Arlo Group MD on recent disturbances in the investment area

Finn Houlihan is the CEO of The Arlo Group and the founder and CEO of ATC Tax. He is a Chartered Financial Planner who provides tax-led financial planning advice to UK and foreign clients, specializing in portfolio management, pension planning and inheritance tax planning. We talked to him to find out more about the current investment area and the transitions that are taking place

Looking at the last decade, what are the biggest changes that have taken place in the investment platform landscape in relation to the customer?

It is important to look at why investment platforms were developed in the first place. Going back 10 years, many customers had funds held directly with the institution, such as Invesco, JP Morgan or HSBC. From an admin perspective that was incredibly difficult to manage.

Platform technology was a massive game-changer in organizing customers’ investments in one place where they could become more involved in the investment process. Clients could see the results of their portfolio collectively whenever they wanted, and could go down to the results of individual funds. This took a lot of the pressure off advisors by providing updates to clients on performance.

Similarly, when it comes to expat customers, the development of offshore platforms has been crucial. Traditionally, these clients wanted offshore bond structures and life bonds, and over the last 10 years there has been a gradual shift to offshore platforms to help them manage their investments when they are in jurisdictions that are less economically developed than the UK. .

In addition, the implementation of Open Banking has been very important. Allowing people to access all their investments across platforms, and their bank account information in one place is an incredible development and one that makes people’s lives easier. This is something that will continue to grow.

The development of robo-advice has also been significant, and many suggest that it would make human advice obsolete. However, the first recording has not been as groundbreaking as first thought. There has been more demand for “do-it-yourself” advice – for example with Hargreaves Lansdown and AJ Bell – where the individual takes the risk on himself by using the research offered.

ESG is a big trend right now – is this something that will continue to occupy investors in the foreseeable future?

ESG has and will continue to occupy investors’ minds in the future. Traditionally, ESG was seen as a more risky investment alternative, but as larger blue-chip companies developed their ESG offering, the market became more stable. This can only be a positive development – to redirect people’s money to have a positive impact on society and the planet.

In the future, it will be good to see additional government incentives for ESG investments, for example by providing tax breaks for investors, or government protection to develop additional flows into these products. It will then be a clear incentive for investors, and advisors will be able to provide better results for their clients by helping them achieve better returns on their investments.

The current political and economic climate has raised significant investment challenges. How does the industry handle this when it comes to customer protection and value propositions?

If you look at any chart that tracks the financial markets over the last 20-30 years, you can find political and economic events, and we’re currently leading to one of these adjustments. However, it is catastrophic where we are now with inflation of 40 years – interest rates must rise further, but it will clearly have a catastrophic impact – it could lead to a real recession, something commentators have predicted recently.

The key here is that financial advice is becoming increasingly important. Advisors must help educate their clients about the risks and work closely with them so that they have full transparency. This is what platforms help with.

What should customers look for in a new investment platform – which elements are crucial to success, and which ones add the most value?

When looking for a new investment platform, clients should look for easy access to their account information. Ideally, they should be given as much information as possible. This may include complete portfolio performance data, underlying investment performance data, investment tools such as tax tools, unused capital gains and confirmation of paid income. The more information the better, but it must be provided in a manageable and personal way.

The initial setup process must also be as frictionless as possible. With an aging population, many customers must have a platform registration process that is seamless and does not expose them to investing.

If you could look a decade into the future, what would the investment area look like?

In the future, I expect the development and continuation of what we see now. Smartphone technology and apps related to Open Banking will be the key – giving people access to all their investments, pensions, savings accounts and bank accounts, so they can manage everything from one place.

One of the biggest unknowns will be whether AI and robo-advice will evolve to a degree where people begin to trust it and use it more willingly. However, there will always be a place for human advice face to face. People like to deal with real people, especially when the financial outcome is crucial to that person’s or family’s future.