Can it really be Wednesday again? Yes, it can. I’m glad we’ve sorted that out.

Anyway, the title of this week’s Update is a quote which has appeared in many places over the years, but most recently from Stephen King’s On Writing (the best copywriter’s textbook I’ve ever read). The quote as King has it is this: “Kill your darlings, kill your darlings, even when it breaks your egocentric little scribbler’s heart, kill your darlings.”

What this means is that it’s the things we hold closest and most dear that we have to question the most and potentially get rid of – whether it’s the author’s favourite character in a novel or an adviser’s Centralised Investment Proposition. Now’s the time to start thinking.

Loads going on to talk about over the last week.

As part of the noise that’s springing up around MiFID II disclosure, it’s been interesting in the last week to hear from advisers and actual paying end customers about what’s going on with their own circumstances. One correspondent wrote to me this week to express concern that his total cost of ownership was well over 2% and that this was really eating into his near £1m portfolio, held on a popular and well-regarded platform.

It really seems that new disclosures are hitting at the worst possible time. Poor returns last year are biting all over the place (and not in a fun way) – I’ll come back to that in a bit. I’m no-one’s idea of a macro-economist, or any kind of economist, but even a basic reading on what’s going on with grown-up money stuff suggests that the way the industry builds portfolios (largely based on Modern Portfolio Theory) and relies on bonds to behave differently to equities might be tested quite comprehensively this year.

We’ll see this most sharply in Risk 3/4 grade portfolios, which should experience much smaller drawdowns than their more fun cousins higher up the spectrum. How will supposedly ‘safer’ (I know, I know) portfolios behave, and how will clients who signed up to them react when they also get the news of what it’s costing?


If you want to know more about what platforms are doing for MiFID II disclosure, please have a wee visit to our free MiFID II ex-post research paper. We’ve just updated it with Transact’s details; just Hubwise, FundsNetwork and Novia to go now… if you use any of those and would like to see them included, give ‘em a nudge from us. A pack of Rolos if you manage it. Oh, and our Mike did a podcast with New Model Adviser on this stuff too.

Back on platforms, we’re in reporting season now and Q4 2018 has been a bit of a reality check I think. Nucleus’ AUA was down 5.5% in the quarter, although up 2.3% overall on the year. Things have recovered a bit in January, but it goes to show how sensitive platforms are to market movements. Hargreaves Lansdown saw the same kind of drop. This has nothing to do with the quality of various different platforms – it’s about the environment we all find ourselves in as we settle into 2019.


I was driving back from a gig in Glasgow on Sunday night (Karine Polwart, outstanding) and before I hit the M8 I got stuck behind a gritter that was out doing the necessaries on a cold night. I thought to myself – that looks like a nice job. You load up the gritter, you drive to the place you’re gritting, you grit, you go back. “Mark, did you finish the gritting on the M8 slip roads?” “Aye.” “Cheers.” I found myself wondering if the gritter drivers would fancy a shot at constructing investment propositions in a constantly changing landscape.

Not sure why I mentioned that.

Anyway, a few links to finish off:

  • One from us, if you’ll allow – we’ve just published a new paper which the nice folk from Curtis Banks asked us to do as part of the launch of their new SIPP. It’s all about SIPP pricing and investment flexibility and stuff, which won’t be a surprise, but there’s tonnes in it about all sorts of other providers too. Download here, for free.
  • Regulation watch – the FCA is proposing some new stuff on investment ‘pathways’ for drawdown customers – this is important and well worth 10 minutes of your time.
  • And one which is nothing to do with all this. Many, if not most of you, will have followed the inspirational Nick Cann as he rebuilds his life after a stroke. Last week I went to the book launch of an old school friend who had also had a stroke, and it made me think of Nick. If you’re interested in that sort of thing, the book is called – no prizes for guessing – Stroke and it’s by Ricky Monahan Brown. You can buy it from Amazon here. If you use this link we’ll get a wee referral fee and I will donate all proceeds to the Stroke Association.

And that’s it.