Your IndustrySep 14 2018

Fraudsters and ombudsman complaints: the week in news

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Fraudsters and ombudsman complaints: the week in news

This week saw us celebrate - if that's the right word - a decade since the collapse of Lehman Brothers and the start of the financial crisis.

With so much speculation about where the next crash will come from, it seems more likely the markets will make fools out of us. The best thing to do is to read the week in news.

1) Salt in the wound

Just when you thought things couldn't get much worse for the former clients of Active Wealth, who had been advised to transfer out of their British Steel pension scheme, it looks like that's exactly what has happened.

The Financial Conduct Authority (FCA) has warned fraudsters are contacting the firm's former clients, falsely claiming to be from the regulator and offering to help them claim compensation for pension and investment mis-selling by the advice firm, which was involved in the British Steel debacle.

The FCA had been made aware a third party may have provided information about former clients of Active Wealth to another entity.

Active Wealth entered liquidation in February after the firm was told to cease any pension transfer activity by the regulator months earlier.

The firm had advised as many as 300 British Steel pension clients, of which 64 proceeded to transfer out of the British Steel pension scheme into alternative pension arrangements without taking further advice.

2) Banking on Brexit

After the Bank of England's hotly anticipated decision to increase interest rates to 0.75 per cent in August, this month the monetary policy committee decided to stick rather than twist.

Interest rates have remained at 0.75 per cent and forecasts suggest they are unlikely to go up again this year, despite improving economic data.

Until Britain's departure from the European Union becomes much clearer, markets are expecting the Bank of England to stay put at 0.75 per cent.

Bank of England governor Mark Carney has also said the central bank would be powerless to intervene under the worst Brexit scenarios.

Mr Carney warned that under a no-deal Brexit UK house prices could be 35 per cent lower than they would otherwise have been, while GDP would decline and unemployment rise.

The governor said, unlike in the period immediately after both the financial crisis and the referendum vote in 2016, the Bank of England couldn’t cut interest rates to stimulate economic activity.

Instead, he said, interest rates would likely rise in order to prevent sterling falling further.

3) FCA goes public

The FCA's senior management dusted off their tin hats and took to the stage to field questions this week.

The regulator's annual public meeting took place and the FCA's executive team fielded almost two hours of questions.