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.
Property market boom could quickly turn to burst
Concern among estate agents and surveyors is mounting over the risk of a surge in activity in the property market in July coming to an abrupt halt if the UK economic downturn deepens later this year. A sharp rise in demand for properties has been partly driven by buyers taking advantage of the financial incentives provided by the nine-month Stamp Duty holiday. However, a possible increase in unemployment following the winding down of the government’s furlough scheme is likely to suppress buyer activity. (From FT, 13 August 2020)
Advice gap to widen amid households experiencing financial strain
The financial advice gap could widen as financial advisers turn away prospective clients, while others prepare to leave the business, according to a new survey from Octopus Investments. The report’s findings come as many households may require financial advice to help guide them through intensifying financial strain caused by the pandemic-related economic decline. Attracting more people into the industry could help narrow the advice gap by increasing the supply of financial advice. (From FT Adviser, 18 August 2020)
Financing to dry up for fintechs and start-ups next year
The majority of fintech founders in the UK believe that Covid-19 will make it harder to raise finance in the next year, according to a study by Digital Finance Forum. Increasing difficult in securing new funding may have been partly driven by investors and venture capitalists taking a more cautious approach to allocating their capital due to fears over a worsening global economic climate. Traditional sources of funding for start-ups and fintechs may dry up as investors spark their capital in safer assets. (From Private Equity News, 18 August 2020).
The only V-shaped recovery after coronavirus will be in the stock markets
While the rapid bounce in stock markets helps to give the impression that the economic crisis is drawing to a close, this is not the case for many, highlighting the widening gulf between what is happening in the real world versus the financial markets. It is also argued that policy makers continue to ensure that there is a permanent welfare safety net for financial markets, adding that government measures taken to cope with one crisis inevitably bring forward the date of the next one. (From The Guardian, 18 August 2020)
Passive funds to take even bigger bite of ESG amid $48bn green ETF boom
According to new findings from investment manager Invesco, 55% of institutional investors expect that the majority of their ESG holdings will be held in passive, index-tracking products over the next five years. It is also observed that investment in environmentally themed exchange traded funds has been accelerated by the Covid-19 pandemic, with an increased focus and prioritisation of ESG within the sector. (From Financial News, 19 August 2020)