What providers can learn from the problematic European Super League (ESL)

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It didn’t take long for the European Super League (ESL) to quickly crumble as the suits forgot one incredibly important piece of information, whilst plotting to increase their already bulging cash pockets with yet more cash – the foundations or, in other words, the roots that all good businesses and propositions are built on. 

Even though football was invented by the wealthy over 150 years ago, it was the works’ teams and the everyday worker that turned football into the global institution it is today and the money men just turned their back on these people (their clients) as they plotted to fill their overflowing coffers even more.

“But Hannah…!” you’re probably wondering as you read this, “what does this have to do with the financial services industry?”

I’ll tell you…

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Parallels between ESL and the financial services industry

Sadly over the last two decades the financial money men have decided, just like those in football, that they want to get rich quicker too. 

But rather than creating an exciting new business concept and adding value, they can do this with much more ease and less effort by buying out other, already established, companies; generating more funds under management and potentially making their company more profitable. 

They justify their actions using the universal get out clause: ‘to enhance the customer experience’… Yawn! 

Just like in the football world, the suits break up these traditional companies, earn their buck and move on. 

Over time these companies become too big to keep up with changing markets, as I have just recently experienced with a well known traditional investment company that took six months to transfer a pension fund because one part of the company doesn’t talk to another part! 

From my experience the service from the traditional companies has gone out of the window, as the area managers have been withdrawn to save cost and in house centralised help desks became the norm. 

Having direct access to knowledgeable staff has become a joke.  And then there are the added complications surrounding the pandemic. 

Whilst the smaller businesses under FCA scrutiny chased around putting continuity plans into full force and having to justify Covid surveys, what did the big dinosaurs do? Cut costs further, furloughed staff and implemented call centres where, after waiting up to 60 minutes on the phone ,the call handlers would take a note of your enquiry and tell you that new pandemic-related company policy means they’ll get back to you within 21 to 28 days. Absurd!  

Whatever happened to treating customers fairly!? Or even with just a little respect! 

With this, I’d like to pose a question: 

When there are no more companies left to buy out and the money men have left the industry to pasture, what is going to be left? 

I can’t help but think that the answer to this question is this: 

A handful of big names that are just too big to adapt to new challenging market places. 

But even this opens up questions within itself, such as: will they still be offering overpriced average funds designed to keep the shareholders happy? Have they forgotten that their market (IFA’s) are coming under more pressure to provide transparent and financially efficient portfolios as investors become more knowledgeable and demand value?  

Just like the football supporters who, over the years, have invested their time, money and unwavering passion into their favourite football club to keep it running through good and bad times, it’s the IFA’s that in the past have invested clients’ money in these traditional companies, because they believed in them and what they stood for, but that image has undoubtedly been lost. 

Moving away from tradition

If these companies have sold out for shareholder profit, why should we continue to support them? I certainly won’t be. 

From my experience, it’s the platforms that have adapted to the challenges faced as a result of the pandemic; stood up to the plate and provided valuable services and feedback. 

It’s the platforms themselves that will get my continued support and I would not have said that a decade ago.

Just as the loyal football supporters revolted against the ESL and the suits apologised for their greed, I wonder what would happen if loyal IFA supporters revolted and moved their clients’ money away from the traditional dinosaurs… 

‘To enhance the customer experience’? 

To talk to me about anything mentioned above, or to discuss your own portfolio, please contact me today.

The author of this book explains that most financial advisers and institutions do not operate in the best interests of the clients, but to maximise their own profits through exorbitant fees. The actual percentage charged may appear relatively low but compounded can knock tens of thousands off your final pension fund.

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The book provides a number of practical illustrations of the effects of fees, transaction charges and risks on investors. Definitely a read for all investors not just company Directors.

Book Review