Some welcome news for IFAs in terms of the FSCS scheme, as costs rise for everyone and everywhere.
The Financial Services Compensation Scheme (FSCS) has 'reduced' its annual levy to £625m due to a fall in expected claims.
In November 2021, the FSCS forecast the levy for the year 2022/2023 would be £900m.
Good news is that the fall appears to involve fewer complex pension case claims.
Less good news is that the FSCS wants an overhaul of the levy amount in the belief that the maximum isn’t providing enough compensation in the wake of many failures.
If the FSCS is listened to and without an overhaul of the scheme in terms of moving the system significantly towards 'polluter pays', then it could see bills rise long term. Not a prospect that will be welcomed by advisers.
Core Origo services will remain free in spite of the change of ownership, its new PE owners have said.
Private equity firm Vespa Capital announced it had purchased Origo on 20th May.
The Chancellor of the Exchequer Rishi Sunak unveiled a £21bn support package for energy consumers. North Sea oil and gas production faces a 25 per cent windfall tax, but with concessions around investment. It did fail to dent energy companies' share prices. Companies have complained about the indefinite nature as the tax will end when profits normalise.
As the tax only raises around £5bn a year, it is clear that the bulk of the support comes from the bond market.
The financial regulator is instigating reforms which it says will attract growth firms to the UK stock market.
Currently, firms listing in the UK have to decide whether to meet the criteria of either the premium or standard segments, which both have different ongoing requirements.
The new proposals would mean companies need to meet one set of criteria, and could then opt-in to a further set of obligations.
There are probably two almost parallel debates here. One is that since the financial crisis the UK has declined in terms of IPOs from around 40 per cent to 5 per cent. You could argue that is a collapse. The rules have, it is argued not been updated for decades.
The alternative argument is that there have been quite significant changes including lowering the free float levels and ultimately lowering the rules can lower the quality and certainly tilt the balance against small shareholders and even passive investors. (Debate and discuss)
Proposed new rules on how pension pots should be projected to retirement could lead to ‘perverse’ results, according to consultants LCP.
This sentence is key – “In order to facilitate the government's requirements for providing estimated retirement incomes, the Financial Reporting Council has proposed pension schemes and providers should be required to project current pension pot values to retirement using a single, standardised, method”.
There are concerns in particular about assumptions about returns from bond. A little odd this is falling to the FRC as well and it feels more of a joint issue for TPR and FCA.
We saw last week’s bruhaha about HSBC’s former head of responsible investing Stuart Kirk challenging at least some of the climate consensus in investment and risk management terms. He has now been suspended.
Lots of advisers on the FTAdviser comment board seem to agree with Kirk’s comments – the headline says advisers believe he was spot on. The matter continues to rumble on.
Website Global Capital has an analysis here particularly on why HSBC had less freedom of action than you think.
National Review, a right leaning website sets the issue in ‘cancellation terms’ here.
London Financial News argues that the bank’s latest assessment of climate risk is not scary and indeed LFN’s David Wighton argues this justifies Kirk’s comments.
“So how scary were the results of the Bank of England’s climate risk stress tests announced on 24 May? Er… not very scary at all. Based on the results, Sam Woods, head of the Bank’s Prudential Regulation Authority, said that “the costs of a transition to net zero look absorbable for banks and insurers, without a worrying direct impact on their solvency”.
Advisers need to stop ignoring crypto assets according to Cerulli Associates with US advisers expecting to include them in portfolios. We do appear to be a long way from that in the UK, not least because of current regulations.
And finally, Twitter investors are suing Elon Musk, which is surely no surprise to many.
