Financial Product Fashion

16/10/2020

Like all things, behaviours and fashions constantly change. Sometimes in an evolutionary way and other times more dramatically.

Forces driving such change can include technology, other societal and cultural dynamics or problems encountered (either by the product itself, or in the wider environment, such as with the current pandemic).

Change, as the cliché goes, is perhaps the only constant.

Looking back a decade or so, in terms of financial services products which have fallen out of fashion, there are some big ones. Endowments being one that now feels a long time ago and more recently with profits more widely, together with annuities.

Like fashion where for some things there is a return or a retro niche revival, what if anything might be seen from these, recently unfashionable, products. Endowments aside, I think it will be interesting to see in coming years, what is in store for annuities and with profits. Particularly given possibly changing mindsets in terms or risk and security more broadly. These products may currently be vintage at best to many, but they are (1) still on the shop rails and (2) may well have increasing numbers who think they suit them for a changed season?