No prizes for guessing what’s getting me out of the cat basket, bristling with Updating fervour this week. In fact there are never any prizes for guessing what’s getting me out of the cat basket, bristling with Updating fervour, so that pretty much makes this a normal week. Albeit one with an unusually straightforwardly titled Update. But you can’t always come at stuff sideways. It’s exhausting, and you often bump into things.

Anyway, as you have no doubt spotted, the FCA loaded the regulatory cannon with a Dear CEO letter aimed at advisers and fired it right at your inbox without even buying you dinner first.

For those of you who haven’t read it, most of it is pretty basic. The TL;DR is:

  • advisers are really important
  • we are going to be giving you all a Hard Stare this year
  • particularly in regard to retirement income advice
  • don’t dick about with DB transfers
  • make sure you’ve got enough PI and cap ad
  • watch out for scammers
  • be pure. be vigilant. behave.

I made the last one up. The FCA isn’t Judge Dredd, though doing regulatory analysis would be much more fun if it were. “Inconclusive needs statement on your suitability letter? Lack of ex-ante rebalancing disclosure? You have been judged. Take this perp down for twenty in an iso-cube.”

The one there that we will have to be thinking about is about retirement income advice. The letter says:

“The review will focus on initial and ongoing advice to consumers on taking an income in retirement…we want to assess the outcomes consumers are receiving…You need to ensure the advice you provide is suitable, costs and charges are disclosed clearly, and you act in the best interests of your clients. Conflicts of interest must be identified and where they cannot be prevented, disclosed and managed.”

So what’s your proposition for clients in retirement? In our recent State of the Adviser Nation survey, 45% of the 404 firms who answered said they had a different process for clients taking an income, and another 10% said they had that and also changed up their investment strategy. The rest either weren’t sure or said they had no set way of dealing with clients and every single one was a beautiful unique snowflake, thus proving that millenials don’t have a monopoly on that.

Cashflow planning is the non-gendered monarch in this area, but how it’s used varies widely. And given that most firms don’t change the investment strategy much and don’t change their charges either, that suggests typical total all-in ongoing charges are in the region of 1.5% to 2% or a bit more.

The conflict of interest bit is interesting too. Here’s one you’ve heard before – if a client annuitises you would have to charge them a VAT-liable explicit fee every year for ongoing advice. If they go drawdown you can take a percentage of AUA. One is worth radically more to you than another. How do you manage that conflict?

So lots to think about – one thing you will definitely need to do is be ready to answer the inevitable slew of daft-laddie questions (which are never as daft as they seem) when the review happens.


It has come to my attention that at least several of you have still not picked up the 2020 lang cat advised platform guide. This is unacceptable, but easy to fix. If you’re a sort of normal-sized adviser firm (about 10 or fewer RIs) then it’s yours for £200 plus the tax. You’ll need a discount code to get that rate which I’ll happily supply if you email me on [email protected] or DM me on Twitter. Tonnes of good stuff in there.

You can buy the Guide here, and we guarantee to keep you out of the iso-cubes for at least three (3) months.


  • Also shilling our HomeGame #2 event in Edinburgh in May – register your interest here. We have got yon Carl Richards from Behavior Gap talking in his first ever Scottish date, and other cool stuff. Cheap tix will be available for advisers, even though you can afford normal priced ones.
  • Results just out for AJ Bell and Integrafin – both looking healthy. AJB net inflows on the advised platform are up 1.2%; Transact managed 2.5%. AJB trading at 45x, Integrafin at 38x.
  • Never mind the annual story about higher rate tax relief going, how’s about entrepeneur relief? Bet this will have some of your clients experiencing tense, nervous headaches…
  • And your music choice this week a) is a tune and b) was on the Judge Dredd soundtrack, although it still couldn’t make up for Stallone’s performance. Please enjoy Release The Pressure by Leftfield.

See you next week