This year’s Autumn Statement delivered u-turns and bombshells for buy-to-let investors.
Elsewhere, the Association of Professional Financial Advisers’ chairman took aim at the Financial Conduct Authority and the Financial Ombudsman Service for their unfair treatment of the advice industry and Barclays saw a large scale fine.
As is customary, here are the top five topics of the week on FTAdviser.
1) George the Builder is for turning
Among the raft of decisions which chancellor George Osborne announced in the Autumn Statement was the assertion there will be no further cuts to tax credits.
Additionally, new penalties will be introduced for the General Anti-Abuse Rule, action will be taken on disguised remuneration schemes and stamp duty avoidance.
Energy generation will now be excluded from venture capital schemes, in a move Mr Osborne said was “to ensure that they remain well targeted at higher risk companies”.
In terms of pensions, Mr Osborne managed to please those who hoped for less tinkering, with a simple delay to auto-enrolment and a welcome increase in the state pension.
For the mortgage market, Mr Osborne doubled the housing budget to more than £2bn a year and promised 400,000 more affordable new homes will be built by the end of the decade.
Finally, to tackle cash property purchases that were not hit by the Summer Budget changes to mortgage interest relief, new rates of stamp duty will be introduced at 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.
Buy-to-let investors with cash who thought they had escaped Mr Osborne’s clutches were left sobbing.
2) Apfa slams unacceptable FSCS levy
Speaking at Apfa’s annual dinner held earlier this week, said the trade body had a short list of demands that formed an “absolute basis to go forward sensibly as a profession”.
The chairman of the Association of Professional Financial Financial Advisers said year-on-year Financial Services Compensation Scheme levy increases were “unacceptable” at a time of falling inflation.
“You cannot run a system on that basis. We have to have that change and we are determined to have that change. I have to say to those that have responsibility here that this is an industry that I have never known to be as angry as it is about the facts of regulation.”
He added that while this is a government he supports, it is also one that has been de-regulatory everywhere else but the financial industry.
3) Yet more insistent clients requirements
Insistent clients have yet again come to the fore of news for the adviser community, with the Financial Conduct Authority’s Ritchie Thomson, manager for retail investment themes, stating advisers need to be keeping records of why they reject insistent clients requests.
Speaking at an Institute of Chartered Accountants of England and Wales conference held yesterday (26 November), he said: “I don’t think it’s a difficult thing to do and we’ve got nothing against firms having an insistent client process in place.
“It is not our role to say any adviser of provider should accept this business, but we are concerned that people might be being denied access to the pension freedoms.”
4) Exits in auto-enrolment
Earlier in the week, the head of the Department for Work and Pensions insisted his staff will act to prevent people from opting-out of an auto-enrolment pension as the process continues.
Robert Devereux, the permanent secretary of the DWP, appeared before Parliament’s Public Accounts Committee on Tuesday (24 November) and was grilled about opt-out rates for automatic enrolment.
The department has revised the headline estimated opt-out rate to 2018 from 28 per cent to 15 per cent, given lower than anticipated opt-outs so far.
But the department’s estimated opt-out rate for when contributions reach 8 per cent would also be 28 per cent, prompting questions about whether large numbers of people would leave with a small pot.
Later in the week, the chancellor delayed the increase in contribution rates for auto-enrolment schemes in a move welcomed by employers struggling to get to grips with opting staff in and frowned upon by those fearing future pensioners having to pick heating or eating.
5) Barclays held to account
What is a week in news without a fine or Financial Ombudsman Service ruling?
This week the Financial Conduct Authority fined Barclays Bank £72m for failing to minimise the risk that it may be used to facilitate financial crime.
The failings relate to a £1.88bn pound transaction that Barclays arranged and executed in 2011 and 2012 for a number of ultra-high-net-worth clients.
The clients involved were politically exposed persons (PEPs) and should therefore have been subject to enhanced levels of due diligence and monitoring.
While the FCA makes no finding that the transaction actually involved financial crime, the circumstances gave rise to a number of features which, together with the PEP status of the individuals, indicated a higher level of risk.
ruth.gillbe@ft.com
