Capital Markets Corporate

September 25, 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 Four release universal ESG reporting standards 
The Big Four accounting firms have jointly issued a universal reporting framework to measure firms’ environmental, social and governance standards. The move is being led by the International Business Council and aims to sign up the Council’s 130-strong membership to use the metrics. It is the first fully co-ordinated approach to ESG reporting. The release of the framework has been driven by mounting investor frustration over contradicting systems for measuring sustainability. If widely adopted, the framework should help investors effectively monitor firms’ ESG credentials to help inform decisions on where to allocate their capital. (From the FT, 22 September 2020)

Savers scramble to secure top rates 
Savers had less than 60 hours to sign up to the best savings rate on the market after a regional high street lender’s 1.2% easy-access deal was oversubscribed within three days. The sharp rise in demand for accounts offering just over 1% shows how hard savers are having to work to earn a return on their capital. None of the UK’s high street banks are offering above 0.01% on their easy-access accounts, contributing to a boom in interest for Government backed NS&I products. Preference to keep capital in easy-access accounts as opposed to looking to equities or bonds to earn returns may be driven by savers wanting to have quick access to their money to help weather financial strain as a result of further economic decline caused by the pandemic. (From The Times, 20 September 2020)

Global pandemic drives investment advisers to greater data consumption 
The coronavirus pandemic is accelerating greater data consumption among investment advisers. The increase is being driven in part by advisers seeking new and more effective ways to help clients better manage their private markets portfolios. Severe drops in economic activity, in part the outcome of the disruption caused by lockdown measures to curb the spread of the virus, and wild fluctuations in consumer spending is prompting investment advisers to build new data models which provide more responsive metrics to monitor portfolio performance. (From Private Equity News, 21 September 2020)

More borrowers to repay mortgage after age 65 
According to a survey from Hargreaves Lansdown, the number of people who expect to repay their mortgage after the age of 65 has risen from 11 per cent last year to 18 per cent. In addition, one in five mortgage borrowers who were aged 55 and over said they expected to repay the loan in their 70s, while 5% said they would never be able to repay it. The piece highlights that rising property prices are also having a significant effect in the sector, with borrowers taking longer to save a sufficient deposit and earn enough to qualify for a mortgage. (From FT Adviser, 22 September 2020) .

The financial watchdog may have finally brought insurers to heel  
The Financial Conduct Authority (FCA) has proposed a ban on insurers “price walking”; the practice of enticing customers with low and favourable rates, only to introduce price rises in the following years. It is noted that if the proposals are implemented in the second half of next year, anybody renewing their policy should be charged the same price as new customers. Through bringing this into effect, the FCA estimates that insurance customers will be better off by £3.7bn over a decade, assuming that savings in companies’ customer-acquisition costs will be passed directly onto consumers. (FromThe Guardian, 22 September 2020)

 

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