June 8, 2018
Our Weekly NewsletterContact
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.
Older Not Wiser When It Comes To Financial Planning
The results of the latest Aegon Retirement Readiness Survey 2018 show that fear of growing old and suffering from declining health are the two main concerns of respondents. So far, no surprise. The interesting finding of the study relates to financial literacy. It looks like the world is failing to grasp basic financial concepts around inflation and investments. So is the globe’s personal finance future in danger? (From Bloomberg, 29 May 2018)
Never Too Old To Learn New Tricks
Santander started a programme earlier this year called Scam Avoidance School (SAS) to help people over 60 to identify and beat fraudsters. Participants such as Alec Daniels, an 86 year old pensioner, learned how to write and distribute mock phishing emails in just 13 minutes while also being made aware of the dangers of public Wi-Fi hotspots. A useful lesson for those coming to terms with the threat that 21st century cybercrime represents. (From FinExtra, 31 May 2018)
Minimising Climate-Related Risks
A report released by the Environment Audit Committee argues that owners of large assets should be required by law to report their exposure to climate change risks by 2022 – ranging from physical impacts to liability risks. The committee believes we need to change our thinking to long-term sustainability rather than short-term financial decision making. (From CityAM, 4 June 2018)
Young vs Old – A Widening Gap
New research shows that in the past 20 years, the pay gap between over-30s and younger employees rose from £1.51/hour to £2.81/hour. The findings show that too many young workers are stuck in low paying jobs with little opportunity to move up. And while this is the most qualified group of workers ever seen, many are struggling to meet basic living costs and postponing key decisions, such as buying property or having children. (From Daily Mirror, 4 June 2018)
A study conducted by the University of Nottingham showed that eight out of 10 people in the UK do not understand insurance policies. All of the policies covered by the study required at least some undergraduate or even postgraduate level education to be understood. This begs the question, has the time come for traditional wording that has been used for decades to be rethought to be fit for purpose in modern times? (From Financial Times, 5 June 2018)
All The Money In The World
2018 has been the year of cryptocurrencies. We hear so much about ‘crypto’ that we could end up neglecting not only what it means as a concept, but where it originates and who handles it. It’s easy to get carried along with hype-driven stories – but can we take it seriously and do we really know anything about 2018’s biggest news story?
The unbelievable nature of crypto currencies begins with the supposed founder of the technology. There is an ongoing quest to find out the inventor of the concept. Concrete answers have so far proven elusive, even though the name of one man is unanimously assumed to be behind it: Satoshi Nakamoto. Rumours persist as to whether he even exists, or whether he is actually a group of people operating under a pseudonym.
It doesn’t stop there. When you dig into the dynamics of the market, you find that we don’t truly understand who really owns bitcoins. Is the market controlled by bitcoin ‘whales’ – a small cluster of investors who hold a hefty proportion of the market – or is this a genuinely open market?
Aside from all the intrigue, there are plenty of reasons to see crypto currencies as a hotbed of frauds, fakes and snake oil peddlers. News stories detailing the rise of the first ethereum religion don’t exactly instil confidence that this is the purview of sensible market makers. Neither does the fact that many of the top financial sages have continued to label crypto questionable or worse.
And it seems that the most ardent of crypto believers are losing faith. A mansion in Manhattan’s Upper East Side was recently put up for sale for USD30 million by a prominent crypto investor, who’s asked for an additional USD15 million if bought using a digital currency.
Unfortunately, it’s those at the bottom who usually pay the price for such bubble mentality. Crypto-mining machines are now inundating the homes of the poor in Venezuela looking to find their fortunes, and fraudsters are using celebrity endorsements to shake down people looking for the next big thing.
Whether a believer or a critic, the one takeaway from it all is that – at this very moment – someone, somewhere is hedging their bets and having a go at making the most out of digital currency hype, one way or another. The question is what are they really investing in?