First things first, heathens. It is the most wonderful time of the year once again – that’s right, we’re doing the fieldwork for State of the Advice Nation. This is the 8th wave of our biggest advice professional research exercise of the year. It remains, we think, the biggest truly independent study in the UK. No provider can buy questions or influence it in any way; we ask the things we think matter and what you have told us matters over the year, along with a bunch of stuff to track changing attitudes over time.
This isn’t a “which provider do you use” type study. It’s about where you are with your business, or the business in which you work. It’s about what’s going well, what’s on your radar, what’s causing you pain. And the insight from it drives a huge amount of development around the sector; your views really do make a difference.
You guessed it: all of that is only true if enough of you fill it out. So this is a plea that if you work in an advice firm, whatever your role, you take a bit of time to help us out.
Now, SOTAN is a chunky monkey. It is a cup of coffee job, although many respondents tell us they quite enjoy it as it’s a chance to vent. But that’s not enough, so if you complete SOTAN you also get:
– to be among the first to get the report and the data
– entry into our huge end of year draw
– advance notice of free tickets to our events
– our annual platform review publication right in your inbocks
– big discounts for new subscriptions to our Analyser tool
In short, we need you to complete SOTAN. Please give us a hand. You can do so here. Thank you x 1000.
ON WITH THE SHOW
It was tempting to talk about Rachel’s Rolling Of The Pitch this week, but that might be divisive and I’m all about unity, peace, love and understanding. So let’s talk about consolidators, client outcomes, and the FCA.
You probably noticed that the regulator dropped its eagerly-anticipated (by our policy nerd team) multi-firm review of consolidators last week. If you didn’t, here’s a wee summary from Sahar Nazir in Investment Week that may be useful. And if you want a more opinionated take on it then Justin Cash is never short of an opinion, and here it is. The FCA’s own summary is here.
Most of you don’t run consolidators and might be tempted to skip this particular barrel of laughs, but you shouldn’t. And the reason you shouldn’t is that there is a whole world of consequential regulatory nuance in it, whether you’ve been bought by a consolidator, you are one, you’re thinking of being acquired by one or even if you’re selling against them.
There are plenty of good practice examples in the review, but most of them just read to me like the basics done tolerably well. Along with everyone else, I’m more interested in what’s not going well, and there is a fair bit of that. The links above give you a professional rundown of all that, but here are my top three in my own words…
- There is a lot of knavery going on in terms of corporate financing; this includes ‘upstreaming’ (a new word to me and one I am not happy about; “verbing weirds language” and you get 10 points if you know where that quote is from) where cash gets sent out of regulated businesses off to unregulated entities. We’ll add various layers of various companies being located offshore to avoid regulatory oversight to that. This isn’t unexpected in a PE-financed environment, but that doesn’t mean it’s good for clients. Citywire has been exceptional in its reporting on this.
- Try and control your surprise, but there are conflicts of interest all over the place as firms recommend their own stuff in an attempt to set up camp on other parts of the (eurgh) value chain. Some of these are well managed, some are, you know, not so much.
- Governance isn’t where it should be and some of these consolidators aren’t run all that well. Due diligence on acquirees can be patchy and that’s being nice. Good operators are expensive and regulated ones even more so. This may not have been fully factored into whatever financial model has driven the consolidation gold rush…
The last one is my favourite, because of the discussion I had a few years ago with a PE chappie, who said that this consolidation game is the easiest one in the world because most IFA businesses are either badly run or not run at all, and so all you do is buy them, smash them together, slap a decent management team on top and then sell it. I’d love to say I am paraphrasing there, but I am Not. I assume that dude must be part of the ‘good practice’ ones.
Anyway, look. This is a shot across the bows; it’s not enforcement-level stuff, we aren’t seeing a bunch of s166 orders being handed down, and I’m sure there are sighs of relief in several boardrooms, probably in Jersey or Guernsey for the most part. But – much as what happens when Rachel rolls the pitch – what you see in front of you is only a small part of the story.
Your music choice this week is Tom McRae’s new song. Is it his best? No, probably not, but I’ll take second quartile Tom over most things any day of the week. And live? I get goosebumps thinking about some of his gigs. Give Kick It All Into The Fire a go, and then go and listen to his debut or Just Like Blood.
