This week marked two significant events for the advice community. It has been a year since the FCA’s asset management market study launched and, of course, the Autumn Budget was revealed on Wednesday. Both, in their own different ways, test how much value advisers can offer for their fees.
The FCA is almost certainly right to want to look at the entire cost and process of investing and saving, as it is doing in the asset management study.
Yes, as the title implies, it is taking a critical look at what and how fund managers charge, but what relevance does that have if the client is getting ripped off at another point along the way to returns?
Whether a consumer is paying an excessive fund charge or an excessive platform charge, they are still getting a rubbish deal.
Advisers should show they are part of the solution, not the problem, in creating a value chain that really delivers for investors.
If you are large and lucky enough to have fund-buying power – platform or adviser – the FCA is going to expect you to pass this on to your client.
IFAs should be, and very often are, wrangling with fund managers and platforms to ensure they are getting the best deal possible, and will undoubtedly be able to document the benefit this has to the end consumer as the FCA continues weighing up reform.
It is often said that advisers are at their most valuable in times of turmoil. The Budget is unlikely to test this philosophy, as Chancellor Philip Hammond stuck resolutely to the status quo on pensions and savings. This is good news for those advisers and clients just looking for a period of calm away from policy change for a while.
But there are still planning opportunities to be had: the lifetime allowance has been bumped up slightly, as have the allowances for Junior Isas, and Enterprise Investment Schemes.
The gains may be more marginal, but advisers will still be hunting for every win in an otherwise uninspiring day in Westminster. They know full well turmoil is only ever just round the corner. As does Hammond, with a new £3bn contingency fund for Brexit. Let’s see how long that lasts, and how quickly pensions tax relief re-enters the conversation as we head into 2018 and beyond.
Justin Cash is editor of Money Marketing. You can follow him on Twitter @Justin_Cash_1