John Ventre’s Old Mutual exit shocks industry

The sudden departure of Old Mutual Wealth head of multi-asset John Ventre has left many surprised, even though the team reshuffle following the Quilter Cheviot acquisition makes sense, experts say.

Ventre, together with François Zagamé and Stewart Cazier, will leave Old Mutual Wealth in a restructure of the multi-asset investment team following the £585m acquisition of Quilter Cheviot.

Quilter Cheviot’s Ben Mountain and Old Mutual Wealth’s Anthony Gillham will now lead the combined 24 staff multi-asset investment team as the two multi-asset teams are merged.

Gillham, who currently manages the Old Mutual Voyager Strategic Bond Fund, will also manage Ventre’s Spectrum Funds range as well as the Voyager Funds range with Sacha Chorley.

Tilney Bestinvest managing director Jason Hollands says Ventre’s departure is a surprise for many, especially since the firm has been very supportive in nurturing the fund manager’s image within the industry.

He says: “The news comes as quite a surprise as OMGI have been proactively raising the profile of John Ventre and the team, with regular updates and thought pieces until very recently.”

Axa Weath head of investing Adrian Lowcock also says it is a surprise that Ventre is leaving the firm as he is a significant figure within the group and has a high profile among advisers.

Following the OMGI announcement, Square Mile has removed its recommended rating on Ventre’s Spectrum fund range.

Square Mile says: “Our decision is based on Mr Ventre being integral to the running of the range. Anthony Gillham has assumed responsibility and we plan to meet with him in due course to discuss these strategies moving forwards.”

Hollands says the team reshuffling and the consequent departure of some of its members is simply a “rationalisation of an investment capability,” as after the acquisition of Quilter Cheviot there were some overlapping capabilities between the two investment teams.

He says: “The logic of rationalising the multi-asset capabilities within the Old Mutual group having acquired Quilter Cheviot, is easy to see as this is an area of clear duplication between OMGI and Quilter Cheviot. It also marks a step towards a greater integration of the various distribution and manufacturing businesses within the group, a nudge perhaps towards a more vertically integrating model.”

Lowcock adds: “Whenever a merger or acquisition does occur it usually results in some departures as there are a duplication of roles. So from that point of view it suggests Old Mutual are progressing with the integration of Quilter Cheviot into the Old Mutual Wealth operations and not leaving it run as a standalone business.”

Old Mutual has made a number of acquisitions recently, including investment joint venture Cirilium, as well appointing Richard Buxton as chief executive in August.

Despite the surprise among commentators, experts argue that it is more important to focus on the consistency of the investment philosophy within the newly-formed multi-asset team.

Chelsea Financial managing director Darius McDermott says it is positive that the multi-asset team “will keep carrying on with their range” and that Old Mutual has said no changes will be made to the investment strategy.

He says: “We don’t know Gillham although he has a good track record. However, we think Sacha Chorley will do more of the day-to-day management of the funds.”

AJ Bell investment director Russ Mould agrees that the important thing is the investment philosophy, which advisers and investors will look at very closely.

He says: “People will look at the continuity of the funds’ management but also at whether there will be any changes in the investment philosophy of the funds, which is the most important thing”.

Labour under fire over financial transaction tax plans

Labour’s plans for a financial transaction tax have come under fire amid concerns the policy will “damage growth”.

Speaking at the Labour party conference in Brighton yesterday, CityUK director of policy and public affairs Nicky Edwards said the policy will fail to achieve the stated goals.

Labour leader Jeremy Corbyn has already backed the introduction of a European financial transaction tax of 0.1 per cent on share and bond trades and 0.01 per cent on EU derivative transactions.

Edwards said: “This is being sold as the lovely idea of robbing from the rich to give to the poor, but in fact, it would be precisely the individual consumer and their household that would pay and pay again.

“At every stage of pension saving and with every product people buy, they would have additional cost loaded onto it. It wouldn’t do what it sets out to do, and it would damage growth.”

Speaking on a panel focusing on the contribution of financial services to the wider UK economy, Edwards added that more needs to be done to allow pension firms to better utilise savings assets to boost the economy.

She said: “One of the reasons that we need to have conversations with policymakers about how you regulate the industry so that its safe is so it doesn’t choke the ability to mobilise savings for investment purposes.

“Everyone who has followed Solvency II will know the tensions between safety and investment. I hope we’re moving to a place where the insurance industry in particular is able to put pension savings to work in the interests of growth in the broader economy.

