Closer to home, the High Court’s ruling over a landmark Sipp case dominated the headlines while further warnings were sounded over the state of the UK’s economy post-crisis.
1 Carey triumphant
The long-awaited High Court case involving Carey Pensions was concluded this week when Carey emerged triumphant after the claim against it was dismissed on all grounds.
It centred on a Sipp provider's responsibility for the investments accepted on an execution-only basis. The judge ruled the claimant’s execution-only contract meant Carey was not responsible for the failed investments.
Any clarity the case brought for the Sipp world was short-lived, however, when the FCA muddied the waters with warnings that it expected Sipp providers to continue assessing any non-stand investments for suitability.
2 Dividend drought
Income investors took a further blow this week when the government changed the rules of its coronavirus loans for large businesses, meaning those borrowing cash were banned from paying out dividends to shareholders.
Other changes included that borrowers could not pay any cash bonuses or award any pay rises to senior management, including the board, and companies now face limits on share buy-backs during the period of the loan.
The rule change came as the government increased the maximum loan size available under the scheme from £50m to £200m.
3 'Faceless' providers
Advisers told FTAdviser they are battling a declining level of service from providers, which left them scrambling for answers from “faceless” companies and often resulted in frustrated clients and lengthy delays.
Gripes included blunders that left the adviser looking as if there were “passing the buck” and call centre staff with insufficient knowledge to deal with problems effectively.
Advisers pinned the blame on a falling number of “reps” and cost cutting, while providers said the shift was due to the rising use of technology.
4 Sunak warns
Chancellor of the exchequer Rishi Sunak warned this week the UK is facing a “severe recession, the likes of which we have not seen” as a result of the lockdown measures set up to curb the coronavirus.
Mr Sunak was speaking at a Lords economic affairs select committee when he said once again that the government measures would not be able to “protect every job and every business”.
He said: “This lockdown is having a very significant impact on our economy and we’re likely to face a severe recession, the likes of which we haven’t seen."
5 Green light
The government’s controversial changes to its off-payroll working rules were given the green light this week to come into force in April 2021, despite widespread calls for the reforms to be delayed by at least two years.
The changes, which would see the IR35 rules extended to the private sector, were scheduled to come into effect in April 2020 but were postponed due to the coronavirus crisis.
This gave campaigners hope the rules would be scrapped entirely or postponed further, but MPs this week failed to vote on a relevant amendment and put the changes on track for April 2021.
imogen.tew@ft.com
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