Platforms for IFAs | IFA 71 | September 2018

For today’s discerning financial and investment professional

Using Wraps & Platforms in Financial Planning September 2018

ANALYSIS

REVIEWS

ISSUE 71

COMMENT

NEWS

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CONTE NTS September 2018

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CONTRIBUTORS

Ed's Welcome

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News

Brian Tora an Associate with investment managers JM Finn & Co.

10 Ed's Rant A planetary mis-alignment. Michael Wilson considers what might lie ahead for emerging markets

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Blackrock Helping clients identify value for money

Richard Harvey a distinguished independent PR and media consultant.

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Brian Tora - Investing in technology – boom or bust?

Should advisers be worried about investment in this dynamic sector?

18 Neil Martin has been covering the global financial markets for over 20 years.

Jupiter - Donald Trump v.China A global game of table tennis. Analysis from Ross Teverson on its possible impact on global emerging markets

20 Better Business - In-house or outsourced?

Brett Davidson of FP Advance with tips on working with outsourced solutions

Brett Davidson FP Advance

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Investment Trends - Platforms in the spotlight

Kicking off this month’s special focus on the use of platforms, Sue Whitbread talks to Recep Peker of Investment Trends

26 Platforms – adviser case study: Bailey Richards Bailey Richards Wealth Management on the role of platforms within their financial planning business

Michael Wilson Editor-in-Chief editor ifamagazine.com

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Platforms - Tony Catt

Compliance consultant Tony Catt reviews some of the issues affecting the platform market today

30 Platforms - Aegon

Sue Whitbread

Putting clients’ needs first: Steven Cameron, Aegon

Editor sue.whitbread ifamagazine.com

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Platforms - Platform profitability

Giving your platform wings: white paper and analysis from Altus Consulting

Alex Sullivan

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Publishing Director alex.sullivan ifamagazine.com

Connecting with clients through Managed Accounts technology can increase client engagement & build stronger business says Praemium

Platforms - Praemium; the power of connecting

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Platforms - Lang Cat

The FCA’s Investment Platform Market Study - what advisers need to know. Mike Barrett, the lang cat

IFA Magazine is published by IFA Magazine Publications Ltd, Arcade Chambers, 8 Kings Road, Bristol BS8 4AB Tel: +44 (0) 1173 258328

40 Wisdom Tree How I learned to stop worrying and embrace the “vol”

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The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.

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Full details and eligibility at: www.ifamagazine.com

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All eyes on emerging markets

Nick Price, Portfolio Manager, Fidelity Emerging Markets Fund

44 Richard Harvey What’s so funny ‘bout peace, love and understanding? Richard Harvey with a light hearted look at financial planning

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E D'S WE LCOM E September 2018

Gnashboard What’s that you say, Minister? A joined-up government plan for giving British wage earners consolidated information on their personal pensions isn’t something that you still regard as a priority?

Surely, Mrs McVey, you can’t mean that you’ve ditched George Osborne’s proud boast from 2016, to the effect that his Pensions Dashboard would put a final end to the murky confusion that still makes it well-nigh impossible for the average employee to get a proper grasp of his combined pension arrangements? Why have you suddenly gone so quiet on the Dashboard which we were promised for 2019?

And why haven’t we seen the interim report that was supposed to have been published by last March at the latest?

Why can’t your office tell the press anything better than that you’re still “studying the feasibility work”, but that you’re not committing yourself to anything beyond that? Didn’t the 2016 Red Book promise that the government would “ensure [that] the industry designs, funds and launches a pensions dashboard by 2019 [where] an individual can view all their retirement savings in one digital interface?”

And wasn’t it going to be a crucial tool for employees who wanted to see whether they needed to increase their contributions, and by how much? Wasn’t the Dashboard

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going to be a bonus for pension consolidators, as well as for the vendors who would stand to make all that extra business?

Wouldn’t it have brought muchneeded clarity to those employees who were trying to get their heads around the much-reduced lifetime allowances? (And joy to the hearts of financial advisers everywhere?) So how come none of this is important any more?

The case for the defence I am, of course, being a teensy bit cruel here. Esther McVey’s team at the Department for Work and Pensions can point out with fair justification that the technical task of consolidating all those loudly clashing pension accounts has been harder than expected.

29 million people sharing 40,000 different pension schemes – some of them on legacy computer systems, some of them never computerised at all – was always going to be a bit of a challenge.

Mrs McVey can also point out that the pensions industry itself has not always been conscientious about getting its information standardised in time. And I can personally attest that the industry has not always been historically notable for the accuracy of its

record-keeping either. When I was consolidating my pensions late last year, I found that one of them from 1986 was carrying the National Insurance number of a complete stranger, who probably got my tax rebates. And, since the fund’s owner-managers had changed hands four times since then, the typing error had been irretrievably lost in the records and was of no apparent interest to anybody except me.

But seriously…

There’s more. There are estimated to be around £400 million worth of ‘lost’ pension funds out there, many of them belonging to dead people who never found out that they existed.

But even so, it comes a shock that the government hasn’t even tried to deny the (allegedly leaked) press reports that it’s planning to end its commitment to the Dashboard and to turn the whole job over to the industry, because the DWP has got other things to do with its precious time.

Such as sorting out the flawed universal credit system. So remind me again, what does the P in DWP stand for?

Michael Wilson Editor-in-Chief

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N EWS September 2018

CISI calls for financial planners to sign up for this year’s UK Financial Planning Week 3 – 10 October #PlanWell2LiveWell The Chartered Institute for Securities & Investment (CISI) is encouraging the UK financial planning community to sign up to 3 – 10 October national Financial Planning Week #PlanWell2LiveWell to offer pro-bono guidance for consumers and highlight the life-changing value of financial planning.

The annual CISI campaign, which aims to encourage all UK consumers to sign up for a free, one-hour financial planning session, is an opportunity to showcase to the UK public the professionalism of CFPTM practitioners and highlight the relationship-based focus of the process.

With the primary aim being to help people organise their finances to achieve specific life goals, the campaign seeks to help consumers build financial confidence, combat anxiety and stress about money and deal with life’s challenges around day-to-day financial decisions.

Financial planners throughout England, Scotland, Wales and Northern Ireland are encouraged to: • Join the campaign to help highlight the real benefits of financial planning • Consider offering one hour free consultation surgeries, either in person, via skype or over the phone for members of the public • Take part in “Ask a Planner” online sessions and offer written responses to individual’s queries

“This is an important opportunity to show their commitment to Financial Planning Week by giving up some of their time and to give something back.

World Financial Planning Day will kick off the week and we look forward to joining forces with other CFPTM professionals across the world to raise the global understanding of financial planning.

Martin Ruskin CFPTM Chartered MCSI and Chairman of the CISI IFP Forum said: “We have a wonderful community in the UK of those willing to give their time and skills to helping change lives for the better. Please sign up to the campaign and get involved as highlighted above so that we can help build our profession for the benefit of the consumer.”

Financial planners wishing to sign up to CISI Financial Planning Week should go to www.Cisi.org/fpw This year the start of CISI Financial Planning Week is also marked by World Financial Planning Day 3 October, organised by IOSCO (International Organisation of Securities Commission) as part of World Investor Week and supported by the Financial Planning Standards Board Ltd (FPSB).

These are global campaigns to raise awareness of the importance of investor education and protection.

• Provide talks to local schools across the country to share the merits of the financial planning profession as a career Jacqueline Lockie CFPTM, Chartered FCSI and CISI Head of Financial Planning said: “Our financial planning community understands the importance of Financial Planning Week to raise awareness of the role of qualified financial planners in helping people from all walks of life, not only the wealthy, and of all ages, to think ahead and plan for their future. This is our chance to demonstrate our planners’ social responsibility credentials for all consumers to understand the real benefits having a financial plan can bring them.

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September 2018

Prism: Empowering your financial planning business through technology

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Things all IFAs can do to improve PRODUCTIVITY & increase PROTECTION

IMPROVING YOUR

PRODUCTIVITY

INCREASING YOUR

PROTECTION

GET THE BEST TECH SUPPORT

OUTSOURCE YOUR CYBER SECURITY

Access to a UK service desk for quality remote support and highly skilled on-site engineers on hand, on time and on location when needed.

Ensure you protect yourself and your clients through managed Antivirus, Cryptoware & Ransomware Protection - with a trusted partner.

EMBRACE CLOUD COMPUTING

ENCRYPT ALL YOUR COMPANY & CLIENT DATA

Maximise use of Microsoft’s Office 365 productivity apps - flexibility for your entire team to work securely from any location or device and collaborate effectively.

Protecting your data from hackers whilst active and at rest, ensuring your company and client data remains safe and secure.

UTILISE SECURE COLLABORATION TOOLS

ADOPT A FUTURE PROOF FIREWALL

Exchange online provides efficient secure email across your organisation and fully synced services enable Sharepoint online and Zee drive to give your team easy cloud based sharing and access to files.

Antiquated on-site Firewalls could be putting your network at risk, whereas a global Firewall-as-a-Service solution is continually updated and covers your entire network, all traffic, all devices, all locations.

SYNC YOUR IT HARDWARE & TELECOMS

ENSURE YOUR BACKUP PLAN IS AIR-TIGHT

Guided procurement means you get the most efficient and cost effective equipment. IT can be fully supported and synced with internet based telecoms - increasing productivity and reducing costs.

Peace of mind that all your data is automatically backed up. Cloud-to-cloud backup automates, encrypts and stores all your data in a compliant UK data centre with simple restore capabilities.

WORK SMARTER WITH TRAINING

HAVE A SOLID DISASTER RECOVERY PLAN

Staying ahead of the tech curve is not easy when you have a busy business to run, but investing in training and education on tech tools means you and your team will work smarter, not harder.

Leading Distaster-Recovery-as-a-Service solution that ensures your business can be back up and running quickly and painlessly in the event of breakage, accident, disaster, cyber attack or data loss.

Prism deliver Productivity & Protection to over 1000 IFAs across the UK. To find out how we can help you call us on 0345 121 7770 or visit prism.uk.com I FAmagazine.com

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N EWS September 2018

Fidelity International has appointed Anne Richards as Chief Executive Officer Richards, who is currently CEO of M&G Investments, will join Fidelity International in December and report to Abigail P Johnson, Chairman.

Ms Johnson said: “Anne will assume responsibility for Fidelity International at an important time in its near-50 year history.

Our ambitions to broaden and deepen our relationship with our clients; innovate in product development and solutions design; and to continue to develop our investment platform and Workplace Investing businesses have never been greater. I am very confident in Anne’s abilities to lead the company in this exciting period of future development and growth.”

Richards has 26 years’ experience in the asset management industry, including over two decades as an analyst, portfolio manager and CIO. Her career path spans many blue chip global names in the financial services industry. She chairs the UK Financial Conduct Authority’s Practitioner Panel and is a member of the US-based Board of Leaders of 2020 Women on Boards, which works to increase the proportion of women on corporate boards.

Richards added: “This is an exciting opportunity to lead an international company as it moves into the next stage of its growth plans. Fidelity is an admired global brand with the potential to lead the market as individuals recognise the need to take evergreater control over their financial security.”

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N EWS September 2018

Advisers invited to attend popular seminars on preparing your business for sale Planning for your retirement or selling your business for other reasons is an incredibly complex project. Because of its importance, specialist brokers Gunner & Co. have designed a seminar series around it – to give advisers the knowledge and understanding of what happens when selling your business, and how to prepare for it.

Gunner & Co.’s Managing Director Louise Jeffreys puts it succinctly as she comments that “controlled and planned business sales are proven to realise higher valuations, be less stressful and take less time.”

Explaining in more detail about the seminars, which are aimed at providing an understanding of key issues, Jeffreys gives examples as to what is covered.”

We deal with important issues such as what buyers are looking for in the businesses they buy and what you can be doing now to prepare for the future.

Also, we give some background as to how the acquisitions market has changed and how financial advice businesses are currently being valued.

Other things we cover are elements around how business owners can qualify for Entrepreneurs' Tax Relief, how to prepare for due diligence as well as explanations around what all the warranties and indemnities actually mean.”

Gunner & Co. have 4 seminars left for 2018, with a maximum of 20 attendees for each one: 28 September, Birmingham 4 October, Newcastle 17 October, London 14 November, London Register online today at www.gunnerandco.com or email louise.jeffreys@gunnerandco.com

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E D'S RANT September 2018

A planetar y mis-alignment Emerging markets are feeling the effects of Donald Trump’s wildly erratic behaviour, says Michael Wilson. But has the President inadvertently created a unique buying opportunity?

