This week’s news has been dominated by turmoil at the Investment Association, overshadowing any comings and goings at the Institute of Financial Planning’s conference.
Of course, other noteworthy things went on during the last five days, so here is our customary round-up of what you need to know:
1. Another trade association in flux
Following a few high profile member exits at the Association of British Insurers, this week started with talk of M&G Investments and Schroders not planning to renew their memberships with the Investment Association when these expire at the end of 2015.
This came despite the IA more than doubling its pre-tax profits last year to £371,000 as revenues were buoyed by a greater contribution from membership subscriptions, with chief executive Daniel Godfrey promising to “do everything we can to convince anybody who is considering leaving to stay”.
The rollercoaster then took a sudden dip when Mr Godfrey was given a vote of no confidence by the board and resigned on Wednesday.
While industry chatter was that more fund houses could follow M&G and Schroders out the door, Liontrust’s John Ions said his peers were being “disrespectful”, although he agreed the trade body should refocus on consumer engagement issues.
Yesterday, the IA announced it is to consult over future direction, with chair Helena Morrissey stating: “The results of this consultation will guide the new CEO, once appointed, and, in the meantime, the management team is focused on business as usual.”
2. IFP steadies ship after merger dramas
The IFP has gone through its own tumultuous period, following a brief consultation on its merger with the Chartered Institute for Securities and Investment.
Member concerns were laid bare and senior leadership had the inevitable reshuffle, but this week’s IFP conference gave the organisation a chance to look forward.
Its new president Alan Dick claimed “we are still the same people with the same culture, with the same values and the same beliefs”, calling the merger “an opportunity for us to take all the good things about our culture and spread them to a whole new audience”.
Thankfully, more pressing industry issues were also discussed by the variety of guest speakers, with Partnership’s Steve Groves suggesting the regulator is ready to ‘green light’ robo-advice services following its joint review with the Treasury into the financial advice market.
The Financial Conduct Authority also came under fire after technical specialist Rory Percival failed to outline professional indemnity insurance wording for financial advisers.
Responding to a question from the head of a PI underwriting agency, he said that rather than being heavily prescriptive, the FCA aims to be more principles-based and outcome focussed.
3. Adviser complaints come to the fore
The last few days have also seen some legitimate industry concerns being highlighted on our pages, something which will hopefully spur institutions to take correct actions.
For once, the comments section below an article were a positive place to be, with fellow IFAs pitching in to try and elucidate some questions not fully answered by Financial Limited’s new owners Tavistock, regarding run-off cover for former network members.
There are still clearly things that need to be ironed out - “any further developments in relation to the business will be announced by Tavistock in due course when we consider it appropriate” was the official response - but the winding down of one network and setting up an new one is never going to be a simple process.
Meanwhile, another disgruntled adviser argued that Hargreaves Lansdown is not treating customers fairly by refusing to accept copies of a ‘letter of authority’ sent to request information on an investment portfolio is worth around £475,000.
Penguin Wealth’s Craig Palfrey told FTAdviser that the original letter got lost in the post, as did a further two copies, and when Hargreaves finally received it they refused to act as it is was a copy that was delivered and not an original.
As further reporting proved, this puts the firm out of step with most of its peers; surely something that is easy to remedy?
4. HMRC in the thick of it
This week also saw a couple of wins for HM Revenue and Customs, firstly a tribunal favouring the government in an appeal over the filing of tax returns.
The first-tier tribunal in fact ordered the individual to seek professional advice after he tried to claim tax deductions for investments made towards his retirement.
The second win was rather more significant, with another tribunal - against a complex tax avoidance scheme used mainly by property developers and IT contractors - ruling that investors now collectively owe up to £200m in unpaid tax.
5. Sipp closure
There were a couple of self-invested personal pension products launched over the last few days.
Offshore provider Brooklands closed its Sipp to new members and opened a new one under its IVCM rebrand. A joint venture with Heritage Pensions, it is available for standard assets only and will be supported by a new website and literature.
Meanwhile, Partnership unveiled a new hybrid Sipp, combining annuity and drawdown options while providing an opportunity for investment growth. Called the Enhanced Retirement Account, it features a flexi-access drawdown account, an annuity as well as an interest-paying cash account and an Isa.
peter.walker@ft.com
