To date we’ve had disclosure, but it has always been separated out in one way or another. This is a whole new ball game. I’m not saying it will cause clients to switch off – but it will make it easy for people to compare, easy for journalists to write about, and easy for troublemakers like my business to analyse.
That in turn leads to understanding, which leads to empowerment for clients – and that empowerment often comes with a new-found interest in negotiation.
I think we’ll see some pre-emptive moves from the more fully priced end of the market to bring things under control a bit. Multi-asset providers and advisers charging 1 per cent or more will probably be the first to feel it.
Pondering planning
Talking of feeling it, I have spoken at a couple of financial planning conferences in the past few days. At both, there was no shortage of people exhorting the planners to locate all their value in the planning journey itself.
Someone probably talked about quarter-inch drill bits and holes and stuff, or if they didn’t it seemed like they did.
That’s all fine, but it strikes me that over the past few years, as financial planning has come into the ascendancy post-RDR, the total cost of ownership (TCO) for clients has gone up quite considerably. There’s no magic money tree, so this comes from firms putting their charges up.
In some cases, it’s advisers who have done this. But I think the harder truth is that the cost of the supply chain that firms use has also crept up. My contention is that this is what happens when those who have what in the US they call “fiduciary responsibility” for the client take their eye off the ball and only think about planning, meaning that all sorts of nasties start to creep in.
It isn’t the adviser that does this, it’s the more nefarious / clever / commercial elements of the industry, and they do it because they know no one’s watching.
So I’d like 2018 to be a year when planners rebalance their focus a little bit back on to the kit they use. No one is saying that planning isn’t valuable, but I’ve seen far too many TCO chains of well over 2 per cent from firms that have arguably lost control of this end of things.
Platforms’ piece of the puzzle
I suppose 2017 was the year when the platform industry really started getting going on consolidation.
