I wonder if we’ll see a closing of the gap between what we see on advised platforms and what we see on their direct cousins. I can’t help thinking that we’re already seeing some moves in that direction. Many of the life companies – Canada Life, Scottish Widows, Royal London, Prudential – are in build or live with new platform-like propositions that give clients and advisers some of the experience we know now as platformy. But they’ll try to do it at a much lower rate than the ‘pure’ platforms (perhaps bringing that big old balance sheet into play) and make it much less complex. All of them have their eye on the at-retirement market.
One of them, so far, has broken ground to say that it’s going to recruit 700 advisers to try and do some damage in this space, or at least its parent has. But look at the line from the Scottish Widows business, to the Lloyds branch network, to the Schroders joint venture, and tell me there isn’t something you could stitch together there given a budget and enough coffee. I should know: I started my career as a tied adviser for Scottish Widows.
The next few years will, I believe, see us as a sector really start to get to grips with what it means to serve this market. In the advised space, that will challenge centralised investment propositions and the idea that you can happily take 1 per cent for a bit of rebalancing and a toolset that tells you what sustainable income means. In the direct space, it will challenge the view of what’s suitable in terms of functionality, and just how much of a poor cousin it can be to the advised sector.
And running all through this will be the impending wall of money that is going to hit us as a sector. That £384bn is as nothing. We are either going to be ready or we aren’t. I don’t know who wins in all this, but whoever does is absolutely going to be living the high life for decades to come.
Mark Polson is principal at the Lang Cat
