Well that was a skoosh. A pure skoosh. No way the lassie lying down in the big glass sandwich should have won it. Was I the only one wondering what challenges those nails posed if she needed to go for a George The Third during the day? No, by rights the gemme should have belonged to Finland, but then everything should always belong to Finland. I’ve never been to Finland but I think I belong there. Plus there are all those Finnish snipers to keep you safe – did you see them onstage? No, you didn’t and that’s the POINT.
(As an aside, there are those who thought I’d like that scheusslich Gräuel from the German metal landfill buried 20 metres under Rammstein, but you couldn’t be more wrong. Metal is not the natural idiom of Eurovision, and terrible industrial metalcore even less.)
But none of this is getting us any closer to fully embracing the role of adviser as manufacturer, and that’s what’s so important. Or at least it is if the evolving understanding of who does what and what regulations they labour under in our brave new world (that has such people in it).
A few years ago when you were being terrorised with the MiFID II bogeyperson, I used to enjoy telling conference audiences that the previous 253 speakers who’d been banging on about financial planning as a profession were all wrong, and you were merely distributors of stuff that other people made. That was a funny thing to do if you were me, and it got florid-faced Men Of A Certain Age very cross, which was even funnier. It also had the virtue of being true.
Spool forward a global pandemic or two, and I’m back up onstage at a small-but-perfectly-formed conference run by the fine folk at fefundinfo (I really don’t think I’ve got that right) and doing the old gags. Except this time something unexpected has happened – lots of advisers have, wittingly or unwittingly, become manufacturers.
You can read what I was banging on about here, but what’s important is that you’re a manufacturer if you “create, develop, design, issue, manage, carry out, operate or (for insurance and credit purposes only) underwrite a product or service.”
Hoo boy. Let’s unpack that. How many firms don’t design, create and manage a service for their clients? Not many, and those that don’t probably thought they were running, I dunno, a small but exquisite local basement cocktail bar or something.
This is just an Update, and the exact parsing of what a service is or isn’t is too much for us here – but it doesn’t sound like moonbeams to suggest that the design of a regulated service which involves the supply of advice, and perhaps the design of a centralised investment proposition might be in scope.
The point of all this isn’t to invoke the Consumer Duty bogeyperson; I imagine they’re off having drinks with the MiFID II bogeyperson, the PROD bogeyperson and the RDR bogeyperson (perhaps in that small but exquisite cocktail bar. I wonder what cocktails bogeypeople like? Bogey cocktails probably. STOP IT MARK.) Rather, it’s to highlight that adviser firms have clearly stepped well outside a world in which they just sell on products that fund managers, lifecos, platform operators and others manufacture. The act of acting on behalf of the client and acting as a gatekeeper between them and the industry means they call new propositions into being all the time. And that’s without deliberate manufacturing efforts such as becoming a DFM or signing an adviser-as-platform deal.
This is as it should be and it’s exactly why the whole sector is reshaping itself around advice. It’s also why we need more advice and we need those who don’t understand it to trust it more. But it’s also the case that – as I’ve written here before – with great power comes, you know, the great other thing, and that does come with certain burdens.
It’s fine to be a manufacturer, but you have to make it real; lean into it. If you’re going to run your own portfolios – effectively your own MPS – then that’s great. But you’ll be held to the same manufacturing standard as a big MPS provider. If you’re going down the adviser-as-platform route that’s great too – but you’re going to be responsible for what goes on, even if you delegate it back, and you’ll need to know how to keep track of that, get issues sorted and manage redress for when it’s needed. Better tech does lots of things, but there are always issues and if you want to be the manufacturer – even jointly – then guess what? They’re your issues.
Greater control has never been more available. But it doesn’t come for free; and nor should it.
- We launched The Advice Gap 2023 last week. It’s one of our biggest papers and is certainly worth douze of anyone’s pwan. Download it here, and if you’d like to have a summary shot directly into your bloodstream then there’s a webinar tomorrow which you can register for here. Here’s a piece from the launch which is also worth your time.
- I really enjoyed this piece on Warren Buffett, fees and leverage. Very much worth a read.
- The mighty Ola Abdul of Fundment is always good value.
- Five million house points to City AM for the headline on this piece. Chapeau.
- And your music choice this week is definitely not from last weekend’s extravaganza for we have had enough of that. And you have had Much Metal recently. So instead here’s something completely different and beautiful from Scottish supergroup Silver Moth. Enjoy The Eternal, and make sure to stay for the end.
See you next week. Cha, cha and indeed cha.