David Cowell: Back from the fleshpots of Faro!

by | Jul 22, 2016

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Fresh from the fleshpots of Faro (how’s that for alliteration?) I return invigorated to the fray. Any wine drinker who hasn’t yet pasted the very good wines of Portugal and of the Alantejo in particular is missing out dramatically. It would appear that I am developing nerd-like tendencies. Whilst on holiday I got halfway through a book on behavioural economics and actually found it interesting.

Both Ernst & Young and PWC have managed to do a complete volte face on the doom they were pushing out prior to the Brexit vote. What’s more they have done it with a straight face. Suddenly the Bank of England are also agreeing. Only goes to show that economists are still searching for new ways to be wrong.



Yet another insurance company is parking its tanks on IFA lawns. Aviva is planning to launch an at-retirement service later this year, in response to increased demand since last year’s pension freedoms. A spokesman said that, “… people now have a lot more choice in respect of their retirement savings, but with that comes a lot more complex decisions. To help those without an existing adviser relationship through this, the provider is developing a new in-house team to support existing customers.”

On Wednesday I went to the funeral of a shooting chum who was quite a character. His interesting take on life meant that he was always good company and sometimes controversial. Take this for example: “We are advised to not judge all Muslims by the actions of a few lunatics, but we are encouraged to judge all gun owners by the actions of a few lunatics.” Funny how that works.

The European Central Bank kept interest rates unchanged on Thursday but left the door open to more policy stimulus. Draghi is obviously having problems in persuading the Germans to pay more.


All in the name of transparency: The 2003 EU-wide Market Abuse Directive has been replaced by the Market Abuse Regulation (MAR), and among the changes is the definition of an “investment recommendation”. Previously defined at a national level, EU regulators now focus on “persons who produce or disseminate… information recommending or suggesting an investment strategy”. Asset managers’ concerns stem from uncertainty over whether client – and journalist – communications are deemed to be investment recommendations under the rules. If so, these communications have to conform to Article 20 of the regulation – a wider range of stipulations focusing on impartiality and objectivity. The European Securities and Markets Authority previously suggested information made public or “intended for distribution channels” that makes an implicit recommendation must comply with Article 20.

It is therefore likely in future, unless FCA clarify matters (unlikely), that fund managers will be pretty reticent when discussing the make-up of their portfolios with people that their compliance departments consider to come within its remit.

On the subject of the FCA, the Complaints Commissioner has said in his annual report that, “My observation, gleaned from studying the FCA’s internal complaints papers and the interactions of my colleagues with FCA staff, is that these factors increased the FCA’s tendency to defensiveness in the face of criticism. While the FCA continues to deal with the majority of complaints competently and fairly, I have seen examples of an unwillingness to face up to and admit shortcomings, and delays in dealing with awkward cases.” He also said he had seen a tendency at the FCA to find reasons for excluding cases from the complaints scheme in circumstances where they should not have been excluded.


So, those regulated by FCA have to record and submit any and everything that could be called a complaint but the FCA itself appears to ignore such matters. FCA rules states that those regulated have to behave in an open manner whereas again the FCA appears to be anything but, even with the Commissioner!

The head of the BoJ has said that he isn’t considering ‘helicopter money’ as legal changes would be needed before it could be done. That doesn’t mean he won’t do it if all else fails.

AJ Bell has announced that it has reclassified property funds that have been suspended as a non-standard asset under the Financial Conduct Authority self-invested personal pensions capital adequacy rules, following a number of temporary suspensions of property funds in the UK in the wake of Brexit. A little previous, n’est ce pas? Have they re-reclassified the ones who have ‘un-gated’?


My wife has days when she wants us to “talk about things”. We were discussing aspects of our future so when it was my turn I asked her,  “What will you do if I die before you do?” After some thought, she said that she’d probably look for a house-sharing situation with three other single or widowed women who might be a little younger than herself, since she is so active for her age.

Then she asked me,  “What will you do if I die first?”

I replied, “Probably the same thing.”


Have a good weekend.

David Cowell, Director, Myddleton Croft Investment Managers

Leeds, Tel: 0113 274 7700, www.myddletoncroft.co.uk


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