And is it all written in the stars?

Ben Graham never had many doubts about the importance of looking beyond the market’s fickle valuations. Don’t waste too much of your time examining the momentary fundamentals behind a particular investment, he said – just focus instead on Mr Market’s daily price, which might be well out of whack with the real situation for all kinds of reasons, and choose your moment to lock into a long-term investment if it looks likely to be a keeper.

Looking at the overall state of emerging markets today, it’s hard not to reflect that Mr Graham had it easier than we do in this internationalised world, a world where money can be moved from one hemisphere to another at the push of a button. When we look at the soaring economies of China, India and much of the Pacific region, of course, there’s absolutely

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no question that the underlying economic oomph is there in abundance. China’s economy is set to grow by 6.6% this year; India’s by 7.3%; the Philippines by 6.4%; Malaysia by 5.6%; and Indonesia by 5.3%. At a time when none of the global majors is pulling in more than 2.5% or thereabouts, what’s not to like?

One question, two answers That’s a question with two answers, unfortunately – a logical one and a market-risk one.

The logical answer is a simple slam-dunk for the optimistic view that the vast population growths in South Asia and the rapid advance of urban consumer cultures in the rest of the developing world can literally guarantee a demand growth of a kind that developed nations can only dimly recall. And for the fact that low

domestic wages and sometimes currency pegs have allowed third world exporters to undercut their Western counterparts on the price front. (Hey, not even Donald Trump can be wrong about everything…) We could also point out that China, for instance, is bringing in so much foreign currency at present that it could afford to bankroll the American government’s deficits almost single-handedly – and that it would be a fool who chose to disrespect his banker. (err, wouldn’t he?)

The market-risk argument, however, has been running all the other way this year. (There, I’ve said it.) The awkward fact is that the MSCI Emerging Markets index (MSCIEF) dropped into technical bear territory during mid-August, having lost 20% of its value in US dollar terms since the start of 2018.

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E D'S RANT September 2018

And that we can’t just blame the index’s slide on the much stronger dollar, which has unquestionably reduced the relative value of non-dollar markets – and which has also sucked away a lot of loose money from EMs toward the United States, where interest rates and yields are getting better.

No, what we also have to face is that some parts of the emerging world are facing challenges that we can’t, in all honesty, blame on Donald Trump, much though we’d like to. Turkey’s recent slide into economic chaos has been a self-inflicted wound caused by an erratic Turkish president who plainly believes that a man can fly, and that you can run a fiscal policy without knowing anything about fiscal economics. Argentina’s awful foreign debt crisis is the result of long decades of wishful inward thinking, and Venezuela’s complete economic meltdown reflects a different kind of political brutality that ill befits the country with the world’s biggest proven oil reserves.

(Yes, you read that correctly.)

Now, none of these smallish countries has the weight to shift global equity valuations by 20% - unless, I suppose, they triggered an avalanche that had been brewing for many years. But the fact remains that international equity investors have been running the other way this year. In May, according to the Institute of International Finance, foreigners

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dumped a combined $12.3 billion of bonds and stocks from EMs, of which $8 billion was pulled out of Asia and $4.7 billion from Africa and the Middle East.

In June, the IIF added, the outflows grew by another 25%, with most of the damage occurring in China.

And although there was still a $46 billion net inflow of portfolio funds into the world’s emerging markets during the first five months of 2018, any comparison with the year-earlier figure of $134 billion did make it clear that something was up. But what?

The view from Venus I had an amusing conversation recently with a star-gazing friend who reckons that the behaviour of the planetary bodies directs everything that goes on in the world. (Or on earth, anyway.)

And she explained to me that the stars and the planets are currently all out of line, and in particularly stressful ways that haven’t been seen for many years.

During August alone, she said, Mercury, Mars, Saturn, Neptune, Pluto and Uranus were all retrograde. That was a combination, she said, that spreads rebellion and chaos, resentment and maybe violence among people who feel themselves to be disempowered. I sighed, nodded, and took another hefty swig from my drink.

But all that uncertainty, she added, was due to change. By 23rd August, she said, the sun would have left the unpredictable Leo and moved into the more sensible, diligent world of Virgo. Meanwhile, she said, the movement of Saturn into Capricorn, and Uranus into Taurus, would soon complete the set-up for a saner world in the final quarter of the year.

I don’t know about you, but that’s the kind of tosh that I’d like to take more seriously than I do. Personally, I’ve got my own eyes set on 6th November, when Donald Trump’s rabidly nationalistic mid-term election campaign finally comes to an

The awkward fact is that the MSCI Emerging Markets index (MSCIEF) dropped into technical bear territory during midAugust, having lost 20% of its value in US dollar terms since the start of 2018

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E D'S RANT September 2018

end, and when we might get something closer to normal thinking replacing the foamflecked trade nonsense that Mr Bump has been spouting recently.

That in turn ought to engender a calmer approach to trade and investment, assuming that China and Europe and the rest have managed to land enough counterblows on the Prez to force his advisers into taking him aside for a quick lesson in trade economics.

And if that happens, there’s a good chance that the emerging markets of the world will be more than ready to seize the upside Of course, it might not take that long. Even as I write, the growing howls of dismay from Chinatariffed American farmers, car and motorbike manufacturers, whiskey distillers and even technology producers are getting more insistent about the downsides of being locked out of their respective export markets.

So the question is, is this a buying opportunity for the brave? Or is it a warning to keep our hands off until things get a bit clearer?

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Some are trying to remind Trump that America will have no essential rare earths and minerals for its tech gizmos unless it starts to behave more nicely toward Africa and China, which produce and control 90% of the world supply.

I could go on about the dark warnings from the US Treasury folk who hint that China’s $1.2 trillion of US government bonds (along with Japan’s $1.1 trillion) would be enough to sink the greenback if Beijing’s central bank were ever sufficiently annoyed to sell them.

That would be a distant likelihood, of course, because it would also hurt the renminbi yuan; but heck, we have a profoundly ignorant and angry man in the White House who just doesn’t see either the lines in the sand or the landmines that lie just beyond them.

Back to the future So it’s back to Ben Graham for our final thoughts, I suppose. As the great man might have observed if he’d been around today, the strong medium-term fundamentals of most current emerging markets (excluding, perhaps, South America and parts of the Middle East) are being railroaded by an externally-instigated insanity that seems to defy either logic or control. And that’s a potential opportunity that’s worth watching.

Agreed, the mood seems likely to stay unsettled for as long as the Prez continues to believe that a

trade deficit to China is an act of Chinese aggression, rather than that America can’t compete on price and that its own consumers simply don’t want to stop buying cheap Chinese products.

So the question is, is this a buying opportunity for the brave? Or is it a warning to keep our hands off until things get a bit clearer?

Fund managers are very sensibly reminding us that it’s dangerous to simply brush over the problematic issues in our rush to embrace the EM opportunity.

Before we assume that everything will quickly return to the longterm mean, we need to at least acknowledge that China’s trade expansion has shifted the earth on its axis in ways that President Trump has yet to understand, let alone accommodate.

And that the rise of non-OPEC oil production has altered the strategic importance of countries like Russia or Venezuela or the United States itself, in ways that we have yet to grasp. Our historical statistical models from the last 50 years aren’t built to cope with the risk parameters that we’re dealing with now.

Risks and valuations There are other, highly specific issues that we shouldn’t ignore lightly. China’s semi-state-owned banks are carrying hideous levels of secret and undeclared

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ED'S RANT September 2018

bad debts that could threaten Beijing’s consumption boom – although, in fairness, we should add that China’s mandatory bank reserve levels (about 15% of lending) are well in excess of international requirements and should be able to handle a lot of the strain if the worst should happen. More seriously, perhaps, China’s foreign debts are nudging 300% of GDP, broadly the same as Japan - but with a much more powerful economy…..

Bombay is not perfect either, although that shouldn’t worry an experienced stock-picker.

The sorry historical memory of endemic industrial corruption still endures, even though safeguards are now in place.

And restrictions on foreign investment in key industries still persist, which is awkward to say the least. Yet both of these markets remain highly liquid and at a time when the dollar valuations of both the rupee and the yuan have been under pressure from a strengthening US dollar, that’s all good news.

And so, of course, to valuations. Some investors are understandably bothered by the sky-high price tickets which are often attached to fast-growing emerging markets – apparently without reflecting that a share price ought to be priced to account for that future growth.

Even so, I was somewhat surprised

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to read last autumn that Bombay is now the most expensive stock market in the world – with the trailing p/e on the Sensex hitting 24.53, compared with 19.67 for the Dow Jones, 23.3 for the UK All-Share, and just 17.04 for the Shanghai Composite.

That, the Economic Times of India claimed, had been happening because of a short-term ripple.

growth in the Hang Seng was trimmed to 12% by the brute force of events. The irony here is that MS’s 18% estimate would have been looking excellent back in January, before President Trump’s talk of trade wars started to look like a reality: alas, however, two crunching downward sweeps had knocked a full 14% off the valuations by the end of July 2018.

Foreign investors who’d been taking profits on Indian stocks all year, it said, had been unexpectedly tempted back into the market by a sudden strengthening in the rupee that had added new eastern promise to the prospective gains that could be had from their Bombay holdings. By May 2018, moreover, the Sensex was on a still-impressive trailing 23.5, which equated to roughly 19 in forward terms. So not so expensive after all.

So how did it go for China itself, then? Well, MS understated the gloom with its prediction of a 0.5% annual drop in the Shanghai index

by June 2018. In practice it had lost 10% due to Trump’s tariff sanctions, and by late July the market had pretty much resumed the 2,900-ish levels of 2010-2012. Having sorrowfully consigned its midsummer-madness peak of mid-2015 (5,166, since you ask) to the record books.

Another thing that impresses me these days is the sheer local expertise of skilled fund analysts.

In June 2017, Morgan Stanley set a target of 34,000 for the Sensex by mid-2018. And whaddayaknow, when the index closed at the end of June it was at 35,400 - picking up further to 37,000 as the end of July approached. Wow. Just wow….

Will those peaks ever return?

For sure they will. Not everywhere, perhaps, but the reversion to the mean is surely bound to hold. There is a worry that a sudden exodus from the US could spark another huge, swamping wave, but my 40 years of antenna-twitching don’t think that’s very likely.

Conversely, and less happily, Morgan Stanley were similarly successful in their downmarket projections for China and Hong Kong, where a projected 18%

But when do we get to see the upturn, exactly? Well, I have a good friend who can sell you some special interplanetary crystals on a piece of string…..

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BLACKROCK September 2018

Helping clients identify value for money Markets have been volatile since the start of 2018, bringing greater focus onto the asset mix in client portfolios. Michael Gruener, Head of BlackRock EMEA Retail, discusses how you can help clients identify value for money

How do you define value for money?

Value for money is coming under increasing focus, but it means different things to different people.

Regulation and technology are driving the increase in transparency and cost efficiency – but what proportion of investors feel empowered to define and then measure the value for money they have received?

Focus on outcomes Value for money will always be subjective. A client’s investment needs may be straightforward, nuanced or complex. Beliefs may need to be incorporated.

Risks such as currency or volatility may need to be offset. Return expectations may be revised as long-term market conditions shift.

And value for money can only be judged in hindsight. An investor in a low-cost passive fund who has enjoyed the past decade’s beta rally will say they received excellent value for money. But one who paid a bit more for a volatilityconstraining strategy over the same period may have received equal value from the peace of mind this approach delivered.

The best route to understanding value for money at outset is to define the desired investment outcome. By identifying clearly what an investor wants over

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a timeframe, the investment objective can be determined.

Once this is established, the next step is finding the blend of investments to meet that objective.

Assessing value for money We define value for money as meeting the investment objective in the most costeffective way. An asset manager’s role is to understand the investor’s goals and constraints. Outcomes are the ultimate goal but risk is the overriding consideration.

Finding the right investment balance to deliver the investment outcome within the client’s constraints is increasingly about combining different strategies and factors.

It’s about finding the right balance between long-term market exposure, strategic tilts, dynamic allocation and security selection. It may be that an investor can get a more cost-effective allocation to one market or strategy and free up fees for a higher-alpha investment approach where it is really needed. Or it may be that broad-based market exposure is complemented by a risk-mitigating factor.

