The advisory world saw a big merger confirmed last week. Professional Adviser gets to grips with the news that Mattioli Woods and Kingswood are set to merge.
It notes that it has been well trailed with questions now being asked around which management team will be the dominant party and how many consolidators will follow suit.
It will have 25,000 clients and £25bn in assets and is deemed evidence of the consolidation of the consolidators, as Roderic Rennison observes in the article.
The Upper Tribunal has upheld the Financial Conduct Authority’s decision to fine two former directors of CFP Management Ltd for their roles in operating a “flawed” pension transfer advice model, Money Marketing reports.
Toni Fox and David Brian Price have been fined £567,584 and £465,415 respectively, after advising on 1,470 pension transfers worth more than £392m between April 2015 and October 2017.
This also seems quite pertinent – The FCA had originally proposed higher penalties of £681,536 for Fox and £632,594 for Price, but these were revised following guidance on tax and interest calculations earlier this year.
There is a huge amount of activity in the world of pensions with the Government planning to double the number of megafunds by 2030, as FTAdviser reports. The aim is to have more default funds of at least £25bn.
The government claims it could leave retirees £6,000 better off.
Good to see the Guardian asking a pertinent question i.e. whether that claim holds water in an explainer by Hilary Osborne, who is an excellent journalist. I like this level of specificity. She writes: “The £6,000 is based on the pension savings of a man on the median annual salary – currently £37,382 – who works from the age of 22 to 68 and pays into his fund throughout that time. His contributions are based on the minimum an employee must pay when auto-enrolled into a pension (4% of his earnings, matched with 3% from his employer and 1% in tax relief).
“The government says that after charges and investment growth, the man’s fund would currently be worth £163,600 when he reaches retirement. It says changes to consolidate smaller schemes into pension megafunds would reduce charges and add £2,500 to his pot, while encouraging providers to invest in a wider range of assets could add £3,300. In total that would be £5,900 more to spend in retirement.”
In reality, as the piece notes the benefit would depend on how much charges actually fall.
The Government simply cannot stop worrying away at workplace pensions. We have all see the voluntary Mansion House reforms but there will now be a reserve power to force changes in asset allocation.
Pensions Expert considers how the final report of the Pension Investment Review will change default funds. Pensions Age takes another angle and we quote the headline here. “Pensions Investment Review sparks concerns over 'unprecedented' threat of mandation”.
This is the key paragraph in the PA story - "The report revealed that the government would take a reserve power in the Pension Schemes Bill to set binding asset allocation targets as it moves ahead with plans to double the number of UK pension megafunds by 2030."
I would draw your attention to the fact that some signatories of the voluntary Accord such as Aviva said at the time that mandation was a red line. The Times reported Aviva's Group CEO Amanda Blanc’s views as fee weeks' ago
Advisers I speak to are generally sceptical and it will be interesting to see how default funds are defined – as I see a range varying from a single default, a main default but with others on offer - Shariah for example - or one large default but others available to employers and even target date strategies which look initially like lots of different mini-funds. (I’ll be asking experts later.)
I do wonder what individual advice looks like if a client has a big holding in a workplace pension with mandated amounts of private equity investments? Do advisers take an overall view of asset allocation. It may become increasingly pertinent.
