Year-end reflections and planning for 2021

5 min read 15 Dec 20

I’m writing this as we enter the festive period and 2020 draws to a close.

Those who know me, know I tend to look forwards, not backwards. But, this year has been tough for many of us and unprecedented in history, with the political climate, the pandemic and the world facing into an environmental challenge that I believe we must address. I therefore think it warrants a little time to pause and reflect.

I’m new to M&G Wealth – joining as Interim CEO of IFDL back in November – but I’ve been around this industry (and platforms) for a long time. In the last 20 years I’ve had the pleasure of doing many interesting things in platforms with Old Mutual, Novia and Aegon, so I’ve experienced my fair share of ups and downs along the way!

As businesses – whether we’re financial planners, advisers, investment managers or platforms – we’ve shared the common challenges and opportunities that the market (and now a pandemic) have thrown at us. They’ve been significant and complex and the impact on our economy – and therefore customers – will continue to be profound for many.

Business models are changing fast. We’re seeing more consolidation of advice businesses and platforms. Margin pressure and operating costs drive much of this in the platform space and this will continue. When I started at my first platform our average charge was 1.5% per annum. I don’t want to open up negotiations as a result of this note, but now I routinely see platforms quoting 20-30bps for essentially the same services.

For advice businesses, the cost and risks of compliance in respect of full service DB pensions and running advisory models are just two examples of the significant challenges you face. And of course many firms are responding by redesigning their CIPs and CRPs.

But, there’s also the client driver. We may be consolidating but clients aren’t homogenous. Clients – like the rest of us – expect more flexibility, choice and personalisation. This is where digital technology needs to step in big-time.

This leads me to the global pandemic. We can’t ignore the impact of COVID. I saw some research recently that surveyed over 2500 enterprise decision makers within businesses globally. It found that COVID had accelerated their digital strategy by six years. I’m sure you can relate to that! Like you, we’ve had to respond quickly and our move to taking all documents electronically has been a huge step forwards. But, we’ve got much more to do and I’ll talk about what’s coming next in a moment.

As I reflect, I do wonder what the long-term impact of COVID will be on the workplace, for example, and whether people will work from home or some kind of hybrid arrangement. It does feel as though having fewer people travelling to and from work is one solution to an ESG challenge.

And, if we think about product choice specifically, I think we’ll see a sharp rise in demand from clients for investment solutions that allow them to do something positive with their money. Investing sustainably in its broadest sense is a strategic route out of the global pandemic – and the climate crisis.

2021 - Ready to grow

The financial backing of our new global parent, M&G plc, is bringing significant investment to the platform and broader proposition.  We’ll build on the improvements we’ve made in 2020 on data accuracy, timely reporting, and flexible cash management. And, as part of M&G Wealth, we have a significant opportunity to help your businesses grow.

Increasing efficiency and flexibility

Great service and experience underpin everything and are our immediate priority.

We’re embarking on a two year programme of investment in our people, processes and technology. You’ll start to see things like online chat and secure messaging in early 2021. At the same time, we’ll accelerate our work to improve the digital experience for you and your clients, providing you with better data and MI, taking paper out and increasing the scope of what you can self-serve. 

We recognise we have work to do. We’ve made improvements in service, but we’ll do better still in 2021.

Investment solutions

As you’d expect, there lots of plans forming around investment solutions as we tap into M&G’s exceptional asset manufacturing capability.

Going back to my earlier point about sustainability, it forms part of the core purpose and values of all the brands within the M&G plc family. ESG considerations aren’t enough and you should expect to see some great new investment solutions in this space. And of course, we have plans to put the hugely popular PruFund range onto the platform which I know many of you are keen to see.

Let me be clear though, we remain a fully open architecture platform – but our asset range can and will be enhanced and enriched by M&G.

Developing the platform with you

The platform technology itself is core to M&G Wealth and we’ll continue to consult with you during 2021 in a variety of different ways to share plans, get your input and develop our businesses together. We’ll start sharing some more roadmap detail in early 2021.

This year has taught us to expect the unexpected. But also, that human connection and collaboration is by far the most effective way for us to set a course through our collective challenges.

In the spirit of this – and on a personal note – I’m looking forward to getting out and meeting as many of you as possible, virtually, or face to face, to hear your feedback.

Until then, I wish everyone a happy, healthy and enjoyable break.