Clients are now using a wider variety of products that span different investment strategies, return targets, levels of risk and cost expectations. They are also asking with ever more precision how much each

additional layer of investment skill should cost. With margin pressures, fee caps and other restrictions on portfolios, this precision will come more to the fore and is where portfolio analytics come in.

Through a scientific and technology-driven lens, portfolio managers can use factors to find the best blend of investments and to show risk exposures, correlations and portfolio inefficiencies.

A new breed of alpha So, how does active management – or alpha – fit into all of this? The growth of indexing and factor-based investing has been a fantastic disruptor to asset management.

This era of unprecedented technological advancement and ‘big data’ also brings an opportunity to enhance returns.

Those able to effectively harness big data and incorporate technology will be able to successfully use factors, models and artificial intelligence to drive investment decisions, mitigate risk and drive down the cost of investing.

Alpha-seeking strategies can now be deployed with much more precision. The expectations and pricing of these strategies is becoming ever more granular as investors discriminate between different sources of excess return such as smart beta, low-cost alpha or high-conviction alpha.

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BLACKROCK BRIAN TORA September 2018

It boils down to assessing the cost of each additional layer of investment skill above an index tracker. How much more for hedging? How will the cost of reducing volatility or tilting to factors change? What effect will ESG have on overall pricing?

What will be the cost of strategic allocation and how valuable is it to have a team making dynamic stock, sector and asset allocations?

And from an outcomes lens, how much more is it worth paying for every 1% of alpha delivered?

Few asset managers have the expertise and breadth to answer all of these questions unequivocally, but portfolio construction is becoming more of a science. At BlackRock, we have been building for these times. Having the right analytical tools empowers investors and helps them answer questions about their investment objective and how they measure value for money.

Diversification - Diversification and asset allocation may not fully protect you from market risk.

Risk - Risk management cannot fully eliminate the risk of investment loss. This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

Important Information This material is prepared by BlackRock and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of July 2018 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed

by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted

by BlackRock, its officers, employees or agents. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts.

There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

Capital at risk - The value of investments and the income from them can fall as well as rise and are not guaranteed. You may not get back the amount originally invested.

Issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority (FCA)). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. This material is for distribution to Professional Clients (as defined by the Financial Conduct Authority or MiFID Rules) and Qualified Investors only and should not be relied upon by any other persons. © 2018 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Michael Gruener, Head of BlackRock EMEA Retail

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BRIAN TORA September 2018

Investing in technology – boom or bust?

Should advisers be worried about investment in this dynamic sector? Brian Tora reflects on lessons from history and analyses what the future might hold for tech stocks Do you recall the crazy days of the end of the last century?

It was, of course, the run up to a new millennium, with all the excitement that upcoming event generated. Nowhere was this enthusiasm more evident than in the stock market and, in particular, in those shares that fell into the so-called TMT environment. Technology, Media and Telecoms was what it was all about as we rushed towards the year 2000. And Technology was the brightest star in a firmament that seemed to guarantee investors ever increasing riches.

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It all fell apart as we ventured into the noughties, of course. Our own UK stock market actually peaked on the last trading day of 1999, establishing a high that was only surpassed last year. Wall Street, buoyed by a positive plethora of technology businesses, carried on for a few months, but in March 2000 the party final ended.

Technology companies, promising fat returns, suddenly found their backing evaporated and, lacking profits – and cash flow in many cases, simply folded or fell into the arms of financially more secure partners.

Profits matter Professional investors learned good lessons from those chaotic days. Those, like me, who were around to observe the carnage that developed as the technology bubble deflated, were conscious that promise does not always translate into delivery and that traditional valuation techniques had merit. Back then, an accounting term – EBITDA (earnings before interest, tax, depreciation and amortisation) was popular amongst start-ups wishing to demonstrate they had potential, if no profits. The joke amongst analysts at the time was that EBITDA really stood for “Earnings before I

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BRIAN BRIAN TORA TORA September 2018

just signing up more and more users. Growth from this dynamic must necessarily be finite. Still, it is hard to take away from this sector the way in which they have changed our lives forever. The biggest companies in the world are now those operating in the technology sphere. And there is more excitement to come.

The rising power of tech Artificial intelligence is the current buzz word. The ability of smart computer systems to further disrupt our world is growing exponentially.

FAANGs in the spotlight Shares like Apple, Google (parent company Alphabet) and Amazon continue to plough on. Indeed, in early August Apple became the first company to achieve a market capitalisation in excess of $1 trillion – and Alphabet was not far behind, despite recent results impacted by a $5 billion dollar fine from the European Union over the anticompetitive nature of its Android operating system. Amazon, too, has seen its share price nearly double over the past year. Tech stocks have been serving investors well.

tricked the damn auditor”. In the end it was profits – and cash generation – that counted.

Just recently we have seen some wild swings in the fortunes of the shares of technology companies.

It has been suggested by several commentators in various media that we are about to witness dot. com bust 2. Make no mistake, though, the situation is very different to that of nearly two decades ago. For a start, this is not an across the board collapse – if collapse is an appropriate term in this context. That this market is looking increasingly tricky is undoubted, but it is far from looking like a busted flush.

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But not everywhere, it seems.

Social media has come under increasing pressure. Witness the share price collapse of businesses like Facebook and Twitter at the end of July. Twitter fell by around a quarter and, while the Facebook retrenchment was rather less, there were some difficult days as the threat of increased regulation looked ever more likely.

Facebook has been an undoubted success, but its business model could be disrupted if they need to start charging for its services, rather than simply harvesting the data they hold for profit.

In Twitter’s case the sell-off was more down to disappointing growth numbers in terms of users.

But it all emphasises that these new industries need to deliver more solid prospects to investors than

Many seemingly safe occupations are now under threat from intelligent computers able to offer a swift and reliable service hitherto only available from us humans.

Lawyers, estate agents and even fund managers are seeing aspects of their service delivery being taken over by computers that require little human intervention. Creativity and personal relationships are looking like the only secure outposts against this creeping invasion.

For the investor and their advisers the message is clear. Technological advancement is ignored at your peril. It is not just companies operating in the technology sector of which you need to be careful about. Every industry these days is impacted by technology, so understanding how their business might see change as a consequence will become an important facet for analysts.

The trouble is that the pace of change, already swift, is likely to accelerate. There will be losers as well as winners – and nowhere is this likely to be more dramatic than in the technology sector itself. I am reminded of a talk I delivered in Hull following the publication of my book nearly 25 years ago, which was based around the way in which technology was – and would – change the investment world. An IFA asked me why he needed to computerise as he had a perfectly efficient paper system. I told him that one day the insurance companies with which he dealt would only deal with him electronically. I think I won that particular debate.

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J U PITE R September 2018

Donald Trump v China: A Global Game of Table Tennis As the interaction between Donald Trump and China surrounding tariffs is increasingly looking like a global game of table tennis, Ross Teverson, manager of the Jupiter Global Emerging Markets Fund, believes that while the trade war is now too big to ignore, there are still long-term structural growth opportunities in emerging markets

On a stock level, it is interesting to note that you can make an argument that the whole trade war began with the breach of conditions placed upon a Chinese telco equipment manufacturer: ZTE. ZTE failed to fire four employees that were dealing with North Korea and Iran, which meant the company was subject to a blanket ban on operating in the US. Its shares were suspended and, when they were re-listed, fell 60%. So that highlights the unintended risks that can lurk in a portfolio and the need to keep aware of them.

The list of industries in Trump’s firing line for tariffs includes many things from furniture to trainers, but so far investors have focused on two in particular: autos and steel.

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The Korean auto sector has not suffered any sanctions or tariffs yet, but investors are acting as though that will be the case, and therefore that Korean autos would lose some of their competitiveness in the US and China. So that sector has lost about 30% of its value recently.

The tech sector arguably should have been in the firing line given Trump’s focus on intellectual property theft and the existing barriers China puts up against firms such as Facebook, but has so far been mostly immune.

But it is Trump’s policy to reduce the intellectual property leakage that has been weighing on sentiment.

On an index level, there has been a direct impact on the mainland Shanghai Composite Index, which has continued to fall and is down -16% YTD and -46% from its peak in 2015. This is despite decent earnings growth being delivered by most Chinese companies, some initial progress being made on deleveraging policies and the inclusion of domestic Chinese shares in the MSCI Emerging Market Index.

Additionally, exports were firm in June, up 11.3% year on year, though this was perhaps helped by frontloading ahead of tariff implementation. China’s trade surplus rose to US$41.6bn in June, the highest since December, the vast majority of which was accounted for by the US. June’s surplus with the US of US$29bn was the highest ever recorded.

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J U PITE R September 2018

Ross joined Jupiter in 2014 and is currently Head of Strategy, Emerging Markets. He manages the Jupiter Global Emerging Markets Fund and the Jupiter China Fund (Unit Trusts) as well as the Jupiter Global Emerging Markets Equity Unconstrained fund and the Jupiter China Select fund (SICAVs). He also manages, alongside Charles Sunnucks, the Jupiter Emerging & Frontier Income Trust PLC. Prior to joining Jupiter, Ross worked for 15 years at Standard Life Investments, where he managed a global emerging markets equity fund. Ross spent 7 years in Standard Life Investment’s Hong Kong office, where he managed an Asian equity fund, and was a director of the business.

Ross is a graduate of Oxford University and is a CFA® charterholder.

Still, China can’t match the US like-for-like in trade sanctions.

The US just recently added a 25% tax on a second wave of goods worth $16bn and China responded in kind - but this can’t continue to happen on a dollar-to-dollar basis. However, while China can’t match every trade sanction, it can make life uncomfortable for the US because it owns more than $1 trillion of US Treasuries (which it could sell making life very uncomfortable for financial markets).

What does this mean for the stocks we own?

In the near-term, trade-war concerns will likely continue to linger on sentiment. However, our portfolio exposure to those companies impacted by the

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tariffs or those being considered is extremely limited. We have no exposure to steel and low exposure to the auto OEMs. Most of our limited auto exposure is indirect through component suppliers to auto manufactures benefitting from structural growth in electric vehicles.

We believe our investing in a balanced portfolio of the most attractive bottom-up opportunities while ensuring diversified exposure across emerging markets should limit volatility to policy risk in any one geography. While shortterm political uncertainty may continue, the many opportunities for substantial positive structural change is no less attractive. Areas of long-term structural change where we have exposure include financial inclusion and travel and tourism.

In Kenya we own Kenya Commercial Bank, which is very well positioned to profit from rising mobile banking penetration through the MPesa payment platform.

Elsewhere, tourism is still an often-overlooked structural change which will likely deliver decades of growth. One stock we own which is exposed to this theme is Interglobe Aviation, India’s largest low-cost carrier is an example where the extent of this change fails to be reflected in the valuation.

While the political ping pong may weigh heavily on sentiment, we believe there are many attractive opportunities in the market which investors which we believe can provide sustainable, long-term returns.

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BETTE R BUSI N ESS September 2018

Better Business In-house or outsourced?

Brett Davidson of FP Advance offers practical tips on how to get the most out of working with outsourced solutions by making sure you’re on the same page One of the benefits of modern business is being able to access high-quality outsourced support.

In our very own profession, the rise of outsourced paraplanning and administration services is revolutionising the way many financial planning businesses operate.

For small one-person owneroperated businesses, these services give them the option of not having to build and manage a support team.

For larger firms the more mundane aspects of paraplanning and administration can be outsourced.

This in turn frees up quality internal staff to do more of what they love and are good at; the work that adds most value to the business.

It’s not only paraplanning and administration that you can outsource. If you take a look at sites like: • www.fiverr.com • www.peopleperhour.com • www.upwork.com You’ll find an amazing array of specialist support people.

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What about values and culture?

I’ve written plenty of articles in this magazine emphasising the importance of all team members buying into your core values. Can you actually do that when you build an outsourced team? Does it work with a mix of in-house and outsourced team members?

For me the answer is an unequivocal yes.

In-house or outsourced: there’s no difference Regardless of whether you are hiring someone to perform a role in-house, or looking to partner with an outsourced person the issues are the same: 1

Is there a values fit?

2

Do they get it, want it, and have the capacity to do it?

Values In your recruiting process for in-house staff, or in your due diligence process for selecting an outsourced individual or firm, you’ll need to make some sort

of evaluation on the values fit.

Do they see the world the same way as you do? If they do, that’s a great start. If they don’t, it’s an absolute show stopper.

So don’t be afraid to explain and discuss your core values with a potential outsourced contractor. It’s not bullet proof in helping you partner with the right person, but you’ll know pretty quickly once they start if there is truly a values fit.

