In this month’s newsletter, we offer a summer ‘listening list’ with highlights from the NextWealth Insights podcast. The themes range from leadership and technology, to platform nirvana and the challenge of forecasting amid a pandemic. 

We launched NextWealth Insights to bring together a community for a future-facing conversation about business models, financial advice, products and technology in the wealth-management industry. Since April, we have hosted and produced 16 episodes, comprised of wide-ranging interviews with financial advisers, leaders of tech businesses, heads of platforms and more. (You can subscribe and listen on Apple Podcasts and Spotify or on our website.) 

Today’s newsletter draws on some of the highlights of Season One from a conversation I had wtih Peter Mann reflecting on the podcast series. 

Leadership  

One of our first podcasts was a conversation with Geoff Towers, the CEO of Pershing Limited. Geoff talked about the need for leaders to take time out to think about how they need to adapt their business for the recovery. He advised leaders to take time to peruse their bookshelves for inspiration, as he does. 

The role and nature of leadership has been changing in recent years—a shift brought into sharp focus amid the coronavirus crisis. Leaders have thought about how they can build an organisation that meets the needs of the people working in that organisation more than ever before. The focus on wellness and mental health is refreshing and hopefully will persist post-pandemic. 

Leaders are also communicating more frequently with staff. Employees report feeling more connected to their company than ever before. This is surely an unexpected irony: despite being physically remote from colleagues, we have become closer to the companies we work for. 

Technology  

Simon Clare of Bravura and Ray Tubman of FinoComp have an uncanny ability to bring technology to life. In our conversation about AI, microservices and the future of wealth-tech, they made the case that microservices can lead to more competition among technology providers, greater open innovation and better tools and functionality for users. 

Microservices can make you less dependent on the core architecture by building an ecosystem around the central system. They also allow platforms to respond more quickly to market or regulatory change. Think of the huge volume of “10% drop” letters platforms were sending in Q2, due to increased market volatility. 

Platform Nirvana: Single Source of Truth  

In my conversation with Jo Kite we discussed the role of the platform in offering an aggregate view of client assets to support retirement planning. The first platforms were launched 20 years ago and from the start, they strove to offer a single view of customer assets. But that nirvana has never been reached. 

Investment platforms certainly offer an aggregated view of a client’s assets, but many people’s holdings—such as property, annuity and equity release—don’t sit on the platform. Offering a single source of the truth is technically hard to do and we are still quite a way from arriving at nirvana.

Platforms changed the way we did business almost overnight, when they were introduced 20 years ago. In my conversation with Tim Sargisson, CEO of Sandringham Partners, he lamented that they have not done enough since then to modernise the offering of some pension providers. Tim shared a picture with me of the stack of postal letters that Sandringham had received since the start of lockdown—offering hard evidence that there is still more progress that must be made.

The Challenge of Forecasting in a Pandemic  

Whenever you produce a forecast, it is wrong: what varies, however, is the degree to which you get it wrong. Forecasting is much more difficult at the moment because the margin for error is greater due to the number of variables one can get wrong. 

Martin Jennings, CEO of Parmenion, articulated the challenges of forecasting the cost base and revenue growth in a service business amid so much uncertainty. His business is famous for good service. So his starting point—figuring out what it will cost to maintain that reputation—is certainly the right one. 

You can listen to all of our podcasts from Season One on our website. If you’re not already a regular listener, be sure to subscribe through Apple Podcasts or Spotify to receive all of Season One. The first episode in Season Two will air in the autumn (and sponsorship opportunities are available). Thank you to all of our guests and to Peter Mann for joining me for the end-of-season wrap-up episode. 

Have a lovely summer and stay safe. 

Heather

About the Author

Heather is a data and research expert specialising in retail investment distribution. Heather is the Managing Director and Founder of NextWealth. She is also a Director of Clive Waller Consulting Ltd and serves as Vice-Chair of The Investment Network and the Schroders UK Platform Awards.

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