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Financial Services Newsletter - Friday 6th March 2020

06 Mar 2020

The UK stock market’s rebound from last week’s coronavirus slump ended abruptly today as the FTSE 100 tumbled 2.2% as investors worried about the growing signs of the economic and business impact of the contagion. The blue-chip index dropped 148 points to 6,666 as ITV (ITV) plunged 11.5% or 13.25p to 103.25p.

Investec Wealth & Investment is transferring its Bath office to a new Bristol base in Temple Quay. The move comes after the firm poached Alex Barrell from Brewin Dolphin to head the new Bristol office at the end of last year. A team of 22 , including five new staff added over the past year, will be moving from Bath to Bristol.

Julius Baer is to cut 300 jobs in a bid to bolster margins following a 37% slump in annual profits. The news comes exactly a year after the Swiss private bank announced it was cutting 100 jobs as it grapples with lower growth.

Sanlam Private Wealth is transferring clients with assets below £300,000 to the firm's multi-asset funds as Chief Executive Penny Lovell aims to increase its average portfolio size to at least £1m. Lovell, who stressed she views the change from a ‘client-centric perspective’, said those migrating will potentially still have access to a Portfolio Manager, but that due to the size of their investment they will be better served in a multi-asset strategy. The average portfolio size for the private Wealth arm currently sits at around £650,000, with Lovell aiming to bring that up to between £1m and £5m.

Tilney’s merger with Smith & Williamson will be pushed into the second quarter as the two businesses continue to work on outstanding regulatory concerns. S&W Chair Andrew Sykes said the proposed merger is ‘highly unlikely’ to happen before the end of the current tax year on the 5 April.

The FCA has revealed it will take further action over DB transfers. It came as the regulator published new data received from firms carrying out transfers. The watchdog says it has “repeatedly made clear its expectations of Financial Advisers as well as strengthening the rules around pension transfer advice”. But, despite this, the regulator claimed “too much advice the FCA has seen to date is still not of an acceptable standard”.

Jupiter Fund Management has revealed it suffered outflows of £4.5bn last year, days after the business said it would be acquiring Richard Buxton’s Merian Global Investors. In an announcement to the markets this morning, Jupiter said it had been hit by a 16% decrease in statutory profit before tax, which came in at £151m, for the year to 31 December 2019. Underlying profits before tax have also decreased by 11% to £162.7m. Basic earnings per share have decreased to 27.5 pence, it said. 

The CISI is targeting young people looking for professional careers as it prepares to relaunch its Certified Financial Planner qualification in the UK. Jacqueline Lockie, CISI Head of Financial Planning says she believes the desire to "do the right thing" in choosing a Financial Planning career will appeal particularly to young recruits looking for a long-term career choice. The new CFP certification, following two years of extensive review will, at Level 7 on the UK National Qualifications Framework, be the UK’s highest level qualification for Financial Planners.

Berry & Oak, Standard Life and Legal & General Investment Management all went home multiple winners at the 2020 Professional Adviser Awards. Berry & Oak, led by Sarah and Andrew Elson, picked up the Adviser Firm of the Year - North East, Best Client Engagement (Advisers) and the big gong - UK Adviser Firm of the Year. Legal & General Investment Management also won double, picking up the Best Multi-Asset Group and Best Multi-Asset Fund Range: Volatility Managed awards. Premier had dominated the multi-asset awards, which are based on data as well as judges' opinions, for the last couple of years. In the three platform categories, Standard Life took home two awards - one for its Wrap platform and one for Elevate. AJ Bell picked up the Best Platform for Advisers (AUA over £25bn) gong.

Bedford-based boosst financial has launched a development programme to help trainee Advisers achieve Chartered and Certified Financial Planner status in under five years, while developing their practical skills. The programme, ‘bright to boosst’, has been built on what the firm has learned from training some of its current staff, one of whom was hired from last year’s NextGen Bootcamp at Manchester Metropolitan University (MMU).

