They say the higher you climb, the further you have to fall. And there is no brand advisers would like to see fall from grace quite as much as St James’s Place.
After being passed an analysts’ note about our favourite wealth manager entitled Growth At An Unreasonable Pace, I thought I had the answer to advisers’ prayers.
But on closer inspection, it turns out the analysts actually had quite a lot of praise for the SJP business model. Not so much on the charges side (which the analysts admit “screen as being expensive”), but because of the one factor SJP has in common with other advice firms. For co-authors Gregory Simpson and Arnaud Giblat, they see advice as a key element of the financial services growth story over the coming years.
Meanwhile in the same research note another big wealth management brand – Hargreaves Lansdown – comes in for sustained criticism. Some of this is to do with the impact of an ageing population selling down assets, and specific business threats, for example the risk of being “Vanguarded.”
But the analysts also argue the growth Hargreaves saw as a result of the RDR is now behind them.
They say: “For Hargreaves we have more concerns over growth. To be bullish we think conviction is needed there is still a large amount financial assets that are currently advised but will become self-invested on a DIY platform. We question what catalysts could cause this to be the case given we have had now nearly three years of investors having to pay explicit fees for advice.”
One of the key things to take away from all this is the rise of direct-to-consumer (and the robots giving guidance) is not a foregone conclusion. Or to be more accurate, the D2C market may grow, but will not be eating advisers’ lunch so to speak. Against a backdrop of the continued need for tax efficient investing and inheritance planning, as well as the spectre of pension tax relief reform, advisers are well placed to capitalise on the expected increasing demand for advice. For once, the picture painted by the “experts” on the future of advice looks to be a rosy one.
So do advisers have the capability and the right framework in place to cope with and effectively serve all that demand for advice? That is a question for another day.
Natalie Holt is editor of Money Marketing – follow her on Twitter here