While our print publications joined everyone else on holiday this week, the online team soldiered on, covering new at-retirement products, personal pension provider deals and the latest on the ‘advice gap’ review.
These, along with a couple of other key themes, make up our five things you couldn’t miss over the last five days:
1. At-retirement innovation in earnest.
Both the ex-pensions minister and the chancellor promised that the pension freedoms would bring with them new products, but the speed of the legislative implementation meant that most providers had to dedicate most of their time and resources into just preparing existing propositions for launch.
Predictions were that towards the end of 2015 and into 2016 the market would start to see some genuinely new ideas, but this week there appeared to be a few green shoots.
Yesterday (20 August), the recently rebranded Retirement Advantage told FTAdviser about the planned launch of its ‘mix and match’ Retirement Account, something written under drawdown rules, but featuring a guaranteed annuity element and cash account all within the same wrapper.
It will be sold exclusively through financial advisers, with lots of interactive tools and support services provided, and while not exactly revolutionary, does seem to tick the boxes that their research identified.
The day before, Investec claimed to have launched the first structured deposit specifically designed for the retirement market, offering guaranteed income with a bonus payment at maturity, provided the FTSE 100 finishes higher.
Available through self-invested personal pensions, it may well seem some imitators.
2. Sipp deals done and debated.
Talking of Sipps, this week saw some action in the market that seemed to have gone rather quiet of late, with Wilton Group buying two firms with a total of over £1bn in assets under management, for an undisclosed sum.
The wealth management and professional services group bought into administrator Hartley SAS and provider The Lifetime Sipp Company, the latter making a name for itself by valuing the Harlequin investments on its books at a nominal £1 until the investments can be realised or a professional valuation is available.
Meanwhile, larger provider Rowanmoor Group responded to speculation by insisting that it is not up for sale, also denying that it is struggling to meet capital adequacy requirements.
Managing director Ian Hammond explained that while he’s not looking to sell, if a “really good offer” came along they would consider it. “This is the sixth rumour in the last 18 months that I have heard. Only a limited number of people could afford to buy a big company like us.”
3. Sharks swarm round Brewin Dolphin.
In the absence of much proper news this week, speculation and opportunism reigned, with a couple of discretionary managers jumping on Brewin Dolphin’s decision to withdraw bespoke investment services for direct clients with less than £150,000 to invest.
Wellian Investment Solutions urged advisers to reconsider the benefits of outsourcing with model portfolios, with their investment director Chris Mayo arguing the case for their model portfolios in the hope of drumming up some new business.
Meanwhile, online DFM Nutmeg took a more entertaining approach, posting adverts across social media offering the “dumped” Brewin clients three months of free service and a box of chocolates. Its chief executive Nick Hungerford assured FTAdviser that they have a big enough “war chest” to be able to follow through on the promotion.
4. Revolution is in the air.
Hopes are clearly high for the government’s financial advice market review (apparently now termed FAMR), as following last Friday’s call to action from Garry Heath, this week saw the Professional Finance Society demanding advisers give their views to influence the “next phase of revolutionary change”.
Its chief executive Keith Richards claimed that there is “clear understanding” within the Treasury that spiraling regulatory costs are making it difficult for many firms to stay in business, impacting the cost of advice and likelihood of more people taking it up in the future.
The Association of Professional Financial Advisers also asked the industry to respond, but this time to its own survey of the cost of regulation - aiming to find out whether the cloud of complaints actually holds any statistical weight.
Last year’s study found that in 2013, smaller firms spent on average 12 per cent of their income on direct and indirect regulatory costs - with the whole sector spending an estimated £460m on regulation and the average client paying approximately £170 per year towards the cost of Financial Conduct Authority.
5. Budget impact on buy-to-let.
Finally, FTAdviser revealed that lenders are gradually updating their buy-to-let affordability calculations, following changes announced in the summer Budget.
Peter Gettins, product manager at London and Country Mortgages, said that so far there have been no “dramatic” moves, but clearly the tax change meant landlords will see a drop in income, so it is “not surprising” lenders want to change their criteria.
As it currently stands, most lenders require the rental income to be at least 125 per cent of mortgage payments, based on an interest rate of between 5 per cent and 6 per cent.
peter.walker@ft.com
