The market needs choice, and if ATS or its subsequent incarnation can offer most of what other platforms do, with reasonable service at a fixed fee that’s a fraction of the price of the big guys, then I think there is a business there to invest in.
Beyond this, interest is mounting in a potential acquisition or float of True Potential. Although it’s not a platform operator, FNZ (the platform tech provider to Standard Life, Aviva, Barclays and more) was bought by Al Gore’s Generation fund, with a value of £1.7bn. This sector may not be as sexy as tattoos-and-beards fintech, but it hasn’t escaped the attention of our capitalist overlords in their smoke-filled rooms.
Regulation
I checked back to my end-of-year column from 2017, and much of it was about Mifid II. So that happened, along with Prod, our new Mifid-y rule book, and to a large extent everyone kept doing what they were doing before, which is sort of all right and sort of not.
This time last year we were all freaked out about the 10 per cent drop rule. “Pah!” said the guys who prove the future by showing occurrences of things in the past. “Such things are a once-in-a-decade, maybe a once-in-a-generation event! What a waste of time! What a bunch of loooooosers!’
Well, all those who said 10 per cent portfolio drops were a once-in-a-generation event now have a whole generation to be nervous in, as the first batch of drop alerts went out in October. Life comes at you fast.
The next instalment will be ex post disclosure, which is good because it’s in Latin. This is the part that will show clients how much they’ve paid – in actual pounds – for your advice, for the platform/product and for the investment in the past year. It could be very powerful, probably not in a good way for those interested in keeping prices high.
However, if that’s you then you can relax, as based on our work the implementation of it is shaping up to be the regulatory version of that bit in Apocalypse Now at the Do Lung Bridge. Everyone’s doing different things in different ways at different times. One despairs.
Finally, the FCA’s Investment Platforms Market Study published its interim report in July. It was a pretty tepid affair, which successfully identified that kittens are indeed fluffy, birds do indeed suddenly appear whenever you draw near, and that rhythm is a dancer. What it failed to do was to identify that the D2C market is fundamentally different to the advised one, or get ripped in around vertical integration in a way that would have satisfied those of us who are worried about client outcomes in that corner of the shop. We live in hope.