Understanding and ability The second piece of the puzzle is to ensure any contractor gets (i.e. understands) the role, wants to do the role, and has the intellectual, emotional and time capacity to perform the role for you. Get it, want it, and capacity to do it, or GWC as Gino Wickman calls it in his excellent business book Traction.

A happy team is a great team As regular readers of my blogs will know, our whole team at FP Advance (11 people) is

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BETTE R BUSI N ESS September 2018

The face-toface Christmas lunch was the first time that my wife Debbie and I had ever met some of our team in person. So what happened?

made up of outsourcers and contractors. Does that mean they’re all selfinterested swashbucklers and guns for hire? No. This group of people are some of the best we’ve ever worked with, and we love them to bits.

Last year, in the lead up to Christmas, we organised a traditional Christmas party at a nice restaurant in central London and invited all of our outsourced team to attend.

Our bookkeeper flew in from Glasgow, our graphic design guy came down from Hereford and my VA came up from Poole. Others were based closer to London.

We paid for their travel and paid for the lunch. Why would we bother to do that? They’re outsourced suppliers. Surely they can pay their own freight.

That’s one view, I guess.

However, we don’t see them, or treat them, as external suppliers, we see them as part of our FP Advance team.

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We did a very short explanation of the work that we do, why we believe in what we do, and told stories about one or two of our core values. We then went around the table and got people to introduce themselves to each other and to speak a little about what they did outside of work. It won’t surprise you to learn that most people around the table shared one of our core values: freedom. It was an amazing experience and brought us all together even closer as a team.

Would you do something like this for your in-house team at Christmas? Of course you would. There’s no difference in my mind between your inhouse or outsourced team.

They’re simply your team.

Partners not suppliers I’d encourage you to think of any outsourcers as partners, not merely suppliers. You don’t necessarily have to

state that publicly, and nor do you need to create a structure that enshrines that commercially or legally.

However, in your mind think partnership and treat them like partners. Don’t act like you’re doing them a favour by giving them your work. That’s not the attitude that’ll make them feel valued and willing to go the extra mile for you when it’s required.

Share the vision You can go even further. Just like you’d do with your in-house team, spend time explaining your vision for the business and sharing the business plan with your outsourced team.

You know from your own motivation that everyone wants to work with a group of driven people trying to do some good.

And Financial Planning firms, once they’re understood by employees or outsourced team members, are fantastic places to work because the work you do makes a real difference. Share the good news; let your outsourced team see under the bonnet just a little, so they can get excited and feel good about supporting you.

What we’ve found at FP Advance is that a team of skilled outsourced people can really buy into what we do.

I know that’s possible for you too. You just need to make sure you’re all on the same page.

Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals advise better and live better.

He is recognised as one of the leading consultants to financial advisers in the UK. Professional Adviser magazine has rated him one of the Top 50 Most Influential people in UK financial services on three occasions.

You can follow Brett online and via social media: Twitter: @brettdavidson Facebook: www.facebook.com/FPAdvanceLtd LinkedIn: www.linkedin.com/in/davidsonbrett Website: www.fpadvance.com

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September 2018

Platforms in the spotlight This summer, global research firm Investment Trends released its 2018 Adviser Technology and Business Report, an in-depth study of financial advisers in the UK that examines how they run their businesses and how their technology and platform needs are evolving. Kicking off our special focus on platforms this month, Sue Whitbread talks to Recep Peker, Research Director at Investment Trends, about the study and some of the important trends it has uncovered The report, now in its ninth year, is based on a survey of 963 financial advisers concluded in May 2018. This year's study highlights a number of important trends:

SW: Recep, before we talk about platforms specifically, can you summarise what your research tells us about how adviser businesses are faring overall at the moment?

•

Financial advisers are battling against the tide of regulatory changes

•

Advisers seek, and are willing to pay for, external support to grow their business

•

Standard Life Wrap, AJ Bell Investcentre and Aegon Retirement Choices have extended adviser relationships at pace

RP: They are doing pretty well from what we can see. Adviser business profitability is growing with 74% of advisers say that their businesses are more profitable than they were last year. This is a notable trend which has followed the reforms to pensions and the focus on developing long term relationships with clients - a very positive development.

•

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Commercial advice and back-office software applications are gaining popularity as advisers place greater emphasis on financial plan production capabilities

However, advisers have not been immune to the regulatory changes and requirements sweeping through the industry. Our research shows that regulatory change and uncertainty is now the top challenge faced by advisers (59% cite this, up from 38% last year), surpassing compliance burden (53%, steady).

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I NVESTM E NT TRE N DS ON LI N E PLATFOR M S

Some providers have been active in supporting and helping educate advisers about upcoming reforms and their impact on their business. .

We asked advisers which providers have been the most effective in helping them prepare for recent and upcoming regulatory changes.

Currently, 41% are unable to nominate any single provider.

Among the rest, Old Mutual leads, while Prudential and Standard Life round out the top three most nominated providers.

For providers, the message is clear.

Being properly attuned to advisers’ support needs is very important and will continue to be so.

One interesting thing which emerged from our study is that advisers are looking for external help to help them with the challenges of compliance and regulatory change. These are areas where 80% of advisers are saying they’d be prepared to pay for help. If your readers are feeling these pressures then we can reassure them that they’re not on their own and that most advisers feel the same way.

We were pleased to see that advisers remain optimistic about the future.

58% are focused on growing active client numbers - although this is skewed towards the younger adviser.

If we drill down a bit, on average and overall, the target number of clients that advisers ideally wish to have is 127. However, the average adviser has 109 clients.

I think it’s quite interesting to do some maths around this point as it raises some questions. With around 25,000 advisers in the UK, if we consider each one wanting to reach those additional clients, then out of a UK population of around 60 million, this would mean that only 3.2 million people would be actively advised. So what about the broader market? Who would advise those?

Such questions are putting pressure

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on advisers to be more efficient.

That pressure feeds through to the platforms they use and the technology they implement within their business to enable them to develop effective client propositions.

Of course, the other thing it puts pressure on is the client engagement process and how to demonstrate the value added.

SW: When it comes to advisers’ use of platforms, what were the main things that your study tells us?

RP: As we can see from the chart (see fig 1) platforms as a whole get 73% of all new client money inflows which advisers generate. This figure used to be much lower but since 2011 it’s been at or around this level. This shows us that platform business is very meaningful for advisers, as it represents such a big percentage. Looking ahead, advisers tell us that they see their use of platforms increasing. This may perhaps be in anticipation of platforms developing their pension proposition further and developing their suitability for different types of clients still further.

The average adviser now uses 2.4 platforms each – up from 2.1 last year. Our data showed that only 14% use just one platform, 50% use two and the balance use more than two. Even though that has increased, advisers’ use of platforms is very much on a one plus one basis. There’s the main platform which tends to get around 75% of their client business – then their plus one is for the rest.

When it comes to which providers they choose, more advisers are saying they are using Standard Life/AJ Bell/ Aegon Retirement Choices. Also more specialists, such as James Hay for example, are seeing large numbers of advisers placing new business with them.

September 2018

The beauty of the platforms market is that it is highly competitive. The majority of providers are well attuned to advisers needs and they compete quite aggressively for business. They know that for advisers it is relatively easy to stop placing business with one platform and to start using another.

This year, 32% of advisers say that they have stopped using at least one platform for new client inflows over the last 12 months. For most of the last five years the average was about 25% but 32% is high – showing a large amount of switches. There are a number of reasons for this – all showing the importance for platforms to stay on top of advisers’ needs and to acknowledge how those needs are evolving. From a provider’s perspective, if your support proposition doesn’t align with advisers needs it’s quite easy to lose satisfaction so switching goes up. More positively, those platforms which really deliver on advisers’ support needs can increase satisfaction and the amount of business they generate as a result.

SW: Looking ahead, are many advisers intending to look to use a new platform in next 12 months?

RP: Our data shows that the proportion of advisers who are looking to do so has increased from 19% in 2017 to 24% in 2018 as we can see in Fig. 2.It’s fantastic for advisers as it puts pressure on providers to support them well although it must be said that platforms do a good job there mostly.

When it comes to satisfaction ratings for platform providers, the highest three are Transact, Parmenion and Old Mutual Wealth – and in that order. Comparing this to what we see in other countries, it’s hard to find these levels of satisfaction.

You have to be very good – very active – to reach these levels.

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I NVESTM E NT TRE N DS September 2018

SW: In relation to their use of platforms, what are the main factors which affect platform selection?

Are there particular areas where advisers say they want improvements?

RP: When we asked advisers what they want, nearly 90% cite areas which need improvement as being around core activities like reporting, better servicing support, more tools etc.

The share of main platform remains fairly consistent but what comes through is that there are different types of advisers who look for different things from a provider – for example, for some low cost is a priority. For those, the likes of Aviva, AJBell, Aegon etc. will be winners. However, other advisers want all-in-one, everything together for example, with Standard Life or Transact.

Then there’s a new group of advisers who are using newer model portfolio driven plaftorms like Parmenion where the importance is about investment administration efficiency. We haven’t drilled deeply into this but I wonder whether advisers are selecting them because they take care of the investment side of the process and therefore the adviser can fully focus on the financial and lifestyle goals of the client – ie on the financial planning process itself. This is the model we see in Australia, which is where I am based. More and more advisers are distancing themselves from being stock pickers/investment selectors to becoming asset allocators - or even going beyond it and becoming true goals-orientated advisers.

As the industry matures and there is greater regulatory clarity, the technology and processes advisers use will continue to evolve. The path the Australian financial planning profession is taking is all about focusing on client

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ON LI N E PLATFOR M S

relationships - helping them to achieve their goals and to show how they are progressing towards their goals. It is so important for clients to know where they are on that journey.

Compared to this, for the client it is clear that investment performance is not as important.

Does it really matter if the portfolio has achieved 4% or 8% returns etc. as long as they’re on track to achieving their goals? That’s what gives them real peace of mind.

SW: Is cost a critical factor when it comes to platform choice or it is more about service?

It all depends on the adviser.

Some are prepared to accept higher costs as service and features are more important to them. Other platforms attract advisers where they want the lower cost and will sacrifice a degree of service and features.

Some advisers have still got a way to go in articulating their value proposition effectively – and charging fees. In such instances lower platform costs is more important. In my view, as the use of client engagement tools such as cash flow modelling grows, it will make it easier for advisers to demonstrate the considerable value they add for clients and hence the underlying fees won’t necessarily be quite as important.

It’s important that we recognise that all advisers are different. The market is diverse, which allows for the development of different propositions over the years as the profession develops into one which gains increasingly strong client support and business success. The use of platforms within financial planning businesses has become embedded as an integral part of the planning process and in helping to deliver a service of real value for clients.

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September 2018

Fig 1. The average proportion of new client money captured by platforms edged up from 71% in 2017 to 73%. Advisers expect this to grow to 77% in the medium term:

Fig 2. Platform switching levels appear set to remain elevated over the next 12 months, with a quarter intending to look for new platforms:

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BAI LEY RICHARDS September 2018

ON LI N E PLATFOR M S

Bailey Richards Wealth Management We talk to Simon Richards, director at Newcastle-based Bailey Richards, about how the business uses platforms to support its client service proposition and improve business efficiency

Over the past eight years our preferred platform of choice has been Old Mutual Wealth (OMW) although we also use Transact and Standard Life Wrap. We initially used Transact for all clients whose needs we had assessed would suit the use of a wrap platform, however when we started working with Clever Adviser Technology and began using their system, we found OMW’s platform was a better fit. This system allows us to monitor on a regular basis the funds held within a portfolio and switch to another when we see under performance. OMW allowed us to perform bulk switching without charging the client for switches, whereas Transact did charge. We have found OMW’s system very easy to use. It is clear and concise and allows us to manage business processing from start to finish with great ease.

We were able to create a range of portfolios to facilitate our clients’ requirements with varying risk ratings. The uscan reporting facility can show the effects of changes made to funds on past performance reports of the portfolio we have chosen. i.e. it takes into account the fund switches performed when providing the overall performance.

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We are currently developing a relationship with a DFM called 8AM Global which allows our clients to still take advantage of the Active fund monitoring system we have, but without the need to authorise fund switches up front. We are using the Standard Life and Transact Platform for this system as OMW do not currently facilitate this.