“We are not entirely there yet, but I think we have made a lot of progress.”

Bellpenny pushed to £5m loss by acquisition costs

Advice sector consolidator Bellpenny has reported a loss of £5m for the year ending 31 December 2014, almost doubling losses from the previous year.

Bellpenny recorded a loss of £2.7m in 2013, and blamed the worsening result on costs generated by acquisitions, including the £10m purchase of Torquil Clark.

The deals saw assets under management rise from £1.1bn at the end of 2013 to £2.7bn at the end of last year, while intangible assets on the firm’s balance sheet rose from £15.8m to £33.4m.

However, it also meant that Bellpenny paid a total of £12.3m in initial considerations for purchases, with a further £4.3m paid in relation to prior year acquisitions.

By contrast, the firm spent £5.7m on acquisitions in 2013.

In addition, the average monthly number of employees rose from 97 in 2013 to 224 in 2014, meaning that staff costs also increased sharply from £4m to £8.3m.

Since the end of the financial year, Bellpenny has acquired a further eight businesses for a total of £8.5m funded, in part, by £7.5m of share issuance.

FSCS declares 42 firms in default

The Financial Services Compensation Scheme has declared 42 firms in default, 28 of which are investment and life and pension firms.

The list of 42 firms also includes seven mortgage brokers.

Customers of those companies can now make claims for compensation to the FSCS, which is funded by an industry levy.

The following 28 firms, classified as investment or life and pensions businesses by the FSCS, have been declared in default:

• Standrings
• Montpelier Financial Services
• CPC Wealth Management
• Bonham Wealth Management
• Financial Professional
• Legacy Wealth Management
• Pentyre Investments
• Matthew Round & Co
• Hewitt & Harris Wealth Management Solutions
• Presto Planning
• Planned Exit
• Archer Bramley
• Asquith Hart Financial Management
• Michael Mallen Associates
• Hightree Financial Services
• Newman Wright Financial Advisors
• Select Financial Solutions
• Provision Financial Consultants
• Davinci Wealth Management
• First Action Finance
• W.P.L.C Financial Consultants
• Avidity Wealth Management
• The Joseph Bevan Partnership
• CP Asset Management
• Crisp Financial Services
• Central Investment Services
• The Mortgage Market
• E David Roberts and Co

FSCS head of communications Mark Oakes says: “FSCS protects consumers around the UK when authorised financial services firms cease trading.”

Origo to deliver back office for pensions dashboard

Life and pensions standards body Origo is to develop a pensions register service to power providers’ ‘pensions dashboards’.

The service, designed to slot into firms’ customer portals, will allow customers to see all their pension policies in one place.

The FCA and Government are encouraging pension providers to develop the digital aggregation concept to help customers engage with their savings.

Last week, Money Marketing revealed the Department for Work and Pensions is to delay the roll out of the pot follows member model for pension transfers and could scrap it in favour of a dashboard developed by the private sector.

Origo managing director Paul Pettitt says: “Origo’s Pension Register Service will provide an index as to who holds what and where.

“The service will create a shared index that can be used by government agencies and companies – such as pension providers, platforms, third party administrators, employers, banks, tracing services – to provide their own dashboard capability direct to consumers that they have identified and authenticated as eligible for access.”

Origo is owned by most of the UK’s life companies, including Aegon, Aviva, Legal and General, Scottish Widows and Standard Life.

FCA director Nick Poyntz-Wright exits

FCA director of long-term savings and pensions Nick Poyntz-Wright has left the regulator, Money Marketing can reveal.

As part of his remit, Poyntz-Wright oversaw the supervision of financial advisers. This has now been passed to Linda Woodall, who the FCA announced earlier today has been appointed director of life insurance and advice.

An FCA spokeswoman confirmed Poyntz-Wright has left the regulator to take up another role.

Poyntz-Wright has been at the regulator since 2011. Prior to that, he was chief executive of Skandia UK, now Old Mutual Wealth, for six years.

In December it was revealed that Poyntz-Wright gave the ill-fated media briefing that sent insurer share prices tumbling in March 2014.

It was previously understood that former FCA head of supervision Clive Adamson had given the briefing to the Daily Telegraph about the regulator’s review of closed book policies, as the quotes were in his name.

Adamson resigned from his role in December ahead of the publication of an inquiry into the FCA’s handling of the announcement.

