I AM SPEAKING NOW TO FOLK WHO WORK IN SCOTTISH ADVICE FIRMS OR WHO FANCY A TRIP TO EDINBURGH: before we start, time is running low for getting your seat booked for HomeGame 4 in Edinburgh on 3 October. It’s free for you, there is a proper and I do mean proper agenda of stuff I think you’ll find interesting, the food and drink and music will be tremendous and we even have Rory Bremner to close out the event. Full details here, but you know us and you know we do this stuff well. I’m pretty sure HomeGame4 will be the biggest and completely certain it’ll be the best adviser event in Scotland this year. Please don’t leave it to the last minute if you want to come; there aren’t all that many tix left.  

I AM SPEAKING NOW TO EVERYONE ELSE: you can get free streaming tickets, no matter who you work for, by clicking here.  

I AM SPEAKING NOW TO EVERYONE: “In Springfield, they’re eating the dogs! They’re eating the cats!” With this simple proclamation last night, Trump gave the Simpsons-meme-creation industry the biggest fillip of its existence and simultaneously dashed the life goals of whole teams of highly-paid speechwriters who had doubtless toiled hard in writing rooms for weeks. I mention this not because it has relevance to the UK long-term savings and investment industry, but to express solidarity and fellow-feeling for any copywriter who has ever written lines or talks or even talking points for a chief executive only to see them place their foot in their mouth and then take a shotgun and somehow shoot themselves in it. I’ve ghosted for a fair number of senior folk in my time and had my share of “nooooooo” moments (ask me nicely and I’ll tell you which CEO did the best job), but this was a whole new level. Tremendous stuff from Trump and that, my friends, is why you listen to your copywriters if you’re lucky enough to have them.  

No such larks here; I guess we’re in that interminable pre-Budget period where there isn’t much to talk about – apart from the shocking revelation that a government with a majority of roughly one bajillion can force through pretty much anything it wants, even if it’s going to be wildly unpopular. How quickly we forget 2019. I did read a thing where someone pointed out that “Thatcher, Thatcher, milk snatcher” lasted for 45 years or so. “Starmer, Starmer, winter-fuel-payment harmer” doesn’t feel like it has quite the same staying power and that, my friends, is why you hire copywriters in the first place.  

That shot of adrenochrome, forcibly extracted from the meat of the innocent, aside, the GDP of the industry at the moment is pretty much playing an increasingly high-stakes game of “my tax/pension/whatever reform is more terrifying than yours”. The winner gets a permanent op-ed in the Daily Express and a year’s supply of proton-pump inhibitors to try and control the bile.  

But in the absence of genuine domestic-animal-comestible amusement on this side of the Atlantic, let’s play with one of the many, many kites currently being flown; that of a major change to CGT to bring it in line with income tax. 

M’colleague Mike Barrett played second fiddle to the legend in his own lunchtime that is Greg Moss out of Eleven.2 Financial Planning but did manage to get quoted on the CGT stuff in Nicola Blackburn’s NMA piece, which is well worth a read.  

The gist is that if we see a major hike in CGT – and I wouldn’t bet against that one – then the tax jeopardy for any assets held inside an MPS and not in an ISA or pension wrapper also hikes massively, and this may well have a major impact on the systemisation of MPS propositions on platforms across wrappers. Will firms use an MPS for tax-wrapped portfolios but do something else for GIA on the basis that any client could potentially have a CGT issue in future? Will more advisers go back to running their own portfolios? My own suspicion: along with the Simpsons-meme guys the next explosion will be in multi-asset fund advertising; expect some totally killer trade press website takeovers very soon after the Budget. 

It’ll be what it’ll be, but what that’s got me thinking about is the systemisation and commoditisation of relatively sophisticated investment portfolios thanks to platforms and MPS providers working together.  

So much of what the industry has built and what advisers have stitched together is designed to remove actual personalisation and instead give the impression of personalisation. That’s how most folk believe you extract maximum value from adviser fees, which can only ever go so high.  

But what happens – particularly if you work at scale – when that isn’t available to you because of tax jeopardy? Are you bounced into using different wrappers – maybe bonds? Is that enough to swing a recommendation where from an investment point of view you prefer the MPS-laden GIA to whatever insured proposition you can get in a bond? Just to avoid having to do the work on the GIA wrapper separately? Do you compromise your MPS recommendation to use multi-asset funds instead just in case? Is it OK for the tax tail to wag the investment dog in this case? Because otherwise it’s too hard? 

This is where proposition design from both MPS providers and platforms comes into play. Does your platform and / or MPS provider allow you to (for example) skip a rebalance for a client with a point-in-time CGT issue in their GIA but not their ISA and SIPP, without de-linking either that client or the wrapper from the portfolio? What if you still want to rebalance and to keep a link to the overall portfolio but to exclude certain assets?  

We often say the platform and MPS sectors are commoditised; pick whichever one you like as they all do the same stuff. That is sort of true, but only superficially. Underneath is a world of nuance, and every time potential changes like this come up it should remind us that the choice of platform and its tech and of who manages client portfolios and their tech is massively consequential in the long term.  

There’s a fundamental truth which I think gets forgotten because platform technology has – for all we moan about it – revolutionised how we look after clients and try to get them the best outcomes possible. That is that there is still proper work to do beyond the crucial and high-profile financial planning stuff and that it can’t all be systemised; anyone just hoping that AI will come and save them (it can do funny pictures now too!) is going to be disappointed for a fair while yet. The big question is whether firms of whatever stripe and hue are up for the challenge that comes when the streamlining and commoditisation hits the ceiling of what it can do.  

A good time, then, to revisit the basics of the portfolio management capabilities of your chosen platforms, and how your MPS provider works with those. Less doomscrolling on the kite-flying, more old-school analysis might be just the ticket.  

And your music choice? Well, we had a huge flurry of excellent new records in the last week or so – God Is An Astronaut, Wintersun (thanks to Solly for pointing that out), David Gilmour, and of course The The. I’m such a The The fan that I even bought and played their Hank Williams tribute record, so although I’ve done one from the new record Ensoulment before, here’s another and it’s the best song on the record. Please welcome Some Days I Drink My Coffee By The Grave Of William Blake.  

See you next week; try not to eat any pets. 

Mark