1) Advice own goal
Former England striker Alan Shearer is used to scoring plenty of goals, but it looks like his retirement goals have caused more problems for him.
The Premier League record goal scorer tried to sue his one-time financial adviser Kevin Neal, as well as Suffolk Life, for £9m in damages this week.
Mr Shearer claims Mr Neal was ‘careless’ and ‘dishonest’ in his management of the Match of The Day pundit’s pension investments, while Suffolk Life failed to abide by its regulatory duties.
He said Mr Shearer and his wife relied on professional advisers and the claims focus on decisions made relating to a personal pension, which had been worth more than £4m.
Defending himself, Mr Neal said that the couple had done well out of one investment fund and that the claim “is just driven by pure greed and ego.”
But after one day of the court hearing Mr Shearer and the defendants reached a settlement, meaning proceedings didn’t even get to extra time.
2) Transfer gossip
At this time of the year it is common to hear rumours about whether Cristiano Ronaldo is moving to Hartlepool United or Eden Hazard is being signed by Forest Green Rovers.
But it is transfers of a different type which advisers are currently focused on: defined benefit ones.
This week we found out that the Financial Conduct Authority is currently carrying out a desk-based study into advice firms doing a “significant” amount of defined benefit transfer business.
Among the concerns the regulator is believed to have is the conflicts of interest involved in the process.
The work is understood to not be a formal review or study but is a piece of supervisory work in which the FCA is looking at advice firms which have increased the number of defined benefit transfers they have been doing.
This work could be one of the reasons why a number of advice firms have found themselves having to stop carrying out pension transfers.
If this ends up going wrong the compensation fees could end up dwarfing football transfer values.
3) Could do better
This week the Financial Conduct Authority had its performance appraised by the chief executive of Aviva’s UK life business.
Andy Briggs said the regulator’s Financial Advice Market Review was “not good enough”.
He said the vast majority of people are making decisions without advice or guidance and will end up with poor outcomes.
These comments were echoed by the chief executive of Hargreaves Lansdown, Christopher Hill, who said the entire process needed to be “reset”.
4) Numbers game
If advisers were worried about robots replacing them, now they have to worry about data.
At least that is what the chief investment officer of Nutmeg said this week.
Shaun Port expressed scepticism about the regulator's Financial Advice Market Review process - which is aimed at making financial advice more accessible to those who need it but have limited means - saying the Financial Conduct Authority needed to address the issues of data and personalisation, which it does not do in the review.
He said data could be more useful for getting to know someone – particularly their behaviour and attitude to risk – than a face-to-face meeting.
5) FCA’s strategy concerns
The FCA is concerned about providers dragging their heels to switch pre-2012 pension investment strategies.
More than two years since pension freedoms were introduced the Financial Conduct Authority has found providers are still reviewing pre-2012 retirement saving investment strategies.
Following the 2015 pension freedom reforms, which stated pensions no longer had to be converted into an annuity, the FCA told providers and advisers to review the appropriateness of lifestyle investment strategies.
For business likely written pre-2012, the regulator found most providers were still reviewing, or have plans to review, this business over the course of 2017.
BONUS ROUND!
6) Following the third
OK, we normally have just five stories here, but there’s been a fair bit of news this week.
The Financial Ombudsman Service published its annual review this week which showed just over a third of complaints against financial advisers were upheld.
The data showed the Fos received 321,283 complaints but only 0.5 per cent of these involved financial advisers.
Compared to the previous year there was a reduction both in the number of complaints and the proportion of all complaints – in 2015 to 2016 there were around 3,400 against IFAs which made up 1 per cent of all complaints the ombudsman handled.
Of the complaints about IFAs, most related to self-invested personal pensions, with 242 complaints and 64 per cent of these upheld.
damian.fantato@ft.com