Garry Heath: All roads lead back to unaccountable regulation

One of the biggest challenges we face as an industry is unaccountable regulation. However, even if we were able to completely reform regulation tomorrow the advice sector would still have to resolve some major issues. These are context, productivity and capital.

Context is driven not only by what we are but by what others project onto us. Your client’s attitude to personal finance is probably as much influenced by their parents and grandparents as anything you say.

Grandparents may well look nostalgically at industrial branch advice while their children may feel burnt by direct salesforce advice received in the 1970s. Whatever the attitude, advice was free in all cases. The sector must now get clients to value advice. We are seeing progress but it will take at least a generation.

Productivity, meanwhile, is an adviser’s Achilles’ heel. The only true value an adviser has is in front of their clients. To make this work they need management and, our final issue, capital.

In 2012, I met nearly every private equity house in London. Last week, I met someone who was doing the same thing this year. Nothing has changed. We were both ready to bring a new form of distribution into the UK. We both had great numbers. The biggest challenge? Capital.

The market loves the idea of new players in financial services but will not invest in a sector with such an eccentric and unaccountable regulator. Unless we can access capital, the sector cannot expand or create new ways of bridging the advice gap. Sadly all roads lead back to unaccountable regulation.

Garry Heath is director general at Libertatem

Labour replaces Lord Bradley as shadow pensions minister

Labour leader Jeremy Corbyn has appointed newly elected MP Nick Thomas-Symonds as shadow pensions minister.

Thomas-Symonds, who is MP for Torfaen in Wales, replaces Lord Bradley, who took on the position in May following Gregg McClymont’s defeat in the general election.

Corbyn has now completed his shadow ministerial appointments following his comprehensive victory in the Labour leadership election.

Corbyn’s campaign manager John McDonnell has been named shadow chancellor, while Seema Malhotra, who joined the House of Commons in 2011 following a by-election, is shadow chief Treasury secretary.

The resignation of Rachel Reeves means that Owen Smith becomes shadow secretary of state for work and pensions.

Following Emma Reynolds’ return to the backbenches after her time as shadow minister for communities and local government, Corbyn has appointed a specific minister for housing and planning in John Healey, with the remainder of Reynolds’ former remit taken on by Jon Trickett.

Wells Street Journal: Providers arm advisers

What do your freebies say about you? Last week’s Money Marketing Retirement Strategy Summit at more-glamourous-than-it-sounds Luton Hoo, pension providers had all their wares on show.

Scottish Widows went for the practical approach, handing delegates handy multi-adaptor mobile phone chargers, presumably in an attempt to prove it has left its days of poor adviser support services far behind.

Royal London took a different tact, delivering bulging sacks full of golf balls, tees, and purple umbrellas. Clearing the mutual wants to be associated with funding fit and active retirements.

But the hardest marketing ploy to read came from Retirement Advantage – until recently known as MGM Advantage. In an effort presumably to prove the versatility of the firm’s new drawdown/annuity blend, advisers were given Swiss army knives branded with the provider’s new logo. Should advisers take this as a sign blended products have all the answers they need, or simply that they should use their newly acquired blades next time they have an audience with the regulator?

As is customary at MM‘s pensions events, the wine and whiskey flowed into the early hours.

According to a source – who assures WSJ he stayed up simply to glean wisdom from veteran advisers – two hardy delegates spurned taxis and decided to walk the mile-and-a-half cross country path back to their rooms as the sun began to rise.

An insider told WSJ the hotel had been expecting a tame night from the pensions conference and would be imposing a strict adviser curfew at next year’s event.

Treasury urges private sector to lead pensions dashboard development

Treasury minister Harriet Baldwin has called on the private sector to take the lead in development of a ‘pensions dashboard’ for savers.

The idea of creating a pensions dashboard formed part of the FCA’s recommendations to improve the way the annuity market operates after a thematic review, published in December 2014, found competition “is not working as well as it could” for savers.

Speaking to the Work and Pensions select committee earlier today, Baldwin said she does not believe it is the role of Government to deliver the dashboard, which would allow people to see the value of all their pensions in one place.

She said: “I actually don’t think it would be our role to come up with what’s the best way to do that for everybody. I’m not sure I see that as the role of Government.

“I think it would be the role of Government to try and enable, and see if there are any regulatory barriers that prevent the private sector from innovating in this area.”

