PIMFA calls for post-Brexit regulatory reform

The UK Government should take the opportunity offered by the completion of Brexit to reshape the regulatory environment for financial services in the country. 

That's according to PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, which in it's response to HM Treasury’s Financial Services Future Regulation Framework Review, highlights the fact that there is now a clear opportunity to create a regulatory architecture that improves supervision and enforcement and leads to better outcomes for consumers.

"Changing the regulator’s focus to good outcomes would ensure we avoid the assumption that a customer who has not taken action is protected," says Tim Fassam, Director of Government Relations and Policy at PIMFA. "We hope this would lead to the industry and regulator working together to increase the take up of advice as well as boosting saving and investment."

The association has also been quick this week to criticise Chancellor Rishi Sunak's decision to freeze the Lifetime Allowance for pensioners, as well as the Capital Gain Tax and Inheritance Tax thresholds until 2026, announced in the Budget.

"Whilst we strongly believe that there should be focus on repairing public finances, freezing the thresholds for Inheritance Tax, Capital Gains Tax and the Lifetime Allowance attacks individual personal finances and aspiration," says Simon Harrington, Senior Public Policy Adviser at PIMFA. 

On a more positive note, in this week's guest feature, David Amaryan, Founder of Balchug Capital, posits that after the turmoil of 2020, 2021 promises to be a year of significant opportunities for wealth advisers and their clients. 

"The losers of 2020 will be the winners of 2021 – and vice versa," writes Amaryan. "These shifting fortunes should be highly conducive to a positive performance of recovery stocks in industries such as travel, hospitality, and retail, which remain significantly below their fair values, despite already having recovered well from their March 2020 lows."

A new survey by TotemFi meanwhile suggests that the confidence of the majority of retail investors has been unaffected by recent market volatility while their faith in traditional financial institutions has diminished since the GameStop saga, with corruption a concern for 41 per cent of respondents.

Volatility is however, a concern for European family offices, according to the latest edition of the Creulli edge, which highlights the 'balancing act' involved in reviewing portfolios in response to the coronavirus pandemic.

"The market turmoil of March 2020 has abated, but concerns over volatility persist," says Fabrizio Zumbo, associate director, European asset and wealth management research at Cerulli Associates. "Family offices need to balance liquidity and returns for clients spanning multiple generations."

The pandemic has also caused problems for many Gen Xers and their retirement plans, says a new report by International Longevity Centre-UK (ILC) and Phoenix Group. As well as having started work too late to benefit from final salary pension schemes, those born between 1965 and 1980 are facing a double-whammy of also being too early into the workplace to benefit fully from auto-enrolment schemes.

"Too many Gen Xers simply can’t afford to save as much as they need to or are juggling too many other priorities to know where to start," says Sophia Dimitriadis, Research Fellow at the ILC. "And Covid has just made things worse, with lots of people having to dip into their pension pots to make do in the short term."

Wealth Adviser

 

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