Your IndustryOct 19 2018

Budget bingo and Fos reviews: the week in news

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Budget bingo and Fos reviews: the week in news

Just when you thought it was safe to come out of your bunker, it turns out a member of the Royal Family is pregnant, meaning endless coverage of nothing in particular.

Before you stock up on more tinned goods and return to the comforting darkness of your underground lair, let's get through the week in news.

1) Budget bingo

It's the time of year when everyone's favourite hobby - guessing what the Chancellor of the Exchequer will do in his Budget - reaches fever pitch.

This year there seems to be a lot of speculation about changes to the annual allowance and the lifetime allowance. This could easily be based on fact but could just as well be complete nonsense.

Either way, Royal London has predicted a cut to the annual allowance from the current £40,000 to £35,000 or £30,000.

As the government plans to provide an extra £20.5bn funding for the NHS by 2023 to 2024, pension tax relief has also been viewed as one of the likely targets of cuts in the next Budget.

2) Review gets a bad review

There have been a lot of reviews going on at the Financial Ombudsman Service, so it's hard to keep track of who's reviewing what and when.

But this week Nicky Morgan, the chairman of the Treasury select committee criticised the Fos's proposed case review.

She said the review placed "too much emphasis on process" and did not attempt to find out whether the correct decision was made by an ombudsman.

The Fos has agreed to review cases made during the early stages of its reorganisation in 2016 as part of the independent review which was carried out earlier this year.

It has agreed to commission Deloitte to carry out a review into a sample of cases against "the relevant controls and standards" and those which do not meet those standards will be reviewed again.

3) Walking with dinosaurs

Financial advice firms have been told by the regulator to consider using the new senior manager rules to clear out sales dinosaurs from management.

David Blunt, head of conduct specialists at the FCA, said financial advice businesses need to start getting ready for the Senior Managers and Certification regime applying to them from December 2019 onwards.

Speaking at a City & Financial conference this week, he said advice businesses should look at how some banks used the rules to clear out bosses who were no longer fit for 21st century business.

4) Verdict TBC on TVC

Several financial advisers, alongside the regulator’s former technical specialist Rory Percival, have criticised the FCA's new transfer value comparator (TVC), claiming it is "misleading" and "unfair".

Under the new pension transfer rules, which have come into force on 1 October, financial advisers will have to provide their clients with a value of how much the benefits in their defined benefit (DB) scheme would cost today in the open market, which is the TVC.

This will be included in the appropriate pension transfer analysis, or Apta, which will replace the current transfer value analysis (Tvas).

Financial advisers are particularly concerned about the discount rate used in the calculation.

5) Pension fund manager guilty of stealing £1m

A pension fund manager at one of the richest authorities in the UK has been found guilty of stealing nearly £1m from a council employee retirement pot to buy a new house and car.

Ian Woodall, 47, tricked colleagues into signing off payments from the £1bn pension fund by disguising them as investments.

Woodall illegally siphoned off £924,841 from Westminster City Council, between 2009 and 2012, while employed as the pension fund manager.

He moved the cash into overseas bank accounts and then back into the UK.

Woodall used the money to buy cars, pay off tax bills and to refurbish his new home, Southwark crown court heard this week.

damian.fantato@ft.com