Some rumblings and clarifications from the Budget continue to make the headlines and as it is core to advisers’ work, this remains one of the most significant stories.
New Model Adviser reports that the tax-free lump sum has been capped for clients with enhanced LTA protection.
The value will be set at 25% of pension value on 5 April under legislation setting out Budget changes to pension tax.
The Times has done an interesting personal finance piece on the matter here.
In the midst of a banking crisis, Stuart Kirk, the former head of responsible investing who decried much of ESG regulation and in particular the doom laden warnings about climate change from central banks, suggests that the failures of intrusive regulation have never been more obvious.
It should start a debate at least.
More turmoil at a former firm favourite among investors. Outgoing director of the £13.2bn Scottish Mortgage investment trust has made a disclosure to the FFC about the governance of the trust, a move reported in FTAdviser.
Last week, the website reported that Amar Bhidé had left the board of the trust, which is managed by Baillie Gifford, over concerns about how directors are selected and the level of scrutiny around the investment process for the unquoted companies in the trust.
The chair of the trust Fiona McBain, who has been in the position since 2017 - and sat on its board for 14 years - will leave after the trust’s annual meeting in June as reported in Business Insider
Advisers could be faced with up to 400 different variations in characteristics and circumstances that lead to customer vulnerability under Consumer Duty, consultancy Morgan Ash has warned.
The following story does rather place the current banking issues in context for advisers with regard to CoCos or AT1s. The UBS takeover somewhat controversially saw Credit Suisse shareholders receive some money while CoCo bond holders lost out confounding most market assumptions about the peaking order. This prompts New Model Adviser to ask ‘Are your clients invested in CoCos?’
The report suggests it is not easy to find out. A very relevant piece.
The Bank of England has reassured investors about where AT1s sit in the pecking order and indeed about the security of UK banking as reported by CityAm.
At time of writing, there were some concerns regarding Deutschebank particularly in the credit default swap market and have led to a further ‘rout’ in banking shares.
The German Chancellor Olaf Sholtz has dismissed fears regarding the bank.
I think this is a pertinent headline from CNBC last Friday as follows - Research firm Autonomous, a subsidiary of AllianceBernstein, on Friday dismissed these concerns as both “well known” and “just not very scary,” pointing to the bank’s “robust capital and liquidity positions.”
I have to say there seems to be strange imbalance in the commentary – lots of market comment is full of woe but that is because the market is down; lots of banking analysis available on Twitter seems to believe the bank is far from insolvency regardless of the derivative markets’ worries about around default.
One pertinent question appears to be whether it is the CDS market that is misfiring, spooked by Credit Suisse, rather than the Deutsche itself. It also feels pertinent that DB, admittedly after years of missteps, made nearly Euro 6 billion profit in the last year.
I do think journalists especially on widely read websites should obtain expert views not just the usual market commentating suspects whose knowledge of bank capital and models may be limited at best.
A bit of positive new for the advice sector in Corporate Adviser.
Research from Standard Life, shows that consumers who seek advice expect to retire aged 66. In contrast those not receiving financial advice are not expecting to retire until they are 69. In addition, advised consumers believe they will be able fund their retirement lifestyle for23 years – six years more than non-advised clients.
The FCA has written to ESG benchmark providers for the second time in six months, outlining an alarming range of failures and risks of greenwashing as ESG Clarity highlights.
But on my reading this is an extraordinary accusation in the Dear CEO letter “Benchmark administrators failing to implement their ESG benchmarks’ methodologies correctly – for example, using outdated data and ratings or failing to apply ESG exclusion criteria.”
Finally, inflation ticked up again last week, arguably prompting the Bank of England MPC to raise rates. Reuters notes the Bank’s view that inflation will fade. The Monetary Policy Committee’s notes are full of references to the banking crisis, but it did not stay the Central Bank’s hand. The rate is now 4.25% with the Guardian attributing some of it to the recent salad crisis.
Not easy times for anyone really.
