Capital Markets Corporate

March 12, 2020

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

Asset managers on hiring spree to meet ESG demands

The largest asset management firms in the world have increased hires across their stewardship and sustainable investing teams in order to meet the growing demand for environmental, social and governance investing. Data compiled by the Financial Times shows that the number of employees in the stewardship teams of leading fund houses has almost doubled in the past three years, while employees working in dedicated ESG roles has seen a fourfold increase over the same period. (From Financial Times, 8 March 2020)

Revolut to apply for UK banking licence

Revolut is preparing to submit a banking licence application to the Bank of England before the end of this year. The licence would allow Revolut to hold deposits on its own balance sheet and issue direct loans to customers. The move would boost returns, as Revolut currently outsources deposits to partner banks such as Barclays, while lending partners, such as Lending Works, provide credit offerings to its customers. (From The Times, 7 March 2020)

Fintech personal finance market to top 2.7 trillion by 2023

The global fintech personal finance industry is expected to be worth $1.5 trillion this year, according to data gathered by LearnBonds.com, a 45.1% year on year growth rate. Furthermore, it is estimated the market will be worth $2.7 trillion by 2023. The number of users in this market is estimated at around 79 million this year, the majority of which comes through online investing platforms. In particular, the ‘robo-adviser’ market has grown in popularity following the 2008 financial crisis as trust in large institutions has fallen whilst fees for traditional wealth management have remained stubbornly high. (From Business Matters Magazine, 24 February 2020)

Watchdog plans new rules to ease mortgage switches

The Financial Conduct Authority is to intervene in the mortgage market after it found that those who remain with their current provider can be up to £1,000 a year worse off, on average, by not switching to cheaper deals. The research also showed that older and lower-earning homeowners were less likely to switch, citing the complexity of the application process, the lack of time, and potential upfront costs. Rules the FCA may introduce to help borrowers switch include reminders of when the initial mortgage period is coming to an end and clear advice on the best deals available. The rules follow a raft of reforms in telecoms and utilities to address the so called ‘loyalty penalty’ following a super complaint by the Citizens Advice to the Competition and Markets Authority. (From Financial Times, 10 March 2020)

Gender pensions gap doubles the gender pay gap

Research from Profile Pensions shows that inequality in the pension pots of men and women is more than double that of the gender pay gap. This analysis of more than 23,000 customers shows that on average women in the UK face retirement with 39% less in their pension savings than men. The pension gender gap differs regionally with London and the West Midlands ahead of the rest with a closer pensions gap of 30%, whilst North Scotland fares the worst with women holding less than half as much in their pensions as men. Michelle Gribbin Chief Investment Officer of Profile Pensions commented that ‘[Profile Pensions] would like to see providers and employers being more transparent about how this retirement shortfall comes about’. (Financial Reporter, 9 March 2020)

 

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