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Heavy metal

Although the Cofunds Economic Forum was two weeks ago, I feel I hardly did it justice last week. Having mentioned the style of the event had been changed, I did not really explain how and why. The why is simple. Cofunds asked its clients what they wanted. And, of course, for platform providers, the world is shifting greatly. This means they need to consult with their clients even more. And they did.

I have attended conferences where the delegates are invited to vote on issues but this was the first time I have had to ask the questions and summarise the results.

The theme was the RDR and technology. Both impinge on the IFA and wealth management communities in different ways. Coming from a wealth management background but having had many years’ exposure to IFAs, I was surprised at some of the findings.

The impression I gained was that those who had aspired to the description “independent” were determined to hold on to it.

I admired the tenacity and confidence of the audience but do not believe for one minute that choosing independent over restricted will prove easy.

On the topic of fees over commission, it appeared that the bridge had largely been crossed, with an acceptance that remuneration patterns would change.

The technology questions made me feel a little superior. Online reporting has been a feature of the wealth management world for many years. I was surprised that more progress had not been made by the adviser community.

Interestingly, I had been asked by an IFA at the pre-conference dinner what I considered to be the role of the ideal platform. I had responded the provision of state of the art, white-labelled administration solutions. Cofunds had identified this as a priority.

But to return to matters investment, one of the questions posed was whether US treasuries and UK gilts were in a bubble.

Not so, opined Fidelity’s Ian Spreadbury, although he conceded there had not been much value there until recently. The extent of the consolidation in our own sovereign debt market has been significant, with yields rising from below 3 per cent to over 4 per cent. Corporate bonds had similarly retrenched, so neither looked too vulnerable.

I was also surprised to learn from Neil Gregson of JP Morgan that at least one investment bank was fore-casting a significant pullback in commodity prices.

Metals and minerals, to be precise, but a move of sufficient significance to place some doubt over the continued robustness of this sector. Neil countered with explaining how mining yields in many major metals had been falling and that supply pressures should continue. Opposing views are always comforting.

As it happened, Jupiter’s John Chatfield-Roberts was not favouring commodities, other than gold, at this particular time. Nor did he back property – a viewpoint maintained despite a solid case being presented by Andrew Jackson from Standard Life.

All in all, it was a sparky and useful event – with good contributions, too, from BlackRock’s Mark Lyttleton and David Griffiths from Aegon. And it showed how the world had changed.

I will be attending an investment conference in Manchester this week as well as chairing a webcast. Both have private investors as the audience. Following on from taking the temperature of the adviser community, these should serve as useful reality checks in what investors are expecting. I will report back in due course.

Brian Tora is an associate with investment managers JM Finn & Co


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