Back from half term, just as you all go off on yours. In a week where timescales have proved to be pretty contentious, it’s tempting to make a political crack about that, but I’m going to resist. So let’s just Get Update Done and I think if we all really put our own agendas to the side and focus on statecraft we can ram this Update through inside that period between when you sit down with your sandwich and when you get up to see if there are any biscuits despite having promised yourself you’d be good today.

Anyway, I had one of my periodic sojourns onto the wireless last weekend, on Moneybox talking about #thatfund. I was on with the luminous and sagacious Anna Sofat of Addidi Wealth, and although we didn’t get to spend much time on it one of Anna’s points was that investors may well have a case to bring against HL and (to a lesser extent) other Best Buy lists they relied on in making their decisions. My thing was that I didn’t think that would work and caveat emptor, while being a tough message, applied here. Investors have the chance to pay for a professional to help them buy and monitor investments – we call them ‘advisers’ – and if they choose not to use ‘em then life, as my old English teacher used to tell me, is a toughie.

But since then I’ve been chatting away with a few folk, including someone at the regulator, and I’m starting to think the situation could be a bit more nuanced. I still don’t think investors will be able to sue HL successfully (though I’m no solicitor, much to the relief of pursuers and defenders everywhere), but I do wonder if there’s enough in this to force a real shift in how we deal with the grey area between information and advice.

To parse this we might turn to the FCA’s 2014 paper on retail advice, which proposed five key tests: you’ll find them in Annex A here. Option A of Test 3 is interesting – “is the recommendation presented as suitable?”. Now, HL and others would say “no, because we don’t know anything about the individual and we didn’t make a recommendation and we made that clear” – though language like this definitely muddies the water.

Life has moved on at pace in the last five years. Might consumers who’ve grown used to online adverts and political messages which are carefully microtargeted at them as being suitable not say they had a reasonable belief that if they were seeing the ad for Woodford in publications, emails or adverts targeted at them, then the platform had used big data to ensure some degree of suitability?

We also know much more about behavioural finance than we used to. When a trusted figure pops up on a banner ad to say that he’s invested a whopping chunk of his own money in a fund, that’s a clear ‘people like us’ kind of nudge – and investors looking for help to navigate the thousands of funds available will gratefully take that nudge. We’re in full Victor Kiam territory here – but no-one is giving investors their money back if the shave isn’t to their liking.

My point is that I don’t think regulation has (or maybe even can) evolve quick enough to work with the marketing methods available to firms now. Can advice definitions which have their roots in polarisation some 30 years ago be relevant now?

My guess is that the regulatory basis for these kinds of best buy lists will have to evolve, and firms will have to take more responsibility – you wanted the AUA hun, now you need to own it – if they are to operate them. At the least, I think direct platforms should be held to the same standards as advised platforms are in PS13/1 – that they have to present fund options without bias. That would help clear up some of the noise around back-end commercial deals and hopefully give investors more trust.

The one group, of course, who don’t have to worry about any of this is advisers. Everyone knows advisers give advice. It’s right there in the name.


  • Big thing for us, and hopefully for you. We do an annual census style survey of the advisory and planning market, and our 2019 one is live now. It’s a bit of a beast, and normally takes 20-30 minutes to complete. However, every advice and planning professional who completes it will get a free copy of the 2019 lang cat guide to advised platforms, which will be out some time next month and which will be AWESOME. That retails for £200 plus the tax, so that’s your carrot for helping us out – and we’ll also provide a summary playback to everyone who completes it. We hope you’ll make your voice heard. Find the survey here.
  • A nice piece from Tim Sargisson here on dislocations in the adviser technology market, and why they happen. Also a shout out to the paper we did with Origo recently called A Disconnected World, which you can find here.
  • Loads of stuff going on globally about asset management getting cheaper, with RayJay and Schwab amongst others cutting trading fees in the USA. Vanguard is doing its bit in the UK, and is cutting costs on 36 funds here. Imogen Tew has the story with her here.
  • I’ve got about 20 tickets left for DeadX on 14 November. Will someone please take them off my hands? Cheers.
  • And your music shot this week comes from the deeply weary but excellent Tom Mcrae. Not much of a video for this tune, but the words seemed pretty appropriate this week. Enjoy We Are The Mark.


See you next week