It benefits clients and our business Within our investment and pension business, we place around 90% onto platforms. It allows us to carry out any work on a client’s plan with ease, including obtaining live valuations, fund switching and performance reports. It also allows our clients to log in and obtain valuations without having to wait for annual statements or to come to us for them, so they feel they are engaged with their money on as regular a basis as they want to be.

There are challenges With OMW, some of the main challenges we have found relate to paperwork. Some forms are still required as original versions whereas others can be scanned over to them. They tend to be very rigid

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on cut-off dates for clients wishing to make withdrawals. They still also require various forms to be signed by our clients when we are submitting new business, whereas other platform providers - like Standard Life - only require one form to be signed and it covers pretty much everything the client will need to do including making future withdrawals. They can take instruction from us by phone and the client can have their funds within a few days, whereas with OMW this process can take around 2/3 weeks.

Overall though, our experience of dealing with platform providers has been a successful and positive one. They have a good telephone teams available for issues or queries and we find we get problems sorted fairly quickly.

Annual reviews When it comes to due diligence, we keep up to date with most platform providers services and capabilities on an annual basis. This is to ensure that we are using the ones most suited to our business and clients’ needs, hence bringing on board Standard Life Wrap just last year. When doing so, the main factors we consider are those which suit our business model of actively managing our clients’ pensions and investments, allowing bulk fund switching for example. We review our platform due diligence annually to check their capabilities, charging structures and any new advances in their technology which would benefit our business.

September 2018

Integration is key Our main investment proposition is to actively manage our clients’ pension and investment portfolios. Many IFAs will recommend funds for their clients at outset and then review their performance on an annual basis. Our technology allows us to monitor our clients’ fund performance monthly, which means if they hold a fund that is underperforming, our technology will see it and then recommend to sell and buy an alternative fund in the same sector which is performing better. We find our clients are very happy with the service they get and the attention we give to their money. The platforms also assist us in delivering our ongoing client service. This needs to be demonstrated and repeatable in process to justify to the client - and potentially the FCA - in order to reassure and remind clients of the value of our service for which they are paying an annual fee.

A few words of advice If I had to give any advice to other advisers considering platforms, it’s that no one platform will do everything you want in the way you want it done. Therefore, there has to be some compromise within the arrangement.

My suggestion is to list your top 5 requirements and choose more than one platform to use alongside each other. From my experience, using platforms has transformed our business. It has allowed me and my team to deliver an even greater client experience which in turn has assisted with the retention of and acquisition of more and more clients enabling our business to grow.

About Simon Richards Having been involved in the financial services sector since 1990 as a tied adviser and IFA, Simon set up Bailey Richards in 2008.

The business provides retirement advice for people who are “near” or “at” retirement. Although based out of the North East, the firm has clients all over the UK. There are 3 advisers and 5 support staff to ensure clients always have someone they can contact. The business has recently been shortlisted as a finalist in the 2018 Investment Life & Pensions Moneyfacts Awards in the “Retirement Adviser of the Year” category.

Away from work, Simon is a keen golfer and enjoys spending time in Spain with his wife, daughter and friends.

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TONY CATT September 2018

ON LI N E PLATFOR M S

Platforms – the disease or the cure?

Compliance consultant Tony Catt reviews some of the issues involved with the platform market today Over the years, platforms have become a major cornerstone of the advice service offered by advisers to their clients.

On the face of it, they make perfect sense. They provide a single place where an adviser can store all the assets of their clients very efficiently and transparently, without restriction of fund management groups, but enabling the use of different tax wrappers and often with lower charging structures than by investing directly. What is not to like about that arrangement?

The use of platforms is good for the adviser’s administration process and provides a cheaper and better service for clients.

The FCA has reviewed how platforms were used. In that review they expressed concern about provider bias and adviser independence if only one platform was being used by an adviser firm. Therefore, it recommended that advisers should probably work with two or more platforms to ensure independence. This also tied in with the idea of segmenting clients for service levels. This ideal works quite well when the charging structures of the platforms is compared. It can clearly be seen which investor types certain platforms wanted to attract in the table 1.

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On the issue of charges, the market is extremely competitive, having almost become a race to the bottom to win business. Whilst this is great for clients, this does raise issues of profitability and therefore sustainability of platforms in the market for the longer term.

This is obviously just one element of the research involved when comparing platforms. Indeed, the research on this very topic which I undertook last November ran to over 60 pages. I am currently renewing that research to ensure that my client firms have up to date research in this important respect.

MiFID II At the turn of the year, the implementation of MiFID II has caused some issues for platforms in respect of their position in the advice process. Fund managers as product manufacturers needed to produce more detail about their charging structures in their illustrations and literature. Also, the fund managers would need to advise underlying clients if their funds fell by 10% in a reporting period. The issue for platforms was whether they should be involved in the chain of advice. The platforms were not manufacturers nor indeed were the advisers, which meant

that the fund managers were expected to be advising the clients direct. However, since the holdings on platforms tend to be in a nominee name, the fund managers would not have knowledge of the end client and would be reliant on the platforms and or advisers giving this information. So, the platforms that had been the centre of the process would be removed from the chain of information to clients, which could be problematic.

Questions, questions Most recently, the FCA has raised the issue of ongoing adviser charges being paid by platforms to advisers as there was some suspicion about whether advisers were actually undertaking reviews for clients as regularly as they were expected to. It was suggested that if the platform had seen no transactions, the assumption would be that no review had taken place and therefore no adviser charges should be paid. Whilst many advisers with large client banks would struggle to hold - or even offer - reviews to all their clients, this would penalise many advisers who undertake reviews, but leave investments to continue to be held within their portfolios. A review should certainly not mean a definite change to a client’s investments for many good reasons.

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TONY CATT ON LI N E PLATFOR M S

It begs us to ask this question.

Surely it cannot be beyond the wit of man for the advisers to be able to confirm that a review has taken place by ticking a box on the portal or possibly even providing a document which would evidence that a review has taken place?

However, it raises yet another question. If the platform stopped paying the adviser would it then mean that the charges to the client would be reduced accordingly - as they should not be paying for advice that they have not received? This whole issue raises logistical problems and questions around who should be paying for the extra work involved in policing this.

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So from having started out life as a pretty neat idea, great for advisers and clients alike, it would seem that as well as having to cut their margins, platforms are having extra regulatory responsibilities laid at their doors. Also because of the FCA’s insistence that they should only get a fraction of any adviser’s business, they need to be dealing with even more advisers to get in the same amount of business.

I guess the conclusion I’m drawing here is that whilst the advisers love platforms, the FCA does not quite share the love.

September 2018

About Tony Catt Formerly an adviser himself, Tony Catt is a freelance compliance consultant, undertaking a whole range of compliance duties for professional advisers.

info@tonycatt.co.uk

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AEGON September 2018

ON LI N E PLATFOR M S

Putting clients’ needs first – why platforms are helping to drive excellence in financial planning The platform market has become one of the financial services industry’s greatest success stories of recent years, as Aegon’s Steven Cameron explains. In this article he lifts the lid on the use of platforms by advisers and concludes that improved client outcomes are the real driver behind their rising popularity Nine years ago, back in 2011, the value of assets managed on advised platforms was just *£150bn.

That value has now risen to **£516bn, with assets up **22% in the last year alone. While there are a small number of large D2C platforms, this is primarily an intermediated market.

It has been the recognition by financial advisers of the benefits for clients as well as their own advice propositions, which have been the driving force behind this growth in platform usage. In this article I will look at what advisers report as the biggest factors encouraging their use of platforms and assess why what was once a niche service is now rapidly replacing the traditional life office business model.

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Survey findings Last year, Aegon undertook a series of research activities to assess how financial advisers were feeling about the outlook for their businesses, their clients’ finances and their use of technology. The Adviser Attitudes reports found advisers to be in a bullish mood, despite the headwinds of Brexit, political uncertainty and further regulation. 76% of advisers said they expected to see an increase in the number of clients they were servicing, while 81% said they had seen their turnover increase in the previous twelve months.

In particular, what advisers said about their use of technology and platforms was both fascinating and encouraging in its customer or client focus. As Table 1 shows, the top reason for

advisers using a platform was to give clients access to broader investment choice (63%), followed closely by the convenience of being able to manage investments from a single portal (58%).

38% said they were a more cost efficient way of managing their business, which can of course have knock on benefits for clients, particularly when regulation and associated levies put upward pressure on advice costs.

There was close alignment between why advisers use platforms and the benefits advisers saw for clients with 66% of respondents saying that the greatest benefit to the client was the ability to view their investments in a single place, while 63% thought the wider investment range was the biggest client benefit.

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September 2018

Table 1 – Advisers’ top reasons for choosing a platform - Source: Aegon

Table 2 - The main reasons why advisers believe that platforms are beneficial to clients - Source: Aegon

FCA study underway Given the rapid growth of the industry, it is perhaps not surprising that the FCA has undertaken a review of the platform market to see whether competition is working well. The interim findings of the study have largely given the industry a clean bill of health. While a number of potential issues have been highlighted, the majority of these relate to non-advised platform customers or with the platform industry itself, rather than advisers and how they’re using platforms.

For example, the FCA wants to explore how to make it easier for direct customers to switch platforms and is hoping the Transfers and Re-registration Industry Group will lead to improvements in transfer timescales and communications.

It is also exploring standardised risk labelling for model portfolios and wants to address any practices which dampen platforms’ ability to compete to receive discounts from fund managers.

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We’re living in an age of rapid technological change.

While platforms need to keep investing in technological advancement, it’s important not to lose sight of how to harness that technology for the long term benefit of its users. From the perspective of advisers and their use of platforms, the combination of convenience, choice and cost efficiencies are a powerful trio of positives which suggest a genuine social utility. Our research showed clearly that when talking about the benefits of platforms, advisers don’t talk about the benefits of technology in isolation, but about the improved client outcomes and business efficiencies which they enable.

It’s against this backdrop that platforms will increasingly sit at the centre of financial advisers’ businesses as they serve their clients’ needs.

References *£150bn figure – Platforum, September 2016 **£516bn/22% growth figure – Platforum, March 2018

Steven Cameron is Pensions Director at Aegon

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ALTUS CONSU LTI NG September 2018

ON LI N E PLATFOR M S

Platform profitability: Giving your platform wings A recent white paper from Altus Consulting has highlighted some common areas of operational inefficiency when it comes to platforms.

Ben Hammond explores the theme of platform profitability and concludes that while things are improving, there is still room for improvement Six years ago Altus Consulting released a white paper, The Platform Machine: Tuning for Efficiency. In it we claimed that, in spite of ever increasing levels of assets under administration, all was not well in platform land.

Revenues were rising across the board, but costs were outstripping them in, many cases significantly so. Fast forward to today and there have been a number of platforms which have moved into profit, some of them significantly so.

As a result, we have re-evaluated the current platform industry and in this article I will highlight some of our main findings.

The number of platforms has continued to grow in recent years and there have been some that have moved into profit, many of them significantly so. Recently a few of those star performers have even begun to openly discuss IPO plans; a reflection of the positive outlook for this corner of financial services.

However, is this case for all platforms? At Altus we recently updated our research into platform profitability, which revealed that the story is not uniformly rosy across the platform sector when you examine profits, costs and the numerous factors that sit behind them.

Total AUA and revenue has risen, however revenue in bps has fallen Total AUA has grown by 230% since 2011 as shown in Fig 1; however, total revenue has increased by just 27%. The explanation is margin pressure: revenue in bps was already falling in 2011, and has continued to slide. It now stands at 21bps, adding yet more pressure to the players in an industry in which it is notoriously difficult to make money.

Figure 2 The platform industry is still struggling to make a profit Fig 2 shows us that almost half (48%) of firms from a ‘pure’ platform background are in profit.

They have achieved this largely by being run by visionary founders backed up by teams of creative problem solvers. As these innovative firms have tried to scale, however, issues have arisen that jeopardise their profit levels. In contrast, group-owned platforms, with their traditional model of high

Figure 1

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ALTUS CONSU LTI NG ON LI N E PLATFOR M S

margins buffering the impact of high development costs, are largely unprofitable. This is often due to project overspends and decreasing margins, which keep profits firmly over the horizon.

September 2018

Figure 3

Run costs and revenue are both falling Effective revenue on platform assets continues to shrink; however, it seems that the cost of servicing both a customer and an adviser is falling at almost the same rate as you can see in Fig. 3. It’s common sense that costs need to be less than revenue to deliver a profit, but how can the industry get there?

