So here we are, siblings. Crunch time. In 48 hours we will know what our immediate futures hold. Will it be shame, and regret for what we’ve just done and the dishonour we have brought on ourselves and our forebears? Or will we hold our heads high and forge proudly towards the sunset on Friday and sleep the sleep of the righteous?

But that’s enough about the lang cat Christmas do tomorrow night. Apparently there is also a General Election happening, and I really don’t know what to say about that. Well, I do, but this isn’t the place.

Traditionally one might see things start to slow down at this point of the year, as the overlords of our sector – the ones with hair like lions and wristwatches destined to be heirlooms sold off in years to come by feckless scions who have taken a bath on geared cryptocurrency plays and now have some rather intimidating gentlemen to settle up – reach for the port bottle and really go to work on their gout strategy.

But this isn’t a traditional year. Last week we tangled with Vanguard and AJ Bell’s new stuff. This week we have another big announcement from perennial industry wallflowers Standard Life or derivations of that grand old name, who have announced a price cut on their Wrap platform, effective from April next year, along with a cool new feature.

The short version is that SLW has taken about five to ten basis points out of its charging at the lower end. Instead of a (say) £250,000 customer split across ISA, GIA and SIPP paying 0.44% blended rate in charges (or a bit less if the firm is on the Core structure), she will now pay 0.38% blended. That’s still a premium to the market – the average is considerably less – but still welcome. The heatmap below shows a portfolio invested 50% in SIPP, 25% in ISA and 25% in GIA.

There’s also a welcome simplification down to four tiers of charging from – count ‘em! – seven. Yes, that’s right, Wrap was the platform for those who felt that six tiers of charging just wasn’t enough. Those fun-hounds will have to look elsewhere now. Transact is probably a good choice. This piece in PA has the actual details of the cut. It’s good stuff and we applaud SL for it.

LOCK AND ROLL

More interesting, though, is the new drawdown price lock feature. Tiered charges work great on the way up (actually they don’t but let’s not do the maths just now) but they do exactly the reverse on the way back down as you take money out of your portfolio to do stuff like pay for electricity or to bail out your scion who’s done the geared cryptocurrency thing. I have a fun story about a situation a bit like that from way back when I was a tied adviser. Strangest suitability letter I ever wrote. Anyway.

The drawdown price lock lets you, as advisers, lock in the price that the client had at the peak of her portfolio size before she started taking money out. So she can spend away within the boundaries of her sustainable withdrawal rate that you’ve carefully calculated, without worrying about insult being added to injury. And if she has over £1m, she can lock in a 0.15% flat fee. This has been mentioned as matching Vanguard, which is total nonsense as Vanguard’s fee caps out at £250k or £375 per year, whereas Standard’s would be £1,500, and they are massively different propositions, but whatever.

Anyway, I think this is great, and I don’t say that often. The exact financial benefit will vary by client, and may not actually be that huge (I don’t think it would be or the moneymen wouldn’t let it happen). What’s really good, though, is the thought process that’s gone into this. It helps with evidencing suitability for your PROD-driven segment of clients in drawdown. It is zeitgeisty in terms of the concern the FCA has expressed about percentage-based charges (more asset management than platforms, but still). And it’s something no-one else does. Nicely done, SL, and we think this is one worth copying for other platforms out there.

That’s not all for this week. As well as hangovers and election results, we will see the FCA publish the next bit of the Platform Market Study at 10am on Friday. We expect this to be relatively minor in nature, and specifically to be pretty quiet on exit fees. We are cross with the FCA for publishing when we will be communing with paracetamol, coffee and bacon rolls, but we’ll get into it whatever happens.

Finally, I’ll do more on this next week when I’ll do my ones to watch for 2020, but I have been out and about seeing demos in the last week or two and hearing what various providers have lined up. I’ve seen a couple of things that have really perked my ears up. A demo we had from Praemium yesterday blew me away, and I’m also really interested in what Adalpha will be launching next year. I think we’re going to have lots to talk about.

TACTICAL LINKING

• I see everyone’s behaving themselves in property funds There’s a discussion to have about firms starting to analyse who the major shareholders are in funds to do a risk assessment about stuff like this happening in future. Multi-asset managers factor this kind of thing in; not sure how many advisers do.
• Tough times round the Barnett Christmas tree as the investment industry convulses a little more post-Woodford. To be fair, Mark doesn’t have hair like a lion or a posh name. Happily James de Uphaugh will sort at least 50% of that out.
• Good piece on coaching from journalist of the year Ollie Smith here.
• And your music choice this week is this outrageously brilliant version of an old favourite by Dublin geniuses Lankum. Please enjoy The Wild Rover, but not like you’ve ever heard it before.

See you next week for the last Update of 2019

Mark