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Robo failings and DB transfers: the week in news

Robo failings and DB transfers: the week in news

Perhaps the best thing about the news this week was the one thing which was gloriously missing from it: barely any mention at all of the Royal wedding.

Having now completely ruined that, let's move on to our run down of the week in news.

1) Getting EUsed to being poorer

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This week Bank of England governor Mark Carney waded back into the paddling pool of predictions about the future of Britain's economy and didn't seem to find the water any more welcoming.

He claimed Britain's referendum decision to leave the European Union (EU) has so far cost each UK household an average of £900.

Mr Carney said the economic reality since Britain voted to leave the EU had been much worse than the Bank's forecasts anticipated.

He quantified that under-performance by saying the economy was 1-2 per cent smaller than its May 2016 forecasts expected.

Mr Carney continued on this theme in a speech later in the week, saying a "disorderly" Brexit could see interest rates fall rather than rise.

But Mr Carney said it remained the central bank’s base case that a deal on the terms of the UK leaving the EU would happen and interest rates would rise.

2) Rise of the Machines

As the robots come to take our jobs, perhaps the only salvation advisers have is the Financial Conduct Authority, which this week burst the bubbles of a few robo-advisers.

The regulator found failings around disclosure and suitability during its review of robo-advice which required many of the companies which took part in the process to make "significant changes".

As part of the review the regulator looked at seven firms offering automated online discretionary investment management (ODIM) and three firms providing retail investment advice exclusively through automated channels.

Among the FCA's concerns was the fact service and fee-related disclosures at most automated fund management firms were unclear.

The FCA also found problems with the way these companies conducted suitability assessments, with many firms failing to evaluate a client's knowledge or experience, investment objectives and capacity for loss.

Some of the robo-advisers later responded to these findings by saying the sector was still young and evolving.

3) How it feels to be free

A financial adviser, who has been reported to the Financial Conduct Authority after advertising free seminars on defined benefit transfers in a local magazine, hit back this week claiming the events were "educational".

John Webb, a chartered financial planner and managing director of Midland Independent Financial Services, recently took out an advert offering four free seminars across the West Midlands for those looking to transfer out of a defined benefit (DB) pension.

But according to an email seen by FTAdviser Mr Webb has been reported to the FCA over concerns whether he presented defined benefit transfers in an unduly positive light in an advertising feature in the magazine the seminars were promoted in.

But Mr Webb said he was not aware of having been reported to the FCA and he said he had not been contacted by the regulator.