Hello and welcome to the middle of your week. How’s yours been? Mine has been one of wild swings – from some very fun stuff on Monday including a lunch with a fintech founder which ended up digging into philosophy and the idea that mankind isn’t equipped to deal with the concept of abundance, right through to experiencing a total lack of abundance that night, at least in terms of the availability of flights to Edinburgh, all of which meant I got to experience the joys of one of the cheaper Heathrow hotels, a 4am start and a redeye back home wearing exactly 100% of the clothes I’d been in the previous day. Rock and roll.
If you’re Scottish – and if you aren’t you should definitely give it a go – it’s been similarly a mix of triumph and disaster over the last few days. We continued our perplexing streak of Not Sucking at Sport by pumping the French at Murrayfield, just three weeks after pumping the English at Murrayfield, and there aren’t many things that feel better than that. Well, that’s not entirely true. I could name a fair few, but this isn’t that sort of Update. For that you need to subscribe to…oh, never mind.
And just as we were drawing breath and thinking that life was pretty good, a batch of faulty vapes took out an absolute landmark in Glasgow. I myself am not from Glasgow – there’s a shock – but I know that building well and have in fact made use of the miraculous soaking-up properties of a smoked sausage supper from the chippie there that now lies in smouldering ruins many times after gigs and nights out. All so teenagers can huff strawberry candy floss flavour chemicals via weird little machines and then go for matcha lattes instead of what I used to be doing at their age which was **redacted** either underneath **redacted** or behind **redacted** while absolutely **redacted** until such time as I **redacted** or weaved home and hoped my parents were in bed already.
I mention all this because my theme this week is the ability for more than one thing to be true at the same time.
Here’s an example. I was reading this piece in NMA about Aviva Wealth defending the margin it takes on client cash on its D2C platform. Now, debates about platform cash margins are hardly new; every few years they bubble up again, usually when interest rates move around enough for people to remember that cash balances exist and start asking who is keeping what.
What struck me about the article, though, wasn’t so much the specifics of Aviva’s, er, channel-specific position as the way different channels think about price in the first place.
Because the D2C market and the advised market like to think of themselves as very different animals. The D2C world, so the story goes, is full of hyper-alert retail investors scrutinising platform fees to the nearest basis point, moving accounts in pursuit of marginally better rates and generally behaving like hawks when it comes to cost – the price of everything etc.
The advised market, meanwhile, likes to imagine it operates on a higher plane. Advice, after all, is about value rather than price: planning, behavioural coaching, long-term relationships, all the good stuff. Yes, big firms push for deals, but there’s a lot more to life than cost.
The thing is that actually both markets work (or don’t work) the same way, and for the same reason – transparency.
If the headline platform fee looks competitive, the overall verdict is frequently that the deal is a good one. Other elements of any platform’s cost structure — trading costs, FX, additional wrapper fees, the mechanics of how cash interest is actually handled — are often glossed over because, well, too hard, innit.
Pressure the most visible number hard enough — the headline fee that everyone can see and compare — and the effect migrates elsewhere in the system.
This is the Tom & Jerry school of pricing I’ve written about before; if you need to give way on one number it’s like Jerry hitting Tom on the head with a frying pan; he pushes the resulting bump down but it pops up again somewhere else on his napper.
Look. The real issue isn’t simply whether a particular platform is passing on enough interest; you can take your own view on that (and it’s worth noting Aviva doesn’t retain interest in its advised channel). It’s whether investors — and advisers — are able to think about costs in the round, or whether the industry has collectively trained everyone to focus on the handful of numbers that are easiest to compare. That’s a nice bit of prestidigitation.
What’s really interesting is that in many, many cases, expert buyers – which is what professional intermediaries are along with being awesome planners – are just as guilty of this as a D2C Reddit warrior.
I think this is particularly important in the large firm end of the market, where routinely consolidators and big shops are bashing platforms half to death for an extra couple of basis points off, but completely ignoring what else goes into the total charge load a client bears. This is because clients can’t care about what they don’t know about, and because the sector makes sure they don’t know about it, there’s not much mileage in bringing it up.
The market will bear what it will bear; it’s interesting to see someone in a regulated business suggest that differential pricing not in terms of easily understood headline charges, but in hidden charges, is the best way to distinguish between channels.
The real point is that we have to find a better way of disclosing total charges. That’ll be easier for some than others; that’s OK. Comparability is very important now, and when investors ask the robot to trawl sources and work out where is cheapest for their money (and perhaps to check their adviser’s recommendations) the robot needs to be able to access the right answers. Which it can’t just now.
There’s work to do here. We might have a go at doing a bit of it; depends on what happens in the Irish game I suppose. It needs something: it can be true at the same time that you can have a brilliant deal on the headline rate, but a distinctly less brilliant one when viewed in the round, and Ra Peepul need to know.
And your music choice this week is something to get the blood pumping as we go to face our Celtic cousins in Dublin this weekend. Does that mean six minutes of Scottish black metal? Yes, yes it does. Do please enjoy Beyond The Wall by Saor. And the 2026 playlist is still here.
