Wealth manager consultancy Alpha’s float is priced and today is ‘State Pension shortfall day’ – Friday IFA news round-up, the week’s news in a nutshell…

by | Oct 6, 2017

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Here’s your Friday IFA news round-up, what you need to know from the industry and the investment communities that’s happened this week. Read this when you have a few minutes to spare and you’ll be up to speed on almost everything.

Wealth manager consultancy Alpha priced at 160p per share

Global provider of specialist consultancy services to the asset and wealth management industry Alpha Financial Markets Consulting, which announced late last month it was preparing to float on AIM, has been priced at 160 pence per share, valuing the company at £163m.


The conditional placing of 22m new and 56m existing ordinary shares at 160p per share with institutional investors will raise gross proceeds of approximately £125.4m.


  • The Company has raised £35.2 million which will primarily be used to repay the Group’s existing debt facilities in full, with the remainder to be applied to pay deal fees and other costs associated with the Placing and Admission and the balance (if any) for general working capital purposes.
  • £89.6 million has been raised to exit private equity owner Dunedin in full.
  • On Admission, management and employees together will hold approximately 23.15% of the issued share capital of the Company.
  • On Admission, the Company will have 101,859,583 Ordinary Shares in issue.
  • Admission and commencement of dealings in Ordinary Shares under the ticker AFM are expected to take place at 8.00 a.m. on 11 October 2017.

CEO Euan Fraser said: “Today’s announcement marks a very exciting new phase of Alpha’s journey as a leading consultancy to the asset and wealth management industry. We are absolutely delighted at the strong response to the placing and the recognition from investors of the significant opportunities we have for continued global growth. This is a fabulous achievement for everyone at Alpha and is a wonderful testament to such an outstanding team of consultants.”


‘State Pension shortfall day’ reveals financial pressure on retirees

Today is ‘State Pension shortfall day’, when the spending power of the average pensioner couple outstrips the full annual State Pension and retirees must find income from other sources to cover spending.

Official figures suggest the average retired couple’s spending power is £21,770 a year, while the full State Pension for a retired couple brings in £16,593, effectively covering just over three-quarters of annual spending or enough to cover their spending up until Friday 6th October: ‘State Pension shortfall day’.


From today onwards, households will need to meet spending from their own sources. That leaves a financial gap of £5,177 a year compared to the budget of a normal retired couple, nearly three months of expenditure, that needs to come from private pensions, savings and investments.

“The State Pension provides a significant part of income for most pensioner households but still only covers about three in every four pounds that the average couple has available to spend over the course of a year,” said Stephen Lowe, group communications director at specialist financial services firm Just.

Fidelity International changes client charging model


Fidelity International has introduced a new variable management fee model across its active equity capabilities for its clients, globally. This involves both a reduction of the annual management fee and a change to a variable management fee that is symmetrically linked to fund performance.

This variable management fee operates as a sliding scale and acts as a two-way sharing of risk and return – also known as a ‘fulcrum fee’. It said in a statement that where it delivers outperformance net of fees we will share in the upside and in the case that clients experience only benchmark level performance or below, they will see lower fee levels under this new model. The fee that clients will pay will sit within a range and will be subject to a pre-determined cap (maximum) and floor (minimum).

FCA Andrew Bailey Mansion House speech


Chief Executive of the FCA Andrew Bailey gave a speech at the Mansion House city banquet and he opened by reminding his audience of the FCA’s 3 statutory objectives:

  • ensuring market integrity;
  • appropriate consumer protection;
  • promoting competition in the interests of consumers.

He expressed concern that not enough people are saving and investing for their retirement, he highlighted the ongoing advice gap and the measures undertaken through the Financial Advice Market Review to address this gap; he also confirmed the FCA will be publishing a pension strategy before the end of the year.

Head of Policy at Hargreaves Lansdown Tom McPhail said: “The reason provision for retirement is still inadequate, in spite of auto-enrolment and the popular pension freedoms, is no one in government is taking responsibility to actively encourage the UK population to save and invest for their future. Financial advice is better now than it has ever been, but most people neither want nor need to pay for it most of the time. The FAMR review has left an advice gap, with firms unable to give their customers the simple help they need to manage their finances.


