Capital Markets Corporate

May 3, 2019

Our Weekly Newsletter


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.

Marlboro turns life insurer

Philip Morris, the tobacco giant, has launched a life insurance business which rewards those who have switched to e-cigarettes or heated tobacco devices with improved rates. The plans, which are part of Marlboro’s efforts to become a “smoke-free” business, will see those who switch to Philip Morris’ heated tobacco product receive a 25% discount, and those who quit smoking for at least a year receive a 50% discount. (From The Drum, 24 April)

 Over-50s taxed to fund care costs

In a new report, former Cabinet minister Damian Green has proposed charging over-50s an extra £300 in National Insurance payments as one route to cover future social care costs. The report also calls for a basic level of state-funded social care, which would operate in a similar way to a basic state pension. The suggested system would give people the option of paying a lump sum of between £10,000 and £30,000 on retirement in exchange for better care should they need it. (From The Daily Mail, 29 April)

Challengers fail to communicate effectively to women

A new survey from AltFi and Streetbees revealed that digital banks are failing to build trust among women, despite winning over half of Brits (53%) who would happily deposit their salary into a bank like Monzo or Starling. The study found that awareness of digital banks is lower among women than men, with a quarter of women (25%) saying they’d never heard of any challenger banks. Women also trust digital banks less with their salaries, as 56% would not keep their salary in a digital bank compared to 37% of men. (From AltFi, 29 April)

 Students targeted with high rate loans

High-cost lenders are increasingly targeting students with high-interest loans as they start running out of money at the end of term before their next loan payments arrive. Google analysis reveals searches for “student loan help” are met with deals from a number of lenders offering high-interest credit. (From The Times, 28 April)

Government spends £800K with Gogglebox to promote retirement saving

The Department for Work and Pensions (DWP) has spent nearly £800,000 on producing adverts that promote the benefits of pension saving in partnership with Channel 4’s popular reality TV show Gogglebox. The DWP said it has spent a further £1,346 to promote the campaign on Twitter, and £1,733 via other social media platforms. Though criticised as a waste of money by some, the ad is intended to inspire ordinary families to discuss the topic of saving for retirement. (From Professional Adviser, 15 April 2019)

FCA lays out the intergenerational challenges ahead

This week the FCA released a discussion paper that begins to try and understand the intergenerational challenges faced by the UK population and financial services industry. The big takeaway is: it’s complicated…

The regulator’s paper on Intergenerational Differences explores the needs and desires of Baby Boomers, Generation X and Millennials across mortgages, insurance, pensions and credit.

Unsurprisingly, much of the paper outlines the new challenges the youngest generation faces to save money, invest and buy a home in comparison to older generations. The traditional route to wealth accumulation has become littered with uncertainty with more debt, lower wages and higher barriers to home ownership.

The issue is perhaps encapsulated best by the FCA’s attempt to map out the financial “life cycle” of a typical Millennial compared to a typical Baby Boomer:



The financial hurdles facing today’s young adults are very different, and the climb they face is much more complex than their parents endured. Yet much of the structure and wisdom of the financial services sector is still based on the typical Baby Boomer journey.

In our recent report, “Who’s caught the millennial bug? Short-circuiting the financial services status quo”, we suggested the debate around millennials’ future finances is often overly simplified and focuses on a few headlining-grabbing issues that underplay the complexities of their situation – which the FCA has neatly captured here.

We also found that security is very much on the agenda for the younger generation, again reflecting a financial future that is much more debt-laden and without clear positive outcomes compared with generations past.

Contrary to popular belief, Millennials are also interested in building their financial knowledge amid all this uncertainty – an essential step if they are to navigate their more complicated financial life cycle.

The financial challenge facing many Millennials is increasingly intricate, and the road ahead for the sector is therefore equally challenging. Many of the norms on which the banking, insurance and wealth management industries have based their products and business models are changing, driven by the populations’ needs and desires being in a state of flux.

As the FCA notes: “The data in this paper show how entrenched the financial differences between generations have become… we hope that we can help to build a consensus of how best to adapt… to meet the needs of all generations, both today and tomorrow.”

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