9 ‘other’ questions you should ask before selecting an investment partner


I joined Square Mile Investment Consulting and Research Ltd only three months ago, from a well-known Investment House who had previously called me in to build a new IFA facing model portfolio service.

An odd departure for a leading investment management house, I hear you say, but this was in the run up to the Retail Distribution Review and many on the manufacturing side of the fence had concluded that the new regulatory environment would drive a move towards outsourcing.

This was certainly going to shake up the distribution landscape for investment managers and everyone wanted a slice of the action.

Are we becoming a nation of boiling frogs?


Few would have failed to notice the recent reduction in welfare spending by the government, meaning that responsibility for protecting household incomes against illness or disability is shifting back to the individual.

I’m sure we are all well versed with the analogy of the frog unaware of the water slowly coming to a boil around him, although it would appear that our under insured nation continues to make an assumption that some kind of employment will always be available.  This unfortunately assumes and relies on one vital ingredient, good health.

Boiling point

Walking away from responsibilities


When the FSA published its Policy Statement on legacy assets, it ignored the warnings of the providers about the costs of amending legacy products to be able to accept adviser charging or increments.

As a consequence, RDR Steering Committees in every product provider had to face the harsh reality of whether or not they could justify spending money to alter products knowing that there was no financial case for doing so.

Today, the advice sector is paying for these decisions in a new layer of complexity when giving advice on legacy products.

Moving to Adviser Charging – All a bit of a mess


(Previously) Bundled Platforms

At one stage I thought the migration to Adviser Charging might actually be alright on the night.

Having digested the FSA policy statements, I had a pretty clear view of the world to come. It was all pretty easy really. At the next ‘advice event’ with each client, the adviser would explain his post-RDR menu of services and agree (or reconfirm) the level of service and associated cost; the client would instruct accordingly and the adviser would either invoice the client for ‘adviser charges’ or take their instruction for a product provider to ‘facilitate’ the payment of adviser charges. Easy.

What role does a broker consultant play?


As the FSA focuses down on incentives and some of the root causes of poor consumer outcomes, perhaps it is time to ask ourselves what role the broker consultant plays and what value or risk they bring to a professional advice practice.

At their very best, a consultant can bring genuine expertise (both technical and market) and can help the professional adviser to access provider support, understand market developments, share best practice from other firms and resolve any problems that may occur with individual cases.

But there is a very different side to the consultants in some providers.