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The Use of Technology in Financial Planning | IFA 80 | July/Aug 2019

  • By Georgie Davey

If there has been one story dominating the news headlines of late, it is the fall from grace of so-called “star” fund manager Neil Woodford following the suspension of trading in the flagship Woodford Equity Income fund. Now, before you gasp in exasperation fearing the prospect of yet more coverage about the Woodford situation, I can reassure you in that this welcome page is where our mention of Mr. Woodford starts and ends this month. Thankfully, we must remember that such fund suspensions are rare. However when they do occur they have the power to damage investor sentiment and even to dent confidence in the nature of professional advice. Fund suspensions also tend to refocus all our minds on some of the more fundamental principles of investment management – notably liquidity and transparency – especially when open-ended funds are concerned. Of course, when things are going well such things tend to be overlooked or disregarded. It’s when the weather turns that things change. In Woodford’s case, whilst the market and investors were aware that the fund has had a growing exposure to illiquid holdings, extremely high levels of ongoing withdrawals meant that the more liquid holdings were being sold to meet redemptions. Of course, we will have to wait and see how things work out for the fund and its investors in the longer term. In the meantime, the advice profession will be on the front foot to reassure clients and prospective clients alike that professional advice remains the very best way to minimise risk and to protect their hard-earned capital from painful damage. This is through the tried and tested formula of having a properly diversified investment portfolio.

Where next?

There are regulatory questions too. No doubt there will be investigations into the relationship between fund managers, platforms and best buy lists as well as regulatory scrutiny, conflicts of interest are all on the agenda as well as is the question of whether Woodford should be continuing to charge management fees. There’s certainly plenty to ponder over the summer months.

The business of financial planning

That’s enough about Woodford from us this month. We turn our attention to more positive matters. Our special focus in this edition of IFA Magazine is on the use of technology in financial planning. We’re grateful to all our experts for their insight and practical tips on how you can harness the power of technology to boost business success. As well as our tech section, there’s plenty more to get you thinking. Brett Davidson reminds us of need to communicate effectively with your team, whilst Tracey Underwood considers the merits of having a practice manager and 7IM’s Verona Kenny discusses the unintended consequences of RDR.

The world of investment

A lot has changed since the millennium. Mike Wilson has his analytical hat on and examines the different ways in which the world has changed since 2000 and the impact such change is having on economics and markets. Brian Tora reminds us that despite the huge benefits to advisers brought by increased use of technology, matters of security are more important than ever. We talk to Paul O’Connor and Dean Cheeseman at Janus Henderson about why they believe that this is an ideal time for a multi-asset approach. Last but not least, John Gladwyn of Pictet Asset Management reflects on the growing importance of Robotics in the world of investment.
We hope you find plenty of interest and to stimulate your thinking as the summer months unfold.

Sue Whitbread
Editor
IFA Magazine

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