I’ve been doing some out of the ordinary work with a firm recently which has led to me pulling together a bit of a sector oversight; looking at trends, what’s topical, a bit of a bird’s eye view if you will. And the word I keep coming back to, possibly somewhat surprisingly, is simplicity. It’s the thing that everyone seems to be striving for - albeit, in the striving, there’s a whole load more mess being created short term!
The whole AI and tech stack approach has been focused for years on getting simplicity. Reducing re-keying and complexity and making a simpler system to underpin an advice firm. (Side note, on the AI front, I’ve linked below two super insightful articles in the 'interesting stuff' section, both coming from polar opposite ends regarding what impact AI will have on the financial advice world. I’d love to know which one resonates most with you… )
For a long time, the FCA was laser focused on minimising client harm and, in doing so, lost the emphasis along the way on keeping things simple for advisers. However, with their
latest consultation paper (with simplify in the title), their
update on PRIIPS, their attempts to align some MIFID and non-MiFID rules, their removal of non-essential RegData reports and their revisiting of ongoing reviews, there is a clear intent to now remove complexity and noise and streamline the advice process.
For those looking to go Directly Authorised for the first time too, we’re seeing a real change in the approach of the regulator. They’re maintaining the high standards needed to get authorisation, as they try to ensure they only authorise firms with the potential for stability and longevity, but the introduction of
PASS is helping to simplify the overarching process, removing blockers at an earlier stage. In addition, we’re seeing authorisations for those looking to join a network as an AR coming through in an average of 3 weeks right now, which is an immense change from just a few months ago.
This is all important as, tech and AI and providers and platforms and compliance and support services trying to simplify things can only get so far if the regulatory environment has a very different vibe and is, intentionally or otherwise, hampering their progression. However, it feels to me that for the first time in a long time, the various component parts of the sector are all striving for a similar thing and everyone flowing in the same direction means that it feels like the possibility of real change is upon us.
It could be because the AI threat has made businesses and the regulator alike knuckle down and get their ducks in a row before the algorithms smash them up. It could be because the pain of the consolidation cycles is starting to move to a new phase. It could just be because it’s spring and I’m full of even more optimism than usual! But I, for one, am very hopeful of a slicker, simpler, more positive, more celebratory financial services industry in the not-too-distant future.
Let me know your thoughts (I love the Eclipse replies I receive each edition!) and enjoy perusing the crazy amount of insight, content, CPD and client extras below. There’s also one of the most interesting
NewIn podcast episodes yet. I loved hearing
Bernabé’s story about choosing finance, his graft to get through his qualifications and sign off, to his joy of now running his own business - and how he’d recommend anyone to do the same!
My wine recommendation for the weekend, having just returned from the French Riviera, has to be a Côte de Provence. Any of them! Grab a bottle of something pink and fresh, and get that BBQ fired up 🤗
Have a wonderful weekend all,
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