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This week’s blog reflects on some of the key developments in the financial services and investment world, drawing insights from major recent events. From the PFS National Conference in Manchester to the impact of the US election and the resilience of the Magnificent Seven stocks, the focus is on understanding trends and their implications for advisers and investors alike. Written by Paul Kenworthy, this post highlights both technological advancements and market dynamics shaping our industry.
On 12th November 2024, Amy North Nicola Porter, and I attended the Personal Finance Society National Conference in Manchester. This event brought together industry professionals, providers, and innovators to share insights and shape the future of financial services. Among the standout speakers was Abraham Okusanya, Founder and CEO of Timeline, whose insightful session focused on “Maximising Client Success: Building a Future-Ready Tech Stack for Financial Advisers.”
Using efficient and integrated technological solutions not only enhances operational efficiency for advisers but also significantly improves the overall client experience. The ultimate goal, he emphasised, is to achieve better client outcomes through streamlined, innovative systems.
A key highlight of his presentation was the discussion around Timeline‘s new Platform 3.0. This innovative system is designed to work seamlessly with Timeline’s existing suite of tools, including letters of authority, fact-finding, cash flow modeling, and fund analysis. Abraham described how Platform 3.0 represents a state-of-the-art approach to managing the entire advice process, ensuring that advisers can deliver a more efficient and effective service to their clients.
As regular readers of this blog will know, we have been following the US election closely over the last few months to see how the outcome might affect the markets.
Donald Trump was elected the 47th President of the United States, securing a majority of 312 electoral votes compared to Kamala Harris’s 226.
It appears that President Trump’s victory will bring positive news for stocks and shares, while government bonds are expected to fall (at least in the short term).
In their latest market update, M&G Wealth made the following predictions:
Summing up their views, M&G Wealth stated the following:
“We think the outlook for government bonds is negative with Trump in the White House. Trump will continue to borrow, and the debt trajectory will worsen compared to Vice President Kamala Harris’s policies. If Congress is divided, spending plans may be more limited.
While elections and policy matter, the economy and business cycle are more important to market performance in the long run. With the election concluded, we expect attention to return to assessing the outlook for company profits, the global economy, and inflation.”
Source: M&G Wealth
The Magnificent Seven stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) experienced a fall of around 17% in August due to concerns about the sustainability of their spending on AI. This led to a significant sell-off.
However, these stocks have quickly recovered and are once again achieving positive performance.
In his recent market update, Guy Monson from Sarasin & Partners stated: “An index of MAG7 stocks tumbled 17% from its peak in August, following an impressive 37% gain earlier in the year, while US equity volatility nearly quadrupled.
Yet, just six weeks later, these same stocks had clawed back roughly three-quarters of their losses, and volatility had eased. The rebound was driven by the realisation that, despite their towering valuations – MAG7 stocks now account for 28% of the S&P 500’s capitalisation – these companies deliver profits, cash flow, and R&D spending in nearly equal measure. Unlike the dot-com bubble of 1999-2002, today’s AI-linked stocks are underpinned by robust earnings and extraordinary cash flow.”
It appears that the Magnificent Seven will continue to dominate the markets for years to come. We will keep a close eye on these developments and provide regular updates.
As we look back on a week filled with valuable insights and market-shifting events, it’s clear that innovation and adaptability remain critical for success in financial services. Whether through embracing cutting-edge technology like Timeline’s Platform 3.0 or navigating the ever-changing global markets, staying informed and proactive is key. We’ll continue to monitor these developments and bring you regular updates to support informed decision-making in this fast-evolving landscape.
Welcome to this month’s edition of Specialised Investments Simplified! This November, we’re diving into the evolving landscape of specialised investments, with insights on ESG-linked innovations, disruptive ETFs, collateralised loan obligations (CLOs), and the persistent dangers of crypto fraud.
Environmental, Social, and Governance (ESG) investments have become a cornerstone of sustainable financial strategies. A standout example is Société Générale Private Banking’s Cristal Solidaritéstructured product, a 10-year initiative integrating social and environmental impact into returns. By allocating a portion of investment gains to philanthropic causes, it demonstrates how structured products can align profitability with purpose.
