Capital Markets Corporate

June 26, 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.

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Big tech to shake up wealth management 
A recent report by BCG has shown that the wealth market will recover successfully from the global pandemic, with the world’s stock of personal financial assets returning to 2019 levels as soon as next year. However, the industry could see a much more dynamic change in the coming years as tech giants including Google and Microsoft are building digital infrastructures required by wealth managers and some, including Amazon and Alibaba, are already offering financial products. These tech giants, as well as established companies, will be able to use big data and digital technologies to tailor products to a much broader range of clients than today, where generally only top-end clients can access truly bespoke services. (From Financial Times, 23 June 2020)

Women’s pensions fell three times more than men during Covid-19 
The size of women’s pensions pots has decreased by three times as much as men’s during the coronavirus crisis, according to industry data. On average, women’s defined contribution pension pots fell 17.5% during the pandemic, while men’s fell by just 5.7%. According to pensions advice provider Profile Pensions, the gap between men’s and women’s pensions savings has significantly widened since the start of the pandemic. (From The Telegraph, 20 June 2020)

Savers move £11bn into easy-access accounts during lockdown 
Savers moved 303% more cash into easy-access accounts between March to April compared to the same period last year, as banking industry data shows that people are choosing to keep cash easily accessible as the pandemic progresses. However, savers are being warned to be mindful of cash saved in easy-access accounts, as the rates on these accounts are likely to fall to lower rates after a year. (From Daily Mail, 23 June 2020)

FCA permanently bans mini-bond ads 
The FCA has permanently banned the mass marketing of speculative mini-bonds following a series of scandals resulting in ordinary investors losing over £1bn. Concerns over firms promoting these high-risk products to ordinary savers have intensified as they often do not properly communicate the risks involved. The ban was prompted by a large group of retail investors losing of up to £236m as a result of purchasing mini-bonds from London Capital and Finance. The company filed for administration last year, with the regulator estimating investors will only be able to recover just 25% of their capital. (From Which?, 23 June 2020)

The new face at the FCA needs to keep politicians at arm’s length 
With Rathi arriving from the London Stock Exchange having previously spent five years at the Treasury, an opinion piece from The Guardian’s Financial Editor Nils Pratley argues that “the last thing the City wants is a regulator with Treasury sympathies”. It is highlighted that Brexit could expose tensions between the Treasury and the chief financial regulator, and that investor confidence in UK regulation would be damaged further if the departure from the EU is followed by looser regulation. (From The Guardian, 22 June 20)

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