Well, this is unusual. I’m writing this Update sitting in the bar car of the Caledonian Sleeper, about to pull out of Waverley on the way down to London for #langcatlive on Thursday, or tomorrow when you read this. It’s my first sleeper trip for at least three years – they have showers now! – and only my second overnight work trip in the last two.
Many things have changed, I guess – not least the price of a whisky – and as I’ve been prepping for our biggest conference ever with speakers and panellists and the small army it takes to put on a show like this, I’ve been struck by the varying levels of comfort people feel with the prospect of sitting down with 160 or so other souls. I’m so deep into doing the event – streaming tickets still available! – that it’s easy to forget. Mind you, at least a couple of folk are mainly concerned in case they catch a dose of Unpleasantness and have to forgo their half term holiday, and who can blame them?
Our theme, then, for this week which has been such a long time coming, is change and perhaps regression too. If you’re attending #langcatlive either in person or online you’ll hear both me and Dave Ferguson talking about this.
As I’ve been looking back at the sector over the last 22 years, re-reading regulation, consultations, market news and more, it’s undeniable that it has come an incredible way. Old lags like me reading this will remember well the stooshie over pay-to-play commission packages for the ‘nats and nets’, and only today m’ colleague Mr Mark “ain’t gettin’ on no stage fool” Locke had to remind me about the mysterious LAUTRO Twelve debacle. We’ve reached a stage now where many of you reading this didn’t live through the glory days and didn’t say “if they’re stupid enough to pay it I’m clever enough to take it” and didn’t get hammered on big boats. If I’m honest you didn’t miss all that much (and I never went on the boat *shudder*).
I’m not smart enough to be able to prove this definitively, but it seems to me that the past five or six years have seen consumer outcomes – at least in the intermediated sector – improve immeasurably, maybe to the best they’ve ever been. This is partly down to RDR and PS13/1 and CP121 and all the rest. It’s partly down to charges experiencing the kind of pressure literally everyone predicted when they became explicit. But I think it’s mainly down to the profound shift of advisers working directly with and for clients rather than doing so via the commission departments of the old and great and terrible lifecos. As Dave will say in his talk on Thursday, it’s all about alignment.
So we have much to be happy about, and I’m not just speaking to those who used to have to do manual commission over-ride quotes. But at the same time I see parts of the market, particularly in adviser consolidation, running hot in a way that those of us who remember Misys and Inter-Alliance and Millfield and all the court intrigue will recognise. I see positive and readily achievable outcomes for clients being passed over in favour of ‘the house wins’ propositions which are meant to build long-term value in the adviser business, but which look horribly vulnerable to disruption in all but the shortest term to me. I see the big guys taking over the little guys, and often not understanding what it is they’ve bought.
In short, I see a very modern way of backsliding. There is no commission, true, but there is more than one way to skin a cat (please note: cat-skinning is off-brand and frowned on even on a metaphorical basis. I can use it occasionally but you can’t).
And so it strikes me that we are at an inflection point. Big doesn’t have to mean bad, and vertical integration doesn’t have to mean poorer outcomes. It all comes down to the question of who all this is for. It’s not moonbeams to suggest that you can have a long-term highly successful business and put the client first, even if it hurts a bit. Maybe that means difficult conversations with providers of capital sometimes. But if we are to keep the industry – as opposed to the profession – on a healthy trajectory then it is the only option.
Anyway, that’s what we’ll be talking about at #langcatlive and I can’t wait. Time to go and lie awake in the rattler for a while. Maybe just one more nightcap first.
OVERNIGHT LINK EXPRESS
- Good piece here on one of my very favourite IFA firms – Wellington Wealth of Glasgow’s fair Merchant City.
- And another good piece on a female-fronted IFA firm, this time on what clients are asking for in portfolios. To the moon! HODL! Or not!
- We still need your platform reviews, please and thank you. How will your platform know you care if you don’t rate them YOU MONSTERS.
- Tom McPhail is not only interviewing Guy Opperman MP at #langcatlive, but also has a new podcast out with the IA’s Jonathan Lipkin. How does he find the time? Listen here.
- And your music choice this week is exactly the kind of tune you need to get your energy up before going onstage. Did you guess it? Of course you did. Here’s Nero Forte by Slipknot, and you are very welcome.
See you next week. Wish us luck.