Hello you lot. Back in the Update hotseat after a couple of weeks, and can you even believe that the last time I sat down and let the Muse take over one of my main concerns was whether the election would clash with our Scottish event in October? It seems like a lifetime ago, and we’re only on day five or whatever. 

I promise that the Update won’t become a running commentary on the election, but (there’s always a but) I think there is something to be learned from the already egregious amount of snake-oilery, flim-flammery, revisionist hokum and prestidigitatory eructations being fired out of the gullet of our political class at the moment. 

I’ll make it brief. The triple lock plus (please) is a great example of what I’m pretty sure will shortly become known as Polson’s Sixth Selbstschlagenwirtschädlichreparatur Precept, or for those who skipped compound word class, the act of repairing economic damage by hitting yourself repeatedly in the hope that someone will praise you for it.  

You’re all good economists and know the reason any kind of promise that a benefit paid for by, er, general taxation shouldn’t be subject to, er, general taxation needs to exist in the first place is the government’s enthusiastic donning of the triple lock collar and leash coupled with a deeply, deeply specialist predilection for fiscal drag. All of this places our current political class right on the outer edge of the Overton Kink Window; at a place where even Russian kompromat agents wince and say “neuzheli, tovarisch?” 

All of this shakes out to wanting praise for sorting something which shouldn’t ever have happened in the first place, and that’s where our lesson for this week comes in. 

Said lesson refers to the already-burgeoning issue of what Australians (we’re very cosmopolitan this week) refer to as “fee-for-no-service”. I was doing a thing a wee while ago for a bunch of Aussie advisers, and we talked about whether the Royal Commission reached down into smaller firms, since here the FCA has only started getting busy with the 20 largest (see Updates passim).  

Their view – absolutely. The sign that this is going to be part of your life is when you get a data request asking what percentage of your clients have had a documented (and that word is important) annual review in each of the last X years. My temporary ocker friends said they’d learned very quickly not to try a “nothing to see here, move on” approach and ‘fess up to either not providing some reviews or having done so but not recorded them appropriately. It is better to be in the pack than an outlier in any direction when painted hunting dogs hove into view.  

If we’re really honest, almost all adviser firms are going to have at least some of this to deal with. Not because of badness, but because of either basic events – folk being away, the moment passing – or client services being poorly described and understood.  

I know some firms are already going back through their records and either updating them to show that reviews actually took place (this is a much bigger job for most good firms than having missed a few) or putting them in place quickly if they haven’t been done. That’s good practice and I suspect the powers that be will consider their pour encourager les autres review of the big’uns a good job if that’s the result.  

But I’m also aware of another part of the sector who are pushing back, either on grounds of “we’re small so no-one will find us other than the fact I’ve just posted about it on social media” or “why do people need ongoing reviews anyway, they’ve got my number” or “people are paying for me to be available on the phone”. All of these are pretty silly if you’re asking people to pony up a percentage of their fund each year. Equally silly are those who suggest we should fix this moving forward and suggesting positioning a ‘renewed’ commitment to delivering ongoing reviews as a benefit. That has the smack of Polson’s Sixth Selbstschlagenwirtschädlichreparatur Precept about it, and no good can come of it. Better, I’d suggest, is to fix what you need to fix, quietly and quickly, and then relax. 

Self-interest is a good motivator, so I’ll just add this: a business I’m involved with sometimes looks at buying other adviser firms. We’re already adding the evidencing of annual reviews to our due diligence process on the basis of potential problems in the future, and it will definitely affect valuations. I suspect we’re not the only ones.  

Your music choice this week was very nearly an Enormous Ball Of Power Metal Cheese because I’m studying up on Avantasia, who’re headlining a Finnish metal festival I’m going to this summer, but I will spare you that as I am nothing but beneficient. Instead, please enjoy some Norwandiwegian goodness from In Vain because you’re not getting away with no metal at all. Shadows Flap Their Black Wings is the track and if you can hang on for a minute or so you’ll get to the big chorus and that will make you forget all your troubles.