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Editorial - November 2016

Paul StanfieldPaul Stanfield
Chief Executive at FEIFA / FECIF Secretary General

Playing your Trump card

Well, for those of us surprised by the Brexit vote - and there were plenty in the City of London that is for sure – the US election creates a whole new perspective with regards to astonishment, and on a much wider spectrum. I don’t know what it says about Hillary Clinton and her campaign – well, on reflection, I probably do – but the fact that Trump won, allied to the UK’s EU Referendum result, and the growing disquiet across Europe, seems to point to increasing issues with the status quo in the Western world. Or at least the mass public’s contempt for it.

One could consider this a potentially US-related situation – “only in America” if you wish. I think, however, that this would be overly simplistic and potentially dangerous thinking.

It is not new or particularly incisive to realise that the public at large, particularly in many of the so-called developed countries, feel increasingly disenfranchised - and there is obviously a rising feeling, or at the very least a perception, of mounting unfairness amongst the masses. The protest vote appears to be gaining significant traction.

As I type, the European Commission has proposed a one year extension to the date of application of the Regulation on Key Information Documents (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs). Whilst it is potentially tenuous to consider this in the same light as a protest vote, it is most certainly, in my opinion, part and parcel of the increasing concerns felt by many EU Member States, and their populaces, with regards to the bureaucracy and lack of empathy within the EU institutions – arguably another protest against the status quo, in its own way.

Is the world at a cross-roads? Perhaps it is. Next month sees the Constitutional Referendum in Italy, followed by Presidential and National Assembly elections in France in the first half of 2017, amongst other key elections and referenda. Right wing and protest stances have grown significantly in Europe in recent years, further “shocks” could therefore follow. 

I don’t think I’m “sticking my neck out” by saying that investment markets are likely to be volatile for some time. I could argue that this is good for the financial advisory sector – in fact, I will categorically say that it is; when times are difficult and unpredictable, consumers are generally more likely to seek professional advice. Perhaps, therefore, this is one of the best examples of the value of that advice – along the lines of the old phrase: if it was easy then everyone would do it!

Maybe it might also highlight the limitations of automated financial services – I avoid using the misleading term “robo-advice” for obvious reasons, particularly for those who have read my views on this before. In times of turmoil people want advice and comfort from other humans not a computer, I would argue.

So, there could be positives that arise from Mr Trump’s victory. Perhaps every cloud has a potential silver lining. Or am I just searching for the proverbial needle in a hay stack. One thing is for sure, that is definitely more than enough clichés for one article!

Welcome to a post-Brexit environment, with Donald Trump as the “leader of the free-world” – oops, one more cliché I guess…..but who would have thought that this would be our near-term future, even as little as six months ago?

“May we live in interesting times” – a Chinese proverb, not a cliché I should stress – seems more relevant than ever. China may also be rubbing its proverbial hands in glee. Perhaps the PRC has played its “trump card”, albeit it unknowingly/

 

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