A month to remember

Following Skandia's u-turn on platform-to-platform re-registration I will forever remember June 2009 as the month in which some real clarity emerged.

Headlines over the past few weeks have been dominated by the publication of the RDR CP09/18 - a hugely welcome piece of work which should change the face of financial advice in the UK forever.

Alongside these regulatory changes broadly aimed at introducing greater transparency into the adviser/client relationship, Cofunds' bid to secure more attractive terms for distributing funds has been a long time coming and highlights the deep strategic flaw in the business model of fund supermarkets.

For all the (justified) talk about adviser remuneration, where is the debate on the remuneration of providers? How many fund supermarket investors are aware that their fund choice is constrained by the revenue model of the platform?

The month of June has also seen the restructuring of the Money Portal amidst debts of £55m. To my mind the restructure of this enormous ‘distributor' is a clear sign that the ‘life office builds product and pays high commission for distribution' game is over.

And if it is over for this section of the IFA sector then it is surely over for the life and pensions sector too. The orphan client ‘noise' of the last few weeks has been a sign of what is to come.

It doesn't take more than a cursory glance at the sector's market capitalisation numbers to reveal that Clive Cowdery's 17 June announcement (that [the new] Resolution's first acquisition would be in the £5-7bn range) implies some of the big players might just be considering the zombie option.

Whether related to the gradual demise of the life sector in the savings and investment market, the withdrawal of Capita's Enabler product is perhaps another sign that the era of over-engineering and complexity is over. Wrap is a simple concept and we never needed an aggregator on top.

As if that is not enough on the change front, the asset management sector is facing (arguably) its biggest strategic challenge since Gartmore first paid trail commission in 1982. It's been a long time coming but this month's UK launch by the world's largest passive fund manager is a further significant sign that the old business model is firmly broken.

Having watched the new model emerge from the sidelines for several years, Vanguard has finally made its market entry with a pricing and proposition model that is truly game-changing for the archaic UK asset management sector.

Winston Churchill's assertion "To improve is to change; to be perfect is to change often" doesn't go far enough. I would suggest that in order to be truly successful we must hold change as our only constant.