The Treasury keeps salami-slicing away at tax-free allowances, undermining confidence and increasing complexity. The FCA’s statutory objectives do not include actually encouraging people to save and invest; a well-run regulatory system without any customers is not much use to anyone. Across the DWP and the Treasury there needs to be a clear focus to work with industry and regulators, actively promoting a culture of personal financial responsibility, engagement and provision for the future.”

One in five chance of November rate rise

There is a one in five chance of a Bank of England rate rise coming on November 2, listed bond provider Minerva Lending revealed. Since the Bank won its independence in 1997, it has raised interest rates 20 times and four of those hikes fell in the month of November, analysis shows. It is the most popular month for MPC adjustments with a further three rate drops among Threadneedle St’s 46 adjustments over the last 20 years.

Global economy enters ‘Goldilocks’ period

According to Aviva Investors, stronger global growth and returning inflation should continue to support risk assets, but is likely to lead to a more challenging environment for fixed income, according to the fourth-quarter House View from Aviva Investors. Global GDP could rise to between 3.5 and 3.75%  this year and in 2018. Inflation is likely to hit 2% by the middle of next year in the US, with a more gradual rise in the Eurozone and Japan.

With central banks starting to unwind a decade of extraordinary monetary policies, market volatility could rise from close to historical lows as correlations break down. The US Federal Reserve has raised rates four times and started to unwind its asset holdings, while the European Central Bank is expected to begin reducing quantitative easing at the start of 2018. Despite the uncertainty around Brexit, even the Bank of England has hinted it may raise rates soon. Equities are likely to fare better than fixed income in this environment, with Eurozone and EM equities offering better relative value than US stocks. EM debt, both in local and hard currencies, currently offers more attractive opportunities than developed market sovereign and corporate debt.

FCA deems less than half of defined benefit pension transfers to be suitable

The FCA provided an update into its investigations into the transfers of defined benefit pension schemes. It found that:

  • only 47% of transfers were deemed to be suitable, 17% were deemed unsuitable and for the remaining 36% it was unclear;
  • 80,000 transfers estimated to have taken place in the last year;
  • Advice is required for all transfers where the transfer value exceeds £30,000.

Nathan Long, Senior Pension Analyst at Hargreaves Lansdown, said: “The starting point for anyone with a defined benefit pension should be to assume it is best left as it is. Transferring means giving up a promised income in return for the uncertainties of investing in the stock market. Transferring away could be investigated further if you are in poor health, are single or have concerns about the employer that provides your pension. These types of pension transfer are very complicated and require very specialist advice. If you want to investigate a transfer further seek out an experienced adviser.”

Head of Policy at Hargreaves Lansdown Tom McPhail add3d: “Taken in conjunction with evidence of a rapid decline in demand for annuities, we are concerned about pension investors’ increasing dependence on non-guaranteed pensions for their retirement security. This has important implications for policy makers in government and in the FCA.”

L&G appoints Director of Legal & General’s Intermediary division

Legal & General has announced the appointment of Craig Brown as Director of Legal & General’s Intermediary division. He replaces Steve Bryan and will be responsible for leading Legal & General’s intermediary distribution in both the Protection and General Insurance markets. He has worked in a number of different areas across Legal & General over the past five years, with the most recent position being Key Account Director. Prior to this, Craig was Head of Claims Commercial Management (Insurance) and Head of Supplier Management (Insurance).

Hilbert’s Defensive Income Portfolio now available on Structured Edge

Hilbert Investment Solutions, the London and Paris based structured product specialist, recently launched a managed portfolio service called Defensive Income Portfolio and it’s now available on Structured Edge, the new structured product research platform operated by Future Value Consultants (FVC).

Spend the money parents, say the kids

Research by Saga Money found that while retired people want to save to pass on an inheritance, their children would rather they spent the money on living today. More than eight in ten children say they would rather their parents spent their money in retirement than leave them an inheritance, yet four in five parents say they are concerned about leaving an inheritance for their children. Just under half believe so strongly in the importance of leaving an inheritance they say that they will not spend frivolously in retirement to ensure there is something left behind for their children.

