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.
Home movers have a spring in their step, says the Halifax
The extension of the Stamp Duty holiday put a “spring in the step” of home movers, according to Halifax, which noted a resurgence in the UK housing market in March. As a direct result of the Stamp Duty extensions in England, Northern Ireland and Wales, the rise in activity caused the average house price to be 6.5% higher than a year ago. While rising house prices will be welcomed by some, it will frustrate those wanting to buy a home for the first time. (From BBC, 9 April 2021)
Is it time to quit Hargreaves Lansdown?
While Hargreaves Lansdown has been described as Britain’s most influential investment platform and innovator, it now faces serious competition. Hargreaves charges a platform fee of up to 0.45% on funds for the first £250,000 invested, higher than those charged by Close Brothers and AJ Bell, and its negotiated deals are increasingly coming under scrutiny because they can restrict customers from moving to rival companies. Other critics observe that its computer systems are unable to cope with surges in demand, with investors claiming that they lost huge sums as certain shares soared. (From The Times, 11 April 2021)
Pandemic sees clients delay decision making
Advisers have been urged to address estate planning with their clients, after research from Octopus Investments found that 61% had clients who had delayed making financial decisions due to the pandemic. The findings come from a January poll of more than 700 advisers, with a quarter saying it had become harder to communicate with their clients during the pandemic, citing this as a potential reason for delays. The poll found that more than half of advisers said they had not yet engaged with clients who could benefit from tax-efficient investments. (From FT Adviser, 13 April 2021)
Gen Z lead new investor participation levels
A new wave of younger investors are entering equity markets. During the pandemic, 16% of Britons aged between 18 and 24 began investing for the first time, compared with 10% across all age groups. Elevated levels of equity market entrants among younger people has been partly driven by this group exploring new activities as a result of having more time to spare amid coronavirus-induced lockdowns. (From FT, 9 April 2021)
PE firms amass dry powder to hoover up distressed assets
Private equity fundraising has soared to record levels in 2021 so far, reaching $50bn, up from just $18.5bn over the same period in 2020. Strong fundraising levels have driven private equity firms to acquire distressed assets. The pandemic and resulting economic disruption has put downward pressure on a large proportion of company valuations, particularly in the retail, leisure and hospitality sectors, making many of them more attractive to private equity firms’ portfolios. (From PE News, 13 April 2021)