Articles

Welcome to this month’s Esoteric Products newsletter. December is proving to be an eventful time for financial and investment markets, with a host of new developments that could significantly affect wealth management strategies. From inheritance tax (IHT) implications to the evolving dynamics of venture capital and crypto, here are some of the most noteworthy updates.

UK’s Wealthiest Face Record IHT Bills Amid Policy Shifts

Recent changes in the UK Budget have brought inheritance tax (IHT) into sharper focus, with estimates suggesting that the country’s wealthiest could face bills exceeding £9 million. These changes primarily affect pension savers and farmers, among others, by tightening reliefs and exemptions. For those navigating estate planning, it is critical to evaluate strategies that reduce IHT exposure, particularly as we approach the implementation of new rules in April 2027. Read more here.

The latest adjustments highlight the importance of long-term planning. Tools like trusts, life insurance options, and charitable giving can help lessen tax liabilities. As we’ll explore below, new products and strategies are emerging to address these challenges.

Royal London’s Second Life Cover: A New IHT Planning Tool

Royal London has introduced a second life insurance option aimed at helping families tackle inheritance tax obligations. This innovative solution ensures a payout occurs only after the second policyholder’s death, offering a cost-effective way to manage substantial IHT liabilities. Explore more details here.

This product reflects a broader trend towards personalised financial solutions that cater to complex family dynamics and significant estates. Financial advisers should consider this as a key recommendation for clients with large assets who wish to protect their wealth for future generations.

Venture Capital Trusts: Unlocking Portfolio Potential

Venture Capital Trusts (VCTs) continue to stand out as a dynamic investment vehicle, offering significant tax benefits and the potential for high returns. Recent analysis highlights their growing appeal, particularly as traditional investment avenues face increased scrutiny. Learn more about VCTs here.

By investing in smaller, high-growth companies, VCTs allow investors to diversify portfolios while benefiting from tax reliefs. However, these vehicles are not without risks, including the inherent volatility of early-stage companies. For experienced investors looking to complement their portfolios, VCTs represent a compelling, albeit specialised, opportunity.

The Role of Active ETFs in Modern Portfolios

Active Exchange-Traded Funds (ETFs) are gaining traction, blending the low-cost benefits of traditional ETFs with active fund management’s potential for outperformance. Unlike passive ETFs, which track indices, active ETFs enable fund managers to pivot based on market conditions and emerging opportunities. Discover how active ETFs work.

Recent developments, such as Pictet Wealth Management’s decision to shift ETF coverage to active fund analysts, illustrate the growing interest in this space. As the investment landscape becomes increasingly complex, active ETFs offer a flexible and strategic approach for those seeking both growth and stability.

Budget Impacts on AIM Shares: What Investors Should Know

The UK Budget has also introduced changes affecting AIM (Alternative Investment Market) shares, a popular option for growth-focused investors. While AIM shares offer certain IHT reliefs and opportunities for high returns, the recent policy adjustments may alter their attractiveness. Read the full analysis here.

Investors should review their exposure to AIM shares, balancing the potential for tax-efficient growth against the risks associated with smaller, less liquid companies. Diversification and a clear understanding of the new rules will be critical for maintaining robust portfolios.

Gold ETF Flows: November 2024 Trends

Gold continues to shine as a haven amid market volatility, with November data revealing net inflows into gold ETFs. This trend reflects investors’ growing preference for stable assets during uncertain times, particularly as central banks adjust monetary policies globally. Check out the latest gold ETF data.

Gold ETFs offer an accessible way to gain exposure to this precious metal without the challenges of physical ownership. For those seeking to hedge against inflation or diversify their portfolios, gold remains an essential component.

Deregulation and Crypto: Big Changes at the SEC

The cryptocurrency landscape is poised for transformation as the US Securities and Exchange Commission (SEC) embraces deregulation and innovation. These changes aim to foster growth within the crypto industry, signalling a shift in how digital assets are governed. Find out what’s changing at the SEC.

For investors, this opens up new opportunities but also demands vigilance. The regulatory environment will play a crucial role in shaping the future of crypto investments, making it essential to stay informed and adaptable.

The Case for CLO Equity in Diversified Portfolios

Collateralised Loan Obligation (CLO) equity is gaining attention as a valuable complement to private equity investments. Offering attractive yields and a different risk profile, CLO equity provides a unique avenue for diversification. Learn more about the benefits of CLO equity.

This asset class is particularly appealing to experienced investors seeking to balance the high growth potential of private equity with the steady income streams associated with debt instruments. As with any complex investment, professional advice is recommended to navigate this space effectively.

