Structured products, 130:30 funds, absolute return, covered warrants, and countless others have all had their moment in the sun; and all have seemingly been designed with much more attention to the journey than the destination.
This problem affects every area of retail personal finance. At the same conference, lang cat CEO and Money Management columnist Mark Polson decried the tendency among platforms to keep tinkering, building add-ons that people do not need and will not use.
Across all the key players in the platform market, hundreds of man hours go into developing the latest whistles and bells, which win awards for innovation, but all the gongs in the world are no substitute for actual customers.If nobody is using your toys, you don’t deserve plaudits for building them.
We are seemingly unable to just leave stuff alone.
The acceptance that we should probably make these things easier occasionally bubbles to the surface, and has resulted in several rounds of changes to regulation, legislation or taxation, each of which is labelled as ‘simplification’.
But you can’t make things simple by adding rules, and each layer of simplification is more about adding a layer than adding simplicity, making this industry ever more impenetrable to the man in the street.
It is as if we are hooked on complexity. We can’t help ourselves. Despite lots of noise about transparency and accessibility, we still come up with convoluted mechanisms that only serve to increase the distance between the masses and the basic but meaningful financial planning they need.
In terms of product development we constantly look to do something new, to go where nobody has gone before. But we would be better served just going back to basics and concentrating on keeping things genuinely simple and comprehensible.
This industry’s collective focus is always on looking to spot and fill non-existent gaps in the market; we should instead be addressing a much more significant gap that is growing all the time.
