FCA Chairman Explains The Sixty Large On PR

by | Jan 29, 2015

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This missive, says David Cowell of Myddleton Croft Investment Managers, is appearing a day early as, despite the snow, he is heading for Bath for the weekend to give the rugby team the benefit of his motivational skills.

myddleton croft

FCA chairman John Griffith-Jones says the £60,000 cost of external PR advice for the inquiry into the regulator’s bungled announcement of its review of closed book business was a “responsible insurance policy”. Under questioning from the Treasury select committee today, Griffith-Jones was asked to justify the £3.8m cost of the review, which includes £60,000 to FTI Consulting for ‘strategic communications advice’. It is interesting that he considered that the advice was useful after the event. I therefore assume that, should one of us transgress, we can take some counselling and avoid a fine or being closed down.


‘What are you charging?‘ is frequently asked instead of more specific questions – and can be answered in “various ways”, making direct cost comparison more difficult, according to Thesis Asset Management.

Advisers, it says, are not asking the right questions when doing due diligence on discretionary managers in response to criticism it is “impossible” to compare their costs and services. One of the first documents we provide to advisers is our due diligence evidence. Most advisers are content with this as it is very comprehensive and is updated annually or when major changes occur. We have it on our website so it can be referred to as required.

The report into the collapse of Halifax Bank of Scotland will now not be published until the summer at the earliest – nearly seven years after the bank was given a £20 billion bail out from the taxpayer. I wonder why? Did they fund the Iraq war?


After buying more than $7 billion of Ukrainian government bonds, Michael Hasenstab of Franklin Templeton has seen their value collapse as the rebels deepened an economic recession, depleted foreign reserves and prompted government calls for a debt restructuring. His investment, equal to almost half of all Ukraine’s foreign bonds, is now valued at just $4 billion, based on fund holdings from the end of the third and fourth quarters. Whoever said that bonds were safe?

Our Tactical Growth Portfolio goes from strength to strength. The one-year chart on (below) shows the actual performance whilst the one below that shows it relative to the sector. Note the lack of material drawdown as well as the outperformance:





Experience suggests that we shouldn’t read much into Tuesday’s surprisingly weak preliminary estimate for UK Q4 GDP. The data has been particularly revision-prone lately, and other sources point to greater underlying strength in the UK economy.

Even if we take the data at face value there is little cause for concern, with the collapse in the price of oil set to give the UK economy renewed momentum in 2015. The preliminary estimate for Q4 GDP showed quarterly growth of 0.5%, the slowest in a year. However, growth of 2.6% for 2014 as a whole should place it well up in international league tables. The collapse in the oil price over the past few months is unambiguously good news for the UK economy with inflation set to move into negative territory and consumers enjoying a substantial boost to their spending power.

Oxford Economics’ Spending Power Index shows that UK households are enjoying a substantial boost to their finances from the combination of low inflation, accelerating wage growth and generous increases in the tax-free allowance. 2014 saw the largest improvement in spending power for nine years. We expect that 2015 will be even better. We expect the index to rise at its fastest rate since 2001. The ‘cost of living crisis’ is finally ending.

Ole, the smoothest-talking Norske in the Minnesota National Guard and a natural born salesman, got called up to active duty. Ole’s first assignment was in a military induction centre. Because he was a good talker, they assigned him the duty of advising new recruits about government benefits, especially the GI life insurance, to which they were entitled. The officer in charge soon noticed that Ole was getting a 99% sign-up rate for the more expensive supplemental form of GI insurance. This was remarkable, because it cost these low-income recruits $30 per month for the higher coverage, compared to what the government was already providing at no charge.  The officer decided he’d sit in the back of the room at the next briefing and observe Ole’s sales pitch.

Ole stood up before the latest group of inductees and said…”If you haf da normal GI insurans an’ yoo go to Afghanistan an’ get yourself killed, da governmen’ pays yer beneficiary $20,000. If yoo take out da supplemental insurans, vich cost you only t’irty dollars a mont , den da governmen’ gotta pay yer beneficiary $200,000! “  “Now”, Ole concluded, “Vich bunch you tink dey gonna send ta Afghanistan first?”

Haf a gud veekend.

David Cowell


For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close

Leeds LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711



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