Financial advisers and their role in the distribution of funds is changing and it is changing quickly. Financial advisers were relegated to the background while single-strategy asset managers were at the fore before now. They achieved this through product sales and the influence they wielded over the advisers.
 
In recent times especially after the Retail Distribution Review, it became clear that advised assets were flowing to fund managers who made investment decisions on the behalf of their clients and also into multi-asset funds. This has taken the responsibilities of asset allocation and the decisions on fund selection away from financial advisers. 

Not a lot of advisers embrace the fact that they have become fund pickers. They have come to rely heavily on research and consultations or fund panels to build custom-made portfolios for every one of their clients. 

The Evolving Role of Advisers

Most financial advisers are heavily weighing in on the aspect of the behavioral coaching aspect of financial planning. They would rather associate with the tag of “financial planner” in place of “investment adviser” or “wealth manager”. The evolving role of financial advisers has caused a major change in the investment world. 

The Influence on Advisers

The largest influence on advisers which continues to impact their roles comes from research agencies. Advisers make use of these research agencies in their advisory roles and process. This use of research agencies has led to the emergence and growing presence of big research agencies such as Morningstar and FE fundinfo. 

The influence of research agencies has made it possible for a financial adviser to offer custom-made portfolios. These portfolios are fast growing because of the dependence of the financial advisers on research agencies. 

These research agencies offer more than just the comparison of funds and assessment but they have gone further to help the advisers with the location of assets and the examination of the performance of Discretionary Funds Managers. 

There is no mistaking the influence research agencies to have over financial advisers and their assets. Two out of three financial advisers make use of the services of research agencies for the comparison and assessment of funds.  

Taking Back Influence

Asset managers must find ways to regain influence over advisers. They will remain in dire positions if they fail to do something. They keep losing their influence as long as financial advisers continue to work more with research agencies, discretionary funds managers, and their platforms. 

The way for asset managers to regain influence is to find a way to establish partnerships with advisers where they provide services of risk assessment and management and back-office systems for ease in the navigation of the tough market. 

Product providers may attempt to take back some of the influence through strategic acquisitions should asset managers fail to regain and exert some of the influence on advisers.

The world stock markets are walking a tightrope since the pandemic rocked the worlds and they have taken over the news. It is possible that within these times you have heard so much about the term Market Timing.

Although not often referred to in those exact terms by financial players the explanation is the same in their message. They give advice and thoughts on the complete sale or partial sale of one’s equity investment due to the effects of the coronavirus and the state of the market afterwards.

Deciding to pull out all of your money or half of it when you expect a fall in the market prices and value or even keeping your investment back in the market is the concept that makes up what is known as Market Timing.

Successful market timing strategies are best carried when informed and intelligent predictions on possible events such as wars, oil price shocks, interest rate rises, the turnout of elections and general opinions, the impact of a pandemic and so on. It is serious work to understand the market and even predict market reactions.

It can be a very challenging approach.

The first red flag about this “predict” or “anticipate” approach is that it is difficult to make clear and informed decisions. Stock market visibility is unclear at these times so choosing to hold back your investment, pulling out all or some of it would not be done intelligently.

This approach has been in competing with another market strategy. This other strategy involves investing a particular amount of money throughout a trading period regardless of the condition of the market. This strategy is called the Pound/Dollar averaging. It is used by a lot of investors and it obviously can be profitable in some cases.

The first strategy where you have to predict or anticipate requires a keen foresight to be able to invest a particular amount everyday but know when to stop as a crash in the market has been anticipated to save cash.

Choosing to use the first strategy or approach of market timing in your investment will be risky and may be damaging to your net worth because no one has the out-worldly foresight to predict events accurately. An example is how difficult it would have been for anyone to predict the covid-19 pandemic or its effects on the market.

Most times financial advisors or commentators will predict that an event will not occur and that it would have a certain effect on the market should it in fact happen then the opposite of what they have said will happen.

As far as market timing is concerned, there are only two types of investors and they are those that cannot actually do it and those that know that they cannot do it. It is smarter to know that you cannot do it than to take damaging risks.

These are the views of Terry Smith, the CEO of Fundsmith LLP which he considers personal. He opined this in his 2013, financial times article which you can read through this link https://www.fundsmith.co.uk/news/article/2020/07/02/financial-times---there-are-only-two-types-of-investors

STATE PENSION PREDICTED TO RISE AS THE COVID-19 OUTBREAK PUTS THE TREASURY IN TIGHT POSITIONS

Keeping to their promise in the Conservative manifesto which is for a tenured duration of five years of the parliament, the government makes use of a system referred to as the triple lock in the computing and payment of the state pension.
The triple lock which consists of the Consumer Price Index measure of inflation, the rising average wage or two and half percent portray the rising cost of living. Currently, the state pension increases annually at the same level with the increasing cost of living shown by the triple lock.
The government however could be dealing with a large increase in the state pension if they stick to the triple lock system. The wages paid by the state due to the coronavirus pandemic technically causes a rise in cost of living which translates to increased state pension.
THE TRIPLE LOCK
Since April, the new state pension has added up to one hundred and seventy five pounds weekly. The prior state pension which is one hundred and thirty four pounds weekly is still paid to most pensioners. There is a possibility these pensioners may get a credit increase.
The recent and old pensions paid by the state both increased to almost four percent.
This increase was as a result of the increase in the average earnings which is one of the factors in the triple lock. The average earnings was higher than the CPI inflation and the two and a half percent. This data was culled from the government’s official data between May to July.
As the year concludes, the government stipulates the amount of state pension that will be paid in the new-year starting from next April.
THE DEBATE AROUND THE TRIPLE LOCK
For the past decade, the triple lock has been used to decide the amount of state-paid pension.
The triple lock system was birthed by an alliance between the Conservatives and Liberals. The alliance was to make certain that the pensioners did not have too little pension to match their increasing cost of living.
Apparently, it is a policy that is exorbitant.
The policy has become the source of a debate since its introduction. It has torn people into two points of views with economists arguing against the triple lock since it sees the pensioners earning more yearly than the active younger workers since the financial crisis. They consider this to be unfair.
On the other side of the divide, charities that stand for the pensioners are of the opinion that the pension is still a little amount for the elderlies to survive on and it is comparatively small on the international scale.
HOW THE PANDEMIC AFFECTS THE TRIPLE LOCK POLICY
The coronavirus pandemic has put more pressure on the government financially. The government has to support citizens as they are not working and earning.
Average earning is bound to increase when people start working again and they begin to earn full incomes again. This would mean that according to the triple lock state pension would have to increase by eighteen percent which is the expected increase of average earnings.
It is expected that the debates will linger and maybe the authorities will re-evaluate the triple lock policy.