It has been another thoroughly enjoyable year for me covering this market and talking to fascinating advisers up and down the country.
Things have moved pretty quickly to say the least. For example, soon enough, Mifid II will be in effect.
That’s just one of the headwinds advisers will have to contend with as we enter 2018. To borrow a phrase from former US Secretary of Defense Donald Rumsfeld, Brexit and the fallout from defined benefit transfers are just some of the sector’s “known unknowns”; we are fully aware they are happening around us, but they have outcomes well beyond our control.
But let’s talk about the opportunities instead, because they are at least as numerous. Actually, many are borne directly out of the challenges that the profession faces. For example, the FCA will be collecting more client files in 2018 as part of a follow-up to its recent advice suitability review.
In 2017, just over 93 per cent of the files collected were rated suitable. There is absolutely no reason why this can’t be even higher next time round, reinforcing a growing impression among the public of a sector really trying to do its best for clients.
True, that suitability rating plummeted to 50 per cent when the FCA reviewed DB transfers. But with rogue firms closing, better regulatory data being collected and consumer attention being turned towards the dangers of cashing out, not just the lump sum available, what will remain is a core of advisers who are responsibly generating more income by helping clients with compelling cases to transfer.
Discretionary fund managers and platforms are feeling the heat in the value chain. As the FCA’s pursuit of fair charges and transparency marches on, they may well feel pressured to deliver performance commensurate to the fees advisers and clients actually pay. In the investment space, those riding the equities wave are still sitting on their winnings and, short of a huge and unpredictable market correction, aren’t likely to see their wealth vanish overnight.
So enjoy a well-earned break and thanks again for all your support this year.