Speaking to Money Marketing, fellow committee member and Pensions All Party Parliamentary Group chair Richard Graham says: “I’m positive the Government doesn’t want to lead on it.

“You only have to look at the experience of when it has tried to make efforts in sectors like health to understand that.

“So the industry has to take the lead, but the question remains who is going to do that. And perhaps then they can sell it on to the likes of the FCA.”

Baldwin also suggested the pensions dashboard idea could be expanded to incorporate other forms of saving.

She said: “There are examples around the world where people already have the technology on their iPhone to look at their pensions and savings all in one application that’s been brought in from a range of different providers.

“That’s been brought about by the private sector and financial technology.

“If there are financial technology companies or private sectors providers who are able to come up with that now, I think that it would be something that would be extremely popular and welcomed by consumers.

“I probably should be just setting out that invitation to innovate something in that direction, because it has been done in other parts of the world.”

Iress: Lessons from the Avelo acquisition

An awful lot can change in two years. The Conservatives have won an overall majority in the general election and we have also seen the biggest shake-up to pensions regulation in a generation. Things have certainly not stood still for advisers or, indeed, for Iress. As a business, we are now two years in from our acquisition of Avelo and a lot has happened.

The strength of the acquisition was that it allowed us to take our experience in Australian and South African markets and apply this insight to the UK market. Central to this has been the development of our Xplan platform. We have focused a lot of energy since the acquisition on localising the Xplan solution and building the capabilities to implement it in the most efficient way possible.

The process has not been without its challenges and we have certainly learnt a lot over the past 24 months. For those who want to move to Xplan, we introduced a process to take them across, supported by comprehensive training. Although this has been broadly successful, some clients did experience issues initially. We have continued to invest heavily to address this and make the process as smooth as possible.

I genuinely believe Xplan is able to deliver the same transformational benefits to UK customers as it has done elsewhere in the world. How advisers have reacted globally to regulatory change, such as Future of Financial Advice in Australia, has shown us how important the right technology support can be in making a difference.

From a UK perspective, too, we are seeing regulation drive business change. This is driving a greater need for advice firms of all shapes and sizes to use technology to improve efficiency and deliver a better service at a lower cost. Businesses need a unified solution that supports their end-to-end businesses, not just their back-office or fees and commissions.

We have been working with both existing and new customers to implement Xplan into their businesses but this has not been at the expense of supporting Adviser Office. We know that many advisers are not ready to move to Xplan and, while we have been bringing new solutions to the market from our global product set, we have continued to invest in AO and will keep on doing so for as long as there is demand.

In fact, the most profound change for us over the last two years is moving from being a private equity owned business to a publicly quoted one. We are now able to commit significant investment to all of our products. This means we are able to both maintain and constantly upgrade our software solutions. So, while we have been developing and launching Xplan Mortgage we have also been upgrading AO.

One recent misconception suggested we were less focussed on smaller scale advice firms, which could not be further from the truth. We support businesses of all shapes and sizes, and our investment in our product suite, staff and training processes reflect this.

Looking ahead to the next two years, it is clear our market is set for further change. For example, the Financial Advice Market Review will look at delivering more affordable and accessible advice. Technology, I believe, is the only way this can be achieved.

Advisers, providers, brokers and lenders are continuing to invest in new technology, and we are committed to do the same to match their evolving needs.

Simon Badley is managing director, UK, at Iress

Warning over death benefit beneficiary trap

Advisers must take action to ensure the beneficiaries of deceased clients are not locked out of the pension freedoms, experts warn.

Money Marketing previously revealed how some of the largest pension providers do not allow beneficiaries to access savings passed on to them using flexi-access drawdown.

Some older contracts only allow beneficiaries to take pensions as lump sums, which could incur extra tax charges, or a lifetime annuity.

Old Mutual Wealth pensions expert Jon Greer warns that while customers can move to more modern plans to access a wider range of flexible options, this cannot be done after death.

He says: “This will be problematic for some customers, who may not recognise that it isn’t possible to move pension assets posthumously. In effect, family members may be locked into a sub-optimal arrangement, with no option to move the inherited assets into a beneficiary’s flexi-access arrangement.

“A sensible move is to ensure the incumbent provider can offer beneficiaries flexi-access to avoid inflexibility and unnecessary tax when passing on assets.”

