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Brexit and HMRC advice: week in news

Brexit and HMRC advice: week in news

HM Revenue & Customs answer to their failure to have everything ready for changes to the lifetime allowance was to tell your clients to postpone retirement.

This, plus other news stories that raised your pulse rate during the last five days, are outlined now in our handy round-up of what went on this week:

1) HMRC tells savers to postpone retirement

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HM Revenue & Customs suggested pension scheme members affected by the reduction in lifetime allowance postpone their retirement until they can be sent a temporary reference number.

From 6 April, the lifetime allowance will reduce to £1m from £1.25m – a move announced by chancellor George Osborne in last year’s Budget.

Up until now savers have been left in the dark by HMRC’s failure to publish any information on how to apply for lifetime allowance.

One adviser commenting on this news story remarked: “This LTA issue is becoming a bigger dog`s breakfast by the day.” Quite.

2) Axa makes partial amends for past advice

The Financial Ombudsman Service agreed with Axa it needed to make partial amends for an Isa recommendation made by one of its advisers.

Mrs R complained about Axa Wealth Services Limited in January 2014 when she received a statement recording the current value of her Isa investment.

The statement showed the value had dropped below the sum invested in April 2011.

When she complained she was told Axa no longer offered financial advice.

One reader in the comments section had sympathy for Mrs R, who said she had agreed to the investment because she believed she would be able to rely on the adviser to discuss her investment in future.

Axa closed its advice business in April 2013, which was when the adviser who made recommendation to Mrs R had left.

Gunter posted: “Can you imagine BMW selling you a car with a service contract then after a few years saying sorry we cant make money out of servicing your car so we will now no longer carry out the annual service?”

More details of this complaint can be found here.

3) Zurich ends stake in Openwork

Openwork and Zurich signed an agreement that will see the global insurer divest its 25 per cent shareholding in the network within the next four years.

Under the agreement Zurich will dispose of its shares in Openwork by March 2020 by transferring them to Openwork’s other main shareholder, Openwork Partnership LLP, which represents the network of some 600 adviser firms and 3,000 advisers.

Zurich’s announcement comes after a “radical” restructure of its distribution business was announced last summer.

4) Providers’ projections fail to make life easier

Sipp providers and insurers are using standard projection rates for retirement savings, risking confusing clients and making advisers’ jobs harder, especially in the move to execution-only.

A number of Sipp providers are still using a 5 per cent mid-point growth rate as a standard across all asset classes, according to CTC Software.