Friday IFA news round-up: what you need to know, from waking up about residential social care in old age, to the latest appointments

by | Sep 22, 2017

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Here’s your Friday IFA Magazine 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.

People facing prospect of residential social care

New research from Aegon has found that only 21% of people anticipate that they won’t need residential social care in their old age, indicating that four out of five people are facing up to the prospect and not burying their heads in the sand. Other key findings show:

  • just one in five (21%) people don’t expect to need residential social care in their old age;
  • of those who believe they may, two-thirds (67%) thought it most likely they would need it from age 80, or older;
  • 80% of people think average time needing care is over three years and 30% believe the average is more than five years.

Impax to acquire Pax

Impax Asset Management Group, the AIM quoted investment management group, is to acquire 100% of Pax World Management for an initial valuation of US$52.5m. There will be an additional contingent payment of up to US$37.5m payable in 2021, subject to Pax’s performance.

Calastone appoints COO


Calastone, the global funds transaction network, has appointed Stephen Mohan as Chief Operating Officer. Mohan will assume responsibility for managing the UK and European business as well as leading global operational functions including product development and service delivery.

New commercial finance

The Mortgage Hut launched a new bridging and commercial finance arm to meet growing demand from customers requiring complex property loans. The bridging and commercial finance arm will offer a range of bespoke loans to private and commercial clients for property acquisition, refinancing property redevelopment. It claims to be able to handle complex property deals, many of which would be turned down by mainstream lenders.


Vacancies for private practice lawyers

Vacancies for private practice lawyers across the North East have risen by 24% month-on-month according to new survey data from specialist recruiter, Clayton Legal. The firm believes the rise in advertised positions can largely be attributed to a buoyant commercial property market thanks to inward investment into the region which is fuelling demand for conveyancing professionals.

GAM appoints investment director


GAM apointed Adrian Gosden as an investment director. He joined the Group to manage a new UK equity income fund that will be launched later this year.

Fundment moves into pensions

Fundment, the automated investment platform for IFAs, has today moved into pensions by launching a SIPP. The firm, which aims to help traditional advisers use the power of technology to compete with robo-advisers, is partnering with Liberty SIPP to deliver the new product.


UK expats face losing pension payments

Hargreaves Lansdown says that UK expats face losing their pension payments unless a post-Brexit deal is found. UK insurance companies could be forced to suspend payments to customers living abroad, unless a solution is incorporated into the settlement negotiated between the UK and the European Commission.

The Chair of the Treasury Select Committee Nicky Morgan has written to the Chancellor of the Exchequer asking for answers regarding the Treasury’s view of the issue and possible solutions. The issue was originally raised by the Association of British Insurers.


Number of older women marrying increasing

With recent official figures showing that the number of older women marrying, or remarrying has increased in recent years, the decision for many to tie the knot is as much about money as love alone. Investec Wealth & Investment’s research showed that 48% of divorced and widowed women aged over 55 said that their financial wellbeing would influence or has influenced their decision to remarry rather than have a common-law relationship.

HSBC share of the week


Ian Forrest, investment research analyst at The Share Centre, chose HSBC a his share of the week: “The largest of the UK’s banks, HSBC, is our share of the week this week as the share price has fallen around 5% over the past two weeks which may make the stock an attractive entry opportunity for investors.”

MiFID II reminder from FCA

The FCA sent out a reminder: “MiFID II applies from 3 January 2018, less than four months away. It widens the scope of MiFID by capturing some financial entities that did not previously require authorisation. Some firms who are already authorised may also need new authorisations or a Variation of Permission (VoP) to carry out activities from next year.”


2017 over-indebtedness figures for the UK 

On Tuesday, the Money Advice Service announced its new 2017 over-indebtedness figures for the UK, which wasn’t pleasant reading:

  • 8.3 million adults in the UK are living with problem debt;
  • the lowest proportion of over-indebted residents live in the South East 13.3% and East of England 14.3%;
  • Newham, London revealed as UKs most over-indebted local authority area, 22.7%.

