On 13 February, we presented our perspective on the key issues in investment distribution – the 2018 Platforum Perspectives.
Here they are for advised distribution:
- Scale gives an edge – advisory groups and platforms have used it to bring down charges. Those that can’t compete on scale will look to diversify or have a very clear proposition.
- Easy peasy margin squeezy – active managers have felt the squeeze but what about platforms? Some new entrants are pricing aggressively and a scale player might shake things up in 2018. While there’s strong demand for advice, the squeeze will be felt here as well.
- Get integrated – regardless of whether vertical integration is good for the end investor, it could be the only way to make a profit in the future. Horizontal integration across financial advice, workplace and D2C helps consumers join up their financial affairs but it’s hard to do well.
- Own the data – advisers, platforms and back office providers own data. How can they use it to benefit the customer?
- Increasingly customers control their own data – how will the industry respond?
And in D2C:
- Be price competitive – ‘price’ trumps ‘brand’ for many investors. We also expect ‘pounds and pence’ pricing to make consumers even more price sensitive.
- Go beyond guidance – guidance isn’t enough for everyone. More D2C propositions are offering a route through to advice and 12 of the robo advisers now offer regulated advice.
- Upgrade the mobile – more investors use mobile apps and optimised websites. A limited mobile proposition won’t do for a growing cohort who expect to do everything this way.
What about for European fund distribution?
- Distribution bottleneck – third-party distribution is growing. It’s mandatory for the provision of an enhanced level of investment service but the rise of investment solutions, automated fund selection and compliance will mean assets concentrated in fewer hands.
- Get used to platform service fees – platforms are moving to explicit platform service fees which will be paid by asset managers for the time being.
Those are our perspectives – we’ll develop them further at Platforum ID – The Investment Distribution Conference – which we’ve launched this week. Click here to register for an early bird pass and we’ll look forward to seeing you on 4th July.