You may also have noticed that both AXA and Aviva have sold parts of their offshore offering to a new consolidator. See more on this story here. These developments lead me to ask:

Could these have been spotted by your due diligence process? Would you have placed client money elsewhere if you had known?

I’m sure we are all reviewing our processes to identify any further areas we should be examining when selecting products and platforms to implement our clients’ financial plans.

What does the future hold for platforms and custodians? In the short term it feels that we probably have enough (or too many) platforms.

Paraplanners should be aware that these tend to be operated using technology from three to four companies. I’d recommend reading some of the material that Lang Cat and Abraham Okusanya publish to get a feel about how these work.

Longer term I think that we should start to prepare for a much more radical change. At the moment we use platforms and custodians to know who owns what.

As these are trusted parties they can facilitate exchanges of assets and money; these trusted parties confirm that you own what you are selling and record the trade. You may have heard of BitCoin which is a digital currency based on a technology called Blockchain (sometimes called a Digital Distributed Ledger).

The way this works is that instead of having trusted parties you have a shared record of ownership.

The Blockchain means that all participants have information about all of the owners of all of the assets recorded in the Blockchain. The blocks are mathematically linked such that if one is compromised the link will be broken – to avoid this you would have to edit every block in the chain to ‘add up’!

Instead of approaching a few trusted parties (who pay to hold your data and could be bought/sold/hacked/fold) to place a trade, you would check the ownership with a few other Blockchain holders.

The logic is that if you managed to hack one person’s copy of the chain, in such a way as not to noticeably compromise it, you are unlikely to have hacked enough other chains to be undetected at this point.

There is a long way to go, but Blockchain is coming. Major banks are experimenting with this and Greece is exploring using the technology for their land registry. There are hurdles that need to be cleared but this has the potential to have a big impact in the way we hold and trade client portfolios.

If you want to read more the Economist has an excellent mini-site with a short animation (Money with no middleman) that gives a great summary.

Should we be immediately concerned? Probably not.

However, I think we need to have this technology firmly on our radar.

Are the providers/platforms we work with able to adapt to change? Do they have the resources to keep up and are they prepared to use them?

One story I liked this week:

Financial Planner warns over HMRC bond proposals

In terms of ‘must read’ articles I’d say that this is really important for Paraplanners to read.

• Dan Atkinson was the 2014 IFP Paraplanner of the Year. He is a senior technical consultant at EQ Investors and is co-chairman of the 2016 CISI Paraplanning Conference. Follow Dan on Twitter via @DanAtkinsonUK.

Really good @CISI #ifp session tonight with @Gerald_Ashley highlighting asymmetries of utility and impact on risk taking behaviour. ???

— Dan Atkinson (@DanAtkinsonUK) April 26, 2016