I'm currently on a countdown to my last day at IFAonline and now going through mixed emotions of sadness and excitement at the prospect of changing markets after six years as editor.
For those of you who were not aware, Friday 27th April will be my last day as editor of IFAonline, as I’m changing roles (and companies) and heading back into the institutional market to cover the activities of European pension funds.
It might seem like a significant leap but the conversations I’ve had over recent months with industry experts and commentators suggest it’s not as big a change between the two markets as it used to be. If anything, say firms operating in the technology space in particular, the lines between retail and institutional financial services are blurring and IFAs could soon find themselves stepping more into what was previously considered the institutional market to advise clients on their company pensions.
More importantly, it is anticipated this retail shift will be of huge benefit to the consumer because the cost of managing their investments and pensions should drop closer to the levels now enjoyed by pension fund members.
Worksite marketing is fast becoming the buzz word across the industry because if technology can take the work out of managing client information, it could give the adviser access to a greater client pool not currently receiving advice.
At the same time, using technology to manage and deliver pensions with technology support means the cost of moving assets are cut substantially and the argument for maintaining higher retail annual management charges become increasingly weakened.
Don’t misunderstand me: I’m not suggesting IFAs will be able to step in and become pension fund consultants because that clearly is still a specialised service. But the need to advise members on the state of their investments – particularly with the continuing shift towards defined contribution schemes – means IFAs will need to take worksite marketing propositions more seriously and, as a result, ensure they continue to deliver service to their clients for the revenue they earn from them.
Contrary to popular perceptions, European pension fund schemes are light years ahead of the UK market and already fully embrace the need to use technology to manage assets and advise members on the status of their potential retirement income. And this means they are able to focus on ensuring member assets are being managed to achieve their goals rather than worrying about too many other issues which, if I’m frank, distract them from the real job at hand.
I’ve simplified somewhat the broad status of both the retail and institutional finance markets but you should hopefully get my point: pension funds have acknowledged their priority is to use their expertise to manage the scheme according to the rules and investment requirements, all other aspects of the role can be easily managed through the use of technology.
It’s exactly the same for IFAs, albeit their priority is to manage client expectations about their financial life goals. But the apparent divide between retail and institutional investment is reducing and clients/members are better informed.
I’ve relished my role as editor of IFAonline since its relaunch in March 2001 so thank you to readers and experts who have made my job so enjoyable.
In that time, I’ve seen - and sought to try and understand - a wealth of change to the UK retail market but at the same time believe, in the grand scheme of things, nothing has really altered either.
On the whole, I believe there have some positive moves by the industry over that six years, regardless of the suggested pressures of regulation.
My parting shot before I go however - for those of you interested in what I really think rather than what I can say as editor of a title aimed at financial advisers - will be to highlight, as a consumer, where I think the industry is going wrong and where there is still a lot of work to do.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7034 2679 or email [email protected].IFAonline
Head of UK intermediary distribution
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