In private equity, ESG-linked subscription lines are transforming financing approaches. These innovative loans align funding structures with measurable sustainability KPIs. For example, Bridgepoint Credit rewards diversity in management teams and incentivises renewable energy transitions.
However, navigating ESG investment products comes with its challenges. Financial advisers must contend with varying global standards, ever-changing regulations, and the need for adaptable KPIs. Tools such as Bridgepoint’s ESG framework and third-party certifications are becoming essential in ensuring credibility.
💡 Advisory Opportunity: Looking to include ESG investments in your advisory services? We Complement provides guidance and resources to integrate sustainable solutions into your practice effectively.
Innovation in the financial sector often comes with risks, as illustrated by a recent UK case involving a £1.5 million crypto fraud. Using professional websites and cold calls, two fraudsters duped over 65 victims with promises of high returns.
The Financial Conduct Authority (FCA) has been at the forefront of combating such scams through initiatives like ScamSmart, which offers tools for identifying fraudulent schemes. Steve Smart of the FCA advises:
“If you’re contacted out of the blue about an investment opportunity that sounds too good to be true, then it probably is. If in doubt, don’t invest.”
For financial advisers, staying informed about emerging scams and educating clients is crucial. Building awareness around resources like ScamSmart can help protect your clients from becoming victims.
💡 Protecting Your Clients: Enhance your fraud prevention strategies with expert support from We Complement. Let us help you build trust and security in your advisory services.
Exchange Traded Funds (ETFs) have redefined traditional investment strategies and are now challenging the dominance of structured products. Buffered ETFs, which provide downside protection, and covered-call ETFs, which offer income generation, are prime examples of this innovation.
Matteo Andreetto of State Street Global Advisors predicts a future where structured product benefits, such as capital protection, will be fully integrated into ETFs. These products promise not only cost efficiency but also enhanced transparency, making them attractive alternatives for wealth managers and financial advisers.
With structured product issuance reaching $80 billion annually in the US and Europe, the emergence of bespoke ETFs is a sign of adaptability in the financial sector. These tailored solutions offer financial advisers a way to meet client-specific needs more effectively.
🔗 Discover the future of ETFs
State Street Global Advisors gears up for new ETF disruption
💡 How We Can Help: Explore ETF trends with We Complement, and learn how to incorporate these solutions into your client portfolios.
Collateralised Loan Obligations (CLOs) are gaining traction in Europe, marked by the debut of the Fair Oaks AAA CLO ETF. While CLOs have a strong foothold in the US, where they attracted $8.3 billion in inflows during the first half of 2024, their complexity has historically limited their reach in Europe.
CLOs pool corporate loans into tranches, offering varying levels of risk and return. Despite perceptions of complexity, AAA-rated CLO tranches boast an unblemished record, with no defaults since their inception in 1997.
The ETF structure makes CLOs more accessible to financial advisers and institutional clients by offering liquidity, transparency, and lower minimum investment requirements.
🔗 Learn more about CLO ETFs
Europe’s first collateralised loan ETF listing overcomes concerns
💡 Empower Your Practice: Interested in introducing CLOs to your offerings? Let We Complement guide you through the nuances of these sophisticated asset classes.
The digital finance revolution continues to expand, with Hong Kong’s Victory Securities receiving approval to market virtual asset-linked structured products. As the first broker licensed by the Securities and Futures Commission (SFC) for such offerings, Victory Securities caters exclusively to professional investors, signalling a growing regulatory focus on high-net-worth clients.
Elsewhere, UBS Asset Management has launched a tokenised investment fund, showcasing how blockchain-based assets are reshaping the investment landscape. Tokenisation offers significant potential to improve liquidity, transparency, and efficiency in traditional finance.
🔗 Stay informed about digital asset trends here.
From ESG-linked investments to ETFs and digital assets, navigating the complexities of specialised products can be daunting. That’s where We Complementcomes in. We partner with financial advisers to simplify investment strategies, empower your team, and help you deliver exceptional client results.