Will Hale to CEO


Key Retirement has promoted Will Hale to CEO as it launches a recruitment drive aimed at taking its total equity release adviser numbers to more than 200 across the UK through next year.

Brown Shipley expands Edinburgh office

Brown Shipley made two new appointments at its Edinburgh office, with Rhona McColl joining as Business Development Manager, and Andy Bolden, a wealth planner, relocating from the firm’s Shipley’s Nottingham office.

Liberty SIPP marks ten years

The SIPP provider Liberty SIPP has marked its 10th anniversary by celebrating significant growth in the business. The Manchester-based company, which was established by Ian Currie and John Fox in September 2007, now has 9,766 clients. It said that strong investment inflows have propelled the firm’s assets under administration to £1.95bn, an increase of 18% in just three months. The total is set to surge past the £2bn mark by next month.

New Level 6 Certificate in Pension Transfers & Planning Advice approved by FCA

The Chartered Institute for Securities & Investment said that its new Level 6 Certificate in Pension Transfers & Planning Advice has been officially approved by the FCA.

And staying with the CISI, Robert Noble-Warren, Chartered FCSI, has been appointed President of the West Country branch. He’s an asset manager, working direct with private clients in Independence Wealth Management, and a Chartered Wealth Manager and CISI Fellow. He started his City career working for a Eurobond issuing house, taking entry examinations to the London Stock Exchange.

Netwealth raises £10m

Netwealth Investments, the online discretionary wealth manager launched in May 2016, has completed a second round of capital subscription, raising £10.02 million of new capital. Some 13 new investors joined the 28 angels who provided initial capital of £6.57 million pre-launch, resulting in total funds raised to date of £16.6 million.

BlackRock global update

Richard Turnill, BlackRock’s Global Chief Investment Strategist, said in his latest update, A turnaround in eurozone politics:

  1. we see a steadier eurozone political environment helping support growth and reform momentum – and bolstering the case for the region’s equities;
  2. global stocks hit new highs, government bond yields rose and the U.S. dollar rallied. Hurricane Irma’s impact was less severe than feared;
  3. the Federal Reserve this week is expected to announce its plan to start gradually winding down its balance sheet in October.

Auto-enrolment began in October 2012

Hargreaves Lansdown reminded us that auto-enrolment began in October 2012, approaching its 5th birthday. Its recent survey of over 400 employers showed overwhelming support to expand auto-enrolment to get more people saving, more often and for more purposes:

  • 4 out of 5 employers think minimum contributions under auto-enrolment should rise;
  • employers are happy to shoulder the increased cost of retirement saving. 6% believe they should cover all the cost of a contribution increase, whilst 31% think they should shoulder a greater share of the cost increase;
  • 60% support using automatic enrolment through the workplace to nudge employees towards building an emergency cash fund and so improve financial resilience;
  • 53% think all earnings should count for a pension contribution, currently there is no obligation to pay a contribution on the first £5,876 of pay which penalises lower earners;
  • 55% support a lowering the earnings trigger, currently anyone earning below £833 per month is not included automatically.

The Government is currently reviewing where they go next with auto-enrolment, with a response expected by the end of 2017.

Pareto hires five

Pareto Financial Planning has hired five recruits, including Nicky Aspray joins Pareto FP who joins as operations manager. The Manchester-based financial services company, which specialises in providing independent advice and hands-on assistance to owner-managed businesses and high net worth private clients, has also launched a new servicing department to widen its offering and support growth.

New president at PFS

The Personal Finance Society has chosen Thornton’s Sharon Sutton as its new President for 2017/18. She takes over from Nick Turner, who has stepped down from the board after completing a 12-month rotation as President of the professional body and six years as a Member Director. The leadership change was formalised at the recent Society’s Annual General Meeting.