Moving funds to another scheme that does offer beneficiaries flexible ways of taking income will not be treated as a recognised transfer and could be subject to a tax charge.

Santorini Financial Planning managing director Matthew Walne says: “When we request information that’s something we would add into the letter of authority request now.

“Death benefits on pensions are a growing issue, quite a few clients have cottoned on to the fact leaving money in pensions is a good planning tool – if you lost all that you’re potentially leaving yourself open to being sued by beneficiaries.”

Apfa: New cap ad rules will hit mid-sized firms hardest

Income-based capital adequacy rules proposed by the FCA will hit medium-sized advice firms hardest, Apfa warns.

The trade body says some firms will have to hold up to 10 times as much capital under the new rules.

In May the FCA proposed requiring firms to hold 5 per cent of the annual investment business income earned in the previous year from 30 June 2016.

The minimum capital resources requirement will increase from £10,000 currently to 15,000 on 30 June 2016, and £20,000 on 31 July 2017.

Currently firms with up to 25 advisers pay the minimum. Those with more than 25 advisers must hold four weeks’ expenditure, or 13 weeks’ expenditure for networks.

Apfa argues that firms with 10 to 25 advisers which currently pay the minimum will see their capital requirements increase dramatically from next year.

It says a firm with an income of £2m would see its requirement jump from £10,000 to £100,000.

Apfa says in its consultation response that the requirements should be staged for these firms as well as those paying the minimum.

The trade body proposes a level of 3 per cent of income by 30 June 2015, rising to 5 per cent by 31 July 2017.

Apfa director general Chris Hannant says: “Overall, we feel the proposals are sensible. But mid-sized firms will feel the biggest increase and it does not seem right that those with the furthest to go are only given a year to get there.”

Will John Chatfeild-Roberts’ CIO move boost £8bn Merlin range?

John Chatfeild-Roberts’ decision to step down from his chief investment officer role at Jupiter is positive for investors because it will give him more time to focus on the Merlin funds, say experts.

Chatfeild-Roberts, who has been CIO at Jupiter since 2010, will concentrate on managing the £8bn Jupiter Merlin portfolio range, while current deputy CIO Stephen Pearson will take over the CIO role.

Hargreaves Lansdown senior analyst Laith Khalaf says the move is good news for investors in the Merlin fund range because Chatfeild-Roberts “is going to spend more of his time” working on the funds.

Khalaf says the range has gone through “some difficult times” recently, including underperformance and team departures.

Over a three-month period, Merlin’s £31.75m Conservative Portfolio returned less than the sector average, losing 4.04 per cent against the 3.62 per cent loss for the the Mixed Investment 0%-35% Shares sector, FE data shows.

Similarly, the £1.5bn Balanced portfolio returned a 6.32 per cent loss, slightly above the 6.82 per cent loss for the Mixed Investment 40%-85% Shares sector over the same three-month period.

The £1.9bn Income Portfolio lost 5.36 per cent against the 5.16 per cent loss of its Mixed Investment 20%-60% Shares sector in the past three months, while the £4.1bn Growth Portfolio returned -6.91 per cent against the -7.77 per cent for the Flexible Investment benchmark.

Among the reasons for the underperformance is the fund’s underweight to US equities at a time when the asset class was in favour, says Khalaf.

Some of the Merlin funds, especially the Income Portfolio, also had a big exposure to gold and energy, meaning this portion of the portfolios underperformed for some time, says Khalaf.

The Merlin team has also recently lost high-profile fund manager Peter Lawery, who retired at the end of 2014.

Lawery has been a member of the Jupiter Merlin Independent Funds team since 2001 and co-managed the firm’s multi-manager range alongside Chatfeild-Roberts and Algy Smith-Maxwell.

Tilney Bestinvest managing director Jason Hollands says: “Jupiter has grown significantly from essentially being a UK retail-focused boutique to a business including institutional clients. It has distribution into continental Europe so it is understandable that as the business has grown in its scope they should consider realigning roles to reflect that growth.”

Chatfeild-Roberts cited the growth of the business as a reason for his role change, saying: “Jupiter has grown substantially and the assets managed by the Jupiter Merlin team have doubled since I became CIO in 2010.”

Chelsea Financial managing director Darius McDermott says: “Investing is his passion. He is now giving up the responsibility of a CIO to focus on the fund.”

Chatfeild-Roberts’ replacement, Pearson, joined Jupiter in 2001 as European equities fund manager, taking the role of deputy CIO in 2012 and being promoted to head of investments in 2013.