📧 Get in Touch
💡 Let’s Collaborate: Ready to expand your knowledge and enhane your practice? Contact us today to see how we can support you!
Welcome to the November edition of TechTalk from We Complement, where we bring you the latest updates in UK financial services. This month, we’re covering Scottish Widows’ new income protection offering on Iress, Intelliflo’s latest estate planning partnership with Estgro, and Close Brothers Asset Management’s innovative partnership with SEI. These developments highlight the industry’s rapid evolution toward more streamlined, client-focused solutions.
Scottish Widows has just expanded its income protection (IP) offerings on Iress’s widely-used Exchange platform, enhancing its line-up of products available to financial advisers. “The Exchange” enables UK advisers to compare and source life insurance, critical illness cover, income protection, and other insurance products all in one place. This addition reflects Scottish Widows’ commitment to financial resilience and their goal to make IP products more accessible.
Rose St Louis, Scottish Widows’ Protection Director, explained, “Our new IP product helps people prepare financially in case they’re unable to work. By working with tech partners like Iress, we’re making it easier for advisers to provide clients with efficient, streamlined solutions.”
Iress’s Global Head of Product for Sourcing, Jacqui Durbin, expressed enthusiasm for the collaboration: “As long-term partners, we’re excited to help Scottish Widows expand into the Income Protection market and to support brokers with a wide range of products.”
Read more about the partnership here.
Intelliflo is helping advisers prioritise generational wealth planning through a new partnership with estate planning tech provider Estgro. Estgro’s tools integrate seamlessly with Intelliflo’s platform, giving advisers access to features like the “estate health check,” which pulls client data and offers tailored recommendations for wealth transfer and inheritance tax strategies.
With Estgro’s accredited network, advisers can digitally refer clients to trusted legal partners or manage beneficiary engagement early on, ensuring better protection for family portfolios.
Richard Wake, Chief Customer Officer at Intelliflo, said, “This integration is a key addition to our partner ecosystem. By bridging financial and legal services, advisers can now provide truly holistic advice.”
Dave Newick, Estgro’s CEO, added, “With £5.5tn set to pass between generations over the next 30 years, this partnership helps advisers prioritise legacy planning, safeguarding both client assets and business futures.”
Estgro – Estate Planning Software for financial adviser
Close Brothers Asset Management has entered into a tech partnership with SEI, choosing SEI’s Wealth Platform and Data Cloud as core components of its growth strategy. SEI was selected after a detailed selection process and will work alongside Close Brothers to improve technology, data, and operational capabilities within the firm.
Gregg Clarke, Close Brothers Chief Operating Officer, said, “This partnership with SEI is a significant step in supporting our strategy and delivering consistent high-quality service for our clients.”
Additionally, Close Brothers will adopt Objectway’s Portfolio Management Solution and will use Winterflood Business Services (WBS) for order-execution activities. Some Close Brothers employees will also join SEI’s operations team, reinforcing the collaboration and future growth plans.
Jim London, CEO of SEI Investments Europe, expressed his excitement for the partnership: “We’re thrilled to work with Close Brothers to provide them with a full suite of tech, data, and operational solutions that align with their growth ambitions.”
These latest developments are a testament to the drive for innovation within the UK financial sector. At We Complement, we’re here to support you as these changes unfold. For more insights or to see how our services can help your business adapt, reach out to We Complement. Let’s work together to keep your business ahead.
Welcome to the November edition of our regulatory roundup, covering the latest in enforcement actions, industry developments, and updates essential for financial conduct and compliance. This month’s focus is on the administration of PSG SIPP, fines related to customer treatment issues, insights on workplace culture, and new FCA action against “finfluencers” on social media. These updates signal crucial areas of regulatory focus and offer pointers for firms aiming to stay aligned with the latest standards.
