Honestly, we’ve got so many Updates stored round the back that we’re running out of places to put them. Might try and strike a deal with WeWork, seems like there’ll be plenty of cheap storage available there soon.

Ooh, satire.

So the kids are back to home schooling, except as m’colleague, the ever-wise Steve Nelson said recently, “You’re not homeschooling. Homeschooling is a thing that needs practice, planning and expertise. You’ve been ordered to stay at home for the good of society and doing your best to balance work, life and the kids well-being. Give yourselves a break.”

I think another bout of Minecraft, don’t you?


Q1 trading updates are starting to come out for the listed platforms, and while the results aren’t pretty, the AUA drops we expected to see aren’t as bad either. Transact reported a drop of 11% in Q1 down to £35bn or so. Quilter wasn’t miles away from that with a 9.6% drop to £95.3bn from £105.7bn for FY2019.

(We’ll have full Q1 results in our Platform Market Scorecard (if you’re a provider) and Adviser Briefing (if you’re, er, an adviser) in the middle of next month. If you want to get the Briefing you need to be a premium subscriber to Platform Analyser and you can do that here, thank you please. 7 day free trial available. I’ll stop punting now).

Anyway, those drops aren’t anywhere near as bad as we might have expected. As Transact pointed out in their update, the FTSE All Share Index fell by 26.0% and the MSCI World Index fell by 16.1% during the same period. The IA Mixed 40-85% sector was down 15.2%.

So what gives? I think two things are at play here. First, aren’t diversified portfolios good? The indices above are useful, but if we take a real life AN Other DFM MPS as a benchmark (and yes, I know the arguments, but at least I can get data which I can’t for most advisory models), where AN Other = Brewin Dolphin’s balanced MPS on Transact, it was down 14.4% to the end of March. So it feels like the act of diversification has worked at least to an extent compared to being…undiversified, I suppose.

Second, it feels like clients have been doing what you told them. We see some evidence of outflows reducing as clients hunker down and delay taking action in terms of withdrawals or transfers until the Current Unpleasantness is over. Quilter says in its update: “In the latter weeks of the quarter, against a backdrop of high market volatility, transfers out from the Quilter platform to competitor platforms reduced significantly while transfers in remained steady, due to a relatively higher level of business continuity and adviser support. March was the strongest month of the quarter for net flows.”

We also have some evidence of platforms struggling to fulfil transfers at the moment, or at least ones which aren’t taken care of by TEX automated re-reg or Origo Options.

If all this is true, then we know something new about platforms – the stickiness of their asset base, which is your asset base, which is your clients’ asset base, is inversely correlated to market drawdowns. So while asset values may fall, the dynamics of net flows (money on vs money off) may improve in major stress events.


Inside that is, of course, your behaviour as advisers. If you’ve throttled back on activity and reduced the velocity of money moving round the market in one form or another, then you’re part of this. I’ll come back to this in future weeks, but currently most platforms price at a client level, even where special deals are in place. I wonder if we might see more recognition of firm ability and behaviour in pricing models going forward.

It’s entirely possible that a normal sized IFA firm which is tightly run, knows its stuff and sticks to its knitting could cost far less to serve and deliver far better margin (expressed as a percentage of assets under administration for that firm) than a big whopper which is running in all possible directions at once but which has no control over its eleventy billion AUA and its oodles of self-employed RIs. Generally speaking the whopper gets a better price than the normal firm at the moment. I wonder if that might change? Just an idle thought.


See you next week