Here we are again for what I think must be the 421st Update of January. I’m reminded by a pal of the Brian Bilston poem: “Thirty days has September, April, June and November / Unless a leap year is its fate, February has twenty-eight / All the rest have three days more / excepting January which has six thousand, one hundred and eighty four.”
I think we should all buy Brian something nice, don’t you?
It’s not all bad. The snowdrops are peeking through under the hedge (this is not a euphemism, stop it), up here we’re getting a few of those crisp days with the incredible light that this part of the world is famed for, and the process of REGENERATION is well underway. Plus the platform sector has started to eat its young, so that’s all good.
(If you’ve suddenly developed a sore toe, that’s because it’s tripped over the massive advert I just left lying around casually in that last paragraph. I’m not apologising, because it’s just a week to go till our biggest ever London event. We’ve got a stunning venue, we’ve got all the tech and the food and the drink, we’ve got live streaming, we’ve got pensions minister Paul Maynard being interviewed by Tom McPhail, we’ve got Kate Blatchford-Hick from the FCA, we’ve got a session on how firms are shifting their propositions upmarket to take on the private banks, we’ve got a no-bull AI session with folk who know what they’re talking about and loads more. I’ve also got about 20 tickets left till we reach usable capacity, and I want to get shot of them sharpish. So clear your diary for next Thursday and book in here. Free for folk who work for adviser / planning / paraplanning firms.
Streaming is free for everyone, but as ever you have to book on first to stop INFILTRATION by BAD ACTORS. )
Right, no more of that. Let’s do platformy stuff. I love it when I get the chance to write about platforms; it’s where the lang cat started and it’s like coming home. Except home is on fire and mummy and daddy are shouting at each other about whose fault it is and whose side of the bedroom is most on fire and your uncle has turned up and is shouting at them both about how new houses are more fireproof and it’s all full of sound and fury and it signifies absolutely, and I do mean absolutely, nothing.
Times are tough and, as one wise platform boss said to me last week, folk are “getting tetchy”. Another wise and perspicacious soul who isn’t in charge of a company but probably should be described the tetchiness as “emotional outflow” which is very good and given we’re buying Brian Bilston something nice we should probably get her something too.
Last week we had news of hundreds of redundancies at Abrdn, more at Canada Life and there will be more to come at other providers. I didn’t cover it last week as I know too many people who’ll be losing their jobs there in the middle of a cost of living crisis and it didn’t seem like the time. Huge employers employ huge numbers; when things reverse they lose huge numbers. Every single one of the people caught up in that – folk just doing a job – deserve respect; something they didn’t get as a bunch of brave-at-a-distance keyboard warriors jumped on to LOL and ROFL and make half-formed self-aggrandising, self-promotional cheap-ass sugar-rush hay out of others’ discomfort. Last week showcased some of the worst of this industry and I hated it. It should be possible to talk about this stuff without being a dick.
Because we’ll need to: there is more to come. M&G did that thing – either themselves or by proxy – when you trail selling something early to whip up some excitement and then refuse to comment on it. It looks like what was once Ascentric may be heading for its third ownership change in ten years.
That middle part of the market remains tough: securing distribution on a sustainable basis is crucial and that’s what will be behind Wealthtime’s investigation of getting into vertical integration.
Margins are under attack; not just from pricing deals and the price disruption the neo-platforms are bringing, but (as we’ve written about before) cash margins too.
And all this is happening while outflows are spiking due to all the things we’ve talked about before – Q4 numbers are starting to come in and we think 2023 will show outflows of about £55bn; well up from the previous high of £40bn in 2021. That money isn’t just jumping from platform to platform because someone’s better or cheaper or has bought a firm; that of course is always going on but lots is disappearing from the sector as clients pay down debt and help out less well-padded family members.
With all that in mind, it’s not a surprise we’re seeing businesses, larger and smaller, making strategy changes. Each one might be smart or not smart; everyone gets to have their opinion and no-one knows till the dust settles. For my part I think the platform market separates into firms who feel like they’ll be happy operating at or around the 15bps mark, whatever their proposition is, and those who don’t but can put their hands on very large amounts of capital in order to either stockpile assets or distribution or both in order to defend prices for longer, probably as part of some kind of vertically integrated offer. That won’t be necessarily correlated to size nor will it have to do with what tech people use. The supply chain will flex and shift as the market regenerates itself (sorry not sorry), and it will as always be messy and interesting along the way.
I’m reminded of the apocryphal Keynes quote: “When the facts change, I change my mind. What do you do, sir?”. That feels relevant here. And just to add to the shifting sands point, there’s no evidence Keynes ever said that directly (a bit like Einstein and the compound interest quote). Be careful not to be too trusting…and think very carefully before placing your bets.
#langcatlinks below as usual, and your music choice? Well, there’s loads of good new stuff out – I nearly gave you the new record from Sgaile, a cracking one-man black metal outfit from Scotland, or the new Depeche Mode which isn’t black metal but is great, or Illumishade which is sort of overblown power-ballady stuff that’s gloriously cheesy. But none of these are as joyful, as camp, as completely daft or as funny as Bruce Dickinson’s new single from his not-Iron-Maiden solo thing called The Mandrake Project. Here’s Rain On The Graves and if this doesn’t cheer you up I don’t know what will.
I won’t see you next week because it’s event prep time so another cat will be in the chair. But I hope to see lots of you in London and on-screen. Did I mention we have a bit of space left?