PSG SIPP Limited, an FCA-authorised provider of self-invested personal pensions (SIPPs), has entered administration. All SIPP schemes managed by PSG, except for Unity SIPP, have been transferred to Alltrust Services Limited (Alltrust), a regulated operator. PSG has also exchanged contracts with another regulated SIPP operator, London and Colonial Services (LCS), for the transfer of Unity SIPP. During this transition, Unity SIPP customers will be supported by Alltrust for a limited period, maintaining their ability to contribute, withdraw, and make investment decisions as usual. LCS and Evelyn Partners will later contact customers to explain next steps for their pension funds, ensuring continuity and security of service.
The FCA has fined TSB Bank plc £10.9 million for failing to adequately support customers in arrears, which led to the risk of unaffordable repayment plans. TSB’s incentive schemes and inadequate training for staff created a risk of prioritising targets over truly understanding individual customer circumstances, a situation particularly harmful to vulnerable customers. Following an independent review ordered by the FCA in 2020, TSB implemented a corrective programme costing £105 million and worked with the FCA to address these shortcomings.
Read the key findings here
The FCA’s recent workplace culture survey, which reviewed over 1,000 firms, revealed an increase in reports of non-financial misconduct, particularly in areas such as bullying (26%) and discrimination (23%). Notably, a significant portion of concerns fell under the “other” category, illustrating the broad spectrum of conduct issues affecting workplaces. While a higher number of reports may indicate a culture where employees feel encouraged to speak up, the FCA stresses the importance of firms benchmarking their reporting and investigative processes to foster a more transparent culture. Trade associations will play a key role in helping to coordinate industry-wide improvements.
Culture and non-financial misconduct survey – findings
The FCA has begun a crackdown on social media “finfluencers” – influencers promoting financial products without proper regulatory oversight. The FCA is investigating twenty individuals under caution and has issued 38 alerts against accounts potentially promoting unlawful services. With many young people following and trusting finfluencers, the FCA stresses that they must verify that any products they endorse meet legal standards, ensuring they don’t inadvertently put their followers’ finances at risk. The FCA’s InvestSmart page provides practical resources to help consumers make informed financial decisions.
FCA probes 20 ‘finfluencers’ over illegal financial product promotion
As these updates highlight, firms need to remain vigilant and proactive in managing transitions, supporting customers fairly, and fostering a healthy workplace culture. With the ever-increasing presence of social media in financial decision-making, there’s a clear call to action to maintain robust practices and safeguard consumer interests. Look out for our upcoming editions as we continue to track the latest developments in financial conduct and compliance.
Rachel Reeves has delivered her long-awaited first budget, and with it come significant changes that will affect individuals and businesses alike. As financial planners, it’s crucial to guide your clients through these changes, helping them understand the implications and adjust their financial strategies accordingly. Below are the key budget announcements relevant to financial planning, along with practical tips to assist your clients.
Key Budget Changes and Practical Tips
1. Capital Gains Tax (CGT) Rate Increase
2. Inheritance Tax (IHT) Threshold Freeze
3. National Insurance (NI) Contributions Increase
4. Minimum Wage Increase
5. VAT on Private School Fees
6. Abolition of the Non-Dom Tax Regime
7. Household Support Fund Extension
8. Freeze on Income Tax and NI Thresholds
9. Windfall Tax Increase
10. Flat-Rate Duty on Vaping and Increased Tobacco Duty
Your Trusted Partner
At We Complement, we understand the complexities that arise from budget changes and how they can impact your clients’ financial plans. We’re here to support you in guiding your clients through these transitions, ensuring they remain aligned with their financial goals.
If you have any questions or need assistance in implementing these strategies for your clients, please don’t hesitate to reach out. Our team is always on hand to help you navigate these changes effectively.
Contact us today!
Welcome to this month’s edition of Investments Matter, written by Paul Kenworthy, where we explore the key events shaping the financial markets. In this issue, we delve into the latest developments in the US, China, and the UK, examining their potential impact on investors. From the Federal Reserve’s unexpected interest rate cut and the upcoming US presidential election to China’s economic instability and the much-anticipated UK Autumn Budget, we provide insights into what these events could mean for your clients investments. Stay informed with our market analysis and expert perspectives as we navigate the evolving financial landscape.
