Newsletter 14th December 18
Written on 14/12/2018

Question

Which one of the following is prohibited from becoming a trustee of an occupational pension scheme?

a. The scheme actuary

b the schemes legal adviser

c A scheme member

d A director of the sponsoring employer

The answer is A

Findings from FCA work on pension transfer advice
link here
The FCA is disappointed to have found that less than 50% of the advice it reviewed was suitable

However FCA "surprise" at the outcome is, IFAC suspect, stage managed for a political audience.  

After all, their review in 207 of the whole market listed here showed that 58% of files in small independent firms were deemed to have submitted unacceptable disclosure to their customers.(section 4.6).  This number was markedly lower at 31% in networks - take note all ye DA IFAs.

Unacceptable disclosure means that the advice cannot be deemed suitable – ipso facto these files presumably failed in just the same way as the PTOO files.  So where does this leave us who do not do Transfers?

We await another review in 2019.  We can only hope the FCA appetite for action will be diminished at that round.
Our experience is that they will find standards improved, but in suitability reports - only by a little.
How much is enough?
There is no bar, no minimum standard set, and with the FCA pursuing a principals based agenda, this is unlikely to come soon.

Also take note -FCA research is hardly independent, and findings of widespread failings can have two equal and opposite reactions.
First is that the lack of improvement shows the need for a strong enforcement led regulator.
Second is that politicians ask why after all this money spent on regulation is yet more work required - where does it all end up?

"Ours is not to reason why, ours is to do or die."
Nobody is going to lose their life in this battle, but businesses will die if they fail the standards.
Get your files checked - it is to compliance what the abacus is to maths! 
Upload to BAT and await the results.


ICO FINES
Two firms that were behind nearly 600,000 nuisance calls attempting to sell home security systems to people registered with the Telephone Preference Service (TPS), have been fined a total of £220,000 by Elizabeth Denham (pictured) of the Information Commissioner’s Office.

Now you’ve got to hand it to them.  It is against the law to make marketing calls to numbers that have been registered with the TPS and this firm clocked up over half a million of them. 

There were 128 complaints made about the company between January 2017 and February 2018.  It just shows that if you do get caught doing this, it is the complainant that will cause you trouble.  

The script used by the company for making the calls, even asked people whether they were registered with the TPS.  Again – lesson here.  Observing the compliance slavishly without actively working “in the spirit of the legislation” as the FCA would say, is a foolish thing.  You need to buy into compliance and act it out as much as be able to deliver the paperwork and compliance results.
 
The full penalty notice to ACT Response Ltd can be read here.


GDPR
It is now six months since the GPDR deadline passed and hopefully we have all tidied up our GDPR suites.
 
Not so, a brief review of the GDPR pages on BAT shows!
And so we have pushed the GDPR dashboard to the home page temporarily, and now ask those who haven’t completed the microsite to start doing so. 
See image..follow the steps.
Any questions?
Ask max.durrant@ifac.eu



Regulating the regulators!

Compliance industry regulation on the horizon

FCA requests details of compliance contracts on all application forms now.(see picture)

On all new applications….the attention the FCA now pay to compliance firms is unprecedented even a couple of years ago.  This hopefully shows the value of what we do, and will encourage you to book your next onsite audit in good time.  If you don’t, you will get an annual invitation from us.  Make sure you respond, it is what you pay us for.



Brexit barmy  
29 March 2019 deadline

If the withdrawal agreement is not ratified by 29 March 2019, the UK government could do either of the following before that fateful day. 

  1. Request an extension of the Article 50 period. An extension can only be granted by a unanimous decision in the European Council, so would depend on the agreement of all the other EU member states.  During any extension, the UK would remain an EU member state and could continue negotiating the withdrawal agreement. The UK would then leave the EU under Article 50(3) at the end of the extension of the Article 50 period, with or without an agreement.
  2. Revoke the Article 50 withdrawal notice



Remember Brodie’s Notes?
 

Gives students a mug’s guide to Shakespeare et al.

A sort of “for Dummies” quick guide. 
Here is our latest on the FCA recent newsletter:

 

FCA newsletter

 

FCA proposals for a price cap on hire purchase.  This is labelled by FCA as The rent to own sector – RTO. The CP is available here https://www.fca.org.uk/publication/consultation/cp18-35.pdf 
This is a significant step towards being the price regulator that the FCA is becoming.   These the rather ominous words used: “We want consumers to have access to lower cost credit options….Our work on high-cost credit isn’t over yet. “

Datanapped?
We all invent words when children – but somehow lose it as we grow old.  But what about datanapped?  Surely a better coin of phrase than what the FCA call ransomware?   Fca have published a report covering the themes from the Cyber and Technology Resilience cross-sector survey. click here

In particular they are concerned about the ransomware…here is what they say you should do if your data is kidnapped (datanapped?)  see here NCA strongly advice you don’t pay. 

Postscript. After writing the above, we discover that others have also discovered this name, thus barring us from claiming the term for our own.



Aegon have launched a protection site, to help firms sell keyman.

see link here

Full of interesting documents, that all advisers in the corporate space should be familiar with.

Regulating the regulators!

Compliance industry regulation on the horizon

FCA requests details of compliance contracts on all application forms now.(see picture)

On all new applications….the attention the FCA now pay to compliance firms is unprecedented even a couple of years ago.  This hopefully shows the value of what we do, and will encourage you to book your next onsite audit in good time.  If you don’t, you will get an annual invitation from us.  Make sure you respond, it is what you pay us for. 





Bulk annuities in the DB market

Willis Towers Watson, the actuary has said it expects deal values of £30bn next year, 20% up from 2018, and more than double the 2017 size.

Bulk annuities — allow companies pass on their defined benefit pension schemes to insurers via deals knows as buy-ins, buyouts and longevity swaps.   Just swap the book for a single fee and say goodbye to the admin.  Sadly the firm has to be clear of deficits.

Work in the SASS and small DB market is lucrative and skilled, and advisers should never say no.  IFAC have some experience here and will always help if required.  The market is often unregulated, highly paid and currently run mainly by Actuaries – not known for their communication skills, and incapable of helping investing the funds.  IFAs present a golden link to large providers.




Sippchoice ltd take on HMRC over in-specie contributions

Sippchoice have been forced to pay the tax relief after claiming it on an inspecie contribution. 

HMRC now plans to appeal in the Royal Courts of Justice, using the Upper Tribunal (Tax and Chancery) route.  My own experience proves just how difficult HMRC can be.  In 2006 I set up a firm with HMRC approval to act as a SIPP.  The firm accepted its very first contribution that should have been paid net.  By mistake the investor paid gross, by cheque, at the end of the tax year, and left the country.  So instead of returning the cheque and demanding a new one, which would have missed the tax deadline, we claimed the Pension Relief at Source PRAS and paid it immediately onto the client as a rebate.  The end result is, of course, identical to the PRAS process.   Big mistake!   HMRC claimed the same amount back from us, plus a penalty for non compliance – fortunately paid for by my long suffering insurers.  An unyielding unforgiving and ruthless tax man.  You can understand that they are not a charity, but their action was heavy, unnecessary and grossly over proportionate.  HMRC do not like pensions.  In fact, during that process, we discovered that an invalid pension set up is liable to 90% fines and reclaims payable to the HMRC.  That’s right, you can end up with just 10% of what you paid in if the trust isn’t set up right. No wonder SIPPS are dying on their feet. Charie.palmer@ifac.eu




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