It’s true, siblings. Nothing makes your love light shine brighter than the Top Class Wednesday Update…

…but enough of all that. It’s an advisory-themed Update this week. And we’ll give the Valentine’s schtick a rest.

There are two stories that have got me thinking about advice. First, it turns out that Lloyds is planning to hire 700 advisers to storm the gates of wealth management, or at least to shift a fair amount of pensions. The FT has the story with it here. Lloyds hopes to up its wealth management AUA from £13bn to £25bn or so, and give SJP, Rathbones and possibly some smaller businesses a bop on the nose into the bargain.

Second, Interactive Investor has let it be known that it intends to dip its toe into the advisory waters by the end of 2019. The indefatigable Tom Ellis of Professional Adviser has all the news that’s fit to print here.


So do we care about these moves? I sort of think we should. By itself, a bank shouting that it’s getting (back) into advice isn’t a big deal; after all banks have proved over and again that they can’t locate their collective posteriors even given both hands, a map and a brusquely worded Section 166.

But, but, but…I can’t help thinking about the tie-up between Lloyds and Schroders, and the tie-up between Schroders and Benchmark Capital (the holding group of Best Practice, Fusion Wealth and Enable). There are some smart people in there, some of whom have run advice businesses with some success before. What if these tie-ups mean that this time round the advice itself is better? The product set might be restricted, but so are the product sets of lots of advisers these days.

Some years ago I did a talk called “What if the banks don’t screw up?”. No-one I did it to took it very seriously and the banks vindicated the collective ‘meh’ of the advisers I addressed it to by pretty much sitting out the last decade of stunning opportunity in retail long-term savings and investment. But here they are, and I’m thinking of dusting off that talk again.

As for Interactive Investor, it’s a business with a pulse. It’s already scarfed up TD Direct, Telegraph Investing and Alliance Trust Savings. It isn’t a sleepy little D2C platform: it’s owned by proper red-in-tooth-and-claw private equity firm JC Flowers and is here to compete. This is a business with £35bn AUA, a fixed fee model and an advised proposition already in place through ATS. Its targets will be Hargreaves Lansdown (which lest we forget is a big old advisory firm as well as a D2C platform) and SJP. It’ll radically undercut both with its fixed fee offer. In so doing it might undercut some other firms as well.


Maybe both of these will come to nothing. Maybe the banks will screw it up again, and the advice offer of big D2C firms won’t do much. Maybe the old truth that the natural unit of a financial advice firm is about 5-10 individuals and the further you get from that, the worse the outcome for all concerned including the firm itself will hold firm.

Or maybe it won’t. Either way, it’s clear that the big moves and disruption to the advisory landscape aren’t coming from robos; at least not this year. They’ll be from the big shops, who’ve had an extra Shredded Wheat for breakfast and who are suiting up for a proper go. It’s going to be fascinating.

With that, a few links to ease you into the afternoon…

  • Provider TVAS systems are now classed as incentives. But provider assistance in creating CIPs, right up to sitting on investment committees isn’t…or is it? An interesting piece from young Mr Gilbert of New Model Adviser here.
  • One from us – we’ve just done a paper on drawdown functionality in the D2C market. You might be surprised with some of the results. This is a fast moving area and one which providers will (if they’re smart) rush to fill. You can get our paper here (it’s free, courtesy of GBST).
  • And nothing to do with finance, but here’s a beautiful thing fitting for those of you who want some romance in your week from Kate Rusby. One week soon I’ll post some black metal up here. But not this week.

See you next week