A month into the job and new Work & Pensions Secretary David Gauke has been determined to make a splash this week, featuring in a grand total of three top FTAdviser stories.
Away from the Gauke-iness, we’ve seen the merger of two large wealth management groups and some clarification from the FCA also caught our eyes. It’s been a busy week. Here are the top stories that you may have missed.
1) A feast of David Gauke
The week didn’t start well for David, when he repeated the mistakes of his predecessors by calling the government’s new guidance service an “advice body.”
Twice during the Association of British Insurers’ Long-term savings conference, he referred to this new service – which will be created by combining The Pension Advisory Service and Pension Wise, as an “advice body.”
When questioned on this by FTAdviser's editor, Emma Ann Hughes, Mr Gauke acknowledged his mistake, added that he was aware of the difference between guidance and advice. But if he can’t get the terminology right, what hope is there for the general public? It was only his first speech in the new role, too. Tricky.
Fortunately, the rest of the speech was much less controversial. Gauke called on insurers to adapt their retirement income services to emerging trends, offer value for money and understand the potential of new entrants into the market.
Gauke might have thought he’d got away with his advice/guidance slip, but it reared its head again in the House of Lords later in the week. Liberal Democrat Lord Sharkey said there was a clear need for complete clarity over what is guidance and what is advice, plus a statement of what is being offered in what circumstances. Lord Sharkey: “It is very easy to confuse the two and thereby accidentally to mislead. Even secretaries of state get this wrong.” More snarky, than Sharkey.
2) HMRC gets the last laugh
Any sentence that begins ‘an accountant, two film producers and an independent financial adviser’ might sound like the start of a bad joke, but the judge was deadly serious about a quartet of tax avoiders paying back their ill-gotten gains. They have been ordered to pay back more than £2m of their criminal profits.
Film tax fraudsters currently serving a jail sentence, including independent financial adviser Neil Williams-Denton, must pay back £2m between them or face an extension of their time behind bars.
3) Merger creates £6bn wealth giant
Bellpenny and Ascot Lloyd announced a ‘merger of equals’ to create a joint entity managing £6bn of assets. CEO Nigel Stockton revealed that the group was seeking quality, not quantity when it came to further acquisitions, and that it was talking to two potential groups about a robo-advice service.
4) UK economy not safe as houses
Professor Paul Cheshire of the London School of Economics effectively ruined dinner party conversation for the whole weekend, when he predicted that house prices could fall as heavily as 40 per cent.
Ray Boulger, at John Charcol, attempted to lighten the mood by predicting only a 25 per cent fall. Still enough to put Middle England off its starters.
5) Pension Wise to cost advisers dear
If that wasn’t bad enough news, the Financial Conduct Authority weighed in to tell advisers how much they’re contributing to the running of the Pension Wise service via FCA levies. At £2.1m a year, many believe it’s a high price to pay for a service that gives them no benefit.
6) FCA gives taping guidance
Not content with one burden on advisers, the FCA also chose to tax their brains with a 1,068 page document clarifying when they should tape telephone conversations.
New rules mean that any conversation that might result in a customer buying or selling must be recorded, but without the benefit of time travel mindreading, it’s very hard to predict this. The FCA paper clarifies many different scenarios, but it’s a long read.
7) Selectapension stops pension transfer business
Most people close services when there’s not enough demand for them, but it seems that Selectapension just can’t keep up with the current trend for DB to DC transfers.
It put a note on its website stating that the move was due to "unprecedented demand", and will now deal with the backlog.
8) MetLife shuts to new wealth customers
Last but not least, MetLife ended the week on a low, at least if you wanted to become a wealth management customer. It is closing to new wealth customers to ‘refocus its strategy’, and will only accept new applications until July 28.
According to bosses, “high levels of service” will be maintained for existing wealth management customers and their advisers.
