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Phoenixes and dogs: the week in news

Phoenixes and dogs: the week in news

Since it's the middle of summer and everyone seems to be on holiday, it feels slightly like we could put anything in this piece and no one would notice but that would be #fakenews.

Since we're diligent journalists, let's have a look at what happened. The answer is not a lot, but here's the week in news anyway.

1) Without a care in the world

The government is considering the creation of a Care Isa to address the problems with funding social care costs, adding this to the increasingly long list of issues Whitehall seems to think can be solved with an Isa. Next up is surely the Brexit Isa.

The idea of a Care Isa, which would be exempt from inheritance tax, was criticised pretty widely, though that doesn't mean it won't see the light of day.

Experts warned it would only serve "a small minority of wealthy people", with Sir Steve Webb, director of policy at Royal London and former pensions minister, highlighting that 19 out of 20 estates pay no inheritance tax at all, meaning this tax break would be "irrelevant" to most people.

It later emerged such a product would only be used by a quarter of UK adults, with the majority favouring a pension-led option.

Providers also warned that introducing a Care Isa could prove costly as uptake may be too small to prove a significant business opportunity.

2) Advisers join the order of the phoenix

Unfortunately there's nothing magic about joining this phoenix club, because fears over regulatory risk involved with defined benefit (DB) transfers and a lack of professional indemnity cover have pushed financial advice firms to consider phoenixing.

Henry Blunt, managing director of Retiring IFA, which specialises in matching potential buyers with advisory vendors, expressed concern this week at the number of small businesses that were considering closing their old firm and starting again because they feared future liabilities over DB transfers.

According to Mr Blunt, the "one or two dodgy" players in the DB market, who have carried out transfers without due diligence and proper assessment of client suitability have caused everyone else to suffer.

This is especially the case since the regulatory attitude from The Pensions Regulator and the Financial Conduct Authority (FCA) seems to be that the default position is DB transfers are not suitable, he said.

3) Barnett in the dog house over foul performance

Things will certainly feel...ruff...for fund manager Mark Barnett at the moment but we're sure he won't be hounded out of the industry because he found himself on Bestinvest’s "spot the dog" list of underperforming funds

The list is made up of funds which have both failed to beat their benchmark and fallen by at least 5 per cent over three years.

Mr Barnett succeeded Neil Woodford as manager of the £9bn Invesco High Income fund, which has returned 10 per cent over the past three years, compared with 25 per cent for the IA UK All Companies sector over the same time period.