The financial markets have performed well over the last few months, with both equities and bonds generally delivering positive returns. Below, I will discuss recent market events that may affect the markets in the coming weeks:
The US Federal Reserve recently announced a 0.50% cut to its benchmark interest rate, which was higher than the expected 0.25%. This was notable as it marked the first rate cut since the start of COVID-19 lockdown measures in March 2020.
The reduction contributes significantly to the formal target for interest rates in the US. In their statement announcing the rate cuts, the Federal Open Market Committee noted:
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated.”
The US Presidential Election, scheduled for Tuesday, November 5th, will almost certainly impact the markets (and quite possibly interest rates) in the short and long term.
Recent reports indicate that Kamala Harris is slightly ahead in the run-up to the election, but approximately 5.50% of voters have yet to decide whom they will support.
China’s Economic Instability
Chinese equities have been extremely volatile recently. A few months ago, they were performing well following a number of economic policy announcements made by the government. However, this performance could not be sustained, and equities have now begun to decline, with some falling as much as 10%.
In response, further measures were recently announced to stabilise the economy, including cuts to the reserve requirement ratio, policy rates, mortgage rates, and liquidity injections.
In a recent market update, IBoss Asset Management observed:
“While these new announcements are positive, they are not game-changing enough to suggest a sustained turnaround. However, they do signal the leadership’s understanding of the gravity of the situation, particularly in light of growing discontent over property valuations and general economic performance.
Source: IBoss Asset Management
Chancellor Rachel Reeves is set to deliver the Autumn Budget—Labour’s first in 14 years—on Wednesday, October 30th. She has warned that it will involve “difficult decisions.”
Some announcements have already been made. The winter fuel payment will be restricted to those receiving pension credit or other means-tested benefits, a decision that has drawn heavy criticism. Additionally, VAT will be added to private school fees from January 1st, and some private schools will lose business rates relief.
Rumours about possible budget announcements are making many investors nervous. Speculation includes potential increases in Capital Gains Tax, Inheritance Tax, and changes to pension taxation.
Many clients have been contacting their financial planners, worried that the government may reduce or even abolish the tax-free cash allowance from pensions. This has led to a significant increase in the number of people accessing their pensions prematurely.
The Financial Times reported that “a number of wealth managers told the FT they had contacted the Treasury to warn Chancellor Rachel Reeves that people were pulling their money out of their pensions early due to the ‘uncertainty.’”
Source: Financial Times
Times like this are when a financial planner can provide significant value to clients, helping to reassure them and advising against panic until official announcements are made.
We will closely monitor the Budget announcements and provide our thoughts and feedback in the coming weeks.
Welcome to the October edition of Specialised Investments Simplified! As the year winds down, now is an ideal time to assess new opportunities that could benefit your clients’ portfolios. This month, we’re diving into the potential of US mid-cap equities, exploring the strategic advantages of real estate debt, and examining the factors behind gold’s recent performance. Each of these investment themes offers potential avenues for adding value to your clients’ strategies, and we’re here to break down how.
With US mid-cap stocks trading at significant valuation discounts compared to large caps, now might be an opportune time for financial planners to consider adding exposure to this segment. Bob Kaynor, manager of the Schroder US Mid Cap fund, recently shared insights on why these companies—often referred to as the “heartbeat of the US economy”—are poised for growth. Given the current market environment, mid-caps offer a compelling blend of value and potential upside for client portfolios.
Key Considerations for Financial Planners:
For planners looking to diversify clients’ equity exposure or tap into US economic growth, mid-caps could be a valuable addition to portfolio strategy.
Listen to Bob Kaynor’s Interview on Mid-Cap Opportunities
Real estate debt can offer an attractive risk/return profile for clients seeking income without the responsibilities of direct property ownership. For financial planners, this asset class allows for tailored strategies that align with clients’ financial goals, risk tolerance, and time horizons.
