Back at the start of the year (which feels approximately 5 minutes ago) I wrote about some of the themes I thought would be topical this year in the world of finance.
Now we’re at the half-way point, it seems a good time to revisit the predictions and look towards the second half of 2022…
ESG
As expected, the ESG conversation is continuing, but at an evolved level. Companies and fund managers are still looking at how they showcase their green scale, but the expectations on them are increasing and just giving it a surface level of attention is no longer working.
In addition, advisers are looking to evolve their conversations with clients on this topic, as we’re hearing from those that have completed our survey on it. If you’re one of those advisers, you register for one of our free events on this topic, later in the year.
From our survey responses so far, the advisers gave themselves an average score of 7/10 for “I am comfortable talking a client through the three pillars of ESG-integrated investing, giving examples of what constitutes a good score within each aspect of E, S and G”, which shows a reasonably good level of confidence. However, many have pointed out that the following would be helpful to have sooner rather than later:
- Consistent research and ratings
- Better descriptions and literature available from providers and DFMs so funds can be properly compared
- A specific and consistent definition of ESG criteria that they can then use with clients.
It’s definitely a buzzword, and one that advisers are now looking to do a deep dive into, but the current information available just isn’t quite cutting it. We shall see how this develops over the latter half of the year…
Consumer Duty
What’s interesting to see with this topic is advisers and providers all considering the Consumer Duty impact on what they do now, despite the final statement not yet being released and implementation not fully required until next year.
I think this is a real positive for financial services; we’ve moved from reluctantly implementing new rules and regulations at the last possible minute, to taking them in full seriousness, and starting the work on real, integrated changes as soon as is practical. I think it shows a mindset shift across the industry towards professionalism and should, ultimately, result in regulation being more effective.
Unless, of course, a couple of huge curveballs are thrown into the policy statement, and then all the pre-emptive work will have been for nothing…
We’ll be sharing more information on Consumer Duty over the next couple of months, so we’ll be doing our best to keep it simple!
Tech
My prediction at the start of the year was for lots of the new tech that was being worked on in 2021 to start getting released in 2022. I still think that will be the case, although there hasn’t yet been a huge amount of new stuff put out there yet. However, anyone who works in tech will know that deadlines / launch dates / best laid plans are just as likely to need moving as not!
The conversations are continuing in the same vein; how we integrate better, how we use tech to better service clients, and how we leverage it to run more profitable businesses and reduce costs to clients.
We hosted a very successful in-person tech event here in Darlington together with our friends at Haystack and Pardoe Wray called ‘CTRL. ALT. MEET.’ We covered several subjects one of which was a whistle-stop tour of the pre and post-RDR world of finance, and how the approach to tech in finance, and tech as a whole, is out of date.
What’s important in fintech is supporting growth and efficiency without replacing the human element, meaning pure tech ‘robo-advice’ is something we don’t expect to see take off. This event was so well received, we’ll be doing another very soon, so watch this space!
In general, the year so far has been fairly tame in financial services at a sector level (albeit it crazy busy at a firm level with endless movings and shufflings) and I can’t help but think that’s a good thing since it has been far from tame in the rest of the world.
This could very well be the calm before the storm however and I, for one, am excited to see where the rest of this year takes us.