The outgoing Chief Executive of the FCA Andrew Bailey has fought back against claims of inaction as he argued the regulator is undertaking a 'large investigation' into defined benefit (DB) transfer conduct. Speaking to the newly-formed Treasury Select Committee, Bailey was asked what the regulator was doing about poor DB transfer advice and misselling following pensions freedoms in 2015. He said FCA actions over the past two years had already led to 370 firms leaving the market, while a 'large investigation' by the regulator had found a 'large number of firms' had been misselling and providing poor DB transfer advice.

National advice giant St. James’s Place (SJP) used its 2019 full-year results announcement yesterday to admit its Partner Advisers had seen their 'morale wounded' following negative press coverage around its remuneration structure and business culture. SJP also talked about its contribution to the Financial Services Compensation Scheme (FSCS) revealing it had received a ‘surprise’ bill of £7m and commenting that the lifeboat funds ‘shows no sign of moderation’.

We hear a lot about consolidation, but opinion is split on how to do it well. That is the challenge for David Inglesfield, Chief Executive of London-headquartered IWP. The new consolidator has already racked up £2bn in assets since it announced plans to create a national brand last year. This month it made its seventh acquisition by buying Scotland-based AGL Wealth Management. What is driving all this acquisition activity? IWP is privately owned, so it is not beholden to private equity. Its purchases are funded by an institutional credit fund, which Inglesfield believes will grow the business to £10bn in assets.

National advice business Frenkel Topping has announced its second tie-up in as many weeks, this time with personal injury solicitors Horwich Cohen Coghlan (HCC). This is the second business launch for the national in as many weeks. Last week, the AIM-listed firm said it would open its discretionary Fund Manager (DFM) business Ascencia to IFAs for the first time, via a 50-50 joint venture with Carlisle based IFA Truly Independent Advisers. 

Tesco has hired a third-party company to oversee advice given by two firms appointed to help members of its £13bn pension scheme, prompted by fears about the damage unsuitable pension transfers could cause. Both unnamed firms, who have an agreement to advise the 22,000 members of Tesco's scheme, are also required to provide regular updates on capital adequacy and complaint levels. 

New advice firms seeking to join the market are struggling to get Professional Indemnity (PI) insurance cover, leaving them unable to get FCA authorisation. A backlog of renewals, a lack of capacity in the PI market and a reluctance for insurers to take on new potential liabilities have led some Insurers refusing to give newly-launched advice firms cover. 

An Ipswich IFA was found guilty of defrauding clients and a family business out of more than £300,000. Luke Durrant was charged with two counts and pleaded guilty to both in front of magistrates in Norwich. The charges relate to a two-year period when he worked for advice firm Lifetime Financial Solutions, the trading name for Sophex, a family-run IFA with offices in Norwich and Suffolk. 

HSBC plans to cut around 15% of its workforce following a 33% tumble in 2019 profit. The Asian-focused lender said it will axe 35,000 jobs, reducing headcount to around 200,000, after reporting a $13.35bn (£10.3bn) pretax profit. The number is far higher than the 10,000 job cuts forecasted by analysts in the bank’s battle to shore up its balance sheet.

Lighthouse has taken a former Adviser who is now working for Sandringham Financial Partners to court over a restrictive covenant dispute. Representatives from both Lighthouse and Sandringham appeared in the High Court on Friday 14 February, including Sandringham Chief Executive Tim Sargisson. The Adviser, Neil Grey, was an Adviser at Lighthouse for over five years, but left shortly following its acquisition by Quilter in June 2019. In November 2019 he set up Woodfield Wealth Management, which became an Appointed Representative of Sandringham last December.

In further news...Sandringham Financial Partners has targeted retiring advisers with an offer to keep paying them three years after they hang up their cashflow planning tools. The buyout deal will see advisers receive 100% of their firm's income in the first year after retirement, dropping to 75% in the second, 50% in the third and 25% in the fourth. 

Coutts has been fined $27.9m (£21.4m) by US authorities after admitting it had not fully disclosed accounts potentially used to evade tax at the time of an earlier $78.5m fine. The Swiss arm of Coutts signed a four-year agreement with the US Department of Justice in 2015, paying out a substantial sum in order to avoid prosecution over a failure to report accounts held on behalf of US citizens potentially involved in ‘tax-related criminal offences’.

