Money Marketing’s Weekly Must-Reads: Top 10 Stories
This week’s top stories cover Chancellor Reeves’ Budget struggles and potential changes for self-employed advisers. Read on for more:
Chancellor Reeves ‘wrapping herself in a straight jacket’ ahead of Budget
Chancellor set to scrap plans to change pensions tax relief
Rachel Reeves is expected to scrap plans to alter pensions tax relief in the upcoming Budget, as reported by The Times.
Previously, there was speculation that Reeves might switch to a flat tax relief rate to address the £22bn financial shortfall. This change could have benefited basic-rate taxpayers but penalised higher earners.
Experts now suggest the government may instead introduce a “death tax” on unused pension funds and reduce employer relief on National Insurance contributions.
True Potential hires new CEO from Tesco Bank
True Potential has appointed Tesco Bank CEO Gerry Mallon as its new chief executive, replacing co-founder Daniel Harrison, who is stepping down after seven years.
Mallon, who led Tesco Bank for over six years, will assume the role in early 2025, pending regulatory approval. In the interim, chief information officer Jeff Casson will act as CEO. Mallon brings extensive experience from roles at Ulster Bank, Danske Bank and McKinsey & Co.
True Potential’s chairman praised Mallon’s credentials and commitment to client-centric values.
Aviva completes £1.5bn annuity transaction
Aviva has completed a £1.5bn bulk purchase annuity buy-in with the Michelin Pension and Life Assurance Plan, securing the benefits of around 15,000 members.
The transaction, finalised in September 2024, included an in-specie asset transfer. Aviva’s CEO of insurance, wealth and retirement, Doug Brown, highlighted the firm’s strength in large-scale pension transactions. The Michelin Pension Trustee, advised by XPS Group, expressed satisfaction with the deal’s security improvements for members.
Aviva manages assets worth £398bn and serves 19.5 million customers.
Is time up for the self-employed adviser?
The use of self-employed advisers in financial services may soon face increased scrutiny, following the IR35 case against ex-rugby player Stuart Barnes, who was left with a £700,000 tax bill.
Employment lawyer Claire Holland warns that many self-employed adviser contracts might not pass HMRC’s employment status tests. Key concerns include personal service, control and client ownership.
Firms heavily reliant on self-employed advisers should consider alternative business models, as HMRC could soon focus on the financial services sector, mirroring actions in other industries.
FCA to probe consolidation in advice market
The Financial Conduct Authority (FCA) has announced a review of consolidation in the advice market, noting an uptick in firm acquisitions over the past two years.
In a letter to advice and investment firm leaders, the FCA acknowledged that while consolidation can be beneficial, it may also lead to risks if not managed prudently.
The regulator plans to assess the suitability and financial soundness of acquisitions, urging firms to seek approval before completing transactions. Firms must prioritise good outcomes and conduct thorough due diligence, especially if acquisitions are debt-funded.
AJ Bell strengthens senior leadership team with two appointments
Mark Dampier: Why active management is really over
Mark Dampier argues that active management in the asset management industry is facing unprecedented pressure as passive funds gain dominance.
Historically, active funds were recommended for their commission structures, but recent changes have shifted investor preference towards cheaper passive options, particularly following the Retail Distribution Review and Consumer Duty regulations.
With passive funds outperforming most active funds over the past 15 years, and the growing influence of large US companies in global indices, Dampier anticipates significant consolidation within the active management sector.
Behind the Headlines: FCA consolidation review is a ‘wake-up call’ for buyers and sellers
The Financial Conduct Authority (FCA) has announced a review of consolidation in the advice market, which has become increasingly relevant amid recent activity.
As firms seek to sell before anticipated capital gains tax increases, the FCA warns buyers and sellers to ensure rigorous due diligence and regulatory compliance. The review aims to assess the suitability and financial soundness of acquisitions, stressing that poor practices could harm consumers.
Experts suggest that this is a timely move for the FCA, given evolving market dynamics and the need for updated guidelines.
‘Selling your advice firm should be the last option’
Advice firm owners should consider selling their businesses as a last resort, said Roderic Rennison from Catalyst Partners during a recent session at Money Marketing Interactive.
He advised exploring alternatives like management buyouts (MBOs), employee ownership trusts (EOTs) or family succession before deciding to sell. Rennison highlighted the importance of having a written growth strategy and warned that the sale process involves more than just the transaction itself.
Integration challenges post-sale can impact staff morale and deferred payments, making careful planning essential.
