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Brexit and immigration

By Simon Commander, Stratforma Network Partner and Managing Partner of Altura Partners
September 2017

Immigration vitally affects the way in which Brexit is playing out. Both major political parties in the UK have interpreted the June 2016 referendum as
primarily a vote against immigration, although at first blush hostility to immigration might appear surprising with unemployment at historic lows of just over 4%. Equally implacably, the EU27 remain opposed to dilution of the right to freedom of movement. With little apparent sign of compromise in sight, the UK will have few options but to leave the single market and customs union.

These incompatible views of labour mobility have clouded much of the debate and made it more difficult to identify the net consequences for the UK economy, particularly the direct implications of reduced immigration. This note looks at whether there has indeed to be this stark trade-off: political gain but economic pain or whether lower migration could potentially benefit, or come with limited cost to, the UK.

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Asset Management’s Groundhog Day?

The Financial Conduct Authority (FCA) published their review of the UK asset management industry last week, advocating “radical reform” of the £7tn sector. Their key findings included:

  1. A lack of price competition, especially in retail active funds
  2. Questionable “persistently high” levels of profitability across the industry, with average profit margins of 36%
  3. Neither active nor passive funds on average outperform their own benchmarks after fees
  4. There is no clear relationship in retail active funds between gross performance and fees charged
  5. Virtually all investment risk is taken by the retail investor, who are poorly equipped to select funds and typically chase past performance, which is not a good indicator of future performance (as we all should know!)
  6. A lack of transparency in communication of fund objectives and in some instances (an estimated £109bn) of active funds actually acting as closet trackers (but still charging higher, active fees)
  7. A sharp divergence in the sophistication and awareness between retail and institutional investors, in their ability understand fees and charges
  8. Concerns about the lack of competition and conflicts of interest in the investment consulting market, whose purpose ironically, is to secure a better deal for investors

In short, the asset management industry is painted as being opaque, uncompetitive, customer unfriendly, offering poor value for money and in the round, not achieving their primary purpose, i.e. offering appropriate risk-adjusted returns for the fees charged and enabling investors save for their respective futures. Not exactly a ringing indictment.

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The Digital Driving Age: A Bumpy Road Ahead?

Key Challenges to Adopting the Next Generation of Driving Technology

Hardly a week goes by without a new exciting announcement in the world of driving technology. However, having worked over the last 12-18 months to explore the future of mobility with major technology firms, leading European car manufacturers and government transport ministries, I have come to the conclusion that we have many significant challenges ahead.

Challenge 1: Who’s in the driving seat?

Autonomous cars are “the future”, so we are told. The number of autonomous vehicles (AVs) on the roads of California has doubled in the last 2 years, as traditional and non-traditional manufacturers alike, race to test and bring into the mainstream their self-driving cars. 27 companies are now licenced to test their prototypes on California’s roads (including Uber, who have also somewhat belated applied for permission!). Up to 180 vehicles are being tested at any one time, 77 of those belong to Alphabet’s Waymo alone.

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Digital vs Human – Dystopia or Myopia?

I have just digital vs humanfinished re-reading Richard Watson’s latest book, Digital vs. Human, how we’ll live, love and think in the future. I should declare my interests here. I know (and even like!) Richard. We sometimes partner and work together, hence “re-read”, as I had a chance to proof a number of the draft chapters of this book last year. However, as so often is the case, it was much more insightful and satisfying to read the complete (paperback) book from cover-to-cover, rather than just dipping into disaggregated digital sections.

Richard’s basic premise is that human-kind is unwittingly being sucked into a future dominated by digital technology, where our very humanity is being drained from us in return for a soulless, lonely existence, increasingly bereft of human contact and real emotions. To illustrate this, he starts with the shocking story of a Korean couple back in 2010, who let their own infant daughter starve to death as they obsessed over caring for a baby avatar in an online virtual world. Strong stuff.

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