Sigh... 

Sometimes, one comes across articles in the media, where the levels of idiocy expressed by pundits attain new levels, or plumb new depths, depending upon your view of the phenomenon.  If this were an olympic sport, it would be called 'Synchronised Stupidity'.  One such article, I encountered here - and it was fortunate that it was not printed on paper, otherwise I cannot imagine the end result of that medium.

The pundit, whose utterances were regarded as sufficiently profound to fill up an entire FT Adviser piece, has now set up this new initiative - www.octomembers.com.  I must confess that I find it difficult to repose much confidence in an enterprise which emerges from such a vacuity, of which the following direct quotations are representative samples:

Mr X said any "thoughtful" adviser should be addressing adviser fees and charges in the interests of clients.
He said: "Can we genuinely say as advisers, to our client, yes the complexity of your affairs has doubled? The risk to us from running your portfolio has doubled, therefore I have to charge you?
Mr X said the difference between some structures currently in use was "monstrous".
Mr X said it would be a "big win" for a client if an adviser could put them in a charging structure for fund management that is cheaper than the one they are in today. 

One must be charitable, I suppose, and allow for the nuances of reportage.  It is possible that the anonymised pundit concerned actually voiced considerations of such subtlety and technical sophistication, that they simply passed over the head of the journalist, but I doubt it.  These are the kinds of statement that you would expect from an individual who has recently returned from a residential course entitled How to Patronise People.  If you have clicked on the link and viewed the original article, by scrolling to the comments at the foot of the page, you will see how good a student he must have been.

Of course, we've been thinking carefully about the value of client outcomes for years - in fact, long before the RDR came along.  Our very own ValidPath Investment Proposition, launched in 2011 after two years of preparatory R&D, was designed with that objective in mind, and we're continuing to look closely at new options which may help our Members deliver even more value to their clients.  I am currently experimenting (with my own money) with a Platform where the total annual charge (excluding fund charges) is 0.06% in relation to funds under management.  It's clunky, and nowhere near as intuitive as such exercises in excellence as the Parmenion platform, but it does the job - and it may be suitable, depending upon the client's objectives, and the Adviser's adaptability.

And, as we all know, the 'value' of what we achieve for our clients goes way beyond the scale of assets which may, or may not, be held on a given platform.  That factor alone suggests that 'Mr. X' is working off the back of an old-model, transactional view of the universe.  Our charging structures are entirely dependent upon the nature of our advice-model, which hopefully has advanced a little, in terms of sophistication, beyond a mere holding exercise in relation to assets under influence (AUI).  ValidPath Members will know that we have provided extensive guidance on this kind of issue, and can download the latest copy of our guide to fee-based advice from this page.

 

Kevin Moss, 27/03/2019