Figure 4

The cost of sales Translating some of the typical costs of selling a platform to users into the AUA required to support these costs is a useful exercise to better understand full sales costs as is shown in Fig. 4. Based on a total package cost of £160k, the average platform relationship manager would have to generate £100m of AUA in order to cover their costs. This calculation does not take into account future revenue, repeat business, retention or outflows, but it does provide some metrics with which to compare the financials of distribution.

Platform run costs across the industry The run cost of platforms varies drastically by bps cos as Fig 5 shows. . The highest operating costs come in at £115 per £10k AUA while the lowest is just under £4; the average was £28. Over 55% of platforms manage to service their client book for under 25bps (£25 per £10k AUA), up from 40% 12 months previously; the others are unable to keep costs below what an average platform would consider to be a fair charge level for their customers.

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Figure 5

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ALTUS CONSU LTI NG ON LI N E PLATFOR M S

September 2018

Scale is not the only key to profitability It is tempting to assume that scale is the key to profitability, but our research reveals that profitability is determined more by whether or not the platform began life as a start-up. Platforms launched by large groups are, by and large, still struggling to make a profit when compared to the ‘pure’ platforms that began life as small and innovative start-ups.

Platforms experience a wide range of operating costs We see the costs for a market trade ranging from 20p to over £3, which is quite a range when you consider that it doesn’t cost much more to trade £1m in a fund than £1k in one go.

Reconciling client money and client assets has become a focus for all platforms, but this activity has been reactive and tactical, creating interim processes that are typically manual and labourintensive. These manual processes can be difficult to remove from within businesses once they

are established, not to mention expensive – our research found annual reconciliation costs as high as £420 per asset line. Automation is the key to driving this cost down, as platform technology systems AutoRek and SmartStream are doing in the platform landscape by offering pre-built integrations.

The result is lower costs: certain platforms are now reconciling their assets for £30 per asset line, nearly 90% lower than their least efficient competitors.

Historically, the transfer of assets between providers was done on paper and by human intervention, leading to slow and expensive processes that entailed out-ofmarket risk and a poor customer experience. Open standards for transfers between providers have streamlined these processes, but many firms still rely on operations staff to oversee the process.

However, Altus clients who have integrated electronic transfers into their operation have seen the cost per transfer reduced by 75%; the average ISA to ISA inspecie transfer costs has decreased to as low as £1 per transfer.

Typical platform capability cost view The spread of nonoperational costs varies from platform to platform as is shown in Fig 6. Generally there is a significant amount of spend on IT and core infrastructure capabilities, alongside sales and support teams, but much less is spent on developing products and other areas of the proposition.

To sum up, while the platform industry has taken off over the last 6 years, for the majority, significant profits remain out of range.

There is undoubtedly profit to be made in the platform sector, as evidenced by a few of the current high-flyers; the question is: can the rest of the pack keep up – and how they can do so?

Figure 6

Ben Hammond is Senior Consultant at Altus Consulting Ben has been working in financial services for over 15 years, and specifically in the platform space for the last 8. Prior to joining Altus, he worked for both Cofunds and Ascentric, building and launching new products and propositions as well as navigating the complicated world of regulatory change. Ben works with a wide range of Altus clients across the UK and South Africa, helping them understand the future of the platform landscape, the impact change will have on running their businesses and how they can improve the efficiency of their operations.

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PRAE M I U M September 2018

ON LI N E PLATFOR M S

The Power of Connecting Connecting with clients through Managed Accounts technology can increase client engagement and build stronger business says Praemium Technological innovation is driving change across businesses globally, specifically in how a business deals with its customers.

Customers are demanding more; more information, better service and more engaged relationships with organisations. So what does this mean for the financial advice sector, where customer relationships really are the core of an advice proposition?

The cornerstone of the financial planning relationship The changing regulatory landscape around financial advice has increased the compliance and administration burden on advisers, leaving less time to devote to understanding clients and tailoring advice to suit their needs. To add to a financial planner’s time and resource limitations, the fallout from the Global Financial Crisis has made it more difficult to develop the trust required in the clientadviser relationship. Clients are demanding more transparency and control over the investment process, and fewer clients will hand over the investment reins and content themselves with one review a year. Building enduring trust is becoming harder.

So, how does an adviser build trust? Put simply, make a client feel that their needs are the priority, and keep them informed.

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Communicate with clients the way they want to be communicated with. It’s easy to say, harder to do.

Good technology is the most powerful tool available; however, technology is advancing quicker than business models are adapting.

Unfortunately, time and resource restrictions have been an easy excuse for many within the adviser community and provide a reason to continue as they always have done. Many are maintaining their current models with a focus on retention rather than any real substantial growth.

Technology advances and business model adaption at a disconnect

The outlook for growth

It is incredible how much information is now at everyone’s fingertips. By the end of 2016, global internet traffic was 1.1 zettabytes per year (to put that into perspective, one zettabyte is the equivalent of 36,000 years of high-definition video.) In 2018, 90% of the UK population are internet subscribers, and 47.74% of internet usage is via mobile vs a declining 52.26% through desktop.

With technology connectivity advancing at such a pace, as an industry we need to ask: 1) Have our business models adapted at the same, or a reasonable pace, to keep up with this innovation and change of consumer behaviour?

2) Is the industry having a positive enough impact on the wider population to materially increase the number of people seeking financial advice?

The cold reality for the industry is there does not seem to have been any real net growth in clients. The Financial Advice Market Review in 2017 suggests that as little as 6% of the population had sought regulated financial advice in the last 12 months. All that has happened is that existing, unhappy clients have switched advisers or an adviser is acting as a disaster recovery agent helping a self-directed client to dig themselves out of a financial or strategic mess.

Though there has been no real industry growth, stable retention rates only help to support apathy amongst practices. There is little motivation to provide clients with enhanced connectivity, control and transparency if they convince themselves that it’s not needed, they’re getting by okay. Social media, for example, isn’t deemed relevant for their business due to the belief that an ageing client is not technologically connected.

This overlooks a significant social change that is occurring

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that may force an adjustment in their thinking. Soon advisers may have to confront the reality that those advisers who have developed connected client bases will get the most positive feedback and referrals, and those who need to chase their administrator to work out their finances or gain ad hoc portfolio information are falling behind.

Unfortunately, the generic client engagement model has not advanced much in over a decade. There have been small incremental changes as advisers add components of technology at different stages of the advice value chain; however, they have all been predominantly to the benefit of the practice. Many platforms continue to focus their attention on servicing the adviser to the detriment of building really engaging business models and investor portals. As other industries drive a more dynamic customer experience, financial planning still lags behind at the point when advisers and clients connect.

Some key observations: •

From an investor perspective, the client engagement experience has remained consistent even though consumers are changing the way they request and consume other professional and retail services.

•

Client bases are more at risk than ever before and advisers need to be careful not to react only when clients start their exit process.

•

Increasing numbers of investors early in their financial journey are using online education and services to address their investment or financial strategy needs, remaining self-directed for longer.

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•

General referral rates remain low as client are uninspired by their own experience, even though they may stay due to trust in their adviser.

•

As the financial planning industry continues to fall behind other industries’ use of technology, its value proposition will continue to be eroded and new client acquisition will be hindered.

Of course, the more established and mature a practice is, the harder it can be to transition into this 4digital age. The options available can seem overwhelming and paralyse an adviser firm from making progress, but failure to change may pose the biggest risk to the business.

How the right technology can help transform your business.

Managed Account platforms on their own are just an investment solution with benefits to both the adviser and investor. To truly transform a business, however, using the Managed Accounts investment structure in conjunction with investor-focused Managed Account technology can dramatically improve client connectivity. Of course, many advisers see managed accounts simply as of benefit to the business of reduced compliance requirements and enhanced margins. But the real power of Managed Account technology is how it can allow advisers to engage and connect with their clients to create exceptional wealth management experiences.

September 2018

When focusing on a review or implementation of platforms an adviser firm should consider Managed Account technology for its benefits to the business, of course, and also for the important benefits Managed Accounts offer in capturing and keeping clients.

Selecting the right technology to drive connectivity and keeping the client experience as the cornerstone of the advice process will yield a greater level of business benefits, such as: • A more scalable business, serving more clients better for the same effort • Added efficiencies to improve profit margins • Better transparency and control • Increased client satisfaction • Secure client retention and increased referral rates •

Higher practice value

To understand the opportunities that Managed Account technology provides, an adviser firm should review their business needs alongside the client engagement experience. Managed Accounts technology providers like Praemium can offer clientcentric technology that is proven to be transformational for businesses internally and can assist in enhancing an adviser firm’s client engagement and connectivity.

About Praemium The world's leading financial advisers, investment managers, institutions, accountants and product providers use Praemium to manage or administer over $100 billion (£59 billion) worth of investment globally across more than 475,000 accounts. Established in Australia in 2001, Praemium has grown to be a market-leading provider of managed account platforms, investment management, portfolio administration and CRM solutions with offices in Australia, the UK, Jersey, Dubai, Armenia, Shenzhen and Hong Kong.

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M I KE BARRETT September 2018

ON LI N E PLATFOR M S

The FCA’s Investment Platform Market Study - what advisers need to know For those who have yet to tackle the 400 pages of requlatory material, Mike Barrett of the lang cat assesses the key areas of interest

Deciding on what to read whilst you were on your summer break can be a big decision. If you had a nice long flight, and some even nicer time on the beach to look forward to, the quality of reading material is a vital factor to consider. Do you go for something trashy and low-brow, allowing you to switch off your brain completely, or perhaps a decent non-fiction, where you might learn something as a result? And if you are really lucky you’ll be able to learn something that you’ll actually remember now as you trudge back to work in a post-holiday slumber.

Fortunately, if you are remotely interested or involved in platforms and asset management, the FCA have got your back. Not literally - even those on the supervision team don’t have stalking powers however it is clear they are big fans of ensuring the industry has loads of reading material just in time for their summer hols. Last year we were treated to the Asset Management Market Study final report (a real hoot, unless you work for an asset manager), and this year the spin-off follow up was published towards the

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end of July, The Investment Platform Market Study interim report. With over 100 pages for the report itself, supplemented by a further 260 pages of supporting research there was plenty for the industry to ponder. Just in case you did decide to go for the trashy novel instead of some work-based reading, here are the key things advisers need to be aware of.

Happy clients The first thing to remember is that this is a competition market study. The FCA are one of the few financial regulators in the world with a core objective to promote competition within the markets they supervise, the belief being that effective competition benefits consumers and the wider economy. This means the tone and pace of the work is a bit more gentle than you might expect - this isn’t a supervisory exercise going after obvious consumer detriment. In fact, the supporting consumer research shows that most clients are happy with the outcome they are receiving, from both advised and D2C platforms.

Overall there is nothing for

advisers to panic about. There are no imminent rule changes, or indeed a consultation for any potential rule changes. If you are working with platforms you don’t need to make significant changes as a result of this paper, but there are a few emerging themes you should be aware of.

Emerging themes As well as these emerging themes, the report does highlight some “potential areas of non-compliance with existing rules”. These centre around non-monetary benefits, with adviser training, white-labelling services & bulk rebalancing services cited as potential problem areas. Adviser firms need to demonstrate that these benefits are acceptable minor non-monetary benefits, for example because they can enhance the quality of the service to the client and will not impair the firm’s compliance with its duty to act in the client’s best interests.

Since these are current rules (updated at the start of the year as a result of MiFID II) advisers should look to ensure that they are compliant asap.

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Beyond that, the report identifies five groups of consumers for whom the FCA are concerned that competition is not working effectively. These are:

1.

Switching between platforms can be difficult.

Consumers who would benefit from switching can find it difficult to do so.

2.

Shopping around can be difficult. Consumers who are price sensitive can find it difficult to shop around and choose a lower-cost platform.

3.

The risks and expected returns of model portfolios with similar risk labels are unclear. Consumers using these model portfolios may have the wrong idea about the risk-return levels they face.

4.

Consumers may be missing out by holding too much cash. Consumers with large cash balances on D2C platforms may not know they are missing out on investment returns, the interest they lose or the charges they pay by holding cash in this way.

5.

So-called “orphan clients� who were previously advised but no longer have any relationship with a financial adviser face higher charges and lower service.

Advisers will note that the majority, if not all, of these consumers fall into the D2C market, although there are some crossovers into the advised world, especially for the orphaned group. The potential remedies could, however, impact advisers more widely. For example, point 1 should (eventually) lead to improvements in the process of moving from one platform to another, and is posing questions about the advice process involved as well as proposing a ban on any platform exit fees that might be levied. However, as with most of the report, no change is imminent.