1,000 advisers have now passed Level 4

The Society of Mortgage Professionals reports that 1,000 advisers have now passed the RQF Level 4 Certificate in Advanced Mortgage Advice. The CII qualification was launched in Autumn 2014 to provide a logical next-step for holders of the Level 3 Certificate in Mortgage Advice, and only requires completion of the R07 advanced mortgage advice unit where R01 and CF6 are held.

Tritax boosts team

Tritax, the property investment fund management house, has made two senior appointments: Charlie Withers, as Development Director, and Nick Preston, as Director of Fund Development.

Alarm bells ring over GDPR compliance

A study from Intelliflo has set alarm bells ringing over GDPR compliance. A recent survey among users of Intelliflo’s Intelligent Office (iO) shows the majority of advisers run the risk of not meeting the May 2018 deadline for being compliant with the General Data Protection Regulation. Some 67% say they don’t yet have a plan to ensure GDPR is fully implemented by the enforcement date of 25 May 2018, with almost 9% saying they were not aware of the new regulation.

Homeowners release more

Homeowners have released 50% more equity from their homes over the past three months, according to figures compiled equity release provider Responsible Equity Release. While UK house sales have fallen over the summer period – June to August – as homeowners have chosen to stay put rather than move, the equity release market has thrived. Since the General Election result in early June, the number of homeowners taking money out of their properties has risen 49.6%, compared to the previous quarter (March to May), as they use their properties as pension income boosters and to pay off mortgages.

Investor sentiment towards the UK has taken a dive

According to the Lloyds Bank Investor Sentiment Index, investor sentiment towards the UK has taken a dive in September amid Brexit uncertainty. Headlines are:

  • UK assets hit hardest as gold takes top spot;
  • mixed bag of results for global equities, bad news for bonds;
  • European equities continue on the comeback trail.

Asset managers will have to disclose pension transaction costs

Reacting on the FCA’s announcement that asset managers will have to disclose pension transaction costs by 3 January 2018, Maria Nazarova-Doyle, Head of DC Investment Consulting at JLT Employee Benefits, comments: “Savers will be clear beneficiaries as it will be easier to compare the real costs of different investments, which will ultimately drive costs down across the investment providers.

“While it may not be a straightforward undertaking for the asset managers, it should be seen as a positive development in the longer term. Those managers who diligently apply best practice and offer better value for money will be recognised for their efforts. Greater transparency will not only improve trust in asset management, but also drive greater competition and a better functioning market.

“In addition, this move will help to resolve the absurd challenges facing trustees of defined contribution pension schemes who have to disclose scheme funds’ transaction costs to their members whilst being unable to obtain this information from investment managers because they were not legally required to provide them. Overall, a very welcome development that we have been eagerly awaiting.”

Inquiry in to the 2015 Pension Freedoms policy

Commenting on the news that the Work and Pensions Select Committee has launched an inquiry in to the 2015 Pension Freedoms policy, Stephen Lowe, group communications director at Just Group, said: “This is a welcome and timely inquiry given the findings of the FCA’s recent interim report on the retirement income market. The creation of flexibility and choice in how people can use their pensions has swiftly become the new norm, but it is far from clear that the new environment is working in all savers’ interests.

“One particular concern is the impact of disengagement and mistrust and how this is influencing saver’s decisions. Analysis by the regulator and others has shown many are unlikely to be making informed decisions, which makes the poor take up of Pension Wise guidance and advice a major concern. The Committee is right to ask whether people are getting enough help – this is hugely important when customers are presented with multiple product options which increases the complexity of the decisions that need to be taken and increases the risks people may be exposed to.

“Improving the take-up of the government’s free, impartial guidance would contribute significantly to help people achieve better outcomes.”

“Pensions freedoms was a giant leap in the dark…”

On the same topic as above, Chris Knight, Managing Director, Legal & General Retail Retirement, said: “Pensions freedoms was a giant leap in the dark – so a review is well-timed and appropriate. Whilst it has done a lot of good – not least of which is raising consumer awareness about their retirement options – there is no question that Pensions Freedoms also has its imperfections. Consumers might have more choice about how they use their pension pot, but thousands of individuals continue to approach retirement without receiving advice or planning ahead, and as a result take the path of least resistance by sleepwalking into drawdown by default.

