Weekend Digest for Financial Planners/Advisers & Paraplanners ( 6th & 7th April)

Happy New Tax Year!
Welcome to latest edition of  the Weekend Digest for Advisers. After another week dominated by platforms – mostly the big boys flexing the muscles in their attempt to get special treatments from fund groups on clean share classes-  the words ‘SuperClean‘ and ‘UltraSpecialSqueakyClean‘ have now been introduced into the ever-growing adviser vocabulary.  Too bad we couldn’t find something better to replace ‘RDR-ready’ and ‘trail commission!’
At risk of boring you to death with news and opinions on clean share classes, we look at one article on the subject – because according to platform consultancy AdviserAsset, fund rebate tax may be in breach of competition laws! Yeah… (nods).
Then we move on to more interesting articles on pricing your services and why people really (should) hire a financial adviser.
Click on the title to read the full article (opens new window.) Enjoy…
This article by Alasdair Pal, in Investment Week looks at the suggestion by platform consultancy Adviser Asset that the HMRC’s decision to tax unit and cash rebates could violate UK case law on competition because it ‘forces’ platforms to abandon negotiating individual discounts with fund groups.

 Citing a 1984 House of Lord tax case – Furniss v Dawson – which set precedence that a pre-ordained series of transactions into which there are inserted steps that have no commercial purpose apart from the avoidance of a liability to tax are effectively nullified,  for tax purposes.

I am not a lawyer but didn’t the Inland Revenue (aka HMRC) win that case and how does this apply to anti-competition? Let’s not get ahead of ourselves here,  rebate tax actually seems to have fuelled even more competition as every platform man and his dog try to negotiate with fund groups, hence the words ‘Clean’  ‘Super Clean’  ‘UltraSuperClean’ and so on and so forth being added to FinalytiQ Adviser Handbook as earlier mentioned.

And remember platforms can still charge ANYTHING and ANYONE they want for their own services and product wrappers. They can charge fund groups, clients and advisers! Where is the anti-competition in that?

Let’s see if anyone with deep pockets is going to take the tax man to task on this and challenge the decision in the courts.


Are You Under-Charging  for Your Services? Here’ How to Find Out

This piece by Gil Weinreich in AdvisorOne  is a follow-up on an earlier article based on the latest White Paper in the series called ‘Pricing Your Value Unappologetically‘ by  Pusateri Consulting

pricing PyramidThe latest paper provider advisers with a simple way to visualize their pricing integrity. This involves using a triangle with one axis each for an adviser’s value, the perception of that value and the price charged. They can then state where they think they are on each axis and connect the dots to form a triangle.

The theory being that, the smaller and less balanced your triangle is, the more likely it is that your aren’t charging enough for your services.

The paper emphasizes that the real driver of pricing is perception of value and that lack of clarity on pricing impels clients to request discounts as a hedge against the uncertainty of knowing what they’re paying for. “Challenges to prices should be seen as requests to validate value, not as demands to discount,” he writes.

The 5 Real Reasons People (Should) Hire A Financial Adviser

This article by Sally Krawcheck tackles the popular misconception that the reason to hire a financial planner is to try to outperform the stock market.

Although this article is written from a consumer point of view, I think it is very relevant to advisers, especially in the way we position services to clients. Why build a proposition around something you have the least chances of controlling – alpha?

Krawcheck lists 5 real reason people (hire) an adviser;
  1. Press you to answer (uncomfortable) questions you don’t want asked:  Is your will is up to date, what you will do if you lose your job.
  2. Put together a financial plan. Very few people ever, ever do this on their own.
  3. Identify risks in your portfolio that you might look right past, like being overweight certain asset class or sector etc
  4. Talk you through market volatility. Most of us energetically claim we don’t need this.
  5. Identify your biases. This is a biggie. Many of us think we don’t really have any….which is exactly the point

Hiring an adviser does cost money but they are worth their weight in gold!


This article in Financial Planning Magazine looks at the increasing role of women in handling household wealth and why it is more important that ever for advisers pay more attention to women clients, in particularly during/after divorces and other life events that force changes in their financial circumstances.

With female clients, issues around family and inter-generational wealth transfer are likely to be key areas that advisers can add value.

The article suggests that advisers ‘learn how to listen and talk with their female clients, not at or over them — and they’ll integrate their next generations.” But I wonder if this is not true for female and well as male clients. In order words, should advisers treat female clients differently than male clients  and why? Or is it just a case of treating every clients differently, because they are.. different?



I hope you have enjoyed this and hopefully it’ll make you job a little easier! As outsourced paraplanners, that’s what we do best! As usual, thoughts and comments are welcome. Enjoy your weekend!



























Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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