Fortnightly News Blog – 7th December 2021

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Financial Conduct Authority

Consumer Duty: TCF redux?

The FCA continues to be concerned that the financial services industry is not doing a good enough job to ensure a fair deal for consumers, and rolled out a new consultation on Consumer Duty. Sound familiar? Well, in 2015 it wanted the industry to do a better job of treating customers fairly. Read the full Consumer Duty consultation from the FCA here. Refresh your memory on what Treating Customers Fairly (TCF) was all about here, and read Money Marketing’s take on the new Consumer Duty here.

Do fund boards and their directors need to worry about Consumer Duty? It does, after all, feel like something much more targeted at the banks and the insurers who are very much at the coal face of dealing with end customers. Well, think again, because as Garry Murdoch from the FCA said to FBC corporate members earlier in December, it is absolutely something Authorised Fund Managers and their boards need be au fait with. Asset managers feature in the consultation, with a repeat of the FCA’s Feb 2021 feedback on product governance shortcomings and messages on addressing poor value (i.e. Assessment of Value requirements). FBC’s Quarterly Newsletter, out next week, has a summary of the meeting ‘In Conversation with the FCA’, available on playback for FBC corporate members.

Streamlining decision-making

Transformation has been a big agenda item for the FCA, and as part of that process it has sought to streamline the way it makes critical regulatory decisions in a bid to be more effective and efficient in stopping harm to consumers and markets. Read Investment Week’s summary of these proposed changes here, and should you wish to reacquaint yourself with the consulting paper (CP 21/25) issued in July which led to the changes, you can do so here.

On the move

Speaking of transformation at the FCAMegan Butler, the executive director responsible for transformation is ready for her next challenge and will be leaving the regulator next spring. Investment Week reports the move here, whilst other personal changes involve the appointment of Stephen Braviner Roman as general counsel and member of the FCA’s executive committee. Money Marketing has the coverage here

ESG/Responsible Investing

A tale of two sets of expectations: High demand and low delivery

Investment Week has coverage of two reports. In the first, here, it points to Broadridge Financial Solutions’ forecast of assets hitting US$30 trillion by 2030. Impressive, but … in the second, reported here, the asset manager Ninety One surveys over 5000 investors in five markets with the majority (57%) of the respondents saying they do not believe the deals and pledges signed at the recently concluded COP26 Summit are enough to put the world on the unified goal of tackling climate change. Worrying.

And the role of fund board iNEDs …

The directors of fund boards, both executives and iNEDs, have much to think about when it comes to ESG/Responsible Investing and their roles and responsibilities, with the key issues laid out in our lead report in next week’s FBC’s Quarterly Newsletter. But lest there be a few laggard fund board iNEDs not thinking deep and meaningfully about this hugely important issue, Ignites Europe reports the Institute of Directors is calling on the UK regulator to “broaden the role of independent fund directors to include oversight of vehicles’ sustainable investment activity”, as part of efforts to rebuild trust in the country’s fund governance framework. Read their report here and see here for a copy of the IoD’s policy paper.

Diversity

Covering all bases

Fund manager M&G has launched a fund that will invest in some 40 companies with gender or ethnically diverse leadership teams, whilst investment manager Goldman Sachs Asset Management is to take a tougher stance on ethnic and gender diversity at listed companies under new proxy voting policies to apply from next year. Ignites Europe has both reports here and here.

Sting in the tail 

Staying with diversity, but linking it to compensation, two lawyers from Linklaters in this report in Financial News ask an important question. City regulators are focused on how diversity and inclusion can support better decision-making, better outcomes, and better risk management. Could linking progress on diversity to pay drive accountability in firms and incentivise progress? It’s a longish read, here.

Distribution

Abrdn buys II

Much ink has been spilt on the reporting of Abrdn’s acquisition of D2C investment platform Interactive Investor for an impressive £1.5 billion. Read Money Marketing’s reporting of it here. Some think the move is a bold one, and Investment Week has that report here, whilst others think it is hard to see how the fund manager “will use the acquisition”. Ignites Europe has the report here.

Several of the news outlets cited in this blog require registration or subscription. 

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. In some instances, as indicated, a subscription is required to access certain news articles, and content stored on the FBC portal is freely accessible for FBC members.

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