Welcome to our quarterly newsletter. It will have escaped no one's notice that this quarter was dominated by the EU referendum and the subsequent political and economic fallout. Just what impact Juneâ€™s vote will have on our Financial Services industry remains unclear but the reality is that with the negotiations and mechanics of the UKâ€™s exit taking months, if not years, weâ€™re unlikely to get any clarity for some time.
What we do know is that we have a new pensions supremo, or should I say, Under Secretary for Pensions. The lack of Pension Minister status suggests the days of radical pensions reform are over for now and a period of stability might prevail. That said, there is a huge amount of regulatory and legislative change already afoot and it will need a strong hand on the tiler to ensure the continued rollouts of auto-enrolment and pension freedoms and the successful introductions of the Lifetime ISA, secondary annuities market and Pensions Dashboard.
In this issue we have highlighted a broad range of topics and insights which are indicative of the various activities undertaken by our Consulting and Business Systems divisions. I hope you enjoy it.
The next Altus Transfer Gateway (ATG) User Group extravaganza will be held on 27th & 28th September.
And, yes you read it correctly, itâ€™s going to be a two day event. Weâ€™ve always struggled to fit everything into one day so the new two day format will allow lots more time for best practice discussion, networking and advance training.
The event is free to attend and will be held in central London. You are welcome to attend one or both of the days.
Jon Dean, Senior Consultant, Altus joined Richard Parkin, Fidelity and Tom McPhail, Hargreaves Lansdown to discuss their views and answer audience questions on the new Lifetime ISA which was announced in the March Budget by Government.
Questions ranged from: "Will Lifetime ISAs replace the stakeholder pension market?" to "Is the CPS unduly influencing government to get its own way?"
Altus Chairman, Hugo Thorman believes increased back-office automation in conjunction with standardised date could cut the cost of investing from 2.2% a year to 1.5%, knocking out 0.75 basis points in costs.
Hugo explains how the Altus Transfer Gateway software, which transfers funds between platforms, can reduce the number of staff required for this process from 10 to 2.
In 1984, Motorola launched the DynaTAC 8000X, a truly mobile phone weighing less than 1 kg with a 32 number memory, 10 hour charge time and 30 minute talk time. It cost Â£3,000 (equivalent to around Â£8,000 today). Surely, we all thought, the last word in mobile telecommunications.
Well, not quite. In 2014, among a plethora of other products, Samsung launched the Galaxy S6 with 32 GB memory and on which you can watch 2 hours of HD TV after a 10 minute charge. It cost around Â£300. The mobile phone market is an excellent example of how we all benefit from the innovation and cost pressure created by fierce competition between technology suppliers.
With the news that Standard Life had acquired Axa Elevate I suspect that another batch of already overworked advisers gave out a weary sigh! Not more due diligence on our chosen platforms I hear them cry!
These kind of developments in the industry do raise an interesting question though in terms of which â€˜partsâ€™ of the Platform chain are you evaluating? Is it the parent company, the platform or the underlying technology provider (very rarely are all 3 one and the same). As we dig deeper it can start to feel like a Russian doll and like a Russian doll, with each layer down the detail is often that much harder to see.
The federated model does not require central funding for technology and avoids the need for a monopoly technology supplier. The governance role is limited to setting technical standards, and service obligations.
Success will require cross industry collaboration and government support. No one part of the industry should control the dashboard - the past shows that monopoly services are easy to create but difficult to break up and the industry should resist any such moves. However, the industry has successfully collaborated on similar issues in the past and can do so again.
Once again, Altus Consulting has been given the privileged position of judging entries in the UK Platform Awards. The great and the good of the platform technology world will gather at the London Hilton in Park Lane on the 20th September 2016 to celebrate their achievements in excellence.
With the awards in their tenth year, they will be celebrating in style and once again, the lovely Kate Silverton will be their host.
The awards are open to platforms, advisers and providers of platform technology and toolsets. This year a special award will be added, the Platform of the Decade, to reward the platform that has demonstrated superior and consistent quality and service to clients and their advisers over the last ten years.
Kevin Okell, Altus Consulting Director, Adam Jones, Senior Consultant and Simon Bussy, Principal Consultant and have all enjoyed judging the awards this year.
In Q2 we saw a significant increase in the volumes of electronic transfers - over 20%.
The increase wasn't all attributable to a significant number of new platforms, providers and custodians supporting open standards electronic transfers. We also believe, a particular surge around the time of the RDR Sunset (no more trail commission) in April may have contributed.
Up to a third of advisers would like to see the return of commission, with a third considering pensions as the product most suited to enabling this. But those who do want to see a return will need to take into account the strongest argument for banning commission: the inherent conflict of interest in selling these very products. Read more...