Harsh words in this Money Marketing headline for the advice sector. The advice profession has started to regress, warns the Lang Cat’s Mark Polson has warned.
Polson thinks there is an emerging division in the sector between those who are embracing change and a larger group who, he implies, are not.
He has concerns that some very forward thinking businesses are now being absorbed by larger players and that leaves those who would drive change often frustrated by a bigger company culture.
“You get guys who built incredible fintech that was designed to do one thing astonishingly well, and improve consumer outcome in one slice, spending their life in risk and control meetings in big providers – which isn’t what they were ever going to be good at,” he said.
Consolidation and vertical integration are also challenges for the advice sector.
“If we look at the profession as a whole, it is dominated by a few very, very large providers.”
He added that “big doesn’t have to be bad”, and “vertical integration doesn’t have to be anything to worry about”, as long as consumer outcomes are “at the heart of what it is that we are trying to do. My concern is that that’s too easy to forget.”
It is interesting because it is sometimes quite difficult to write up this sort of speech in a news story. MM has done a valiant job here but it was probably better to hear the speech live.
On Friday, the Financial Times writes about Johnson’s investment big bang – the second time the proposal has been given a major outing in the press.
Should advisers care? Well, it does seem to center around a major reform to insurers’ capital requirements – set out in the Solvency II EU legislation. A significant easing of the capital requirements is suggested. Some insurers have said it would help the UK fund the climate transition.
It might allow insurers to get on the front foot in terms of the range and depth of what they offer. There is a case to say the big capital requirements have restricted firms in what they can do. It would, of course, bring more risks as well. It feels to me there is a lack of significant expert opinion in the story however.
Robert Colville, the head of the right-leaning Centre for Policy Studies thinktank says he fears the Government is giving in to the NIMBYs and will not build sufficient housing as he writes in the Sunday Times.
The FCA has said the pensions dashboard will increase competition in the advice profession and offer consumers better value for money as it issues proposes rules governing the project. Progress is slow but, it seems increasingly relentless.
Quite a claim about competition. Advisers are probably more focused on the prospects of a dashboard making their job a little easier.
The FSCS has paid out £36.5mn in British Steel Pension Scheme compensation, so far.
On Citywire’s the Advice Show, SimplyBiz head of business consultancy Karl Dines says the consumer duty changes are more important than the RDR – a challenging point of view certainly.
