DavidAttenborough, looking at the financial planning landscape in the early 1990s, would have noted how the scene was dominated by relatively small, independent packs of advisers.
Most packs had been in existence only a few years, and were still led by their founders. The supply of clients (their staple diet) was plentiful, so the packs rarely needed to stray into each other’s territories. Instead, to save energy, they sought out places where the food was most concentrated.
They found safety in numbers. The larger the pack became, the more domestic chores could be handled by a team of workers, leaving the natural hunters and gatherers more time to find food.
The packs were rich with characters — John Blewitt, Tony Muston, Kevin Wyld, Jim Clegg, Don Sharp, John Godfrey, Barry Lambert, David Bleakley to name a few. Each, in his own way, provided distinctive leadership. They used their personalities and business skills to nurture the best hunters in their packs or to tempt other ‘big hitters’ to join them.
One of the defining issues of the period was the rapidly growing importance of master trusts. These were a panacea for advisers who, in trying to capture recurring income, had got bogged down by inadequate portfolio monitoring services. By placing investments through a master trust, not only did they crawl free of the back-office mire but they also gained control of more of the revenue.
The balance of power was shifting. Most fund managers recognised that the trend was irreversible, so the name of the game then was to get on the menus of as many of the popular master trusts as possible. The master trust ‘fee war’ ensued, together with endless debates about ‘Who owns the client?’.
If master trusts were one battleground, another was the influence of the major research houses.
For fund managers, now rapidly becoming product manufacturers, the imprimatur of researchers was a necessary condition to getting their products distributed. Inevitably there were spats when products were downgraded or questioned in any way. Most memorable was Gil Hoskins’ National Mutual taking legal action against Assirt.
Amid all this, what else wasMoney Managementreporting? Trail commissions — euphemistically called ‘service fees’ by some — were big news. Who did they belong to, what did they represent and how should they be disclosed? This gave rise to another variation of the ‘who owns the client?’ question.
On the product front, allocated pensions were set to be the next big thing in retirement planning. International investing was catching on fast, while capital guaranteed products were in a near-terminal decline.
Financial planning found a unified voice when the FPA, with Greg Devine as its first president, was formed out of a marriage of the IAFP and ASIFA.
Meanwhile, theMoney Managementregulars were doing their thing. Peter Bobbin, when he wasn’t pondering the tax advantages of death, was scaring the life out of dealers and reps over the tax implications of their structures. Paul Resnik was probing the industry’s more vulnerable areas for his and our interest, entertainment and maybe a dollar or two. Michael Rice was warning of a consumer backlash against spiralling fees.
And Peter Thornhill was passionate about how every moment of his waking life he was contributing to the growth of some company’s profits, somewhere in the world.
Simon Wallace was editor from 1992-1994and now runs his own media business.
