And we will lose the value currently placed on comprehensive holistic financial planning as people instead turn to automated services that offer no meaningful advice, but which are perceived as ‘good enough’.
In the post-RDR era, when so much of the industry has been desperate to convince the public financial advice should be a profession, a sizeable part is trying to reduce an offering labelled as ‘advice’ to the most basic level possible.
Elsewhere, the interminable row between passive and active fund management rumbles on. And on. And on.
Like Jets and Sharks, you apparently have to pick a side and defend it with passion, although not necessarily with reason.
Again, there is a reliance on machine-driven, one-size-fits-all approaches. Portfolios worked out by algorithm to mimic an index, rather than a manager employed to select the best performers from that index and, in theory, outperform it.
I have also written before there is a place for passives and, when push comes to shove, a lot of active managers aren’t that much cop, but working out if you are getting value from an active manager requires a fairly straightforward calculation of deducting the fee from the return to see if you still have more cash than a passive fund would have provided.
This obviously is only possible with the gift of hindsight, but even if active management is ruled out completely in favour of passives, if there are only trackers, what can they track?
Meanwhile model portfolios and risk profiling, which should be useful tools in an adviser’s arsenal are instead becoming crutches which advisers rely on to do the hard work for them.
The whole advice process is being handed over to automated questionnaires and there is no longer any demand for tinkering and tweaking and all the benefits that human expertise, derived from experience, can provide.
Don’t get me wrong. I don’t want to sound like some luddite railing against the pace of technological advance. Computers can and do enhance the advice process in terms of service and delivery.
But we must not lose sight of the importance of the human element of every step of that process, from planning to fund management. Otherwise several of the skills that should define you will become lost arts. And I will have to concede that my other half is right. Again.
