The FCA has warned advisers about managing ‘conflicts of interests’ with clients, as decumulation portfolios and thus ad valorem fees fall but advice potentially becomes more complex.
I am not entirely convinced that conflict of interest is quite the right phrase, but there may be an issue if it isn't managed not just in terms of fairness to clients but also in business and reputational terms.
The regulator’s head of life insurance and financial advice supervision Debbie Gupta, speaking at the PFS conference, said: “But we do expect you to manage conflicts…each level of withdrawal reduces the fee you receive, and over time that fee can drop significantly. At the same time client circumstances can become more complex. They may need more care from you. We would be concerned if long-standing clients would be priced out of the market just when they needed you the most.”
Invesco Perpetual has added a cohead to its UK equities team with Martin Walker joining Mark Barnett in the new year. The firm and, in particular, the income funds have seen significant redemptions and performance issues on the funds which were previously managed by Neil Woodford. IFAs with clients still with exposure to the funds may see this as a reason for reviewing the situation though the long term performance is actually not bad at all.
Keith Richards, speaking at the Personal Finance Society conference says that Artificial Intelligence will complement advice not threaten it. If I were an adviser, I would still keep a watchful eye out.
Invesco Asset Management is to list on the UK and South African stock exchanges as Ninety-One. The firm was created in 1991. It says it will be free from some capital constraints as it breaks from the broader Investec Group.
The Governor of the Bank of England Mark Carney is to become the UN envoy on climate action and finance.
Intriguingly, the Governor has in the past talked of a Minsky moment, where too fast an energy transition causes a big collapse in asset prices. I would like to hear his updated view.
The FCA has temporarily banned much of the marketing of most mini-bonds from January for 12 months – with permanent rules to come in in the New Year as CityAM reports. Important to note that some bonds such as those linked to a single property may still be marketed but there is greater focus on this being only to sophisticed clients.
We should expect more action to follow adds FCA chief executive Andrew Bailey. In this S&P report, Bailey says he is in talks to get Google and Facebook to take down web marketing of risky products much faster.
I think IFAs might be interested in the documents themselves. In the paper setting out the changes, there is a very long list of why the FCA deems these bonds to be a risk, but it has to beg the question why were they so late to the party?
Shares in SJP fell by 4% after Goldman Sachs slapped a sell recommendation on the firm over concerns about charging structures and loans to members which are now well above £500m.
The following is a very interesting article given one of the films on current release the Irishman. This 2016 report from Marketwatch sets out how the US teamsters’ pension disappeared faster under Wall Street than the mob. One reminder of the importance of getting the governance right at the very least.