The news engines are not quite firing on all cylinders yet, but they are certainly showing signs of life after the summer.
1) Adviser’s good will shows the best side of financial services can prevail
A financial adviser has been providing pro-bono help to a man who lost nine tenths of his pension savings after being recommended to invest in high-risk assets.
Neil Liversidge’s client had been contacted by a company which claimed to be working for the UK government to improve pensions.
This company then passed his details on to Blueinfinitas, a financial adviser based in Weston-super-Mare, which, until January, had been FCA regulated.
According to documents seen by Financial Adviser, Blueinfinitas recommended that the client transfer his stakeholder pension worth nearly £80,000 into a self-invested personal pension (Sipp).
Some of his money went into blue chip equities such as Vodafone, Tesco and BAE Systems, but the majority – more than £73,000 – was invested in a range of assets Mr Liversidge described as “interesting”.
These included £19,238 in a five-year bond issued by St Lucia property developer Affinity Global Developments and another £19,355 in Goldcrest, a company looking to develop gold mines in Ghana. The largest investment of £34,465 was made into Auhua Clean Energy.
2) Politicians rebel to stand in the way of EU regulation
The European Parliament’s Economic and Monetary Affairs (Econ) Committee has voted to halt the progress of the Packaged Retail and Insurance-based Investment Products (Priips) legislation, scheduled to come into force at the end of this year.
The commitee backed a vote to reject the Priips delegated act because it proposes that past performance figures be replaced with “future performance scenarios”.
Asset managers have previously campaigned against the change, and MEPs supported them, with UK MEP Syed Kamall said introducing future performance projections ran the risk that investors would not realise they could lose money.
3) Pension freedoms fail to liberate adviser to carry out client’s wishes
Restrictive pension transfer rules post-freedoms have meant a client in ill-health has lost out on a favourable annuity rate after a request to transfer could not be processed in time.
Julian Pruggmayer, sole trader at Financial Risk Management, applied in May on behalf of his client for a transfer of an old defined benefits (DB) scheme, which had no guaranteed annuity rate attached to it and it has still not gone through.
The client, Tony Potts, who is in his late 60s and has type two diabetes and high blood pressure, asked Mr Pruggmayer whether he could transfer this old pension of £42,000 into his existing pension, with a view to taking out an impaired lives annuity.
Mercer stopped the transfer from going ahead because of new pension freedom rules meaning the transfer had to be signed of by a specialist, despite the fact it had been.
4) Treasury asks for advice over pension advice allowance issues
HM Treasury needs the advice of providers (and advisers) after stumbling across some issues with its proposed pension advice allowance.
It has admitted that some savers may not be able to use its proposed £500 pension advice allowance.
FTAdviser flagged this up months ago, but the Treasury’s mandarins have said people who are stuck in a product which won’t offer the allowance will have to wait for their provider to routinely transfer them into a newer product. Hopefully they aren’t holding their breath.
5) Widow wins compensation over investment in Green Oil Plantations
The Financial Ombudsman Service has ruled that Apollo Pension & Investment Advisers should compensate the widow of a client it arranged a Sipp transfer for, just three years before he died.
In 2007, Mr T was diagnosed with a degenerative neurological condition for which there was no treatment available.
By 2012, when the transfer advice was given, Mr T’s condition was rapidly declining.
Apollo recommended Mr T move his existing Sipp - worth around £315,000 - to a new Sipp with the same provider.
His original Sipp would not allow for an investment into unregulated scheme Green Oil Plantations Ltd (GOP), so the transfer was made and Mr T invested £150,000 in the oil plantations.
