Traditionally one of the slowest weeks of the year, the last five days have in fact provided a stock market crash, provider sale speculation and complaints data intrigue.
All this and more will now be mushed into an easily digestible form for you to consume:
1. China finally crashes, taking the world with it.
Along with torrential rain, the stockmarkets also ensured the week started with another ‘Black Monday’, with global indices following China’s lead.
The Shanghai Composite plummeted 8.5 per cent, with the FTSE 100 extending losses throughout the day and reached a nadir shortly after the US open, trading down some 6.7 per cent.
We asked industry experts what this might mean for those who have taken advantage of pension freedom and opted to stay exposed to the market via drawdown contracts, rather than opt for the relative safety of traditional annuities.
Predictably enough they were split, but the general message this week was not to panic and go defensive with equity strategies.
This morning’s four-year record gains in the FTSE100 proved that to be the right move, with a silver lining ready to be invested in from the clouds earlier in the week.
2. The devil makes work for idle minds.
You could blame it on summer silly season, but market speculation does tend to pass the time, and FTAdviser sister paper Financial Adviser got people talking with a story about how French insurance giant Axa is looking to sell off some of its UK divisions.
According to those good old industry insiders, Barclays has been appointed to handle the sale, which could fetch tens of millions of pounds, following the parent’s frustration over the tough regulatory landscape this side of the Channel.
Something that was pretty much confirmed this week was another continental power-play, with Zurich looking to splash £5.6bn on the UK’s RSA Insurance Group, after the UK’s Takeover Panel agreed an extension to make the deal stick.
Meanwhile, the Swiss insurer’s intermediary director Richard Howells told FTAdviser that while it is currently reviewing other market options, there are no great plans to follow Standard Life’s lead into financial advice.
Nutmeg however, did reveal to us this morning, that they’re on the hunt for advisers to help them do exactly that...
3. Complaints data makes sees same old suspects top tables.
This week also saw the fun of sifting through the Financial Ombudsman Service’s half-yearly complaints data, seeing mostly the same names cropping up yet again.
Embattled network Sesame was the most complained about advisory firm for the third six month period running, followed by Openwork and Hargreaves Lansdown also making the top five.
Prudential again led the life and pensions firms, while on the mortgages side Bank of Scotland were on top, although with less complaints than the previous period.
Lenders that joined it among the most complained about all saw their numbers rising this year though, with the Fos blaming the increases more publicity around tougher lending rules introduced under last year’s Mortgage Market Review.
4. World’s biggest manager buys into the robo game.
In what is quickly becoming the click-bait buzz word of the year, we had the opportunity to get ‘robo advice’ back in a couple of headlines, as first Blackrock bought itself one and then the Association of Professional Financial Advisers’ director general railed against the robos.
The asset management behemoth announced on Wednesday that it had bought US automated advice firm Futureadvisor for an undisclosed sum, with plans laid out to operate the business within Blackrock Solutions and grab a slice of the market already being eaten up by rivals like Vanguard and Charles Schwab.
Speaking about how the trend for robos is being mirrored on this side of the Atlantic, Chris Hannant told FTAdviser that systems backed by artificial intelligence or algorithms are most suited to narrow investment advice, because it is easier to program a computer to design an asset allocation when it is given a risk profile.
“It is harder to do the broader holistic financial planning, that is more of an art than a science because it involves trying to understand peoples’ aspirations, goals and hopes,” he commented.
5. Compensation scheme levy debate rages on.
Finally, in part of an ongoing series, yesterday saw the Treasury rejecting an IFA’s call for fines collected from the financial services industry to offset the Financial Services Compensation Scheme fee increases caused by unregulated investments held in self-invested personal pensions.
Financial Escape’s Phil Castle wrote to the Financial Conduct Authority earlier this week, stating that while he is willing to pay fees for the FCA, the Money Advice Service and the Financial Ombudsman Service, he is disputing paying his £3,000 FSCS fee.
A government spokesperson responded: “It is right that fines collected from the financial services industry, over and above enforcement case costs, are returned to the taxpayer. The government reformed this element of the system through the Financial Services Act 2012 to ensure that the bad behaviour of some banks was not subsidising the costs of the other.”
peter.walker@ft.com