“We need to get people thinking about and understanding what Pensions Freedoms really means for their retirement and how they can use their pension pot strategically, not just on day one of retirement, but potentially for the next 30 years. That means encouraging, where appropriate, a blended approach which mixes the benefits of drawdown with the insurance against longevity offered with an annuity.”

“The Select Committee’s inquiry presents an excellent opportunity for the Government to address the imperfections of Pensions Freedoms, clarification of the implementation of regulation and laws around ‘Freedom & Choice’ and ultimately provide clearer pathways to consumers when it comes to making decisions about their retirement income.”

Eastgate joins JM Finn

John Eastgate has joined JM Finn’s London office, following the completion of his contractual notice period with his previous employer. Eastgate joins as an investment director and is reunited with his former colleague, Edward Furness-Smith, who joined the firm Finn in January.

View on Fed’s decision

On this week’s interest rate announcement from the Federal Reserve, Tom Stevenson, investment director for personal investing at Fidelity International, comments: “The US Federal Reserve has, as expected, left interest rates unchanged at between 1 and 1.25%. With inflation in the US subdued and Hurricanes Harvey and Irma expected to impact the US economy over the short term, no-one will be surprised the Fed sat on its hands.

“In addition, also as expected, the Fed has fleshed out its plans for reining in the size of its balance sheet. This has ballooned since the financial crisis on the back of America’s massive quantitative easing stimulus programme. The balance sheet has expanded to $4.5trn since the financial crisis. The plan is to start reducing it from next month and to progressively accelerate the rate at which bonds are returned to the public market. The Fed hopes that by telegraphing its $1trn to $2trn taper, it can avoid unsettling bond and equity markets.

“However, the real focus is on how the markets will react over the longer term to policy normalisation. The trajectory of rate hikes is indicated by the so-called dot plots, which signal rate-setters’ views of future rate rises. Today’s chart continues to suggest that the Fed will press ahead with one more quarter-point interest rate hike by the end of the year and three further quarter point hikes in 2018. This will provide some support for the dollar, which has weakened in 2017 on expectations for lower for longer US interest rates.

“If the Fed does pull the trigger on another hike in December, it will add to the upward pressure on bond yields (and so downward pressure on bond prices). However, structural issues – namely still high global debt, an ageing global population and rising inequality – should help to keep a lid on yields and so support bond prices. In addition, US financials such as banks also stand to benefit from higher rates, as they will see a boost to their lending margins.”

Carnegie-Brown appointed new president of the Chartered Management Institute

Bruce Carnegie-Brown has been appointed the new president of the Chartered Management Institute. Currently the chairman of both Lloyd’s of London and Group, Carnegie-Brown brings to the role a wealth of experience from a 30-year career in the City.

fscom appoints James Donnelly as CISO

fscom has appointed James Donnelly as Chief Information Security Officer (CISO). He will be responsible for helping clients understand and meet their obligations to protect and uphold the data-rights and freedoms of their customers and employees. With the introduction of PSD2 in the new year and applications for re-authorisation opening in October, James will also work directly with firms to identify what sensitive payment data they are holding and the sufficiency of their information and technology security.

DNCA appoint absolute return bond fund specialists

DNCA, an affiliate of Natixis Global Asset Management, with more than one hundred staff across three offices in Paris, Milan and Luxembourg, has appointed Pascal Gilbert and François Collet, two international absolute return bond fund specialists.

More to be done with financial education at school

The Share Centre reveals that 78% of personal investors had no exposure to financial education at school and feel unprepared when faced with tax, mortgages and pension decisions. With the majority of respondents feeling that financial education should be compulsory within the school curriculum it is clear that more needs to be done to help give everyone the financial skills they need to equip them for life.

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