Catch up on Money Marketing’s most popular stories this week. Consumer Duty should end active management and Monzo moves into the pensions market. Read more below:
The Consumer Duty should end active management
The Consumer Duty, which sets higher and clearer standards of consumer protection across financial services, should put an end to financial advisers putting their clients in active funds. This is because passive funds, which track a market index, have been shown to outperform active funds over the long term. Rockwealth head of client education Robin Powell said that it is becoming harder to make a case for active management, and that many financial advice firms are still advocating it despite the evidence.
State pension set to rise as wage growth hits 8.2%
The state pension is set to rise by £869 next April to £11,469, as average pay including bonuses hit 8.2%. The rise in average earnings between April to June 2023 could see the state pension increase by 2% higher than expected by the chancellor at the time of the Budget. The rate of increase will depend on the highest of three numbers: the rise in average earnings, the rate of CPI inflation and a floor of 2.5%. The rise in average earnings for the months May-July 2023 will be published in September 2023.
Monzo moves into pensions market
Monzo is on the hunt for a pensions product manager to join its newest savings and investment team. The digital bank is looking to launch a pensions product in the next few months, and the product manager will be responsible for leading the development and launch of the product. The ideal candidate will have experience in the pensions industry, and will be able to build a product that is both user-friendly and meets the needs of Monzo’s customers.
‘Dog funds’ increase 27% since February 2023
The number of “dog funds” in the UK has increased by 27% since February 2023, according to a new report by Bestinvest. A dog fund is one that has underperformed its benchmark by 5% or more over a three-year period. The report found that there are now 56 dog funds in the UK, with a combined value of £46.2bn.
Carl Lamb: Advisers’ crisis of confidence
Financial adviser Carl Lamb has warned that the advice sector is facing a crisis of confidence, as clients become increasingly concerned about the state of the economy and the performance of their investments. Lamb urged advisers to focus on managing their clients’ mindset and ensuring they understand the importance of looking at building wealth as a long game.
Aviva claims 90% of adviser platform is automated
Aviva’s adviser platform is now 90% automated, according to the company’s chief executive of UK and Ireland Doug Brown. Brown said the automation is part of Aviva’s efforts to make it easier for advisers and customers to deal with the company.
Victoria Ross: Professional qualifications aren’t up to scratch for the modern world
Victoria Ross, a chartered and certified financial planner, argues that the current professional qualifications for financial advisers are not up to scratch for the modern world. She says that the qualifications focus too much on the technical aspects of financial planning and neglect the emotional and behavioural aspects.
What next for consolidators as pressure piles on business models?
The financial advice sector in the UK is facing increasing pressure, with rising costs and regulatory demands. This has led to a slowdown in consolidation activity, as buyers become more discerning about the future financial performance of IFA firms. Consolidators will need to adapt their business models to survive in this challenging environment.
Aegon retail platform suffers as £1.1bn flows out
Aegon’s retail platform suffered net outflows of £1.1bn in the first half of 2023, as customers reduced activity due to the current macro-economic environment and an industry-wide reduction of transfers from defined benefit to defined contribution pensions.
Exclusive: Advice firms must be realistic on valuations
Advice firms looking to sell their businesses must be more realistic about valuations as the consolidation market grinds to a halt. Industry experts say that both buyers and sellers need to be realistic in the current economic climate for deals to be agreed.
