Me again, sorry about that. Thanks to Hannah for covering for me in what was a pretty horrible week but mainly for a brilliant Update last week on a subject we don’t often cover. I know some of you were like “what has this got to with financial planning?” but the more imaginative among you got it and my goodness was our postbag bulging with messages either supporting Hannah’s point of view or even offering alternative models for this quite bizarre student loan situation. By the way, if you ever do want to write to us you can just reply to this email, or use thelangcat at thelangcat dot co dot uk. We like letters. Nice ones.

We may not often cover student loans, but we do often cover the MPS market, and what do you know? We’re doing it again. Don’t all write in at once. 

I’m drawn to this like an ageing moth with compensatory facial hair to a barely flickering flame this week because approximately eleventy gajillion new MPS ranges launched this week. That’s an exaggeration. There were three. But that’s still a lot, right? 

First we had Fidelity with three new ranges which are passive, not passive, and slightly passive. I might have got the names a bit wrong. They’re not properly available till mid-April but I guess Fidelity is trying to get some hype going in the meantime. I’m just saying, if it’s hype you want, Fidelity, you could probably get Flavor Flav for a decent price now he’s finished with his Olympic duties. Bit of free hype advice there. 

Next up is Swiss behemoth Julius Baer which is launching two ranges, broadly active and less active with a global tilt and a steely-eyed distrust of home bias. (Disclosure: JB is a client and we’ve helped them with some of their take-to-market stuff. I’m afraid Flav was found to be off-brand.) 

And then there’s Vanguard, fresh from revamping their small, unappreciated LifeStrategy range, launching a blended range with Wellington, about whom I should probably know more than I do. These are slightly passive, and continue the US giant’s unbeatable knack for putting capital letters in the middle of words. BlendedLife is what they go by, and which of us, I ask you, does not live a blended life these days? Now <that’s> marketing. 

I am obviously poking fun, but here’s my point. These three new propositions all hit an already very busy market, with well over 100 providers hoping for a slice. All three will fit in to a box somewhere. All three will be rated from a number to another number by a bunch of tools. And firms will continue to mumble something about “a plague on all your houses” and either pin-stick or pick the cheapest.  

But the thing is, these three propositions are very, very different. The Fidelity one is classic, but with a twist because it’s built through combining ten Fidelity-run funds which are open architecture underneath in different strengths depending on the risk level. Remember how lifecos used to build external fund linked propositions? This is that without the life part.  

Julius Baer’s one is more straightforward, but that global outlook means return and volatility experience might be quite different to many others which keep a home bias because it’s what the people want. 

And the Vanguard one…has a capital in the middle of its name. I’m sorry about that, Vanguard. You’re special too – this is an MPS mixing Vanguard doing Vanguard with a bunch of active managers, and that’s different in its own right. 

My point is that the MPS market is no longer one market. It’s at least four. Maybe more. And a risk-level first approach to choosing or to due diligence is, in such a complex and fractured space, seductive, intellectually easy and dead, dead wrong. It would be incredibly easy to think that all three of our new entrants this week have portfolios which are rated from three to seven, say, on the whateveritis scale, and therefore are interchangeable. And they are not. Very not.  

MPS providers pay a huge amount of money to have their portfolios rated. This is an industry in itself, and while risk ratings can help with rounded client discussions, there’s a level of mechanisation going on which surely can’t be healthy.  

So what? I don’t know, really. But I do know that we need a new way of looking at this space, because for companies to spend money, innovate and move things on, they need to know they can cut through. And to do that we’re going to have to find a better way to segment the MPS market, otherwise the prize will always go to the guy shouting loudest with a big clock round his neck. 

Your music choice this week by rights should have Flav in it…and it does. Here’s my very favouritest Public Enemy song. Please enjoy Harder Than You Think. Oh, and the playlist keeps growing and can be followed here.