Member Update 12th April 2019
Written by Charlie Palmer on 11/04/2019

TEST QUESTION

Who is NOT involved with the regulation/oversight of mortgages in the UK?

A: SRA

B: FCA

C: PRA

D: BoE

Answer is A.


Niel Gavin on LISA vs ISA

  • So ISAs have been around for quite some time now, you have the Cash ISA, the Stocks and Shares ISA, the Junior ISA and the Help to Buy ISA, so what, pray tell is the Lifetime ISA?



    ARGENTINA GRANTED ACCESS TO THE FIRST WORLD

    EU says that cash held in Argentina can be ranked as secure as in the UK.
    On 1 April 2019, European Commission added Argentina to the list of third countries considered equivalent for the purposes of the treatment of exposures under the Capital Requirements Regulation.
    This means their debt is equivelent to debt held by the other countries listed here Brazil, Canada, China, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and the USA, and their 
    regulatory arrangements have been deemed equivalent to the corresponding EU supervisory and regulatory arrangements.
    Great country, Argentina, Fine wine, great polo players and footballers, but alongside USA in debt quality and regulatory standards?

    ADVERTISING STANDARDS AUTHORITY PUSHED ASIDE

    On 5 April 2019, the FCA published a memorandum of understanding (MoU) which it has entered into with the Advertising Standards Authority (ASA). 

    This puts regulation firmly into the hands of the financial regulator. 


    Feeback on BAT

    BAT, is a great system and we have embraced it totally for commission runs, compliance, fact find and your great suitability reports.
    The guys In my Brockworth office are working completely on BAT, so far they have made 8 sales this week, having the whole sale process on BAT together with the telephone system it is quick and simple way to keep an eye on the whole operation.
    Thank you. Salvo 

    CLAIMS MANAGEMENT 

    On 1 April 2019, the FCA published a number of forms and guidance notes that claims management companies (CMCs) with temporary permission should use if they plan to apply for full authorization. 
    IFAs might note that many activities relating to claims managemnet are covered by their existing permissions.  

    • Insurance brokers providing a service in respect of a policy that they have arranged (in accordance with section 19 of the Financial Services and Markets Act 2000). 
    • Firms authorised by the Financial Conduct Authority (FCA)  in the course of carrying on a regulated activity (e.g. advising on investments) only notify clients that they may have a claim against a previous adviser.
    • Small scale introducers (i.e. ‘exempt introducers’) where this is incidental to their main business and the person to whom they introduce business takes responsibility for their activities. 

    However, where an FCA authorised firm  provides a regulated claims management service for which they receive remuneration, then you would need to be authorised.
    and brokers who refer uninsured personal injury losses to a solicitor or to a claims management business are not covered by the exemption.  
    However they might qualify as an ‘exempt introducer’, on approval of the same claims management business.  

    The cost is a minimum of £550 per annum, plus £600 to apply.



    DB CLOUDS

    FCA’s ‘Dear CEO’ letter earlier this month, here
    warned SIPP providers they must be able to show advisers are ‘responsibly and appropriately’ recommending their products when accepting DB transfers.   Sipp firm Intelligent Money and DP Pensions stopped accepting DB transfers last week. 

    SIPP providers will presumably need to see SR reports, and know that they have been checked by qualified persons - a three lines of defence strategy. 

    M&A - Quilter buys lighthouse for £46m

    This values each of hte 400 IFAs operating under Lighthouse at £100,000.  
    Since most IFAs have £10m under management, and take in £2m new funds each year, this looks thin gruel, 
    but then again the IFAs have given away their value to their network, by not having a licence direct with the FCA.
    After this deal one third of all IFAs will be inside two firms, Old Mutual and SJP.  


    Directors course is being run 

    on Wednesday 24th April
    Free for members, see niel.gavin@ifac.eu
    The course is 10-3.30pm at Andoversford.
    If you have an idea for a course, ask Niel, our new T&C director.
    book here if you are  NOT a member- otherwise email niel.

    HMRC BENEFIT FROM LEAK 

    Following the documents leak from Panamanian law firm Mossack Fonseca in 2016, the UK has secured over £252m in tax, nearly half of that in the last nine months.


    The Team at IFAC

    •Charlie Palmer – Chairman    Charlie Palmer charlie.palmer@ifac.eu
    •John Downs – Compliance Director / CEO     john.downs@ifac.eu
    •Niel Gavin – T & C Director                               niel.gavin@ifac.eu
    •Alastair Frame – Compliance Consultant       alastair.frame@ifac.eu
    •Chidi Kalu – Compliance Consultant.              Chidi.kalu@ifac.eu
    •Surekha Bagi – Accounts                                   Surekha.Bagi@ifac.eu
    •Dan Rey – I T / BAT support                              dan.rey@batsoft.co.uk
    •George Romero – I T / BAT support                george.romero@batsoft.co.uk
    •Business Monitoring Unit / File checking       contactable via Niel/John/Alastair/Charlie
    •Pension transfer specialist support                 as BMU


    IFAC director Charlie Palmer explores regulation and change in financial services. 


    The retail financial services industry is the change-game.  The IFA industry has shrunk from 250,000 advisers to under 25,000 today.  Mortgage broking to the retired has replaced new pension saving.  Half the new mortgages are to the over 65’s today.
    My most popular articles this year has been on Mifid2.  Arguably unnecessary, expensive to implement and not much help, it has also come at a difficult time for IFAs.   The Senior Managers Regime starts at the end of this year.  Does that explain the unsettled feeling you get at the end of each day?  CF10’s working alongside free-wheeling entrepreneurial founders looking to “take the firm to the next level” will fear being pinged for failures and will want to put the brakes on growth.

    The standard lifetime allowance for pensions

    The Lifetime Allowance has increased by £25,000 (inflation) and is now £1,055,000 for this new tax year 2020.
    This is the lifetime limit for pension savings liable to standard tax rates before a higher tax charge is made.  Funds withdrawn in excess of this, or have excess funds on death before age 75, or on reaching 75, create additional tax charges on the excess.

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