Capital Markets Corporate

December 18, 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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High-risk mini-bonds banned by regulator 

The Financial Conduct Authority has confirmed that it will permanently ban the mass marketing of high-risk “mini-bonds” to retail investors, with the new rules coming into force at the start of next year. This follows the temporary marketing prohibition after the £236m collapse of issuer London Capital & Finance in January 2019. LCF’s collapse left most of the 11,600 people who bought its high-interest mini-bonds unable to claim compensation as the bonds themselves were not regulated by the FCA, only their marketing. (From Financial Times, 11th December 2020)

MP warns outdated perception of advice leading to crisis 

MP for Delyn, North Wales and former financial adviser Rob Roberts has warned that the UK could reach a retirement crisis in 20-40 years’ time if the benefits of taking financial advice are not promoted. Speaking at a House of Commons debate on the future of pensions policy last week, Roberts said widespread advice and education regarding pensions and retirement were “urgently needed” if people were to have a comfortable retirement. It is added that financial advice is often viewed as too expensive, or savers worry they do not have enough money to invest to warrant taking it. (From FT Adviser, 14th December 2020).

Barclays fined £26m for poor treatment of customers 

Barclays has been fined £26m by the Financial Conduct Authority for the way it treated customers who fell into debt or experienced financial problems. The regulator said Barclays’ poor treatment of its customers “risked making these difficulties worse”, adding that the bank knew about many of the shortcomings in its systems and controls as early as 2013, but failed to adequately resolve them until late 2018. Barclays has compensated those affected, paying more than £273m to 1.53 million customer accounts since 2017. (From BBC, 15th December 2020)

What is Brexit doing to the pound? 

At the beginning of the week, the pound edged up in value against the dollar and the euro as investors took in reports that a deal in the UK’s trade negotiations with the EU had taken a step closer. On both sides, uncertainty remains as we move further towards the brink of a no-deal Brexit departure. Looking ahead, final push talks in the run up to 31 December will be the ones to watch. (From The Guardian, 14th December 2020)

Private equity pay remains robust during the pandemic  

A new study by Heidrick & Struggles has found that that in 2020, almost half of investors in Europe and Africa noted a rise in base compensation. In most ways, the pandemic has negatively impacted economies and prompted drastic cost-cutting measures by companies across the board, however private capital professionals’ pay has continued to rise throughout the year. (From Private Equity News, 14th December 2020)

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