As 2024 draws to a close, the financial landscape is marked by rapid changes and emerging opportunities. Whether it’s adapting to new IHT rules, exploring innovative investment vehicles like active ETFs and VCTs, or staying ahead of shifts in the crypto market, now is the time to reassess strategies and align portfolios with future goals.

We encourage our readers to reach out for personalised guidance tailored to their clients unique financial circumstances. Here’s to navigating 2025 with clarity, confidence, and success!

Welcome to this month’s edition of the Tech Talk Newsletter! As always, we’re keeping you updated on the latest tools, insights, and news to help you stay ahead. December might be a quieter month for some, but our industry is buzzing with updates, especially around Consumer Duty and new innovations in financial advice technology. Let’s go!

New Diagnostic Tool to Tackle Consumer Duty in 2025

If you’ve been keeping an eye on the Financial Conduct Authority’s (FCA) Consumer Duty regulations, you’ll know the landscape is set to shift again in 2025. To help firms get ahead, the Consumer Duty Alliance (CDA) has partnered with The Consumer Duty Diagnostic to launch a new diagnostic tool.

This isn’t just another compliance checklist—it’s a dynamic tool designed to help firms benchmark their progress across critical areas of Consumer Duty, like cultural transformation, outcome testing, and client advocacy.

Keith Richards, CDA’s CEO, explained the reasoning behind this launch:

“The FCA is increasingly using data requests to evidence compliance with the duty and has signaled plans for random spot audits during 2025.”

The tool includes ten subject areas and 50 diagnostic questions. Answering these provides firms with a personalised report, offering actionable recommendations to plug any gaps, meet regulatory standards, and even identify potential growth opportunities.

The focus here isn’t just compliance—it’s outcomes. Richards made a great point about how the shift from prescriptive tick-box exercises to outcomes-driven assessments is already proving beneficial:

“Good consumer outcomes are leading to good business outcomes across the sector.”

But it’s not all smooth sailing. With a record number of Section 166 notices issued this year, firms are under pressure to tighten their practices. The CDA tool is a smart way to ensure you’re ready for whatever the FCA throws your way.

Consumer Duty Diagnostic

Making Financial Advice Accessible with LifeStage

Let’s switch gears to something super practical. WPS Advisory Limited, in partnership with Moneyhub , has launched a new app called LifeStage —and it’s a game-changer.

LifeStage was created to make financial advice more accessible and affordable. It’s designed to help users get a clear picture of their finances, from income and spending to savings, debts, pensions, and property. All of this is presented in one user-friendly dashboard, giving people the tools they need to make informed decisions.

Natalie Oliver, Head of Strategy at WPS Advisory, summed up the app’s mission perfectly:

“Our aim is to empower customers to manage their finances today, tomorrow, and in the future, while maintaining exceptional value for money.”

The app integrates with tools like:

• Guiide: A pension modeling tool that helps users create and manage retirement plans.

• Legado (joinlegado.com): A digital vault for securely storing and sharing important documents.

• SmartSearch: For instant anti-money laundering checks, ensuring compliance with regulations.

One feature I love is the data-sharing capability through Moneyhub’s sharing centre. Users can share their financial data with advisers, ensuring their advice is always based on real-time, accurate information. It’s a win-win—clients get tailored advice, and advisers get a clearer picture of their client’s financial situation.

Dan Scholey, Chief Commercial Officer at Moneyhub, described the app as a response to growing demand for workplace financial advice, especially in light of the FCA’s advice guidance boundary review. He also highlighted a key insight:

“Poor employee financial health impacts mental health, productivity, and retention. Employers have a big role to play in supporting their workforce’s financial well-being.”

The Problem with Platform Service: Parmenion’s Report

Now onto an issue that’s causing headaches across the industry—poor platform service.

Parmenion ’s latest report, The Impact of Poor Platform Service, created with the the lang cat, revealed some staggering statistics. Did you know that 95% of advisershave had to apologise to their clients because of poor platform service this year? That’s up from 2023 and a clear sign that something needs to change.

One adviser quoted in the report called the service they’ve experienced “unbearable,” citing long delays, lost records, and a lack of knowledgeable support. It’s no wonder 45% of advisersswitched platforms in 2024 due to frustration.

Platform transfers are a particular pain point:

• 90% of advisers associate transfers with negative experiences.

• Over 20% reported delays exceeding six months.

• Nearly 10% have waited more than a year for a transfer to complete.

These delays and inefficiencies are more than just an annoyance—they’re impacting productivity and eroding trust. Martin Jennings, Parmenion’s CEO, didn’t hold back in his assessment:

“In the new era of Consumer Duty, this year’s report is a disappointing read. Poor platform service is linked to a double-digit loss of productivity in advice firms.”

