Alright, alright, I’m quite aware that today’s Update merely exists as filler while you suckle greedily at the fountain of largesse with which the guy with the red box will be spraying the walls and the floors and the ceilings and really anything he can find to try and hang on for. just. one. week. more. So I’ll plaster on an antic disposition – as if – and keep things light and short this time.  

Will we have anything to really get excited about from today’s giveaway? I can’t imagine we will; it’s a case of here we go, that old refrain…a giveaway on NI here, a freezing of a limit no-one understands there, no fuel duty rise, 10p on a pack of cancers and perhaps a bit of pensions nip and tuck in the supplementary notes. Get it done, raahhhh, commend this budget to the house madam deputy speaker and get out of there before anyone asks too many questions. Mind you, there is a particular lang cat who thinks we might get a pensions tax relief change because for the first time since Methuselah was a lad no-one’s talking about higher rate relief being removed. But we don’t listen to him. 

Away from all this flim-flammery I think we really have to talk a little more about the ongoing advice thing and SJP’s woes in that regard. Mike wrote a good blog on it here, but I want to just attack this from a different angle; what it means for the ongoing consolidation of the advice sector. 

So many smaller firms have sought what they think is shelter from the storm inside bigger organisations, but guess what? Those organisations might have blind spots, but they’re not soft, and if this is anything to go by then the SJP partners at fault for fee-for-no-service may well be having their allowances docked. 

I know many advice firm principals who’ve taken the shilling from one of the big consolidators and I think many of them would be saying “caveat emptor big man, you knew what you were buying when you picked us up. Good and bad. Didn’t you?” But this is real life and frankly I think we’ll be seeing the big guys reviewing how they work so they can tighten up loose ends that might not have mattered so much when the sprint was on for growth at any price but now all of a sudden seem pretty important. (Citywire carries a good barometer on the speed of the sprint and has just updated it here).  

The issues will be different firm by firm, but I think we might be seeing a fraying of the ties that bind; a realisation that the covenant isn’t as mutually beneficial as was believed. This could surface as a result of old, legacy clients still generating commission or ongoing advice charges but not being actively serviced, or it could be the quality of record-keeping or it could be the next issue. Doesn’t matter.  

Back a few years ago in the States this got written about a lot. We call it ‘refragmentation’; they called it ‘breakaway advice’ but it means the same thing; the wheel goes full circle and a bunch of firms decide they liked it better not standing under the consolidation umbrella-ella-ella after all. Whether this happens here depends not just on an ongoing advice review, but the strength of the covenant, the willingness of consolidators to create client propositions that frankly suck a great deal less than many of them do at the moment and to put clients and not a 3-year flip at the heart of things. The dynamics that forced consolidation didn’t go away because things got uncomfortable, but I like to think that there will be a new breed of post-consolidation firms who’ll take in those who’ve decided to move away and will learn from the sins of the past. They might start with making sure that ongoing advice proposition is solid. I’m repeating from the other week, but 77% of IFA income is recurring. That doesn’t mean it’s passive. 

Turns out it wasn’t so antic after all.  

Your music choice this week is something to wash your brain with. You know how going and sitting in the woods is called ‘forest bathing’ and is meant to be good for you? This is like that except for your ears. And it’s got a forest themey linky thing too. Please wave your order papers for If These Trees Could Talk and their new soon-to-be-hit record Trail of Whispering Giants. 

Time for me to run away; I’ll be oot and aboot next week so another feline will Update you. I hear great things about their planned music choice.