/ Platforms

THE TOP CLASS WEDNESDAY UPDATE IS IMMUNE TO CANCELLATION

This feels…unusual. If an Update falls in an inbox and Mark hasn’t palmed it off on someone else to do, is it even an Update? We may never know, but in the meantime here I am back again after three weeks off Update duty, and it appears that everything has got even more appalling and buying a shotgun, a very large amount of canned goods and whisky and moving to an isolated cabin in an elevated position is the only rational response. So it’s only a matter of time till the Top Class Survivalist Update and a healthy dose of surveillance from intelligence services, I guess.

We’ll get to the story of the week in just a mo, but I’m occasionally allowed to plug our own stuff above the line (the line being the bit further down with the links and that) and this is one of those times. It’s been three years since our last home event – home being Edinburgh – and that’s quite long enough. So I’m very pleased to say that HomeGame 2 is now ready for booking. We’ll be at the beautiful National Museum of Scotland on 5 October and we’d love to see you there.

We’ll cover tech fragmentation, Consumer Duty (of course) and look at the reality of operating in this sector in Scotland – we’ll be joined by Ivan McKee, MSP and Minister for Business, Trade, Tourism and Enterprise to discuss that last one. There will be drinks after, and whisky in particular.

Advice professionals are free. Providers and tech firms and so on aren’t. And if you can’t make it to Embra – and you really should – there’s free streaming for everyone. Tickets were released on Thursday last week and we’re getting towards half full already, so reserve your spot. Full details are here. I shall stop punting now.

ANIMAL/VEGETABLE…

Lots I could write about this week, but the thing that mainly caught the stary lang cat eye was Fairstone hooking up with FNZ, much in the style of two colleagues hooking up in the pub when no-one’s looking, although everyone’s sort of wondered before because there was definitely something in the air. I’ll probably stop that there.

Anyway, the FNZ-powered Fairstone platform (which is called Mineral because…salty? I don’t know) will be hoving into view before long. This is notable because outside of a couple of big banks / wealth managers FNZ hasn’t provided platform services to advice firms directly. This is also true of the other big outsourced platform software guys – Bravura and GBST – even the Succession platform which runs on Bravura does so through what was IFDL and is now part of the M&G Wealth stable.

So what does it all mean? Well, there’s been a clear trend for advisers to consider cutting out the platform middleperson for some time. We wrote about it in this paper (opens online flipbook) a wee while ago and various others have covered it too. The market for adviser-as-platform has heated and cooled a couple of times in recent years, usually based on the experience of firms who probably shouldn’t have gone down the road given the level of complexity and cost involved.

And that’s why this deal is particularly interesting. Fairstone is a beast, no doubt about that. It’s big enough to be able to take on the overhead of working in this way – and there is an overhead, no matter what anyone tells you. It’s also big enough to have different propositions for different segments – Mineral is aimed at its more transactional clients so far as I can tell. And it’s big enough to be interesting for FNZ, which is a beast in its own right.

FNZ, through its new deal with Nucleus Financial Platforms Group, is now in a position to run pretty much the full gamut of front-to-back service. Traditionally it’s offered investment admin, but not policy admin or customer contact. I don’t know for sure, but I suspect Fairstone is taking advantage of this here; I can’t believe it wants to be a platform helpdesk for clients and to do all the grungy policy stuff it would have traditionally outsourced. If that’s the case, this is a pretty new model – in other examples of adviser-as-platform the adviser has to take on more of that stuff, or use a third party provider for it.

We’ve been looking at tech in adviser firms recently, and one thing that has struck us is that there’s a two-speed market developing – firms who can accommodate thinking structurally about technology, data and process, and those who can’t. This isn’t necessarily correlated to size. Both are fine, but the former have the capacity to invest in people and process and are best placed to take advantage of developing models, and possibly benefit economically, though this is far from locked in. I think we’ve just seen what kind of firm Fairstone is.

From the FNZ standpoint, there are lots of clear benefits of working in this way. I do worry that the enterprise nature of these very large outsourcing firms may be testing for adviser firms, even big smart ones, to match, but we’ll have to wait and see on that front. The real test as to whether this can be a viable strategy is whether existing FNZ clients – Abrdn, Aviva, Quilter and the rest – start seeing assets flood off and onto the new adviser-as-platform clients. I suspect there will be some significant Hard Stares if so.

It’s all going on. I think we might even talk about it at HomeGame 2 on 5 October in Edinburgh. See, I was lying when I said I’d stop punting. You just can’t trust me.

#LANGCATLINKS

  • Outstanding work from NMA’s Jack Gilbert on Panorama about the minibond scandal last night. Well worth a watch and you can follow the jump from here.
  • We’ve been busy on Analyser – new DFMs added (o hai EQ Investors and Parmenion), lots of new data and you also don’t have to give payment details before claiming your free trial. We’ve added direct debit and other good stuff as ways to pay too. Come see.
  • This equity release issue is hotting up. I think it’s not going away any time soon.
  • And your music choice this week – it’s far, far too long since we brought the metal. So it may not be subtle but please let melodeath supergroup The Halo Effect absolutely destroy you with In Broken Trust. It’s goooood.

See you next week

Mark

/ Blogs

Impact of poor service

/ White papers

The Impact of Poor Service

We provided the research for a report, in conjunction with Parmenion, which reveals how far short of expectations many adviser platforms are falling. The research found that over the last 12 months, 88% of advisers needed to apologise to at least one of their clients on behalf of a platform, and that poor service delivery from platforms impacts 91% of advisers every day.

Impact of poor service

/ White papers

The Impact of Poor Platform Service

We provided the research for a report, in conjunction with Parmenion, which reveals how far short of expectations many adviser platforms are falling. The research found that over the last 12 months, 88% of advisers needed to apologise to at least one of their clients on behalf of a platform, and that poor service delivery from platforms impacts 91% of advisers every day.

/ White papers

Answering the Call

Service means a lot of things to a lot of different people. It’s so subjective it can be hard to put your finger on. This paper aims to challenge the status quo and inertia that’s built up in the sector for many years.