Why Financial Planners Should Consider Real Estate Debt:
Incorporating real estate debt into a client’s strategy could be a savvy way to achieve diversification while still tapping into the property market’s potential returns.
Gold has gained 4.6% in September alone, driven by a weaker dollar and ongoing geopolitical tensions. For financial planners, gold remains a classic hedge against market uncertainty, with its role in portfolios serving as a buffer against volatility and economic downturns.
How to Position Gold in Client Portfolios:
With the final quarter of the year underway, now is the time to reassess client strategies and explore new avenues for growth and risk management. Whether it’s considering mid-cap equities for value opportunities, real estate debt for income generation, or gold as a protective hedge, this edition provides actionable insights to guide your planning.
Thank you for reading the October edition of Specialised Investments Simplified. We aim to support you in navigating the evolving investment landscape and achieving your clients’ goals. For deeper insights, check out the links below.
Stay informed and keep empowering your clients to make the most of market opportunities. See you in the next edition!
Welcome to the October edition of Tech Talk, where we bring you the latest tech updates designed to help financial advisers streamline their operations and elevate their client service. In this issue, we highlight new integrations, sustainability-focused tools, and cutting-edge services aimed at making financial planning more efficient and personalised.
Transact, a leading adviser investment platform, has launched an integration with fintech provider moneyinfo, aimed at simplifying the delivery of client documents. This integration automates the process of sending valuation reports, statements, and other key communications to clients, freeing up advisers from manual tasks and enhancing operational efficiency.
With more than 2,000 adviser firms using Transact, this collaboration marks another step in the platform’s commitment to improving adviser processes through advanced technology. By using Moneyinfo’s secure portal and app, advisers can now ensure documents are delivered automatically, safely, and efficiently, while also benefiting from features such as encrypted delivery and audit trails.
Tom Dunbar, Chief Development Officer at Transact, said: “Our mission is to make financial planning simpler for advisers, and a key part of that is improving the tech ecosystem available to them. By integrating with platforms like Moneyinfo, we’re helping advisers work smarter, not harder.”
Moneyinfo’s Managing Director, Tessa Lee, added: “Advisers have been asking for solutions to make their administrative tasks more efficient. This integration not only saves time but provides peace of mind, allowing advisers to focus on what matters most: their clients.”
Moneyinfo integrates with Transact to simplify document delivery
Etcho: Aligning Wealth with Values
As ESG becomes increasingly central to investment discussions, Etcho offers a fresh approach by focusing on what really matters to clients—their values. Rather than overwhelming clients with complex ESG metrics, Etcho helps advisers personalise the investment experience by aligning portfolios with individual sustainability preferences.
Etcho’s innovative platform allows advisers to:
Co-founded by Liall and Charlie, Etcho’s mission is to make sustainable investing straightforward and engaging. By prioritising storytelling and personalisation, advisers can increase client engagement, especially among the next generation, who want their portfolios to reflect their values.
Etcho’s vision is clear: “Less about ESG metrics, more about what resonates with clients’ personal values.”
Etcho Align wealth management to what clients truly care about
Standard Life UK has teamed up with pension-tracing platform Raindrop to help individuals find their lost pensions. With nearly 20% of those with multiple pensions admitting they’ve lost track of one or more pension pots, this free tool offers a practical solution.
Users simply provide the name of a previous employer and the timeframe they worked there—Raindrop’s technology does the rest. With the process typically taking between 4 to 6 weeks, a dedicated case manager provides updates throughout.
This new tool comes at a critical time, as an estimated 2.8 million pension pots in the UK, worth £26.6 billion, remain unclaimed. The collaboration aims to empower savers by giving them access to lost pension savings and helping them take control of their financial future.
Dean Butler, Managing Director of Retail Direct at Standard Life, emphasised the importance of tracking down pensions: “If you don’t know where all your savings are, planning for retirement becomes difficult. Our new pension-finding service removes these barriers and helps people regain control of their pension savings.”
