Many industry discussions still refer to the "post-RDR environment", despite it being almost five years since the RDR was implemented.

    As it turned out, most advisers pretty much sailed through the transition to fees, and the rest got there in the end. Finally liberated from the price of advice being set by insurers, asset managers and old-style platforms, it seems the advice market is thriving and customers are enjoying better service than ever before.

    Of course, RDR wasn't so easy for everyone. Insurance products have pretty much disappeared (or been commoditised into platform operations). The legacy elements of the platform sector have been thrashing around trying to find believable (and scalable) business and technology models for the future. By the time we're done, more than £1.5bn of shareholder capital will have been invested to replace irrelevant technology or bail out and remodel failed platforms.

    The most bizarre aspect of all this RDR fallout (even more bizarre than the mind-boggling sums of wasted investment) is that the FCA is already lining up the follow-up.

    You will hopefully be familiar with our regulator's work on the asset management market study and the more recent platform market study. The former began with a pretty damning assessment of the asset management market, particularly in respect of fee transparency, fee levels, value for money and conflicts of interest in the research and distribution chains.

    The asset management study also appears to have catalysed the platform review. In fighting its corner, the fund management sector has essentially executed a tried and tested distraction tactic, a bit like crying "look at the monkey" while taking a slurp of a two-year old's ice cream.

    There are of course notable differences in sector dynamics: platforms have worked strongly in customers' favour to improve transparency, lower costs, magnify choice and increase engagement. Asset managers; not so much.

    The platforms that came after fund supermarkets in particular opened the door to the rise of passive funds and the associated arrival of new, low-cost benchmarks. It is of course absurd to suggest all active funds are hopeless, or that the entire market should consist of passive funds.

    But a challenging new dynamic has emerged, that is, it is now more relevant to compare funds against the passive equivalent rather than against the so-called 'peer group'. This is a deep, fundamental shift, and has introduced an external dynamic from which fund management (at least in the retail space) has been previously insulated.

    Just as we can choose to fly easyJet from A to B, we can now buy the 7 basis points UK equity fund for baseline market exposure. It took British Airways 20 years to work out how to deal with budget airlines (this is arguably still a work in progress) and the fund management industry must now do likewise.

    Asset managers are particularly hindered because their higher fees don't come with the feeling of luxury or indulgence you might get from a conventional airline. Yet fees directly impact performance and thus the propensity for the ultimate outcome to be better (or worse) for the customer.

    This is a problem, albeit one which can be solved quite simply: fund groups need to get better at what they do and offer their products at a price which offers improved value for money. It's widely accepted retail asset management often costs four times as much as the institutional equivalent - this needn't be the case.

    Studying the FCA's language in the platforms market study terms of reference , it doesn't feel that product-led vertical integration is a durable solution.

    Even if anyone can get all the components to work at scale (and there is nil evidence of that to date), all the current efforts seem far more targeted at propping up market capitalisations than on improving customer outcomes. Given improving customer outcomes is a) the focus of the regulator, and b) the sign of a healthy market, its hard to see stapled together, cross-subsidy-riven vertical models being tolerated for long.

    The cross-subsidy theme appears repeatedly throughout the platform market study. This is to be welcomed as beyond shareholders with vested interests, it can be in no one's interests for heavily-loss-making advice groups and heavily-loss-making platforms to be used to dump full-fat asset management onto an unsuspecting public.

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