With that in mind, a belated Happy New Year!
So let us take a look at some of the things we can expect over the next few months. For the start of the year is a time of renewal, or it is if you believe that sort of thing, and so we have the right – the right, dammit! – to expect something different in 2018 from what we got in 2017.
And, after some years of stasis, I’m starting to believe that we just might. In this month’s column I’ll look at the reasons why, and guess at some themes we might see through the year to come.
Something different
The first thing to say is that after some years of banging on about replatforming – as long-suffering readers of this column will know all too well – some of these interminable programmes will finally come to an end in 2018.
Ascentric is not far away from pulling the trigger. Alliance Trust Savings has a working version live and will accelerate this once it has shaken off some of the servicing issues that are still bouncing around. Aviva still has some work to do but will be there this year.
Most strikingly, Aegon, very quietly over Christmastime, migrated some 75,000 customers and a couple of billion quid from the old Cofunds Investor Portfolio Service book onto its new version of Aegon Retirement Choice. From what we can tell so far, no one died, so this has to count as a pretty satisfactory first step.
There are others too. 2018, then, is a crucial year. For providers who have not yet nailed their second-generation platform (because that is what most of this stuff is all about), life just got a bit bleaker. While no one was delivering, it was easy to be blithe and defer programmes on the basis of no pressing commercial imperative.
But that’s not the case any more. Any platform that has not settled on its next phase now has two-to-three years of being behind the curve, as those who were already sorted accelerate, and those who have just got through the pain start to derive some benefit and puff their chests out.
In general, we reckon you will see more new functionality, innovation and kit in the coming 12 months than you have in the past 36. Robbed of the excuses of Mifid II and the General Data Protection Regulation, constant pensions legislative change and all the rest of it, product teams will have to do some proper work for a change.
Oftentimes new stuff is not a blessing. I’ve lost count of the number of developments I’ve seen that were clearly a great idea on a Powerpoint slide but, by the time they got to market, were of use to neither man nor beast. I am hoping this year will see a raising of the bar for new developments in this regard.
As is the case as for you and for investment managers, platforms will be – and, in fact, already are – being driven to think about what it is they do that gives value to the client (not just you as the adviser). That value is not amorphous; it is an economic concept about being better off using the kit than not using it. And the more platforms get smarter about demonstrating what it is they do, the better it is for you.
It is through this lens that you’ll see platforms work harder on client reporting, for example. I have been banging on about this for years – as ever, it takes legislation to get anyone to do anything – but in 2018 I hope to finally see some proper reporting that individuals can understand.
I’m still looking for a platform to adopt my famous and patented (one or both of these things may not be true) one-page client report infographic. So far I have failed continually, but I’m not downhearted and I really think this could be the year.
This will also be the year, I think, where wraps start to fulfil some of their promise in being genuinely agnostic as to asset type. Ascentric and Seven Investment Management look likely to be at the vanguard (sorry) of this. The latter has had all-in pricing for a while (which doesn’t distinguish between mutual funds and listed securities). Ascentric, as mentioned already, will come back into contention a little more with an offering that prides itself on its refusal to prejudge asset choices. This will be interesting as more and more models look to try and incorporate exchange-traded funds into their asset mix to suppress cost (something the robos really have influenced).
Whatever your model, you will be looking for platforms to help you to some extent with your Mifid II reporting responsibilities, most likely on disclosure of costs and charges, and possibly on the good old 10 per cent drop rule.
Be clear with your approach
It’s important to note that most of the disclosure and reporting responsibility really falls on your shoulders, not those of the platforms. So while it is good that others are trying to help you, you can’t let those shoulders get slopey at all. You’ll find that each platform has a slightly different approach to its own responsibilities, and to helping you with yours.
The way to deal with this is to be very clear what your own approach is going to be, and then discover how your platforms can help with that. Otherwise you’ll get pulled all over the place.
If I’m picking one more theme for the year ahead, it is the platform market review from the Financial Conduct Authority, which will give us interim findings this year. I suspect this will try to finish off some of the work the asset management market study did not manage to.
Specifically, if I was a company that started selling expensive vertically integrated (VI) multi-asset solutions on a proprietary platform as soon as I had joined a consolidator or VI provider, I’d be concerned. This is a subject that, rest assured, we shall return to.
But aside from all this, people will still need advice, still need someone to invest their money and stop them doing knucklehead stuff, and still need someone to take the pain and hassle away, which is what you all do every day.
I think you might find 2018 quite a good year. And if not – well, never fear. We’re one year closer to the Earth being consumed by the sun and us all dying a fiery hell-death. See you next month.
Mark Polson is principal of platform and specialist consultancy the Lang Cat