Raindrop co-founder Vivan Shridharani added: “With more jobs and workplace pensions in the modern working world, the number of lost pensions will only increase. We’re proud to partner with Standard Life to offer a simple, effective way for individuals to track down and manage their pension pots.”
Standard Life and Raindrop launch revolutionary free pension tracing service
That wraps up this month’s Tech Talk. Stay tuned for more insights and tools to help you provide outstanding service to your clients!
Welcome to the October edition of Regulation Round Up!This month, Hannah Keane brings you the latest updates on regulatory changes and key developments in the financial services world. HMRC has issued new guidance on pension regulations in Newsletter 162, offering clarity on issues surrounding the abolition of the Lifetime Allowance. We also look at the significant £29 million fine imposed on Starling Bank by the FCA for financial crime control failings.
Additionally, we dive into a recent case from the Financial Ombudsman Service (FOS) that highlights the importance of robust client documentation in financial advice. Read on for more details!
When the Lifetime Allowance was abolished back in April, there were a few areas of legislation which weren’t completely clear. Just 2 days before the new rules were due to be implemented, HMRC published Pension Schemes Newsletter 158, which outlined some last-minute changes to legislation, as well as some areas that were still under consideration.
Last month, HMRC published Newsletter 162, which provides a long-awaited update on the areas that were still under consideration in April. They stated that they have considered the feedback they received on the draft regulations, and the final regulations will be introduced as soon as parliamentary time allows.
Newsletter 162 — September 2024
Starling Bank has been fined £28,959,426 by the FCA. According to the FCA, the bank repeatedly breached a requirement not to open accounts for high-risk customers, and also failed to implement proper anti-money laundering and sanctions processes.
The FCA state that Starling had grown massively between 2017 and 2023, but the measures the bank took to tackle financial crime “did not keep pace with its growth”.
The FCA initially reviewed the financial crime controls at Starling in 2021, as part of a review into financial crime controls at various challenger banks. During this review, the FCA identified some serious concerns, and imposed a requirement on Starling to restrict the opening of new accounts from high-risk customers until this improved. The FCA state that Starling failed to comply with this and “opened over 54,000 accounts for 49,000 high-risk customers between September 2021 and November 2023.”
As it’s been a bit of a quiet month for financial services regulation, I think this is a good opportunity to take a look at some recent decisions that have been made by the Financial Ombudsman Service.
FOS decisions can be really valuable reading for anyone who works in the financial planning world, and I recommend that all paraplanners, in particular, take a look at some recent decisions from time to time. You might find some of the decisions and the rationale given to be surprising. Regardless of whether you agree with the decisions made by the FOS, looking through their decisions gives a really interesting insight into the sort of things they look at when investigating a complaint. I’ve found this to be invaluable when writing suitability reports, and it helps you think critically about the processes and procedures that are in place where you work, and how they would be perceived by an external person.
The case I’m looking at today concludes with the complaint not being upheld. The investigator’s rationale for not upholding the complaint highlights the importance of making sure your files are robust, as a lot of the investigator’s rationale hinges on the research and KYC processes recorded by the adviser and their team.
In a nutshell, this case relates to a compliant made by a client who believes the advice given to him was unsuitable. His adviser recommended a pension transfer and consolidation exercise into a less expensive pension. The client was determined to be a ‘moderate’ risk investor, and the adviser recommended a fund in line with this. Around a year after the transfer took place, the client was unhappy that his pension had suffered a significant drop. He argued that he was invested inappropriately and raised a complaint.
When investigating this complaint, the FOS investigator based his decision on what was recorded in the suitability report, as well as the content of the fact find, and the attitude to risk and capacity for loss questionnaires on file. The investigator looked through the client’s answers to the individual questions that made up the questionnaires, and assessed whether these answers, when looked at alone and also when looked at together, could reasonably be accepted as supporting a moderate risk profile. In this case, the answers supported the adviser’s argument.
