Mifid II and the Lifetime Isa: the week in news

Mifid II and the Lifetime Isa: the week in news

Britain might be bracing for Brexit but that hasn’t stopped regulation from the continent making its way to the top of the news agenda.

The big news of the week was the Financial Conduct Authority’s publication of its latest Mifid II rules - and how it will impact the way you do business.

1) Mifid Madness

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Yesterday (29 September) the FCA published its latest consultation into the Mifid II rules, which will come into effect in 2018.

Among the changes it has proposed are reforms to the adviser charging rules to prevent the spirit of the Retail Distribution Review from being undermined.

This would clarify that the RDR rules apply to the wider business of providing investment advice, not just to personal recommendations.

The regulator has also said it is investigating whether to tell advisers to record their phone calls with their clients.

2) Which? puts some advisers on naughty step

Consumer rights website Which? found evidence of some advisers claiming to hold accreditations they do not actually have.

In a survey of entries on the Money Advice Service’s Retirement Adviser directory, it found significant proportions of advisers claiming credentials they didn’t have.

For three of the five credentials Which? looked at – Later Life Academy, ISO 22222 and Certified – less than half the advisers claiming to hold them were on the official list of that credential’s official provider.

3) Former ministers gang-up on government

In the space of a week the last two pensions ministers have both had some strong words to say about the Lifetime Isa.

Former Liberal Democrat MP Steve Webb, who was pensions minister between 2010 and 2015, went first, claiming the Lisa was an “abomination”.

He also questioned whether HM Treasury had thought about its impact on workplace pensions.

Mr Webb was followed by Baroness Altmann, who succeeded him, saying it risks pensioners being poorer in the future.

She said: “This product has mis-selling written all over it. Just think about it from a customer’s perspective. The Lifetime Isa isn’t a simple product. It needs someone to understand the whole environment.”

Today FTAdviser's editor Emma Ann Hughes joined them by also criticising the Lifetime Isa.

4) Network on the hook for AR’s fraud

Whitechurch Network Limited has found itself on the hook for fraud committed by an appointed representative who misappropriated a client’s cash.

The Financial Ombudsman Service rejected the network’s argument that since the fraudulent behaviour was outside the scope of the Financial Services and Markets Act 2000 it shouldn’t have to pay the client compensation.

The AR in question, Well Read Financial Solutions, recommended a client ditch his investments and reinvest in the Well Read Property Portfolio.

The client was informed by the police that the adviser was being investigated for fraud and it was established the property portfolio did not exist.

5) Welcome to the world of tomorrow