This week there was more turmoil at Waspi as several directors resigned, while other worries included the GDPR, the future of guaranteed drawdown and an 'error of judgment' from the incoming FCA chair (don't get too excited, the only affairs alluded to are of the tax variety).
1) Getting waspish at Waspi
Women Against State Pension Inequality (WASPI) is no stranger to division and controversy. But the group, which split once in 2016, is at it again with the resignation of three directors filed at Companies House.
One outgoing director cited "irreconcilable differences", but declined to reveal what these were. Susan Beevers, one of the directors who is no longer involved, said that there had been four resignations, with possibly another in the pipeline
The Waspi movement campaigns for women who have had their state pension age increased to 65 with little or no personal notice, giving them no time to plan.
2) Fresh woes for Woodford
This week after yet another of Neil Woodford's holdings had some bad news. The veteran fund manager saw the value of his AA investment nosedive by 25 per cent in one day, after the breakdown and financial services group said it would need to lower dividend payouts.
Mr Woodford’s Equity Income fund is now the worst performing fund in the UK Equity Income Sector - 83rd out of er, 83.
AA is not the first of his investments to take a large tumble, with Provident Financial, the home credit lender, also suffering. Investors such as Jupiter and Architas have already pulled their funds out.
Some people are more sanguine, however. Darius McDermott at Chelsea Financial said that he was sticking with Woodford, noting that he had also underperformed in the tech boom.
"We are sticking with Neil, but if you buy the fund you have to know what you are buying," he said. "If you are worried about Brexit Britain or Corbyn Britain this probably isn't the one to own." Which leaves one wondering exactly what we should be worrying about.
3) Data danger for advisers
Oh General Data Protection Regulation, how we do love thee! The full implications of the GDPR, which comes into force in late May, are only just being understood by the financial advice community.
Experts, such as Lorraine Mouat, a specialist on the new rules, the General Data Protection Regulation, at compliance consultancy TCC, warn that advisers will have to delete many potential clients from their databases, unless they have explicitly consented to data being used, while those advisers who use online directories will also be responsible for the data generated by any enquiries from them.
Penalties for non-compliance are severe, and the new rules are likely to have a hugely adverse effect on company’s ability to market.
Ms Moaut warns that using data for marketing without the consent of the person it belonged to would be effectively illegal from 25 May. Time for a data audit, if you haven’t done one already.
4) Bad week for the FCA
It’s been a bad week for the Financial Conduct Authority (FCA). First, the incoming chairman Charles Randell admits to an "error of judgement" over his investment in a tax relief scheme.
Given the revelations over other leading figures in industry and charity over the last few months, perhaps the financial services industry should be grateful to discover that Mr Randell’s error of judgment involved him investing in controversial tax avoidance scheme Ingenious Film Partners II that resulted in him repaying more than £100,000 to the taxman, rather than sending inappropriate texts or anything similarly incriminating.
Mr Randell revealed in a parliamentary hearing into his appointment that he had "dispensed with the services" of his financial adviser when HMRC began taking action against the scheme.
The regulator also faced criticism for its news annuity comparison templates, with Retirement Advantage, an annuity provider, saying that they are "flawed" and will not resolve the issue of consumer detriment that they were designed to address.
5) No guarantees from Aegon
Aegon’s Secure Retirement Income (SRI), will close to new business on 1 March with new applications accepted until 28 February.
The business says there is a lack of demand from advisers for the product, despite requests from the FCA for pension providers to be more innovative.
Advisers said that the main problem with guaranteed drawdown was the expense, and doubted there would ever be a huge market for the products, despite rumours that Scottish Widows was planning a similar hybrid.
"If demand resurrects itself and people feel that they want more guarantees and interest rates start to rise to make it more economical, we will consider recreating them,” Aegon says. No guarantees there.
