Fortnightly News Blog – 16 May 2023

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Consumer Duty crackdown

Sheldon Mills, the Financial Conduct Authority (FCA) executive director of consumers and competition, has said that the regulator will take “robust action” against firms who ignore the Consumer Duty regulation, which comes into effect on 31 July, Professional Adviser reports. Unfortunately, an FCA review into the Consumer Duty preparedness of firms has found a lack of challenge on the question of fair value to clients, also carried in Professional Adviser. 

Meanwhile, Franklin Templeton has said it will withdraw share classes on several of its offshore SICAV funds, due to consumer duty rules ‘making it less economically viable’. Comment from UK country head Martyn Gilbey in Citywire.

EU values 

Early sight of the imminent EU investment strategy draft proposals, set to be unveiled on 24 May, include tough ‘value for money’ rules, Reuters reports. Also take a look at Ignites Europe view.

Old-school rules

Sheila Nicoll, senior public policy adviser at Schroders, commented that rules for Ucits funds have fallen behind the times. Ignites Europe reports on the speech made at an event organised by the development agency Luxembourg for Finance.

Scaling up

Despite regulatory pressure to pass on economies of scale, Fundsmith is standing firm on its pricing model based on the value delivered, not the cost of delivering the service. The boutique manager has rated both its £24.3bn (€27.9bn) Fundsmith Equity fund, and the £702.2m Fundsmith Sustainable Equity fund, top in all seven pillars of Assessment of Value. Ignites Europe has the full story. 


Market News

Fintech furore

Top executives at one of Europe’s most highly valued fintechs, N26, accused the co-founders of promoting a “culture of fear” that threatened to drive the group into a “downward spiral”. Hopefully these governance red flags don’t see it going the way of Silicon Valley Bank! Read more in the Financial Times (FT). 

Looming liquidity crisis

Very timely in current market conditions, global chief investment officer at State Street Global Advisors, Lori Heinel, gives her view on liquidity risk management in the FT. And in case you’ve not seen it before, or you want another look, still very relevant is Brandon Horwitz, FBC Senior Adviser, interview with Sebatjan Smodis, also from State Street Global Advisors, on Managing Fund Liquidity (on our Product Governance webpage) and, for FBC members, the Practitioners View on Best Practices too (in the Member Portal). 

Driving change

Schroders owned wealth firm, Cazenove Capital, put forward six recommendations to asset managers for voting best practice. Read the list, aimed at ensuring the industry takes demonstrable action on sustainability and ESG, rather than just talking about it, in Portfolio Adviser.


People News

Retirement retreat

A year after retiring from Baillie Gifford, fund manager James Anderson, is teaming up with the Agnelli family holding company with an investor role at Lingotto Investment Management, a new $3bn firm owned by Exor. The FT has the details.

Chair change

Nucleus Financial Platforms has appointed Heather Hopkins, managing director and founder of specialist consultancy NextWealth, as chair of its advisory board. More detail on the board’s newly expanded remit in Money Marketing.


Longer Read

Dr Bernd Scherer, Chief Investment Officer of large German asset manager LBBW AM, and an asset management academic, proposes a way to help investment committees make more effective investment decisions using evidence from social psychology. An interesting and thought-provoking read in SSRN. 

Several of the news outlet cited in this blog require registration or subscription. Also, FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. Content stored on the FBC portal is freely accessible for FBC members.