The Top Class Wednesday Update always performs as expected
Hot enough for you? See, you all moan about Scotland being dreich and cold, and then the first hint of 42 degree temperatures and you’re all like “oh wish we lived there Mark”. To which I say – you and everyone else. (Thanks to Craig Spittal on the twitters for that). Anyway, the mercury did […]
One vote more is enough for The Top Class Wednesday Update
See, I told you there would be lots going on in June. If you want next week’s lottery numbers just let me know. I’m like some kind of druid here. Speaking of which: obviously the TCWU isn’t the right place to discuss Tory politics – we’ve got Tom McPhail for that – but if I did a poll of all the lang cat’s clients and 40% of them said we sucked at our jobs then I venture to suggest I wouldn’t be taking that as an endorsement. If you did one and 40% of your clients said “actually, I’d rather have someone else looking after my money k thx bye” then neither would you.
It’s nice when lots of things happen because this email is much easier to write, and this week is a gift in that regard. We’ve got not one but two new MPS ranges hitting the market, and so that seems as good a theme as any into which to plunge.
I remember touring around with various footpads and vagabonds in 2018 and 2019 – prelapsarian days, siblings – talking about the impact of MiFID II on the administration of adviser-run models and what a basket case it all is. Mike had a funny slide about how much virgin Amazonian timber it took to print the hundreds of pages of total mince required as part of disclosure, and we enjoyed the look of beaten resignation on many faces as firms realised that yet again they were just there to get topped by the regulator, even if a lot of the MiFID II stuff wasn’t aimed at them.
(We may get a bonfire of MiFID II regulations yet, but don’t hold your breath.)
If you’d asked me then, not that you would have because it would have been a staggeringly boring topic of conversation, about what direction things would go, I’d have said that there would be a flight from adviser-run models to multi-asset funds. We’d have got over the single-line-of-stock issue, clients wouldn’t confuse complexity with suitability any more and we’d all get on with our lives.
In a reversal of druidic fortunes I think I’d have been wrong, and instead I think we’re seeing a flight to externally-run model portfolios. 38% of firms we surveyed recently said they were outsourcing in this way. Maybe these are the sweet spot – they do the diversified portfolio job, they aren’t available to D2C clients in the main, and they’re just sophisticated enough to make clients confident that their money is being taken seriously.
(If you want to see some research on all this, we’ve just contributed to a paper with Copia Capital on whether the CIP engine is overheating: free to download here).
Sweet spot or not, we’ve no shortage of models to look at, and to that list of hundreds of ranges we can now add new offerings from Aviva Investors and Vanguard. You couldn’t get two more mainstream names hopping aboard the MPS omnibus: this is not a fad.
A couple of quick observations on both of these. Aviva’s offering is tied into SimplyBiz and is aimed at decumulation. So that’s hitting a range of zeitgeist points right on the button. We don’t have pay-to-play marketing packages any more, but we do have “multi-year managed distribution partnerships”, so there’s that. It’s also only available on the Aviva Platform. So in one fell swoop we’ve got vertical integration, decumulation, MPS and strategic aligned distribution. Somewhere, a Big 4 consultant is getting extremely hot and bothered over a Powerpoint slide.
Vanguard’s LifeStrategy MPS is less zeitgeisty and is available on Transact, Aviva and Abrdn Wrap, but that doesn’t matter because it’s Vanguard and they can do exactly whatever they want. LifeStrategy is obviously a beast, and unless you have a problem with passives, Vanguard itself or the asset allocations then (judging by top sales on most of the platforms) your clients probably have some money in it. There’s just the single-line-of-stock issue, and that’s what this takes care of. It’s Vanguard’s world, kids, we just live in it…
So that’s another fun-filled week in June over. Can there possibly be more juice left in this most juicy of months? You’ll have to come back next week to find out… (or, you know, just read stuff on the internet).
#LANGCATLINKS
More McPhail: sorry about this, but the podcat’s most recent episode with pensions punk Henry Tapper is one of the very best so far and really deserves a bit of your time. Go listen here.
Good piece from yon Jack Gilbert here yesterday on CMCs and phoenixing. A scourge of our times.
And your music choice this week: well, I did say we couldn’t resist the metal for much longer. And so it is and shall be. I only recently discovered Sweden’s Evergrey, and I’m very glad I did. So do enjoy Blindfolded, and to be honest for the first two minutes 15 seconds of this ‘film’ you may wish that you were indeed blindfolded. The song’s great, but high concept metal videos…truly specialist stuff. Anyway, give it a go.
See you next week
Mark
The Top Class Wednesday Update is like a whirlpool, it never ends
Alright you lot, it’s Steve here subbing in for the right honourable Mr Polson, who is off work navigating a nasty bout of the East-of-Scotland-despite-being-double-jabbed-covid. He’s at home with the family consuming a ferocious volume of Lucozade and Netflix and we wish him our very, very best as he gets over the shivers, dizziness and […]
The Top Class Wednesday Update is happy being bad cop
Sigh. After many months of being careful, I started to do stuff again last week. Edinburgh is generally pretty risk averse and most folk wear masks in shops and so on, but not at lunch events like the one I went to on Friday for obvious reasons. Spool forward four days and here I am, […]
THE TOP CLASS WEDNESDAY UPDATE NEVER REVEALS ITS AGE
Mr P has somehow wangled another holiday, so I’m in charge of the Update again. And luckily for me, not one, but two industry behemoths came good with some news. The kids are alright First up, Hargreaves Lansdown reported record full-year performance backed by soaring demand for its digital services and a large increase in […]
THE TOP CLASS WEDNESDAY UPDATE COULD GO A-VIKING ANY TIME IT LIKED
So you might think that I’d start this week’s Update with some amusing whimsy about Polson as a surname and how it relates to Yussuf Poulsen, the second-string Danish striker; claim some Danish heritage and all that sort of thing. But I’m not going to, mainly because the frozen patronymic ‘Polson’ goes back at least […]
What’s important to advisers right now on platform selection
Our due diligence reg tech tool Platform Analyser has been going for a while now (16 months to be precise), and that means we’re compiling lots of lovely data that we can play with and interrogate. Among the insights we’re gleaning are the factors that are most important to advisers, planners and advice professionals when […]
THE TOP CLASS WEDNESDAY UPDATE ALWAYS STATES ITS VALUE
It is a truth universally acknowledged that I know absolutely hee-haw about football. Not only don’t I know anything about it, such is my fear of hypermasculine conversations about it that I’ve been known to offer to go to the bar when the subject comes up. Which is odd, as the game I really follow […]
THE TOP CLASS WEDNESDAY UPDATE SAYS IT’S A DEAL, IT’S A STEAL
You know that bit in Lock, Stock And Two Smoking Barrels where Dog’s crew are ripping off Snow White and the Three Little Chemists, and they’re defending themselves with an air rifle and as the second guy in the crew gets shot with the air rifle, Dog says “I don’t believe it. Can everyone stop […]
HMRC take HL to the (super)cleaners
Summer holidays are always a good time to bury good news, and as I glanced at my iphone from my hotel pool lounger the other week this piece caught my attention. I was on all-inclusive mind, so I quickly went back to another mojito, but now we (me) are all back at work, it’s certainly […]