Moeller says: “Pearson should do well. He has an excellent pedigree and knows the business. Jupiter is very much a business that thrives on changes and will always be like that.”

Simon Collins: The three lines of defence on risk management

Now more than ever firms must be able to demonstrate they have robust risk management procedures in place as regulators are increasingly using them as a barometer of their financial health and approach to managing conduct.

A failure to maintain well-articulated risk appetite statements and a practical control framework can result in catastrophe for firms. We have witnessed several examples over the past few years where this has resulted in regulatory censure, loss of business and reputational damage.

Despite these dangers, the regulator is still finding firms making fundamental errors. Failings are not limited to one part of the industry alone, with issues being identified at firms of all sizes across sectors. The fact the larger firms, with more resources to fund the growing costs of regulation, are unable to get this right makes it unsurprising we are seeing issues arise at the smaller end too.

The fundamental requirements for effective risk management are robust controls, independent verification and oversight. How can a small firm best apply these principles? Proportionality is clearly key. This is not a case of one size fits all; procedures should reflect the nature and complexity of the business. Importantly, everyone within the firm must know their role as risk management is the responsibility of the entire business.

Three lines of defence

Traditionally, the three lines of defence are the business units, the compliance function and the internal audit. Small firms can make use of this risk management model, adapting it to suit their size, structure and level of complexity.

The reality is that, within small firms, many of these roles will be held by the same individual. Where this is the case, roles must be clearly defined and the framework robust to ensure the conflicts are well managed and mitigated as far as possible.

Business units and individual business writers are responsible for identifying and assessing risk across areas such as disclosure of the firm’s services, the advice being provided, the rationale for a service and any product selection, as well as the fair treatment of customers.

The business can then be supported and challenged by the second and third line. The second line (compliance) should be as independent as possible in order to assess the first line’s due diligence, advice and records management against the firm’s policies. They should be challenging individuals, regardless of seniority, on their actions and escalating to senior management where necessary.

Checking their work should be a suitably independent individual and, for most smaller firms, external third line (audit function) who can provide an objective assurance to the board. Independent verification and checking is essential. Where it is not possible to be wholly independent, management should ensure individuals are able to act objectively when reviewing colleagues’ work and making an assessment as to its appropriateness.

We see some very good examples where firms have taken the time to think about how they can operate a pragmatic risk structure given limited budgets and senior people with multiple roles. However, we also see our fair share of failings in this regard as employees do not always understand their responsibilities and there are not provisions in place to ensure they are effective.

As a result some firms are facing increased financial crime risk, issues regarding suitability and a higher level of complaints. If the business is unable to assess and monitor the risks it is seeing it will not be producing accurate management information. Without this the firm’s management cannot assess the levels of risk facing the business and therefore cannot determine the level of resource required.

Simon Collins is
 managing director, regulatory, at Eversheds Consulting

FCA to review ‘highly dangerous’ pension transfer info

The FCA is to scrutinise adviser support firm IFA Compliance after it published incorrect information about pension transfers.

In a post on its website the firm – which charges firms £350 a month for compliance support – says network members “are banned from transferring safeguarded rights”.

In what it calls a “major blow” to network advisers and appointed representatives, it says FCA rules mean they cannot advise on the transfer of safeguarded benefits, which includes defined benefit funds and policies with guaranteed annuity rates.

The post says: “Safeguarded rights (guaranteed annuities) cannot be transferred by network members or AR firms, because it falls under Regulated Activity Order Article 53 E and the rules in SUP12.2.2 have not been amended to confirm that.

“This means that network members are banned from transferring safeguarded rights.

“While the rules on this have not changed, what is different today is firstly that guaranteed annuities are taken into account under the new definition of pension transfers.”

It also says consultancy Towers Watson confirmed that it blocked a transfer because FCA guidance meant it could not accept transfer requests from appointed representative firms.

However, Towers Watson told Money Marketing this was not the reason the transfer was blocked.

An FCA spokeswoman confirmed the information is incorrect and that the matter would be referred to its supervision team.

Personal Touch Financial Services sales and marketing director David Carrington says: “It is highly dangerous behaviour.

“Directly authorised advisers rely on that type of information, buying services like this is how they protect themselves from the FCA.

“The comeback on wrong advice would be on the adviser, not on the compliance company.