When a client completes a risk profile or capacity for loss questionnaire, it’s so important to make sure that all their answers add up. I’m sure we’ve all seen some questionnaires where certain answers seem to be totally at odds with other answers, or with the overall risk profile. In cases like this, it’s best practice to follow this up with the client and make a note of any conversations. This can make sure that the client really understands the implications of the risk profile they’ve chosen, and will also help make your file more robust.
Effective paraplanning has never been more crucial. At We Complement, our dedicated team of paraplanners is committed to providing comprehensive support, ensuring your financial strategies align seamlessly with current regulations and best practices. Whether you need assistance with documenting your CIP, paraplanning, or enhancing client communications, we’re here to help.
As the global conversation around sustainability intensifies, the role of financial advisers in supporting climate-positive initiatives becomes more crucial than ever. This month, our team had the opportunity to attend Goodstock, a pioneering event focused on sustainability and positive social impact. It brought together passionate individuals and thought leaders working to combat climate change, including those of us in the financial planning industry. In this edition of Investment Matters, Paul Kenworthy will be sharing insights from the event and exploring how Financial Planners can help bridge the gap between wealth and impactful climate solutions.
The first-ever Goodstock event was held on the 19th of September at Dynamic Earth in Edinburgh. Amy North and I were able to attend, and all I can say is that it was a brilliant event, full of people passionate about sustainability and making a positive difference in the world.
Firstly, I’d like to applaud NextGen Planners s for organising the event, and I look forward to attending more of their events in the future.
There were a number of great speakers and participants at the event, each with different ideas and philosophies but sharing one collective goal—combating climate change.
In this post, I’d like to highlight some points raised by Jack Chellman (Chief Project Officer at the Global Returns Project). He spoke about Green Philanthropy and explained the untapped potential for Financial Planners to work with high-net-worth clients who want to gift some of their wealth to help tackle the climate crisis.
One of the key issues raised in Jack’s speech is that many of these people don’t know where to turn when they want to make such gifts, and a number of Financial Planners are unable to assist their clients with these needs.
This is where the Global Returns Project comes in. They are creating systemic change to fund the highest-impact climate charities at unprecedented speed and scale. Their mission is to make high-impact climate philanthropy normal and easy in financial planning, investment management, and corporate social responsibility.
Clients are increasingly concerned about climate change and biodiversity loss. While sustainable investing is important, its overall impact is limited. Many critical climate solutions do not deliver financial returns.
Meanwhile, philanthropy offers fast and tangible climate impact, yet less than 2% of global philanthropy goes toward climate mitigation.
The Global Returns Project currently works with over 20 different client-facing Financial Planners, and this number will hopefully continue to grow. They can hold direct conversations with clients about the charities they support, or they’re happy for Financial Planners to facilitate these discussions.
Using a proprietary methodology, they have identified a portfolio of six different climate charities that clients can donate to. These charities are: Global Canopy, Rainforest Trust, ClientEarth, Whale and Dolphin Conservation, Blue Marine Foundation, and Trillion Trees.
These charities are reviewed regularly (at least every six months), and they will be replaced if they no longer meet the stringent criteria.
Donors can choose to support all of these charities or select a particular one if they prefer. 100% of the proceeds are passed on directly to the charities without any deductions. After making a donation, clients will receive impact reports from the charities every six months.
For large donations, the charities may provide specific literature detailing how those funds have been used and the positive impact they have achieved.
The Global Returns Project is doing valuable work in helping to mitigate the climate crisis, and we feel they can help bridge the gap between Financial Planners and clients who want to donate money for the good of the planet.
They allow you to have in-depth discussions with your clients about how they can make a positive difference, helping to demonstrate the value Financial Planners can provide.
At We Complement, we believe in aligning financial goals with positive global impact. As financial planners, it’s time we expand our role beyond just managing investments and start offering solutions that truly make a difference.
If you’re interested in exploring how Green Philanthropy can complement your financial services, get in touch with us today. Together, we can help your clients achieve their financial goals while contributing to a sustainable future.
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We Complement Limited registered in England & Wales under company number 13689379, ICO number ZB427271. Registered address: Old Brewery Business Centre, Castle Eden, Co. Durham, TS27 4SU.
