors who can optionally register with the site, though any UK-based IFA can be reviewed in an ‘unverified’ capacity and then claim their profile later.
Since its launch last September, VouchedFor says it has signed up just over 500 registered IFAs, and is currently offering to make a £4 donation to Financial Education charity MyBnk for every review added, which is an interesting use of its new funding.
That said, we can presume that the startup is already generating revenue. Its business model consists of taking a small commission for lead generation, though it’s keen to stress that this doesn’t affect the independence of those customer-submitted reviews. In addition, it charges IFAs a subscription for premium features that enable them to beef up their profiles and have more contact options.
Zooming out a little, VouchedFor’s existence looks well-timed. A regulatory change in the UK points to more transparency in the wealth management sector as Independent Financial Advisors will no longer be allowed to earn commission on the products they sell and instead their business model must consist of direct advisor fees only. This has meant that a number of the big banks are exiting the financial advice business entirely, giving a boost to smaller, true independents, many of whom are leaving the banks to set up shop on their own. It’s in this context that VouchedFor hopes to prosper.