LGM Investments appoints new Portfolio Manager

LGM Investments, BMO Global Asset Management’s specialist emerging markets manager, has promoted Anders Anker Heegaard to Portfolio Manager, responsible for co-managing the BMO LGM Asian Smaller Companies and BMO LGM Asian Growth and Income funds.

It also appointed Gokce Bulut as an Analyst, replacing Anders in his previous role. Bulut joined from First State Investments, where he worked as an Investment Analyst. Gokce brings a wealth of experience as an emerging markets equity analyst, having supported the First State Stewart Global Emerging Market team in Edinburgh for three years, followed by another three years in Hong Kong focusing on Asian markets.

Calastone appoints divisional MD

Calastone, the global funds transaction network, appointed Henning Swabey as Managing Director and Head of Continental Europe. Swabey joins from RBC and will be responsible for defining and implementing the European Business Development Strategy, and will build and manage a growing sales team across Continental Europe.

Senior appointment at Round Hill

Round Hill Capital, a specialist real estate investment, development and asset management firm, appointed Alex James as a Managing Director and Head of Capital Markets, based in London.

JM Finn recruits investment manager in Bristol

Isabel Kwok has joined JM Finn as an investment manager in their Bristol office. Working alongside Jonathan Holley, Kwok will be managing tailored investment portfolios for private clients, charities, trusts and pensions. She has over 13 years’ experience managing private client investment portfolios, most recently at Brewin Dolphin in Bristol. She is a Chartered Fellow of the Chartered Institute for Securities and Investments (CISI), and from 2012 to 2014 was President of the Bristol and Bath Regional Committee representing local members of the CISI.

Chief Executive JM Finn Steven Sussman said: “We are delighted to welcome Isabel to JM Finn, where her experience will perfectly complement the team in Bristol.”

Number of preserved pension entitlements increase

ONS figures showed the number of preserved pension entitlements increased by 3.6 million in 12 months. In 2015 the number of preserved pension entitlements was 11.8 million but this rose to 15.4 million in 2016. Peter Bradshaw, National Accounts Director for Selectapension, commented: “Action is needed to stem the flow of small pension pots from flooding the pension landscape. These figures should encourage Financial Advisers to engage with  clients who have multiple ‘small pots’ to take back control of their finances and consider consolidation. Research and analysis can be time-consuming, but using technology can save time and store client recommendations for future regular reviews.”


CETA Insurance, a privately-owned tech enabled insurance broking business, has been acquired by its non-executive directors and senior management supported by private equity company, Kester Capital. The existing shareholders David Quick, Adrian Waters and Sandie Schofield will retire from the business.

New Lord Mayor of London

Charles Bowman was elected as the next Lord Mayor of the City of London. The elected head of the City of London Corporation, an Alderman and a senior partner with PwC, he will serve as a global ambassador for the UK-based financial and professional services industry from 10 November 2017 for a one year term.

Cautious on UK economy

Michael Stanes, Investment Director at Heartwood Investment Management, said: “Heartwood continues to take cautious approach to UK assets, being short duration in UK gilts, underweight UK property, underweight UK equity and diversifying some of our currency exposure outside of the UK. While Brexit has added to the uncertainty, high levels of consumer debt, an unstable political backdrop (even pre-Brexit referendum) and substantial twin deficits as a result of the unbalanced economy have been reason enough for this long-held view.”

On auto-enrolment, Sanlam says

Talking ahead of the five year anniversary of auto enrolment, Elliott Silk, head of commercial at Sanlam UK, said: “Although the initial implementation of auto-enrolment can be seen as a broad success, the industry cannot afford to sit on its hands and think ‘job done’. We don’t know, for example, what impact next year’s automatic increase to pension contributions will have.

“The rise from 2% to 5% coming into force in April 2018 will be a steep one felt by workers all across the country – the government, employers and wider industry need to prepare those who are likely to be affected by the increase, otherwise many people will be in for a big shock when they check their pay packet in April. We are encouraging employers to get the message out there early and provide financial education to their staff, highlighting the importance of saving and thinking beyond the minimum.”

Standard Life boosts Elevate

Standard Life today announced enhancements for the Elevate platform with a simplified new business process and improved functionality. It said there’s a focus on efficiency, ease of use and delivering client value, and that the changes are a direct result of feedback from Elevate users and the adviser research carried out following the acquisition of the platform.

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