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September 2018

Some shortcomings And this is where, in our view, the work falls short. It’s right that the FCA takes an in-depth look at what is an increasingly important area of the market, however 12 months on from the initial terms of reference the study is still asking many of the same questions it originally posed.

The next step will be a final report, due to be published at some time in Q1 2019.

If there are to be any potential rule changes these will then go into consultation, so realistically we are looking into 2020 before anything actually happens as a result of this work. By which time the market could have well moved on significantly.

We would like to see a bit more focus on this work. If there are areas that need to change, get on and make the change. One way to help this momentum might be to separate out the study into separate exercises looking at the direct and advised markets in their own right. These markets are fundamentally different, especially with regards to the responsibility and protection the consumer has in place. They need to be regulated more specifically.

And for advisers, we would like to see more in the way of good/ poor practice examples that clearly set out what advisers should be doing. With the best will in the world, not every adviser was going to wade through 400 pages of regulatory material whilst on their summer holidays, and the FCA need to recognise this.

About Mike Barrett Mike is consulting director and sole-proprietor of the lang cat Isle of Wight office. A driver and survivor of platform mergers, migrations and RDR, he held a number of senior roles at Skandia and Old Mutual Wealth. He is now working with platforms, advisers, banks and asset managers to help them create and communicate in a way that is a little less corporate and a little more human. mike@langcatfinancial.com @langcatmike

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WISDOMTRE E September 2018

How I learned to stop worr ying and embrace the “vol”

By Christopher Gannatti, WisdomTree VIX Levels vs. MSCI Emerging Market Index forward one-year returns

Following a relatively tranquil 2017, volatility came roaring back in late January and early February 2018, resting currently generally higher than what was seen last year.

One thing we found interesting was that during the height of the February 2018 correction, the MSCI Emerging Markets Index outperformed the S&P 500 by almost 150 basis points on the downside.1 Given that the Emerging Market (EM) asset class historically has had a standard deviation about 50% higher than that of the S&P2, EM investors who may have expected the performance of EM to be worse than that of the US were likely pleasantly surprised.

Valuation’s impact on beta The EM outperformance in February 2018 brings to mind a concept that investment strategist Jeremy Grantham has written about: beta is a critical component of explaining relative performance, but valuation can influence beta.

1. Bloomberg, for the period 26/01/18–08/02/18.

2. Bloomberg, for the period from 31/08/2008 to 31/08/2018.

3. Klijn, Wouter. “The Biggest Risk in Investing is in Trying to Avoid it: Grantham.” Investment Innovation Institute.

21 March 2018.

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120% MSCI EM Index Forward 1-Year Return

Many investors were calling for this change. That said, few foresaw how quickly and how violently that prediction would come to fruition. While there was some debate as to what exactly prompted the pickup in volatility, the bottom line is that the spike in the Volatility Index (VIX) left equity investors running for cover.

140%

100% 80% 60% 40% 20% 0% -20% -40% -60% -80% 0

10

20

30

40 50 VIX Closing Level

Total days # of times with positive 1-Yr returns for MSCI EM Index % of times with positive 1-Yr returns for MSCI EM Index Average 1-Yr return for MSCI EM Index

>50 56 56 100% 83.0%

60

70

80

90

When VIX Ends Day >40 >37.32 >30 139 163 295 139 163 277 100% 100% 94% 74.0% 69.7% 46.3%

>20 986 663 67% 11.9%

Sources: WisdomTree, Bloomberg. Historical performance is not an indication of future performance and any investments may go down in value. You cannot invest directly in an index. Data is for the period 01 August 2007 to 31 August 2018 and corresponds with the inception date of the WisdomTree Emerging Markets SmallCap Dividend Index.

Assets that are more expensive relative to their history may experience volatility above their expected levels (and vice versa). When an asset’s price outruns its fundamentals, a downturn in the market can be disproportionally negative when the music stops3.

With the S&P 500 trading at or near historic highs (a statement we’ve been making for some years now),

this concept may become more important to consider.

This is the exact same idea that underpins WisdomTree’s original investment philosophy and why we focus on fundamentals. Regarding those fundamentals, within EM we remain encouraged by corporate earnings and believe that the valuation currently offered by the asset class could be underappreciated.

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WISDOMTRE BRIAN TORAE September 2018

Index forward returns following different VIX regimes 100% 90%

92.0% 83.8%

83.0%

80% Average Index 1-Year Return

Since its inception in 2007, the WisdomTree Emerging Markets SmallCap Dividend Index not only has outperformed the large-capfocused MSCI Emerging Markets Index, but, contrary to what one might expect with small caps, it has done so with less volatility.

74.0%

70%

79.3% 69.7%

60%

54.6% 46.3%

50% 40%

30% 18.8%

20%

11.9%

10% 0% >50

>40 MSCI EM Index

>37.32 >30 VIX Closing Level WT EM SmallCap Dividend Index

>20

Sources: WisdomTree, Bloomberg. Historical performance is not an indication of future performance and any investments may go down in value. You cannot invest directly in an index. Data is for the period 01 August 2007 to 31 August 2018 and corresponds with the inception date of the WisdomTree Emerging Markets SmallCap Dividend Index.

Learning to embrace volatility On a closing basis, the recent high on the VIX was 37.32, set on 5 February 2018. Dating back to 2007, of all 163 instances when the VIX reached levels at least that high, the MSCI Emerging Markets Index had positive returns over the next year on every single occasion—with the average one-year return at 69.7%.

While VIX spikes admittedly were clustered around a handful of key events, the results each time were unanimous: the higher the levels reached by the VIX, the higher the forward returns tended to be for EM.

I FAmagazine.com

The lesson here for investors is the potential to embrace volatility. Where a rising VIX typically equates to a shortterm equity sell-off, emerging market investors who have used the dips as buying opportunities historically have seen positive results.

Small-Cap dividends in emerging markets Over our history, we’ve found that our dividend-weighted approach typically has the greatest excess performance relative to cap weighting in lesser efficient markets, particularly in mid-caps and small caps around the globe.

This excess performance holds true for both the Index’s entire history as well as immediately following jumps in the VIX. Regardless of how high the VIX went, the WisdomTree Index outperformed the MSCI index in the aftermath of all elevated VIX levels.

This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted

by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.

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FI DE LITY September 2018

All eyes on emerging markets Despite the challenging backdrop for the sector, Nick Price, Portfolio Manager, Fidelity Emerging Markets Fund believes that there are still opportunities for discerning investors in emerging markets In the face of heightened trade tensions, US dollar strength and a raft of news flow concerning the developing world, emerging market (EM) equities have struggled in recent times. Looking ahead, these factors and themes will likely continue to shape near-term sentiment towards EM assets. From a trade perspective, it is difficult to assess how US policy will ultimately play out although increased protectionism will negatively impact the global economy and not just EM. US monetary policy and the strength of the dollar is another important consideration.

However, EM governments are now far less reliant on external funding than in the late 1990s when we witnessed the Asian currency crisis.

While there are exceptions see Turkey’s recent woes - the risk today is more apparent on the balance sheets of individual companies. Going forward it will be important to avoid companies with currency mismatches where a depreciating local currency will inflate the value of externally financed debt.

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Political considerations As ever in EM, domestic politics will likely continue to drive some volatility in the coming months.

Already this year both Mexico and South Africa have seen new leaders emerge and Brazil has a general election scheduled for October. Investors will look closely at the next President’s willingness to undertake the necessary reforms to create lasting growth and reduce an unsustainable budget deficit. This will prove crucial in determining the direction in which the Brazilian economy will head.

Elsewhere, the prospect of US sanctions continues to hang over Russia. Whilst the outcome of the Sanctions Bill remains uncertain, markets will require a significant discount for holding Russian assets in the short-term. However, some companies have proved resilient; Lukoil is held in the Fidelity Emerging Markets Fund and has proven to be one such company. It is the second largest oil producer in Russia and the world’s second largest private oil producer, and exhibits an attractive dividend yield.

From a macro perspective, the Russian economy has been remarkably robust thanks in part to a higher oil price although the uncertain backdrop will likely weigh on sentiment towards

its currency and equity market.

Any new sanctions will require careful assessment to fully understand the implications for individual Russian companies.

New vs old China In China, we continue to see many opportunities to invest in good quality businesses that are exposed to consumption, particularly in areas like autos and e-commerce. Beyond the consumer, China’s willingness to liberalise industries such as financial services is encouraging; creating an environment in which leading companies can expand their footprint in China.

The environment across China’s old economy is more nuanced. The government has been successful in executing a significant capacity reduction in areas such as steel and coal and there is scope for this to continue. The data points in the property market are more mixed.

The extent to which the property sector is intrinsically linked to iron ore and steel demand is an important consideration (not only for China, but other key exporters such as Brazil and South Africa).

However, the lack of real supply addition since the global financial crisis tempers those concerns.

I FAmagazine.com

FI DE LITY BRIAN TORA September 2018

About Nick Price Nick joined Fidelity in January 1998 as a research analyst. In 2005, he led the development of Fidelity’s EMEA group. Supported by a growing emerging markets team of analysts and portfolio managers, Nick was appointed to manage Fidelity’s global emerging markets equity products in July 2009. Nick holds a Bachelor of Commerce and Diploma in Accounting from the University of Natal and is a Member of the South African Institute of Chartered Accountants and a CFA Charterholder.

India presses on with its reform agenda Finally, a note should also be made on India. Here, Prime Minister Modi has made notable advancements in his reform agenda in the way of a goods and services tax, demonetisation and a bank recapitalisation program. Each one weighed on the economy to differing degrees, but the prospects of an improved fiscal base, a modernised (and less corrupt) monetary system and a more fundamentally sound banking system should benefit the country for years.

Demand for certain goods and services in India are still nascent. Banking is a case in point and provides an opportunity for companies to take advantage of India’s low credit to GDP. HDFC Bank remains a key position in the portfolio - it has an impeccable track record; having consistently delivered superior growth relative to the industry, whilst also maintaining the best asset quality across banks throughout different cycles.

I FAmagazine.com

Moreover, HDFC has excellent management and a very strong balance sheet. The bank has utilised free cash-flow to develop its branch network and embraced technological advancement; digitising its business to enable more straight through processing and drive efficiencies, without diluting risk parameters.

Importantly, as the challenges in state-owned enterprises persist, private banks like HDFC are in an ideal position to gain market share.

We also maintain exposure to Housing Development Financial Corp, a prudent mortgage lender with solid expertise in underwriting.

Modi’s focus on ‘housing for all’ aims to bring affordable homes to many and provides a supportive backdrop for the company to continue delivering solid loan growth.

While the long-term outlook for India remains very constructive, a nearterm risk to monitor is the potential for dollar strength to result in sustained rupee weakness with higher inflation hastening a series of rate hikes. However, like all holdings in the portfolio, we remain positive that our Indian exposure is appropriate and capable of delivering investors an attractive total shareholder return.

Important information This article is for investment professionals only and should not be relied upon by private investors.

The value of investments can go down as well as up so the client may get back less than they invest.

Past performance is not a reliable indicator of future returns. The Fidelity Emerging Markets Fund has, or is likely to have, high volatility owing to its portfolio composition or the portfolio management techniques. It can use financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. As the fund invests in overseas markets, the value of investments can be affected by changes in currency exchange rates. Investments in emerging markets can also be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only.

Please note that the views expressed may no longer be current and may have already been acted upon.

Investments should be made on the basis of the current prospectus, which is available along with the Key Investor Information Document and annual and semi-annual reports, free of charge on request by calling 0800 368 1732. Issued by Financial Administration Services Limited and FIL Pensions Management, authorised and regulated by the Financial Conduct Authority. UKM0918/22450/SSO/NA.

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RICHARD HARVEY September 2018

What’s so funny ‘bout peace, love and understanding?

Not much is Richard Harvey’s answer, especially when it relates to financial planning Now you might consider yourself a well-travelled sophisticate, but while you’ve been relaxing and enjoying the peace during your summer hollies in foreign climes, you might just have raised an eyebrow at the, well, odd behaviour of the locals. We all do.

Misunderstandings and financial planning don’t mix

You know what I mean!

The Parisian waiter who treats you like a malodorous vagrant, and then scowls when you don't leave a tip.

The Italian lothario who lasciviously ogles your teen daughter, and wonders why you react like a Victorian curate. The Americans at the Sunday brunch spooning dessert goodies onto the same plate as the bacon, eggs and hash browns.

