Will Robins - Editor
If you had asked me at the end of last year, I would have agreed more advisers were turning to passive funds and outsourcing investment, as fees started their downward journey. But research New Model Adviser® carried out earlier this year revealed the majority of advisers operate in-house model portfolios, and allocations to active funds are still rising.
A growing minority of larger IFAs are taking on discretionary powers. Meanwhile, a long tail of smaller firms are sticking with advisory models, despite added demands from Mifid II. Fees are not being forced down. If anything, they will keep rising as demand outstrips supply and regulatory burdens remains high.
All is not what it seems. But ask advisers and they enthuse about the power of planning over investment and products, about how technology will make advice cheaper, and about the future adviser being part human, part machine. Interestingly, another discovery has been how wealth managers have been building financial planning businesses into their firms.
So at issue 600 I see two directions of travel for the future. Bigger firms will want to own their own means of investment production. But proper financial planning will become an existential necessity.
Natasha Turner - Features editor
Before I started working at New Model Adviser®, I thought the advice profession would be male dominated and reserved for the very wealthy.
It is male dominated. But it has been great to see the push for diversity in firms. I have spoken to many advisers who are thinking about how to help younger clients or client niches that have been previously ignored by the profession. More people are being catered for, from young entrepreneurs to women to divorcees to US citizens, in a way that is often holistic and far flung from product-pushing.
This is all as long as these clients can pay. For those who cannot (or will not), the robos have entered the arena. This could drive down traditional advice fees, which, as business and regulatory costs continue to rise, is no doubt a concern. But as Rohan Sivajoti, director of Postcard Planning, says in our special 600th issue feature on page 26, working with robo-advice could be key to the future of financial planning.
Through my involvement with the cover star feature, it has become clear more firms are adopting fixed-fee charging structures for advice. Will this be one of the staples of the new new model? We will see by issue 1200, at which point I’ll probably be looking for an adviser myself.