Of course, other things happened as well, so here’s a round-up of everything you need to know from the last five days:
1. Consultation creates consultations
The biggest thing since the Retail Distribution Review dropped early Monday morning, with 80-odd pages on how to financial advice gap.
The Financial Advice Market Review’s final report laid out 28 recommendations, however 21 of which were suggestions of further consultations, working groups or working parties, many of which have speculative deadlines stretching out over several years.
Of course, the calls for further review did give an indication of where things are going, with the aim to define advice along Mifid lines and based upon a personal recommendation, along with the FCA being urged to create a dedicated robo-advice team and a suggestion that pensions could be raided to pay for advice.
Disappointingly for many, it was more decisive on the long-running issue of a liability long-stop for advisers, ruling this out once and for all. On the upside, the review backed reform of the way the FSCS is funded and stated that “more that can be done to help improve the transparency of the Financial Ombudsman Service’s process and outcomes”.
The regulator’s acting chief executive Tracey McDermott responded to the overwhelmingly negative industry reaction to the report’s conclusions by calling on advisers not to view proposals in isolation, but as a comprehensive package of measures designed to succeed where other FCA initiatives have failed.
2. Spoonful of sugar tax makes the cuts go down
At Wednesday lunchtime, the chancellor delivered his Budget speech, full of rhetoric about putting the next generation first.
Quite apart from the fact he hammered kids with longer school hours and less sugary drinks, one of the flagship policies was the introduction of yet another Isa - this time with the government giving those under the age of 40 a 25 per cent bonus on up to £4,000 that can be saved each year.
Industry reaction was mixed, with many pointing out the 5 per cent exit fee for people wanting to withdraw funds before the age of 60 and not spend this on a property.
While the mortgage market got off relatively lightly this time, there were complaints that previously-announced buy-to-let stamp duty hikes would apply to “significant investors” and those selling property would not benefit from George Osborne’s slashing of Capital Gains Tax.
There was some jubilation amongst advisers at the news that the much-maligned Money Advice Service is set to be merged - along with The Pensions Advisory Service and Pension Wise - into a streamlined financial guidance superbody, subject to consultation.
3. IFA directories take some flack
Elsewhere over the last few days, other things did still happen. One of these things was some criticism for a couple of competing consumer/adviser directory websites.
First VouchedFor promised to refund its charges for business generation after an adviser threatened legal action over a string of unsuccessful leads.
Kim Barrett, managing director of Barretts Financial Solutions, said he paid £1,956 for just two successful leads since last year. Having raised several objections, he threatened to take the firm to court if he didn’t get some money back.
The following day, Sense network’s head of marketing Philip Bray blasted Unbiased over its new Location Plus service, arguing that it allows some advisers to unfairly buy their way to the top of its consumer website’s listings.
A spokesperson for Unbiased said it “never has and never will make recommendations about which particular advisers people should choose”, but Mr Bray said the change “left a bad taste in the mouth”.
4. The first of many sell-outs?
On Tuesday, Standard Life’s new advice arm 1825 bought advisory firm Almary Green. The latter’s director Carl Lamb explained that the sale was in part due to concerns about the sustanability of firms as a result of spiralling costs - due mostly to the increasing cost of regulation.
“It has become clear to me over the past 12 months that many traditional small to medium sized firms will face almost insurmountable challenges if they are to continue to provide affordable advice,” he stated, raising the spectre of similar IFA exits.
Consultancy firm Harrison Spence’s managing partner Brian Spence suggested that 1825 could be looking to make more acquisitions an build several ‘regional hubs’, something that was part of a wider trend of smaller IFA consolidation and moves to restricted status across the industry.
At the larger end of things, Old Mutual confirmed a “managed separation” of its four constituent parts will be completed by the end of 2018, while Old Mutual Wealth chief executive Paul Feeney has said he would be “silly” to rule out selling his division if the right offer was made.
5. Another week, another decision
Finally, it wouldn’t be a news round-up without mentioning the enduring popularity of stories about ombudsman decisions.
This week saw the Fos rule that Skipton should have revisited a client’s financial plans as soon as she re-established contact with the building society’s adviser following her husband’s death - more here - and Positive Solutions ordered to compensate a client who complained her recommended fund was “unsuitable” - details here.
Perhaps more importantly, the Fos and the Pensions Ombudsman revealed they are attempting to rectify conflicting stances on self-invested personal pension liability; something branded “madness” by pensions lawyer Penny Cogher.
