1. ChatGPT lead generation raises control questions for advisers
The rise of ChatGPT has raised questions about whether professions such as financial advisers will be replaced by technology. ChatGPT can help advisers build their firms, and some businesses are already promising growth to advisers through the technology, offering to screen new clients through OpenAI’s tool.
However, lead generation is a contentious issue in advice and throwing a chatbot into the mix only makes matters more complicated. Ultimately, advisers should avoid being seduced by the promises of new technology without first ensuring they retain control. It is less about the technology, and more about control and compliance.
2. Platforms prepare for adviser relationship shift under Consumer Duty
Under the Consumer Duty regulation, platforms now have an explicit responsibility to ensure good outcomes for the customer and must be prepared to alert customers they think are at risk of a bad outcome. While the challenge of getting communication right is daunting, this is also an opportunity for platforms to learn from advisers who are much better placed in understanding the needs of the customer.
Price is another key element of the Consumer Duty that adviser platforms must address. Questions will be asked about why there is such a wide range of fees out there given many platforms use the same underlying software. Justifying the appropriateness of the fees is likely to be an individual adviser choice and finding a universal approach to Consumer Duty across platforms is also unlikely across such a big market.
3. Rathbones and Investec Wealth merge to create £100bn business
Rathbones Group and Investec have entered into an all-share combination of Rathbones and Investec Wealth & Investment to create a £100bn discretionary wealth management business, bringing together two of the UK’s biggest wealth management players. This transaction not only presents a compelling strategic and financial rationale but also accelerates Rathbones' growth strategy. Investec Group will become a strategic shareholder in the enlarged Rathbones Group and, on completion, will enter into a relationship agreement which offers attractive growth and collaboration opportunities for both groups.
4. FNZ and Virgin Money launch digital investment platform
Global wealth management platform FNZ and Virgin Money have partnered to launch a new digital investment solution for UK retail investors. The new digital investment platform and mobile app will offer Virgin Money's 6.6 million customers an enhanced digital experience with a range of new features and capabilities which aim to simplify and speed up investing.
Virgin Money selected FNZ as its partner because of its "state-of-the-art technology, its proven excellence in delivering market-leading direct-to-consumer (D2C) propositions, its track record of complex platform implementations, and its ability to deliver innovative end-to-end digital experiences across multiple channels". The partnership builds on FNZ's ambitions to make wealth management more accessible to more people.
5. Liontrust faces battle with GAM investors over ‘unfair’ £96m takeover swoop
As of the 4th of May, it was announced that Liontrust has conditionally agreed to acquire Swiss investment manager GAM.
However, a group of investors have now formally challenged Liontrust's all-share offer to take over GAM. The group consists of NewGAMe and Burellan wealth management group which control 8.4% share in GAM. NewGAMe is controlled by Rock Investment, a subsidiary of Xavier Neil’s – French telecoms billionaire, personal holding company, NJJ Holding. The challenge is based on Liontrust’s offer being deemed unfair to GAM’s shareholders and contradicting the principles of Swiss takeover law, as Liontrust can withdraw its offer should GAM fail to exit its fund management services business.
6. Digital and hybrid advice best way to serve more clients
EV’s latest paper, “Hybrid and digital advice – driving transformational change, at last”, released at the end of April, argued that providing an "omnichannel" approach to advice would give customers the choice over levels of service and the price they pay. The paper supposed that the adoption of digital and hybrid advice offerings would offer financial services firms the prospect of "increasing both the number of customers they serve and the profitability of advice".
This whitepaper focuses on where financial services firms need to go next to achieve genuine transformational change, which will enable them to serve more customers and, at the same time, improve the profitability of advice.