Moderator: Rod Bryson, Capgemini Consulting
Expert: Andre Lennon Smith, PIMCO
Key takeaways
Building trust with clients will be critical in future as it is now and therefore advisers need to continue to develop their relationship and propositions. This will not change even with new technology or solutions. Maintaining trust will be critical.
Clients will still be at the heart of every successful advisory business but firms need to continue their evolution and drive to become more efficient in their processes and charging.
There is likely to be ongoing advisory firm consolidation in the market but this should start to slow in the next 12 months given the previous and current level of consolidation has been relatively high and probably unlikely to continue indefinitely.
It was felt that overall adviser numbers are likely to remain at similar levels as they are today given the relevant reduction in the numbers since RDR. However it was felt this has now got to the point that further reduction was unlikely and in some circumstance may actually grow.
The value chain pressure for asset managers is likely to increase in the next five years but Vertical Integration was inevitable for those larger and medium sized firms. For smaller firms it was likely to remain unchanged.
Pensions – Accumulation/Decumulation likely to be key focus for advisers in the wealth sector in the next five years given the challenges around pension planning, pension limits reducing and overall demographics of clients. Therefore advisers need to be ready for further conversations around the movement from accumulation to decumulation solutions.
Platforms are expected to continue to consolidate given the changes with a number in the last 12 months alone such as 7im, AXA, Elevate, so over the next five years consolidation would continue to a similar degree.
Platform charges are likely to reduce as the competitive nature of the market continues and when looked at in comparison to the value chain, platforms continued to represent a challenge for owners compared to other areas of the value chain.
D2C market unlikely to change dramatically for the core wealth market. Clients will require lower cost solutions but for wealth clients they will still require face to face advice or telephone advice to provide peace of mind. However for those clients with smaller pots of money, simple solutions would be attractive. These solutions could sit alongside advice-based solutions and form part of a holistic advice service.
