It’s your favourite time of the week: here’s the week in news. Assuming no one has leaked it first…
1) Two trade bodies become one
It’s the old story of boy meets girl: two trade bodies lock eyes across a room and the rest, as they say, is history.
This week the bosses of the Assocation of Professional Financial Advisers and the Wealth Management Association agreed on a merger.
The resulting trade body will be called the Investment Management and Financial Advice Association.
Chris Hannant, the director general of Apfa, has said the merger will allow it to cut costs and achieve “merger synergies”.
Meanwhile his counterpart at the WMA, Liz Field – who will lead the new trade body – has promised to overhaul membership fees.
2) Talkin’ bout a revolution…
The Labour Party had an unconventional manifesto launch this week when its draft plans for government were leaked to the press.
While Labour hasn’t been talking much about Brexit, pensions is one area where the party seems to have a lot to say.
This week we found out that a Labour government would keep the triple lock, offer help for women affected by state pension age equalisation, guarantee the Winter Fuel Allowance and address the issue of expats with frozen state pensions.
The Conservatives have yet to reveal their manifesto but the Liberal Democrats also promise to keep the triple lock.
Among the sceptics was former pensions minister Sir Steve Webb, now at Royal London, who estimated that Labour’s plans to scrap the planned increases in the state pension age beyond 66 could cost £300bn.
3) Making hay
Self-invested personal pension provider James Hay is facing a £1.8m charge from HMRC, over investments in an unregulated biofuel scheme.
In a statement published this week, James Hay parent group IFG announced HMRC has launched an investigation into Elysian Fuels, held by some investors through their Sipps, including 500 James Hay clients who invested around £55m in the scheme.
James Hay has received, in April 2017, assessment notices for sanction charges from HMRC for the tax years 2011 to 2012 and 2012 to 2013 in total for £1.8m in relation to Elysian investments.
4) The final countdown
Swedish rock group Europe asked whether “things would ever be the same again” in their hit The Final Countdown.
Perhaps, for asset managers, this is exactly the problem.
They have been told they are rapidly running out of time to finalise approaches to Mifid II rules on dealing commission, leaving fund selectors uncertain of how changes will impact management fees.
With eight months to go until Mifid II regulation triggers an unbundling of research costs from trading fees, fund managers have begun to set out whether they plan to absorb these charges themselves or continue to pass them onto investors.
The likes of First State, M&G and Jupiter have said they will account for the charges on their own balance sheet, while Henderson, Man Group and Amundi are among those to have plumped for the second option.
But specialists have suggested many firms have left it too late to have effective practices in place by 1 January 2018.
5) Mann questions RDR
Peter Mann, former vice-chairman of Old Mutual Wealth and chief executive of Bankhall, said the 2012 Retail Distribution Review has been unsuccessful in improving accessibility to financial advice.
The Retail Distribution Review required advisers to ditch commission in favour of customer agreed remuneration and raised their qualification level in order to operate in this industry.
However adviser numbers dwindled following implementation of the Retail Distribution Review.
Mr Mann said it was clear the financial planning sector required a rethink of its current regulatory framework to make advice relevant to everyone and not just ‘people who have money’.
Speaking at the Momentum UK Financial Wellness Roundtable, Mr Mann said lessons could be learnt from South Africa, which has two separate frameworks to suit the wealthy and non-wealthy.
damian.fantato@ft.com
