The UK has plenty of free financial information at one end and regulated advice for the wealthy at the other, with a large gap in between where most households sit. That gap is where a wave of financial-guidance apps is trying to build.
Syd Lawrence founded Delphina, a personal financial clarity platform, after qualifying for a financial-adviser diploma and deciding to build outside the regulated advice model. In this written Q&A, part of our Financial Inclusion and Fintech for Good coverage, he sets out the line between advice and guidance, what technology can and cannot do for inclusion, and how he tries to measure outcomes rather than engagement.
You have drawn a distinction between financial advice and financial guidance. Where is that line, and why does it matter for the people Delphina is built for?
Financial advice is much narrower than almost anyone realises. It means a personal recommendation to buy, sell or hold a specific regulated product. That is the whole regulated
activity.
It is not ‘am I on track’. It is not ‘when can I realistically retire’. It is not ‘what would actually let me retire sooner’ . It is not ‘how do I hold my assets more tax efficiently’. None of those questions require a regulated adviser, yet all of them are the questions people actually lie awake with. Because the industry has spent twenty years being cautious about a line most people cannot see, the practical result is that nobody answers them at all. Firms would rather say nothing than risk saying something.
So you end up with a country where general information is everywhere, product recommendations are available if you have six figures to invest, and the enormous space in between is empty. The FCA‘s own estimate is that around 23 million people are underserved by the advice and guidance markets. That is not a niche, that is most of the country.
Delphina lives in that space. We answer ‘where are you’ and ‘what changes the picture’. We do not recommend products, because that is a different thing entirely, and conflating the two is the single most expensive misunderstanding in UK personal finance. Advice tells you what to buy. Guidance tells you where you are. Most people never get to the second thing, let alone the first.
What gap in financial education did you see that made you build Delphina after qualifying as a financial adviser?
I did the qualification expecting to find that the information was the problem. It is not. There is an enormous amount of good, free financial information in the UK.
What I could not find, for my own family, was a verdict. I wanted someone to look at our actual position and tell me plainly whether we were on track. Nobody would. Every route led to either a calculator that gave me a projection I did not know how to read, or a firm that wanted to sell me something first.
The complexity is not a bug in the UK financial industry. For a lot of participants it is the product, because complexity is what justifies the fee. There is no shortage of financial information in this country, there is a shortage of answers.
How does the product actually help someone improve their financial position, and what does ‘free with paid upgrades’ mean in practice?
You put in your position: income, spending, savings, pensions, debt. Delphina gives you a verdict. You are on track, or you have a gap, and here is roughly how big the gap is.
That verdict is the free product. Not a trial, not a teaser. The thing that changes how you feel on a Tuesday night is free.
The paid tiers are for people who want more than a single answer: ongoing tracking as the position changes, scenario modelling, Monte Carlo simulations, and more guidance and time with me directly. Roughly 5 per cent of users pay for that. The other 95 per cent cost me money, and I think that is the correct shape for a product like this.
Financial guidance sits close to a regulated boundary in the UK. How do you stay the right side of the advice line while still being genuinely useful?
I chose deliberately not to operate as a regulated adviser, and Delphina is not a regulated firm.
The line is a recommendation about a specific product for a specific person. We do not cross it. We
do not recommend products, we do not sell products, and we take no commission and no product
referral fees. There is no version of Delphina where a particular answer makes me more money than
a different one.
What we do instead is work on the user’s own numbers and generic principles. When someone’s situation genuinely needs regulated advice, the right output is to tell them that and point them to a regulated adviser. That happens, and it is a feature.
The safest way to stay the right side of the advice line is to have nothing to sell. Then the incentive to drift never exists. The incentives have to be aligned.
What can technology realistically do for financial inclusion, and where does it fall short?
What it can do is collapse cost. The marginal cost of giving one more person a clear picture of their finances is close to zero. That is the entire inclusion argument. You cannot get an adviser’s time to scale. You can get clarity to scale.
Where it falls short is that clarity is not money. If someone’s honest verdict is that there is a gap and no surplus to close it with, no amount of software fixes that. That is a wages and cost-of-living problem, and it belongs to policy, not to me.
The other limit is boring and human. People find entering their financial data tedious and slightly frightening. That is our biggest single obstacle, and it is not solved by better technology so much as by asking for less.
How do you measure whether Delphina is improving outcomes rather than just engagement?
This is the hardest question on the list, and I do not think anyone has fully solved it.
Start with what we deliberately do not optimise for: time in app, daily actives, session length. If someone gets their answer and does not come back for three months because nothing changed, that is a success, and any engagement metric would score it as a failure.
What we do track is whether the person actually reached a verdict, and whether they subsequently changed something. Reaching the verdict is the one that predicts everything, and it is where we lose most people, so that is where the work goes. Our return rate went from 7 per cent to about 30 per cent once we restructured around delivering an answer rather than a projection.
Real outcome measurement, the kind where you prove a pension balance moved because of us, needs years and a much larger base than I have. I would rather say that plainly than dress up a proxy metric as an outcome. I speak with as many of our users as I can, and most tell me they have gained clarity on their finances. That is the main objective.
What is next for Delphina, and what would success look like for the financial inclusion work you are contributing to?
Near term it is unglamorous. Onboarding drop-off is the constraint, and we would rather fix that than build anything new. We have deliberately stopped shipping features this month to force ourselves to measure instead.
Beyond that, we want the self-reported outcome data to be good enough that in a year I can answer your previous question properly.
On inclusion more broadly, success looks like this middle ground existing as something people recognise. Right now the UK offers free general content at one end and regulated advice for the wealthy at the other, with a very large gap in between where most households actually live. I would count it a win if in five years that gap is a category with several credible players in it, and not just us.
The post Advice Tells you What to Buy, Guidance Tells you Where you are: Delphina’s Syd Lawrence on the Gap in UK Financial Help appeared first on The Fintech Times.