“It’s at the heart of the DA model. You have more flexibility on how you run your business, but you have to provide all the different bits yourself.

“You choose your support providers carefully to give you what you would otherwise get from a network. For one building block to be wrong or unreliable is a fairly scary place for DAs to be.”

IFA Compliance declined to comment.

At the time of writing the post remains live on its website.

L&G clashes with ICO over protection info rules

Legal & General has clashed with the Information Commissioner’s Office over the use of medical data requests for protection customers.

The ICO has accused the insurer of “seriously misrepresenting” its position on the use of subject access requests.

Some insurers, including Legal & General and Aviva, have until now used subject access requests rather than GP reports to obtain medical information on protection applicants. They argue this gives them more comprehensive information which aids the underwriting process.

But after the British Medical Association raised concerns about the practice in July, the ICO branded it “inappropriate” in a strongly-worded statement.

The ICO said: “By making a subject access request on a patient’s behalf, an insurance company may be provided with a patient’s entire medical record, including information that is not relevant for the purpose of underwriting a policy.

“The ICO has recently written to the insurance industry to explain that we consider that the use of subject access rights in this way is inappropriate and an abuse of that right.

“We also have concerns that the processing of medical records by insurers once received from GPs is likely to breach the Data Protection Act.”

But in an email to advisers last week, Legal & General said it will continue to use subject access requests following further discussions with the ICO.

The email said: “The ICO have confirmed that we’re acting within the law. They acknowledged that we’re not abusing the Data Protection Act.”

The ICO, however, says its position remains unchanged.

A spokesman says: “Legal & General did not clear this with us in advance. It seriously misrepresents our position and we have asked Legal & General to send out a notice correcting it.”

A Legal & General spokeswoman says the insurer is having “ongoing conversations” with the ICO.

She says: “In the meantime we continue to use subject access requests and have not had any adverse reaction.”

Aviva says it is no longer using subject access requests.

Personal Touch to hike fees from October

Personal Touch Financial Services is to hike fees from October in response to rising FCA and professional indemnity costs.

The network wrote to members this week to explain that costs would increase ahead of the year end, with firms paying an extra £4 for FCA bills as well as a further £114 for each investments and pensions adviser they employ.

PTFS will also charge an additional £150 for each adviser authorised for investments, pensions and mortgages to pay for rising FCA fees.

Each adviser working on mortgages business will incur a further £36 fee.

Costs for professional indemnity cover will also rise by £15 per firm, in addition to a further £8 per investments and pensions adviser, and £12 for those individuals authorised for investments, pensions and mortgages.

PTFS says it will continue to subsidise the cost of PI cover by around £500,000 in 2015/16.

In a letter to members, PTFS sales and marketing director David Carrington says: “We have already paid these levies and the increased FCA fees in full.

“Whilst we would normally apply changes to regulatory recharges in our year end fee review, in view of the scale of increases and to minimise the monthly impact on all our firms, we are writing to inform you the changes to regulatory recharges, will be implemented from 1 October 2015.

“Please note that for firms with three and six months’ notice periods the implementation dates will be either 1 December 2015 or 1 February 2016.”

In November last year PTFS announced a new fee structure, introduced in February, based on quality of business. It says 80 per cent of its members are paying reduced fees as a result of the change.

The FCA said in March that advisers’ fees would increase by 10.2 per cent in 2015/16 to account for higher staff and technology costs at the regulator.

Advisers who don’t hold client money will pay £74.9m in 2015/16, up from £68m in 2014/15.

Nest seeks emerging market bond fund mandate

Nest is seeking to add an emerging market bond fund mandate to its “building block” funds.

The scheme is searching for an actively managed pooled fund that blends bonds denominated in local and hard currencies.

The deadline for receiving tenders is October and the contract will be awarded in early 2016.

Nest’s existing building block asset classes are: global developed equities, UK gilts, UK index-linked gilts, low-risk sterling liquidity, global ethical equities, Sharia-compliant equities, Sterling investment grade bonds, UK direct property, hybrid property, ethical corporate bonds, emerging markets, and single year gilts.

Nest chief investment officer Mark Fawcett says: “Emerging market debt is becoming a strategic holding for a growing number of pension schemes. This is in part because emerging market bonds can offer attractive yields in an otherwise low yielding fixed income environment.

“Nest is committed to searching out new opportunities for diversification where we see potential benefits for our members.”