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NEW YEAR, NEW DISCLOSURE

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Like a bad follow up album that no-one really wants, MIFID is back. 12 months ago we had the first wave of action, with transaction fees being exposed for all to see. Whereas these figures were expected costs, investors are about to start receiving statements showing the actual costs paid over the last 12 months, broken down in Imperial Credits of the Realm (£’s & pence), covering advice, platform, asset management, DFM and anyone else who is taking a slice of your investment returns.

We think this is potentially a big thing. For a long time, so called experts have speculated what might happen when investors are told the total cost of ownership. Whatever the answer to this is, we are about to find out. Some investors will be fine with it all. Their advisers have always been clear about costs, and these new statements won’t tell them anything they haven’t seen before. More importantly, these investors value the services they receive from their advisers.

However, if this isn’t the case, then it might be a wake-up call. If investors read these statements and don’t have a decent relationship with their adviser, then they might be prompted to take action. Especially since these statements are being sent out against the backdrop of some pretty choppy markets over the last 12 months.

As a result, we wanted to find out how this is all going to work, and especially what it all means for advisers and paraplanners. 15 platforms have very helpfully responded to our information request, and we are very grateful for the time they took to do so. If your favourite platform isn’t on the list, please ask them nicely if they could supply the information we need, and we’ll update the list accordingly. The research is available in a free handy document, which you can download by clicking the image below (takes you to our publications library where you can add the document to your shopping cart.

Click here to go to the download page for this SUPER USEFUL document.

So what does it all mean? Here are our top 3 conclusions….

  1. I have some sympathy for the platforms. This is a must do project, with a defined scope and timescale. Having run several of these projects myself I know just how complex they are, and how soul destroying it is to devote loads of time/energy/resource for “just” disclosure. Hate the system, not the player – this isn’t the platforms’ fault
  2. However, for advisers who have client assets with a number of platforms (as the regulator likes you to do), it’s not going to be a great experience. Surprise surprise, everyone is doing things slightly differently, and your clients are going to get statements on different days, with different calculations and products
  3. And as an adviser, for the majority of platforms you will have no involvement in the process. 100% of providers are sending these statements directly to clients themselves, and only a handful of platforms are giving advisers the ability to interrogate the data and/or run their own reports. Some of you will see this as a positive; others won’t. It will be interesting to hear how you feel about it all – let us know in the comments below

Our main conclusion is that advisers and paraplanners need to engage with this detail now. Whatever platform(s) you are using, your clients are about to get these statements landing on their doorstep. We hope this research helps you to plan accordingly.

Posted in: #Platforms   #regulation  

About Mike Barrett

Consultancy director and sole proprietor of the Isle of Wight division of the lang cat. Superstar DJ by night and investment and platform proposition expert by day. Driver and survivor of several major platform change projects. Ask him anything.