As I write this, everything appears to be self-immolating. Our major political parties are eating their young, property funds are pulling up the drawbridge, and Wales has just crashed out of the Euros. There’s a joke in there about how the Welsh voted in the Brexit referendum, but for once I really can’t be bothered making it.
Everything that is bad is because of Brexit – or at least that is what the papers would have you believe. The Daily Mail hasn’t quite gone there with “Brexit causes cancer”, but it can surely only be a matter of time.
So I thought this month I would steer clear of all that nonsense and concentrate on tech. Because tech is not political. Silicon Valley cares not whether the EU Working Time directive is in place, or where your regulations are made. Semiconductors are universal.
Actually that might be a problem in itself. You already know the UK has a burgeoning beard – sorry – fintech sector, largely based in and around Old Street and Shoreditch in swinging London.
Part of what brings that scene to our shores is the easy availability of artisan coffee shops, but also the fact that the UK’s distribution landscape is pretty wide open – especially when compared with our European neighbours.
Regulation
Regulation is tight here, but for plucky fintech pioneers that is not necessarily a bad thing; it is just another set of problems to solve.
If you can build for the hyper-regulated British market, you have a relatively easy job to port what you have built to less regulated markets, starting with northern Europe and the ‘Scandiwegians’, and then looking to the rest of Europe (although so much of southern Europe is dominated by the bancassurers), the US, Australia and elsewhere.
Market access
However, some of this is predicated on easy access to these other markets. The UK is a huge financial centre, but its accessible direct-to-consumer (D2C) retail investment landscape for start-ups is not huge.
Fintech goes where a) the subsidies are and b) the market is – and I do wonder if other financial hubs like Frankfurt, Luxembourg or Brussels, or even Zurich, with its cross-border trade agreements, might be beneficiaries and if we might see some flight as a result of the Brexit vote.
I saw a hopeful headline the other day, which said something like ‘Why Brexit Could Be The Making of The UK’s Fintech Scene’ or something similar. I am concerned that it could be the opposite. Will no one think of the baristas?
Anyway, enough of that. I mentioned earlier that the D2C market – or at least the accessible D2C market – is not huge. But that does not stop firms in that space doing occasionally interesting things.
The lang cat has recently published our 2016 guide to direct platforms – called Come And Have A Go: Rise Of The Machines – which is available to download free from our website (langcatfinancial.co.uk). As part of the guide, we highlight some of the cool stuff we have seen, and I thought that might make a reasonable diversion from all the doom and gloom.
Probably our favourite new thing of the year came from – once again – True Potential (TP), which has got a grip on the zeitgeist and is not letting go. Its latest incarnation of ImpulseSave™ allows you to schedule mini-savings, and it comes with a very welcome new extra in that it shows you straightaway what your little bit of extra means in terms of achieving your goal.
If you are not familiar, ImpulseSave™ is a feature available to any TP customer, whether advised or direct, that allows them to make impromptu deposits via smartphone into their Isa or general investment account. This could be as little as a couple of quid or as much as hundreds.
TP’s business model does not suit everyone, but my goodness this feature – when compared with how you lodge money with almost every other provider – shows how difficult we make it as an industry to let people give us their money.
Wags may point out that if you schedule an ImpulseSave™ then it is hardly impulsive any more, but we do not listen to them. This was a nice little development and good to see.
Over in robo-land (another candidate for Worst Theme Park Ever) it is worth noting that darling/bête noire of the space, Nutmeg, has now moved into offering regulated advice.
I have been in numerous rooms recently where clients have missed this development and had Nutmeg in the does not give advice column. It does now.
We went through the journey as part of our research for the guide and found that it was a pretty good experience. The actual componentry of the journey is not all that different to, say, the Parmenion-powered platforms out there (Parmenion won our Hero award this year), but its design is.
Pensions in a nutmeg
If there is one thing that Nutmeg does really well it is design, and we were impressed. It is also worth saying that Nutmeg is now offering a decent pension wrapper, which is end-to-end signatureless. They are white-labelling that from Hornbuckle, which is using the new generation of FNZ kit, and it looks good.
Nutmeg is always cagey on its numbers, mainly because it is still small compared with the big retail platforms, but whispers are that getting into pensions is really starting to pay dividends in terms of assets under administration. It is all worth a closer look if you have a spare 20 minutes or so. We also liked EQ Investors, which was set up by John Spiers who many of you may know from BestInvest.
Under the hood this is a Parmenion instance, like Fiver A Day, Wealth Horizons and all the rest.
However, EQ has put its own stamp on it, and once again it is a nice experience that genuinely tries to deal with clients as if they were human beings rather than living examples of a channel-based marketing diagram.
We particularly like the fact that clients are encouraged to drop into the office if they want to reassure themselves that the service is pukka and not operating out a shed. There they may say hello, play on one of John’s racing car simulators and visit the indoor beach. No, me neither.
Our other props went out to, among other things, Hargreaves Lansdown once again, and Aviva’s Consumer Platform, which reminds me of the Bill Hicks sketch about orange drink. The latter is a good example of how big companies can sometimes get things right.
So there you have it, some interesting things to go and have a look at when you are bored of Brexit, or perhaps when you are standing in an immigration queue somewhere.
Me, I am off to France on holiday in my Saltire t-shirt with the ‘Je n’ai pas voté pour Brexit’ on the back.
Mark Polson is principal of platform and specialist consultancy, the lang cat
