Today sees the introduction of the sugar tax, but fear not: there have been enough sweet treats in the news this week to give us all cavities.
1) Foolish fund managers
It was perhaps no coincidence that April Fool’s Day fell in this week, when objectives published by many asset managers were branded "ludicrous".
It came as the Financial Conduct Authority told fund management companies to prove they give investors a worthwhile service for their fees as part of a raft of measure being introduced to ensure asset managers act in the best interests of their clients.
The FCA also said fund managers should be clearer about what they want their funds to achieve and how they will achieve it.
Jason Broomer, head of investment at Square Mile found that he could not disagree with some objectives in official fund literature which would seem to state the obvious, as he pointed out: "It could be a UK equity fund and the objective they have is to ‘achieve a return by investing in UK equities".
Mr. Broomer went a step further and branded such marketing speak as "meaningless garbage", which "does not help".
2) Freedom of improvement
HM Treasury was also in the firing line this week, as experts grumbled about the pensions freedoms which came into effect three years ago today.
A committee of MPs came to the conclusion there is room for improvement, and called for a new form of standardised drawdown to protect pension savers and said providers should be forced to offer the product.
Reflecting on the reforms, Andrew Tully, pensions technical director at Retirement Advantage, said: "Pension freedoms were announced without prior consultation with the industry and implemented in a year”, he pointed out: “That left very little time to sit back and understand all of the potential dangers."
And Mr Tully wasn't alone in his views that things weren’t thought through properly, as Rory Percival, former technical specialist at the FCA said "rumour has it that the pension freedom legislation was hatched in the back of a black cab."
3) Value of nothing
It wasn’t the best of weeks for advisers either, who were warned about new powers the FCA has to scrutinise them.
Under Mifid II’s product governance rules, fund managers must define a target market for each of their products, which advisers will have to be aware of and consider when giving advice.
To sum up they will now have to consider which target market a product is likely to be suitable for, have a distribution strategy for their target market and review the products they offer regularly.
Mr Percival, previously of the FCA, said this would make it easier for the regulator to take action against firms doing "things it is not happy with".
4) Opting into opting out
Other regulators were on the warpath too, as it was announced that The Pensions Regulator (TPR) will be prosecuting a national recruitment firm, directors and some senior staff, for allegedly opting employees out of their pension scheme unlawfully.
TPR has accused Workchain Ltd of logging into its workplace pension scheme’s online system, using employees’ personal details and shutting down their scheme membership.
If found guilty, they could end up in jail, as a conviction for computer misuse carries a maximum sentence of six months’ imprisonment in a magistrate’s court (two if the Crown Court is involved).
5) Stop, regulate and listen
And finally, the FCA was also under fire this week after it was found that it took no action for six months, after receiving intelligence about a firm defrauding investors.
Complaints commissioner Antony Townsend upheld a complaint about the regulator, taking the view that it was a matter of "considerable concern".
Mr. Townsend further criticised the FCA, saying that he believed the case showed wider problems within the FCA’s supervision of firms, being carried out with a "lack of curiousity or sense of urgency". The regulator has denied these claims.
