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.
News you can use
Calpers, Schroders call for mandatory inclusion of climate risks in accounts
A growing number of investors, including Calpers, Schroders and DWS, are calling for companies to follow BP’s example and include material climate risks in accounts. The concern is that financial statements that don’t properly incorporate climate change risk aren’t accurately reflecting the longer-term outlook for many businesses. Anne Simpson, interim managing investment director for board governance and sustainability at Calpers, says ad-hoc reporting on climate risks was often “not overseen by auditors, not standardised, not verified or produced in a timely manner, [and that] is not good for investors”. The UK’s Financial Reporting Council said this year that it would undertake “a major review” of the way UK businesses disclose climate risks in their reports and accounts. (From Financial Times, 15th August 2020)
The false dawn of mortgage advice technology
An opinion piece on the premature predictions of the demise of the ‘traditional’ mortgage adviser due to increased digitisation in the sector and the introduction of robo-advice. Self-proclaimed disruptors in the mortgage intermediary space often justify their necessity with limited sample sets of consumer surveys. It is added that wider surveys have identified that instead of simply relying on technology, customers want to deal with an adviser with access to great technology and the knowledge to resolve the array of challenges which typically arise during the home-buying process. (From Mortgage Solutions, 24th August 2020)
British workers have “no idea” how their pensions work as only a third realise workplace schemes are invested in the stock market
According to a new survey from Hargreaves Lansdown, only a fifth of women in the UK are aware that their pension savings are invested in the stock market. While a higher proportion of men surveyed understood their pension was in the stock market, the survey found that 69 per cent of the country’s workers didn’t know how their workplace scheme works. The findings also raised concerns over transparency when it comes to pensions, with a significant number of respondents saying they believed their pension savings are invested in ‘something nefarious’, including for private use by their employer. (From Daily Mail, 25th August 2020)
The Guardian view on fair dealing: name firms bailed out by the state
A commentary piece arguing that if the government supported 1.2m businesses with £50bn of government-backed coronavirus loans, then the public ought to know who the recipients are. The article highlights that the government has demonstrated a lack of transparency in this area, as only when ministers have been taken to court by the Good Law Project have they been forced to reveal details of public contracts awarded under emergency rules. It is added that the few projects made public so far have triggered concerns, namely that money has been wasted on inadequate products and awarded to those with political connections. (From The Guardian, 24th August 2020)
Fewer financial services SMEs lay off staff during pandemic
According to new figures from Barclaycard, financial services SMEs laid off fewer employees than the average firm during the Covid-19 pandemic; just 21 per cent of firms let staff go as opposed to the average 41 per cent. This has led to increased optimism in the sector, with more than a third of financial firms remaining positive compared to just under a quarter responding with the same optimism across all SMEs. In addition, 32 per cent are planning to invest in recruiting staff over the next 12 months, compared to just 24 per cent of firms overall. (From City AM, 20th August 2020)