Money Marketing’s Weekly Must-Reads: Top 10 Stories
This week has been a whirlwind of regulatory updates, industry shifts and insightful reports. From the FCA’s stark warning to advice firms about “polluter pays” expectations to the revelation that young people are turning to social media for financial guidance, the landscape is evolving rapidly.
FCA’s warning shot to advice firms as it outlines ‘polluter pays’ expectations
The FCA outlined expectations for firms under its “polluter pays” proposals, urging immediate action to address redress liabilities.
Firms must ensure risks are provisioned for, with adequate resources like capital, run-off cover or escrowed funds. The FCA demands transparent decisions, liability transfers in customer interests and SUP 15 notifications before transactions. Non-compliance risks rejection of applications, additional scrutiny or enforced corrective steps.
Brian Nimmo advised firms to prepare for compliance, warning unpreparedness worsens outcomes. Poor practices already cost the FSCS £760m between 2016–2022.
Young people want more guidance from financial services firms
Nearly half of young people believe financial services firms should provide guidance, with 90% desiring help managing money, according to MRM’s Young Money report.
Social media, including “finfluencers”, is a key information source for 59%, rising to 74% in London. Trust in finfluencers remains high at 77%, yet only 3% distrust them. Firms face challenges competing with influencers, needing to create engaging, reliable content.
Despite economic struggles, 63% of young people expect improved living standards, reflecting optimism in their financial futures.
SJP gives Schroders £5.2bn sustainable investment mandate
St James’s Place (SJP) awarded Schroders a £5.2bn sustainable investment mandate, allocated through SJP’s Sustainable & Responsible Equity (SRE) fund to Schroders’ Global Sustainable Value and Growth strategies.
This transition, expected in Q1 2025, provides SJP investors access to diversified, sustainable opportunities. Both firms plan to adopt the FCA’s ‘Sustainability Focus’ label under Sustainability Disclosure Requirements.
Schroders executives highlighted the partnership’s alignment with their robust investment approach and commitment to sustainability, reflecting growing demand for tailored, sustainable investment solutions.
Torsten Bell named new pensions minister
Labour MP Torsten Bell was appointed pensions minister, succeeding Emma Reynolds. Bell, formerly CEO of the Resolution Foundation, brings economic expertise and a strong understanding of pension policy.
His dual role across HM Treasury and the Department for Work and Pensions highlights Labour’s prioritisation of pensions in its economic agenda. Bell’s history of advocating pension tax reforms has sparked industry interest.
Jon Greer of Quilter stressed the need for a stable minister to ensure lasting reform amid challenges like sustaining the state pension triple lock.
Using a partner’s pension as a financial planning tool
The OECD’s call for UK fiscal reform has renewed concerns about pensions.
Contributing to a partner’s pension is a practical tool, addressing the 35% gender pension wealth gap and offering tax efficiencies. Couples can boost retirement savings, benefit from tax relief and maximise allowances, especially for high earners. However, unmarried partners face fewer legal protections, highlighting the need for clear records.
Haydn Barlow, a chartered financial planner at Equilibrium Financial Planning, emphasises this strategy combines resilience with smart planning, ensuring long-term security for couples.
Söderberg acquires stakes in three more advice firms
Swedish wealth manager Söderberg & Partners acquired stakes in three UK financial advice firms: Francis Clark Financial Planning, Qi Financial Solutions Ltd, and Radcliffe & Co Independent Financial Advisers.
These firms manage a combined £2.565bn in assets, with expertise spanning long-term planning, tailored solutions and niche sectors. Söderberg & Partners’ CEO, Gustaf Rentzhog, highlighted the entrepreneurial spirit and innovation within these businesses, expressing support for their growth.
This investment reinforces Söderberg’s expanding presence in the UK financial-advice market.
Jess Franks: Some misconceptions around changes to Business Relief
Jess Franks, head of investment products at Octopus Investments, addressed misconceptions about Business Relief (BR) changes, effective from April 2026.
The Autumn Budget introduced a £1m individual BR allowance, with relief above this limit reduced to 50%. Couples can combine allowances but must plan individually to maximise benefits. Defined contribution pensions will also face inheritance tax from 2027, impacting estate planning.
Franks emphasised early discussions with clients and potential BR planning to optimise tax efficiencies while awaiting detailed legislative guidance.
Liontrust outflows hit £1.6bn as further job cuts planned
Liontrust Asset Management reported £1.6bn in net outflows for Q4 2024, with assets under management and advice dropping 5.3% to £24.6bn.
Additional job cuts are planned following 25 announced in November. CEO John Ions acknowledged challenges but anticipates a more favourable market for active investors in 2025, citing stronger fund performance.
Liontrust also secured FCA approval for Sustainability Disclosure Requirements labels on 10 funds, totalling £8.5bn, aiming to enhance trust and transparency in sustainable investing.
Fairstone adds £4bn assets with acquisition programme
Fairstone added £4.1bn in assets via its Downstream Buy Out (DBO) partnership programme, welcoming 29 firms and 177 advisers over two years.
The DBO model supports IFA firms by releasing capital and optimising value before full acquisition. CEO Lee Hartley highlighted Fairstone’s 2024 growth, with firms achieving up to 180% of initial sale values post earn-out.
Fairstone oversees £17bn in assets, serves 125,000 clients and expanded its offerings with Special Purpose Vehicle and Start-up Joint Venture models for entrepreneurial advisers.
Rathbones sees £3.4bn of outflows, ‘partly elevated’ by Autumn Budget
Rathbones experienced £3.4bn in outflows in Q4 2024, partly influenced by increased withdrawals surrounding the UK Autumn Budget.
Despite this, the firm achieved £3.2bn in gross inflows. Funds under management and administration (FUMA) rose to £109.2bn. The merger with Investec Wealth & Investment (IW&I) showed positive results, with strong net flows of £400m, compared to £100m in Q3.
Rathbones aims to complete the IW&I client migration by mid-2025 while focusing on marketing and organic growth opportunities.
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