So itâ??s the afternoon of 31 December, the lang kittens have been beaten over the head repeatedly until they agree to a nap so they can stay up to see the bells in, and I have a few minutes at the end of a tumultuous year to write this.
â??Thisâ?? being a self-indulgent round up of the year. I shall point out, as I do every time I do one of these, that yes, it is indeed self-indulgent, and no, no-one really gives a damn except me.
But none of that matters, largely because itâ??s my blog not yours, and also because self-censorship is not a skill Iâ??ve ever really learned. Maybe if I had I might still be in corporate life. *shudders*
Lots happened in our little corner of the garden this year and thereâ??s no great value in going back over it all. But Iâ??ll carry two big themes away:
- PENSION REFORMS â?? My biggest giggle of the year was the dawning realisation on the faces of lifecos execs that Gideon gives exactly zero f***s about the life and pensions sector. â??Butbutbutbut heâ??s a Tory, heâ??s meant to be on our side!â? came the faint bleat which you could hear if you listened hard enough. Yes, he is, but heâ??s not a Tory who wants a job with any of you lot when his time filleting the state is over. What was really interesting about the GYMBOA reforms (as we christened them â?? Get Your Money Back Out Again) was that rather than being prospective in nature, it drove a cart and horses right through the most valuable bit of the UK long-term savings and investments sector â?? the pensions back book. This was and is massively destabilising, and lifecos havenâ??t yet felt the full impact. If we move from EET to TEE (looking less likely now, but itâ??ll all depend on the politics) then shorting the life sector looks like a sure thing.
- ROBOADVICE â?? hahahahahaha. Iâ??ve come to love the term as much as many others hate it, mainly because it winds people up so much. No, there are no robots, and no, theyâ??re not giving advice (at least in the way we understand financial planning). But this was the first year that we saw the barriers come down a bit to enable new entrants to come up with different models for delivering relatively basic advice. There is lots still to do â?? Project Innovate (again, hahahahaha) will be important along with its sandbox (which if itâ??s anything like my sandbox as a kid will be full of catshit in a week or two â?? but weâ??re seeing interesting new things happening with eVestor, Fiver A Day and others. I had the chance to spend a couple of weeks in the States in the late summer poking around robo a bit, and while the headlines go to the likes of Betterment, itâ??s the big engines of Schwab and Vanguard who are scarfing up assets even beyond back-book rewrites. Watch Vanguard very closely here. If anyone can redefine the market itâ??s them.
For next year? Watch replatforming â?? we had some of it in 2015, most of which was pretty tortuous, and thereâ??s more to come this year. Everyone needs to have patience with companies going through this â?? but the companies themselves need to be honest with advisers and clients, and not delude themselves that itâ??s all going to be fine. As Iâ??m fond of saying, there is no recorded instance of replatforming going well.
Weâ??ll see the back book integrators (Aegon, Zurich, others) accelerate and become very big platforms in their own right â?? the interesting thing is what happens when that work is done. Can they become vertically integrated shops like Standard Life and Old Mutual? Weâ??ll see the â??black boxâ?? providers such as SEI and Pershing do many more interesting things in the market, and over time itâ??ll be easier and easier for firms to create a platform in their own image. The niche guys will still be niche, the big guys will still be big, but those stuck in the middle will find it increasingly hard to get distribution footprint, and will also struggle to get development priority resource.
Iâ??d like this year to be one when we stop trying to outmanufacture each other. When we wrote that Platforms Are Dead, thatâ??s what we really meant â?? the days of asset flows shifting due to more ticks on a crappy due diligence matrix are gone. Now itâ??s about doing the basics really well as a bare minimum. From there itâ??s about recentering the whole platform experience so that itâ??s less of a Godawful schlep to use.
From a lang cat point of view, this was a huge year for us. We were joined by Mike Barrett of Old Mutual, Terry Huddart of Nucleus and Shona McCowan of Aegon. Our little team is 10-strong now and weâ??re about to start hiring again. Weâ??re gonna need a bigger cat basket. We published influential studies into advised and D2C platforms (including a deep dive into platform pricing which made us no friends at all), pension reforms and lots of other stuff. Our (well, Steveâ??s) pricing tables are now a feature of pretty much every personal finance section in the national press. And we still managed to have a giggle along the way.
2016 for us will be a year of consolidation and growth. Weâ??ll keep applying our technical expertise to deliver insight and analysis that you wonâ??t find elsewhere. Data is getting easier and easier to find, as it should be. Itâ??s what you do with that data that matters. Our contention remains that if you know what youâ??re talking about and you can put it across with a half-smile on your face and some pictures of aggressive looking cats, then youâ??re all set.
As happens every year, when I look back at all the shitty stuff happening in far-off and not so far-off places, I remain grateful that we work in a sector which encourages more than one point of view and in which (with just a couple of mardy exceptions) we can robustly take the piss out of one another.
So thank you to all our clients and everyone weâ??ve worked with in 2015. Thank you from me to all the felines â?? please donâ??t go and get proper jobs any time soon. Thanks too to the apers and the haters â?? you keep us getting better. Hereâ??s to a peaceful and fun 2016.