Recently, the media has been full of stories about people being persuaded to re-invest their pension pots into ostensibly better-rewarded schemes.

Misunderstandings like that are just part of the travel experience, prompting much merriment when you later recount them to friends and family.

Such things are all harmless fun of course. But when it comes to financial planning, pensions and savings, misunderstandings lurk at the other end of the spectrum, often catastrophically.

They really aren’t funny at all.

Not surprisingly, this often ends badly, as in the case of a former Rolls-Royce employee who re-invested his £196,000 final salary pension pot on the recommendation of a doorstep 'adviser' - and saw it crumble by £16,000 within just six months.

The long term consequences of such a move are likely to prove significant – and I suspect – not to our poor pensioner’s benefit.

The victim, incidentally, had a childhood brain injury, and has no memory of the transaction.

I have no evidence for suggesting this, but I bet the vast majority of SIPP holders haven't a clue what most of the language means when their regular valuation arrives in the post

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But misunderstandings can occur in the most benign circumstances, even where the relationship between an adviser and their client is based on long-standing trust.

I have no evidence for suggesting this, but I bet the vast majority of SIPP holders haven't a clue what most of the language means when their regular valuation arrives in the post.

They wouldn't know their fund platform from their transfer value, their global targeted returns from their asset allocation.

And why should they? It's why they pay for advice after all!

Anything to clear the fog of confusion around savings is to be welcomed, so it's disappointing to hear the government may be considering to strangle at birth a sensible suggestion to provide an online pension tracker/dashboard for workers planning for retirement, partly so they are better informed when scammers call.

It is also intended to help workers identify old and oftenforgotten pension pots from former employers. According to the Association of British Insurers an estimated £3 billion is sitting in unclaimed accounts.

If the tracker had been available when I was thinking about drawing pension, it would have revealed I had a claimable sum for the 18 months I worked for the British Tourist Authority.

I FAmagazine.com

RICHARD HARVEY September 2018

As it turned out, the entire pot came to ÂŁ96 - just enough to buy a half-decent dinner for two.

And finally‌ The IFA Sherlock Holmes Award this year goes to John Ralfe for his tireless work rootling around the Teachers' Pension Scheme files.

Mr Ralfe says the already generous defined benefit scheme has been made even more lustrous thanks to increasing wodges of taxpayers' contributions. He says a teacher's pension has increased from 15 percent of salary in 2012 to 40 percent in 2018, and that other public sector pensions may also be enjoying a similar bonanza.

The reasons for this are a little convoluted, but he's clearly done his homework, even if the Treasury is quoted as saying: "We don't recognise those figures".

As someone who has spent most of his career in publicity - some of it endeavouring to keep clients out of the media - I can confirm this is Treasury PR-speak for: "He may be right, but we're sure as hell not going to confirm it. And hopefully the story will just go away."

Memo to Treasury: It won't.

I FAmagazine.com

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CAREER OPPORTUNITIES Position: Financial Adviser Location: BIRMINGHAM Salary: £50,000 - £55,000 Per annum The client: This is a multi-award winning and growing financial planning practice with offices nationwide. They specialise in providing tailored advice to private clients across the UK as well as some of its largest businesses.

The opportunity: You will receive a client bank of circa £21M FUM but will also be tasked with generating leads through a private bank with which the business has a professional relationship, within the locations of Birmingham, Derby and Leicester. An attractive remuneration package - plus car allowance - are provided.

What’s needed for me to be considered?

•

Ideally Chartered or working towards

•

Ideally you will have banking and IFA experience

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Proven experience of writing good levels of business

Position: Technical Paraplanner Location: LONDON Salary: £45,000 - £55,000 Per annum The client: This highly regarded financial planning firm specialise in all aspects of savings, investments and retirement planning for both corporate and personal clients.

They pride themselves on the highest level of personal advice and professionalism. You will be working in a supportive company who embrace the latest technology to help their employees provide the highest level of service. You will be joining a very wellestablished firm who are innovative and forward thinking.

The opportunity: This is a fantastic opportunity to build on your industry and technical knowledge by working with an established team of paraplanners to provide high quality support to a team of IFAs. You will have an experienced team of administrators assisting you with other queries and you will be provided with the latest technology to support you in your role.

What’s needed to be considered?

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Qualified or working towards level 4 diploma is an advantage

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Experience of lifetime cashflow modelling, preferably with Voyant would be advantageous

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Previous experience within the IFA practices and paraplanning is essential

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Excellent communication skills, both oral and written

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FCA understanding of regulations and products and their practical application

Position: Compliance Manager Location: HORSHAM Salary: £40,000 - £55,000 Per annum The opportunity: The firm is looking to recruit a successful compliance manager to join their existing team to provide in-house compliance support incuding complex case/high risk submission checks and file monitoring. There is an excellent opportunity to progress within the firm as this practice continues to grow. You will also receive support with any further industry qualifications you may wish to obtain.

What’s needed for me to be considered: •

Level 4 Diploma qualified or working towards – particular interest in qualifications G60, AF3, RO8

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Previous compliance experience and a good level of IFA compliance knowledge required

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Experience in the review of code of ethics related compliance matters

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Clear, confident and enthusiastic communicator

Position: Corporate IFA Location: MANSFIELD Salary: £50,000 - £60,000 Per annum The client: This is a well-established and growing financial services practice in the heart of Mansfield. It focuses on providing a highly personalised and independent financial planning service with the client at the heart of everything they do.

The opportunity: As a growing practice, the business seeks a financial planner with a proven track record. You will have the opportunity to service a number of existing clients for the practice, but will also be focused on driving new business and building your own FUM. This truly is a fantastic organisation, which particularly prides itself on providing unrivalled levels of service and advice to their clients. You will be given the opportunity to build your career in the industry within a supportive firm with a clear progression plan to become a senior figure within the business, alongside being provided with full paraplanning, compliance and administrative support.

What’s needed for me to be considered?

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Level 4 Diploma qualified and keen to progress towards the Chartered Status

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Previous experience within a fast-paced IFA practice

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High level of analytical capability and good communication skills

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Excellent client facing skills

Position: Paraplanner Location: CARDIFF Salary: £28,000 - £35,000 Per annum The client: This bespoke, well-respected IFA practice seeks to build long term, trusting relationships with their clients over the short and long term. They embrace the use of new technology and have a well-qualified support team assisting the IFAs to make the most appropriate decisions for their clients. They provide tailored financial planning advice and really go the extra mile to provide a personalised service.

The opportunity: This is a fantastic position for an experienced paraplanner to join a growing firm that can offer genuine career development by allowing you to be a key part in the firms ongoing successes.

You will part of a technical team and be actively involved in the back-office process as a key member, the ideal candidate will want to have autonomy within the role and work closely with a team of experienced advisers.

What’s needed to be considered: •

Qualified or working towards level 4 diploma is an advantage

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Previous experience within IFA practice and paraplanning is essential

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FCA understanding of regulations and products, and their practical application

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Effective communication, both written and verbal

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Have a professional, proactive and positive attitude

Position: Financial Adviser Location: COVENTRY Salary: £35,000 - £45,000 Per annum The client: Based in Coventry, this business provides tailored financial planning advice to both corporate and private individuals, ensuring that the best possible recommendations are made. They pride themselves on the firm’s work ethic and professionalism.

The opportunity: This is a fantastic position for an experienced adviser to join a growing firm that can offer genuine career development by offering such a broad proposition of technical advice as well as offering exam and study support for candidates looking to further their technical knowledge and qualifications. You will have a qualified and experienced paraplanning team to assist you and will be provided with regular leads and clients to service, so the emphasis here is on retention and development as opposed to generating new business. As well as this a competitive salary and strong benefits are provided.

What’s needed to be considered: •

You will be diploma qualified

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Currently an established Advisor with CAS status

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Excellent sales and presentation skills

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Excellent telephone manner and client facing skills

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Driven and motivated to achieve targets

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Track record or producing good levels of business within an IFA environment.

Position: Paraplanner Location: ASHBY DE LA ZOUCH Salary: £28,000 - £35,000 Per annum The client: A well-established wealth management practice in Leicestershire is looking to expand their technical team with a paraplanning professional who is dedicated to enhancing their knowledge, experience and skills.

They provide advice for both private and corporate clients for whom they pride themselves on providing bespoke solutions.

The opportunity: This is a chance for a motivated financial services professional to provide support on a broad variety of cases for both private and corporate clients. Working within the paraplanning team and closely with the firm’s Financial Planners, you would be expected to handle complex cases and help to maintain long-term relationships with clients of the firm. They also offer exam/study support and encourage progression.

What’s needed for me to be considered: •

Previous experience working within a similar role within an IFA practice

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Level 4 Diploma qualified or a desire to work towards

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A high level of analytical capability with good communication skills and attention to detail, as well as the confidence to interact with clients and providers at all levels

Position: Financial Planner Location: LONDON Salary: £50,000 - £100,000 Per annum The client: This is an award winning, well-respected IFA practice that seeks to build a long term, trusting relationship with their clients.

They have multiple offices and are a very well-established business that are expanding quickly and they pride themselves on their professionalism and the quality of the service that they provide.

The opportunity: This is a fantastic position for an experienced financial adviser to join a growing firm that can offer genuine career development by offering such a broad proposition of technical advice as well as offering exam and study support for candidates looking to further their technical knowledge and qualifications. Due to the ongoing expansion, the successful adviser will be given a strong client bank that is generated north of £100k in recurring income and tasked with servicing this and building on this. You will have a qualified and experienced paraplanning team to assist you and will be provided with a competitive, salary and strong benefits being provided by a well-established firm.

What’s needed to be considered: •

You will be diploma qualified (ideally holding an AF exam)

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Currently an established advisor with CAS status

•

Excellent sales and presentation skills

•

Excellent telephone manner and client facing skills

•

Driven and motivated to achieve targets

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Track record or producing good levels of business within an IFA environment

Position: Senior Advice Technician Location: BROMSGROVE Salary: £45,000 - £55,000 Per annum The client: This fast-paced and well-respected wealth management firm seeks to build long term, trusting relationship with their clients. They provide fantastic support and development through study support and encourage progression from within.

There is a great community feel throughout the company, with a very friendly but professional working environment.

The opportunity: This is a fantastic position for an experienced senior compliance professional to join a growing firm that can offer genuine career development by having such a broad proposition on offer as well as offering exam and study support. This is a varied and technical role that will see you conducting advice audits and assessments on high risk cases, dealing with technical queries, undertaking research where necessary and investigating client complaints across all departments.

What’s needed to be considered: •

Diploma in Financial Planning

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Willingness to take further qualifications, as relevant to your role

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Demonstration of knowledge and experience in personal financial planning

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Experience in an IFA environment

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Strong report-writing skills

And also…

If these specific vacancies are not exactly what you are looking for, please contact us to discuss other opportunities we may be recruiting for that aren’t necessarily advertised. Additionally, refer a friend or colleague to us and receive £200 in vouchers if we assist them in securing a new career.

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Visit the Heat Recruitment website for more details of these and hundreds of other jobs too www.heatrecruitment.co.uk

Position Title: Experienced international financial adviser

Location: Geneva, Switzerland and Sydney, Australia

Job Sector: Finance

Contact: careers@forthcapital.com Move career to dynamic company that will:

Job description Does your current job provide you with the best possible opportunity to succeed professionally and financially? Are you looking for an environment ready to match your ambitions?

Do you want to join a team of experienced licensed professionals with a strong work ethic, using cuttingedge analysis tools and client management systems?

Forth Capital is a leading financial advisory company, specialising in expat pensions and investments.

The company was created with the aim of helping those who aspire to be financially independent.

Our advisers are experts in investment advice, wealth preservation and asset management. Forth Capital prides itself in providing the very best service.

Our company is expanding in Geneva and Sydney, and we’re hiring highly motivated, successful independent financial advisers already living on location or ready to relocate.

You will assess our clients’ needs regarding financial planning and wealth management issues, advise on appropriate products from top global financial institutions and offer tailored solutions to help our clients realise their financial goals.

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Recognise your efforts with excellent potential earnings

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Give you access to a vast market ensuring excellent earning potential

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Provide a RDR free regulated environment with reduced bureaucracy

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Provide you with qualified online leads and back office assistance, including Financial Express

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Provide continuous first class business development and financial training

Job requirements •

UK qualified

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experienced financial advisers

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a track record of achieving and exceeding targets in the financial services sector

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excellent client communication skills

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ambition, motivation and determination.

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