The transparency argument is done, the retirement reforms (part one at least) likewise and the sunset clause is finally set to bring down the guillotine on the kickback-led market of the past.
Now it is all about who really cares about the customer and who is then able to execute effectively.
It is self-evident the advice market has transitioned remarkably over the last few years. Against that, there is still too much legacy thinking, too little use of technology (for various reasons) and almost no real progression in retail asset management.
From where we sit, modern advice firms are winning the length and breadth of the UK. They have evolved customer-aligned propositions, they have easily enough clients to be viable and they are operationally tighter than ever. Crucially they are also making money through a period of volatile markets and in a time when it is now undeniable that people will pay for advice, even when they know what it really costs.
There will surely be margin pressure at some point but it is easy to see how greater use of technology can drive greater efficiency and scale to absorb such challenge.
Platforms and other technologies will be tasked with supporting this next market transition and we are set for an interesting period where some participants are making money and focused squarely on the future while many legacy operators continue to battle with replatforming and heavily-loss making operations.
Many of the latter have extensive capital resources but it is going to be fascinating to see how blind the shareholder faith remains. At least two deep-pocketed institutions seem to have decided enough is enough and it will not exactly be staggering to see others throw in the towel. Doing it right on a 2020’s cost base and by today’s regulations is very different (and obviously more challenging) than was previously the case and few can really demonstrate the roots of a sustainable financial future.
With so much going on I would expect winning platforms to be investing more than ever in their proposition over the coming years but it is not at all clear who is operating to that kind of financial plan.
Even where the technology really delivers and advice firms are able to enhance their client experience, there is a world of change still to wash through the retail asset management sector.
Robo-advice remains nascent in terms of market penetration. Although it actually has little to do with advice, it signposts massive margin compression around the disciplines of asset allocation and fund selection. If these are now truly algorithmic functions, what possible margins can be sustained by discretionary fund managers and the older school fund selectors such as multi-managers?
Surely charging 30 basis points or more for asset allocation will become simply impossible if a robo can do it at nil marginal cost. Robo is no threat to professional advisers and will only make their advice more efficient and extendable to lower value clients.
But this way of licensing asset allocation and fund selection is a notable step forward and those making money out of this component will need to start thinking a bit harder.
Given there are no obvious signs of explosive performance (at least not positive) in the securities markets it seems like the focus on fees will remain for a while yet.
While there may be more to come, platform pricing has been through the wringer already and 2016 will surely be the year when we start to see real competition emerging in asset management.
There is something of a price war in indexing already and when you layer on the robo theme and factor-based investing it is impossible to see active margins remaining at current levels for much longer.
There is much change ahead and these are exciting times. Bring it on.
David Ferguson is chief executive of Nucleus