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

FCA signals intent to clampdown on consumer investment market

The FCA has issued a “call for input” to help it decide how existing rules can reduce the likelihood of consumer harm in the retail investment market. Mounting regulatory scrutiny has been driven in part by the City regulator responding to a string of recent scams and instances of mismanagement of investor capital. The consultation is designed to address the high level of unsuitable products and advice offered to consumers to help improve confidence in the market. The feedback will help shape the FCA’s work over the next three years. (From Reuters, 15 September 2020)

£2tn of pension wealth at risk of scammers

More than £2tn of pension wealth could be at risk of theft from scammers, according to research. The high levels of risk are in part the result of the introduction of pension freedoms making consumers more exposed to financial criminal activity. The research found £31m of pension wealth had been lost to scammers from just 13 providers, while 62% of consumers went on to transfer their pension even when warned of the risks. Industry leaders have urged firms to strengthen their internal controls and recommended that regulators be given greater power to block transfers if they suspect it is fraudulent to help reduce the likelihood of pension wealth theft. (From the FT, 9 September 2020)

Mortgage gap widens for cash-strapped buyers

First-time buyers are facing a widening gap between saving rates and mortgage rates, driven in part by banks seeking to maximise profits in a record-low interest rate environment. There is now a 3.28% difference between the average easy-access savings rate, at 0.22%, and the average mortgage rate for a first-time buyer with a 10% deposit, at 3.5%. Steeper borrowing costs and a contraction in lenders offering high loan-to-value mortgages could cause a barrier to entry for first-time buyers. This may result in a dip in activity in particular segments of the market such as new-build properties. (From The Times, 13 September 2020)

LSE aims to tap blank check companies

The London Stock Exchange is considering introducing new measures to attract blank check companies to list on the bourse. The response comes as US stock markets have benefited from a sharp rise in activity driven by a wave of SPACS – a form of blank check company – listing on American exchanges. SPACS often act as a vehicle for companies to access public markets without going through lengthy listing processes. Investor interest in these vehicles has grown recently due to the exposure they provide to many companies in different sectors. (From Private Equity News, 15 September 2020)

Inner London experiences renters flight

Inner London transport hubs are experiencing a flight of renters as they seek larger properties with access to green space. The high levels of people leaving inner London has been driven in part by the need to be close to physical workplaces diminishing due to workers being able to work from home. Prolonged periods spent at home during the height of lockdown has also prompted renters to reconsider their housing needs, possibly causing them to move further out of the capital or to the countryside. (From The Guardian, 15 September 2020)