So how would we rate the last couple of Updates then? I thought Scott’s was very good. Didn’t read Mike’s.

Only kidding. I was indeed at my first industry awards do for – I think – four years last week, having forsworn them long before the pandemic. I remember being a total grouch at one do, hating everything about it, and it was only when a colleague pointed out that there were about 800 people in the room having a very nice time and one grumpy guy that it became clear to me I should probably lay off them for a while. Anyway, I had fun last week but stayed pretty sober and was out of there at midnight which was a very good decision. A boy needs his sleep to arm him for the day ahead.

I mention this because the format of the event was identical to how it would have been pre-pandemic (that’s not a criticism). I remember writing in an Update two years ago that we would have a chance to decide what we wanted to keep as we came out of the Great Unpleasantness and what we wanted to leave behind. I wonder how many of us have dwelt on that? It turns out one of the things we want to keep is industry awards ceremonies. Who would have thunk it?

As the world appears to be in search of a faster handcart to go to hell in, it’s good to spend time with someone cleverer than you so your mind has to do some work rather than doomscroll. Such a one is the two-brained Bruce Moss of EV, who has penned an interesting piece on capacity for loss testing.

I won’t summarise the article here because you can all read, but Bruce’s core point – as my single, simple brain understands it – is that running capacity for loss simulations based on simple drawdowns (‘markets fall by 20%’) is silly. To do it properly you need to work out what elements of a client’s overall situation would be affected or unaffected, and run stochastic simulations to try and give a sense of what various forms of reality might look like. (As an aside, hands up who was testing portfolios for 10% price inflation a year ago?)

The stochastic vs deterministic debate is an old one, and normally ends up with someone pointing out that clients don’t understand it, and someone else pointing out that no-one reads projections and someone else pointing out that their levies are too high and everyone being cross with providers about phone response times. But whatever your view of how capacity for loss testing and cashflow modelling coincide, the key point that Bruce raises is that for these scenarios to be worth the candle they need to be done properly, and that means hard sums. As for the client’s level of understanding: well, that’s where advisers come in.

I think I agree with Bruce, but it doesn’t matter what I think. More importantly, this idea that giving proper, suitable recommendations resists the straightforward and requires the planner to engage with the complex seems to me to be a theme. There aren’t many easy bits left. Suitability and due diligence needs to be done properly; you can’t dash it off in thirty seconds based on a star rating or some nonsense like that. Cashflow planning, risk modelling, asset allocation: the bar is continually getting higher.

It’s not just advisers and planners. While huckling a platform about its lacklustre drawdown functionality, a certain propositions guy told me that there was no point improving what his platform had, because to do it properly would be a huge job, and most folk just took whatever scraps they were offered. Few clients, reasoned this dude, really cared about their drawdown because most have secured income elsewhere, so he could get on with building stuff that got assets on the platform rather than stuff which helped assets flow off, and that way he might get to salary spine level D7 or something sooner.

There’s a truth in there – many clients reaching the point of taking income do have secured benefits still – but everything else is magical thinking and total nonsense to boot. It’s an example of wishing that the easy thing is the right thing. It won’t last.

And, as Mike pointed out last week, the Consumer Duty asteroid will place an ever higher burden firmly on those who decide what approach to take; what calculations to run – and what to build.


  • Looks like the JHP move to FNZ will be towards the end of this year; any move for Nucleus off Bravura will be well after that. Good bit of clarity in Katey Pigden’s piece here.
  • Congrats to longstanding friend of the lang cat Kirsty Worgan who rejoins GBST as its global chief commercial officer. Kirsty was the lang cat’s very first ever PR client when at GBST the first time – before we even did PR – and so it’s all pretty much her fault.
  • If in the mood for doing suitability properly and you use platforms or DFM MPS propositions, please slide on over to Analyser to see what we’ve gone and built. It will help you.
  • And your music choice this week? It was going to be Rammstein but I can’t possibly include the video. So instead, to distract and inspire us and to give you another week off the metal, please accept the incomparable Tom Waits with Downtown Train. One of those rare perfect songs.

See you next week