One proposed solution is for providers to publish standardised transfer data to improve transparency and accountability—something 89% of advisers support. Meanwhile, 75% of firms now favour cash transfers for their predictability and speed.

Steven Nelson, Insight Director at the lang cat, put it bluntly:

“Platforms must embrace technology and improve their processes—or advisers will vote with their feet, as we’ve already seen this year.”

As we wrap up 2024, it’s clear the industry is facing a mix of challenges and opportunities. From the evolving Consumer Duty landscape to the rise of tech-driven financial advice, the key takeaway is this: staying ahead means embracing innovation and focusing on outcomes.

At We Complement, we’re passionate about keeping you informed and equipped to handle whatever comes your way. If you’d like to learn more about any of the tools or reports mentioned, or if there’s something specific you’d like us to cover next month, let us know—we’d love to hear from you!

Wishing you all a productive and peaceful end to the year.

The regulatory landscape never stays still, and this month has been no exception. From shaping the future of customer redress to addressing financial crime and improving operational resilience, the FCA has been busy setting clear expectations for firms. These updates are a reminder of the ever-growing importance of staying ahead in compliance while also delivering the best outcomes for customers.

Here’s a quick breakdown of this week’s most significant developments and how they might impact your business.

Have Your Say: Modernising the Customer Redress System

The FCA wants your input on how to improve the way the Financial Ombudsman Service handles complaints—especially mass complaints. They’re looking at how the system could be made more efficient, effective, and fit for the future.

This is a great opportunity to share your thoughts and help shape the way complaints are managed going forward.

👉 Find out more and share your views.

Bereavement Handling: FCA Pushes for Better Practices

Losing a loved one is hard enough, and the FCA has called on firms to step up their game when it comes to supporting bereaved customers. They’ve shared examples of best practices and reminded firms to handle these situations with care, empathy, and efficiency.

It’s a good moment for everyone to reflect on how their processes measure up and make improvements where needed.

👉 Check out the FCA’s recommendations.

Metro Bank Fined £16M for Financial Crime Failings

Metro Bank is facing a £16 million fine from the FCA for serious shortcomings in its financial crime controls. The regulator flagged issues with how the bank assessed risks and monitored transactions, which fell short of the standards expected.

This serves as a strong reminder to all firms to keep their financial crime prevention measures sharp and up to date.

👉 Read more about the fine and what it means.

FCA Emphasises Operational Resilience

The FCA is urging firms to bolster their operational resilience, with a regulatory deadline of March 2025 to ensure compliance. This includes identifying critical services, setting impact tolerances for disruptions, and testing systems to prepare for events like cyberattacks or system outages.

Recent incidents, such as the CrowdStrike outage in July 2024, have highlighted vulnerabilities in financial infrastructure, emphasising the need for proactive resilience planning. Firms must act now to address gaps, ensure robust recovery measures, and meet the FCA’s expectations for safeguarding consumers and market integrity.

👉 Learn more about operational resilience requirements here.

Need Support Staying on Top of Regulatory Change?

Keeping up with the latest regulatory developments can be a challenge, but you don’t have to do it alone. Our Adviser Support Services can help lighten the load. Whether you need support with investment research, paraplanning, or just want a partner to help you stay ahead, we’re here to help.

Get in touch today to learn how we can make your life easier.

Have a great weekend!

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.

Timeline and Platform 3.0

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.

US Election

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:

• Stocks: US equities are likely to perform well over the long term, due to potential reductions in corporation tax.
• Government Bonds: These are expected to perform poorly in the short term because of higher levels of unfunded borrowing by the new government, which will push up bond yields and reduce prices.
• The US Dollar: The dollar is expected to strengthen against other currencies, which could lead to reduced performance for emerging market stocks and bonds. However, it might improve the performance of US stocks for UK investors due to sterling-dollar movements.

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

Magnificent Seven

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.”

Source: Sarasin & Partners

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.

The Rise of ESG-Linked Investments

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.

Crypto Fraud: A Sobering Reminder

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.

ETFs Disrupting Structured Products

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: Liquidity Meets Complexity

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.

Digital Assets in Structured Products

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.

How We Complement Supports Financial Advisers

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

• Email: hello@wecomplement.co.uk

💡 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 Launches Income Protection Product on Iress’s Platform

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 Partners with Estgro to Streamline Estate Planning

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 and SEI Partnership Brings New Tech Capabilities

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 Enters Administration

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.

FCA Fines TSB £10.9 Million for Failing Customers in Financial Difficulty

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

FCA Workplace Culture Survey Highlights

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

FCA Targets Unregulated “Finfluencers”

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

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:

US Interest Rate Cut and Upcoming Election

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

UK Autumn Budget

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.