Octopus Group, the London headquartered financial services and energy firm, has announced its plan to launch Octopus Moneycoach with the acquisition of Hatch Financial Coaching as it bids to take financial coaching to the mass market.
The acquisition comes as millions of people adapt to changes in their financial circumstances due to the impact of Covid-19, yet the vast majority remain without access to any form of financial advice, with the FCA estimating that more than 18 million people in the UK could benefit from more affordable advice.
Founded in 2017, Hatch Financial Coaching, which will be rebranded Octopus Moneycoach, aims to help make holistic financial planning accessible to all, combining smart financial planning software with friendly financial coaches. It intends to fill the gap between robo-advice and traditional advice, appealing to those who benefit from a human relationship to help make financial decisions but don’t yet have sufficient assets or complex needs that warrant traditional advice.
The positive impact of financial coaching can be significant. Within their first year, 55% of Hatch clients were able to increase their monthly savings, a quarter increased their pension contributions, while just over half (51%) reduced their debt. Almost eight in ten (77%) of people achieve at least one of these outcomes.
Simon Rogerson, co-founder and CEO of Octopus Group, said: “While the advice industry serves many people extremely well, there are still vast swathes of UK population who don’t get any form of financial advice. This has huge implications for people’s finances but also for their mental health, as money worries are one of the biggest causes of stress. Octopus Moneycoach offers a solution to this by providing easy to understand financial coaching at a much lower cost for those people who would otherwise struggle to get help. It’s hard to overestimate the positive impact this can have, as for many it feels like a large weight has been lifted off their shoulders. For forward-thinking businesses keen to support the mental and financial wellbeing of their staff, it should be a no brainer.”
Octopus Moneycoach works primarily with employers, who offer its services as part of their workplace benefits, with existing clients that include MoneySuperMarket, Sony Interactive Entertainment, Epson, and Experian. This reflects an increased awareness of the role employers can play in in supporting the financial wellbeing of staff, with FCA research finding that 9 in 10 businesses think money worries impact their performance.
As part of this service, Octopus Moneycoach often partners with established advice firms to provide a comprehensive financial advice solution to workplaces. Under such partnerships, advice firms serve employees with more complex planning needs, while Octopus Moneycoach helps those who are typically early-career to mid-life, wanting to plan for their future, build up savings, and possibly start investing. On average, its customers invest circa £10,000 per year.
Adam Price, CEO and founder of Hatch, said: “For lots of people, any proper advice they get tends to be siloed and focused on specific products, such as pensions or mortgages. Our mission with Hatch is to make holistic financial planning affordable for everybody, helping people to make their life goals financially achievable, whatever they may be. Octopus has been a vocal champion of financial advice and the need to close the advice gap for many years now, making it a natural partner for us in this next stage of growth. We know there’s a huge need for this kind of service, maybe more so now than ever before, and I’m incredibly excited about what we can achieve as part of Octopus.”
Alexandra Kosylo, Wellbeing Manager at Experian, said: “These are difficult times. We know that everyone’s situation has changed in some way over the past year. With Octopus Moneycoach we feel confident that every employee has access to personalised one-on-one support and guidance on precisely the right financial actions for them as the process is tailored to each employee’s situation, whether they want to plan for a rainy day, a property, enjoying life, a family, and/or retirement. The real magic is the peace of mind it gives – for us, and our employees.”
The UK’s Growing Advice Gap
Octopus has previously highlighted the need for innovation in this space. Last year it published its Bridging the Gap report, which revealed the growing advice gap in the UK and the need for low-cost solutions for those with more straightforward needs to complement the service offered by financial advice firms.
Octopus will also invest £10 million into Octopus Moneycoach to help scale the business. This includes plans to increase its number of financial coaches from around 30 to as many as 200 over the next 2 years, growing the market as it does so. Adam Price, founder and CEO of Hatch will remain as CEO.
Simon Rogerson added: “We’re really excited to launch Octopus Moneycoach. Adam and his team have done a brilliant job of growing the business and proving the model works while delivering an outstanding service, with glowing reviews from thousands of happy customers. Working together we can now start building something much bigger that will make a meaningful difference to thousands more lives.”