Royal London has put Adviser platform Ascentric up for sale. Fenchurch Advisory Partners has been appointed to help the search for a buyer of the platform, which has £15.9bn of assets under administration. The sale process follows the appointment of Barry O’Dwyer as Royal London Chief Executive. He joined from Standard Life Aberdeen last September.

One of the Britain’s largest financial advice businesses has become the latest to be subject to a whistleblowing complaint regarding culture and remuneration. London-headquartered Chase de Vere, which manages around £10 billion for around 16,000 clients across a network of around 200 advisers, is alleged by a whistleblower to be providing ‘crass’ Adviser incentives and lavish rewards to its staff who generate the most money in fees. 

Quilter Private Client Advisers' purchase of national advice business Prescient on 10 January heralded another year of big advice acquisitions. As part of the deal, 23 Prescient staff will join the company and be redistributed across the UK at Quilter’s London office and other regional outposts.  

 

 

Richard Buxton and five Merian Fund Managers committed to joining Jupiter after its £390m acquisition of the company. He will be joined by Merian colleagues Ian Heslop, Richard Watts, Dan Nickols and Amadeo Alentorn, who have also signed full-time employment contracts. However, Jupiter UK Growth Fund Manager Steve Davies left the firm shortly after the Merian buy after Buxton was appointed Manager on the struggling fund.

Tilney has appointed Ross Anders as a Partner for its financial planning division in its London office. Anders joins from nearly five years at Whitefoord Wealth Management where he was a Partner.

Sanlam UK has hired Lydia MacDonald as a Portfolio Manager in its Brighton office, ahead of the retirement of local boss Tony Gammon in April.

Fowler Drew hoped to give its business a boot last month with the appointment of former Millwall and Bristol City footballer Marvin Elliott to help expand its sporting client base. Jamaica-born Elliott, who made 144 appearances for Millwall between 2002 and 2007, including in the 2004 FA Cup final against Manchester United, joined the firm as a Relationship Manager.

Wealth Manager and Financial Planner Brown Shipley, part of Quintet Private Bank, has recruited experienced Planner Michelle Coulson as a Client Director for its London office. The ex-Financial Planning manager at Grant Thornton and former Coutts wealth manager will be responsible for developing new client relationships and leading a team of Advisers and support staff. Head of London office, Andrew Butler-Cassar has exited the business. Butler-Cassar joined the firm in 2017 in what was a newly created role after leaving Investec Wealth & Investment, where he headed its private office for five years. Brown Shipley Head of Wealth Management Roger Clark will take on the running of the London branch in the interim.

Investec Wealth & Investment have hired Christian Feroze as Associate Financial Planning Director. He joins from Beckford James where he was a Financial Planner for three years. 

Wealth manager St James’s Place has appointed two female Non-Executive Directors following criticism that financial services’ boards lack diversity. The appointments follow the arrival of  experienced industry professional and diversity campaigner Dame Helena Morrissey as a Non-Executive Director at the beginning of this year. The new Non-Executive directors are Emma Griffin and Lesley-Ann Nash who will join the board with effect from 5 February and 1 June respectively.

Prescient Managing Director Chris Woodhams and Director Hugh Bance have retired. 

Kenneth Lambden has been appointed to the board of Quilter Financial Planning as a Non-Executive 18 months after his surprise departure from JO Hambro.  

Advice network Openwork has named former Rathbone boss Phillip Howell as its new Chief Executive, the business has announced. Howell will take over the Chief Executive role from Mark Duckworth, who stood down after ten years at the network. 



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All information provided in this Market Digest has been gathered from multiple Financial Services Media sources and individual company press releases.

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Check out our weekly series of short videos, offering “Top tips” based on our unique insight into the job markethere

 

Check out our weekly series of short videos, offering “Top tips” based on our unique insight into the job markethere

 

Check out our weekly series of short videos, offering “Top tips” based on our unique insight into the job markethere

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