Large areas of the country suffered once again this week as windy and rainy weather continued to pelt already flooded towns and villages.
Meanwhile, the City watchdog put up the floodgates to preempt a wave of advisers applying to leave the market as their defined benefit advice came under scrutiny while Vanguard caused a storm with its ‘low cost’ pension offering. It’s time for the week in news.
1 Blocked de-authorisations
Advice firms whose DB transfer work is under the watchdog’s microscope are being blocked from cancelling their authorisation with the regulator, FTAdviser revealed this week.
The watchdog began its crackdown on unsuitable pension transfer advice, but now the Financial Conduct Authority has confirmed those firms which are currently fielding pension transfer supervision enquiries from the regulator are having any application to cancel their authorisation temporarily blocked.
It is understood the FCA will consider the applications once its enquiries are completed. In the meantime, refusing the requests keeps a firm in the financial industry and allows consumers who have been misadvised to approach it for redress if appropriate.
2 False certification
Data from the Chartered Institute for Securities & Investment showed the number of people found to be falsely claiming the status of certified financial planner had more than doubled last year.
A hefty 103 individuals had falsely claimed certified status in 2019 — a 106 per cent increase on the 50 purporting to be certified financial planners in 2018.
According to Jacqueline Lockie, head of financial planning at the CISI, the main reason for the jump was a number of people falsely stating they were certified on various adviser search websites.
3 Warning sounded
In what resulted in a busy week for the FCA, the financial regulator warned the growing trend of consolidation could be incentivising advisers to recommend products with ongoing fees in a bid to boost revenue streams.
The FCA said: "Consolidator valuations of advice firms are based on recurring revenue streams, which incentivises IFAs to recommend ongoing advice if they are planning to sell their business in the near future."
It added there was a “clear trend” for advised consumers to choose drawdown more often than annuities, compared with non-advised consumers.
4 Value rules cause a stir
The FCA’s new value rules, which mandate fund houses to carry out an annual assessment of whether they provide value, caused a few stirs this week.
Aviva Investors cut the fees on a range of active and passive funds — five in total — by as much as 11 basis points as a direct result of the requirement to assess their value for money.
Meanwhile experts predicted the rules would cause fund houses to stamp out the commission paid to advisers via funds in legacy share classes.
5 Vanguard unveils new Sipp
Investment giant Vanguard entered the self-invested personal pension market with the launch of a ‘low cost’ pension offering this week — something the industry has been waiting for since May 2017.