Investment trading and so on is supplied by AJ Bell Youinvest – the direct-to-customer part – behind the scenes. It’s unconventional in a number of ways, but has been operational for the past six years and seems to work very well. Roughly £1bn sits on the system.
Common strengths
All the firms I’ve mentioned share a few attributes. The first is scale – getting out of the normal retail shop still requires a decent amount of AUA, although this has fallen considerably over time. Second, the firm has to be happy to put some resource behind it. Greater control and potentially greater revenue is possible – but you have to want it.
You’ll need to spend money on development. You’ll need some new people – generally in development, IT management, risk management and middle office, and these folk aren’t always cheap. You also need to have a mindset that is about really driving AUA and growth in future.
In many ways, firms in this position are starting to behave like private client stockbrokers and wealth managers, who have been stitching together tech propositions in terms of front ends, administration and trading for ages – albeit often in a pretty haphazard and sclerotic sort of way. The point of the whole thing is ownership, making sure that each touchpoint with the client is exactly the way you want it.
The more you invest in making sure everything is set exactly to your own specifications, the closer you come to the 200lb gorilla of this space. This is a firm that gets control of the client proposition and maximisation of revenue absolutely right, and which now has nearly £100bn of client assets and a place in the FTSE 100. I’m talking, of course, about St James’s Place.
Would providers cope in an industry where genuine control from advisers meant that they couldn’t really access most flows any more, because firms or groups of companies had just gone ahead and made their own? I’m not so sure they would.
So it’s all there if you want it; you just have to want it. And if anyone tells you it’s a waste of time, or it’s not doable, or whatever, just remember another good quote, this time from that old banterer Upton Sinclair: “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
