The Latest Headlines From Across The Wealth & Asset Management Sector - August

2022-09-05 |  Leo Chancellor

Welcome to our latest newsletter, in which we shine a spotlight on the latest news and insights within the Wealth & Asset Management world.

In this edition of our newsletter, we reflect on increasingly dreary forecast inflation rates in the UK and the impact of the changing environment on some of the industry’s biggest players.

Plus, in case you missed it, what the upcoming Consumer Duty holds and how to capitalise on the private asset opportunity that market volatility, diminishing returns and high inflation have triggered.

 These are our top stories…

The latest increasingly gloomy forecast inflation figure for the UK emerges

Any advance on 22%? Goldman Sachs reveals their latest inflation rate prediction following Citi’s earlier 18.6% prediction. Markets have remained relatively flat despite this news over the summer, however, with overshoots of inflation forecasts becoming more common across the board this is starting to change.

With costs of living rising and waning investor confidence, we’re watching closely as to the impact on flows and business performance across our wealth and asset management client base. If Operational Efficiency and Automation are creeping up the agenda as a result of these market pressures, we’d be happy to share our experience.

Equity funds hit by worst flows since 2016 but boltholes emerge 

UK equity funds have recorded their worst start of the year since Brexit, with July marking the 14th consecutive month of net selling. Emerging Markets have had positive inflows in July, very unusual given the market conditions. 

 However, this could be due to some emerging economies benefitting from elevated commodity prices. Finally Fixed income and property funds also saw positive inflows in July, growing the likelihood of a global recession.

Hargreaves Lansdown struggles to maintain growth momentum

Hedge funds are circling around the firm as it struggles with DIY investors continuing to cool on the markets post-Covid. This is coupled with the firm’s recent decision to plough upwards of £170m into the development of a digital offering as it looks to diversity its proposition.

Whilst a sizeable percentage of the firm’s shares are held in short positions, a good number of long-term holders are continuing to publicly back the broker. 

FNZ’s deal with Fairstone has turned heads

In its first direct tie-up with an advice business, platform technology provider FNZ has partnered with national advice firm Fairstone to enable the firm to launch its own platform. Whilst it’s early days, it will be interesting to see whether further arrangements like this are forthcoming. 

Should platforms be worried? There is clearly something that they’ve been missing that is beginning to push firms directly to suppliers of tech and services. With several platforms tied up in legacy technology migrations/upgrades, their ability to respond to changing demands may have been hampered somewhat. Definitely an area to watch and food for thought for platforms and their proposition teams.

Study reveals glaring wealth manager ESG oversight

A study has revealed that 46% of adults investing have never been contacted about their ESG beliefs, this seems to come from a systematic approach taken by managers to only discuss ESG investments with specific clients. 

The study found that if the portfolios better reflected the views of retail investors on ESG, 31% of adults would invest more money in the funds. We continue to speak to our clients across both the asset and wealth management segments about the challenges of ESG integration and getting this right, so please get in touch if you want to discuss.

And in case you missed it…

FCA sets the alarm for Consumer Duty…are you ready?

The scope of the Duty covers both direct and indirect relationships with retail customers, with the obligation to meet the duty extending across the product chain. The implication of this for asset managers is that there is a more definitive expectation to consider end outcomes for retail investors even if, for example, product distribution is done by third parties, platforms, or other intermediaries.

In this blog, Su Jones recaps some of the aspects the Consumer Duty will introduce, explores the fundamental shift needed in culture and behaviours and how to get ahead of the race to be compliant.

Capitalise on the private asset opportunity – our latest insights guide

Market volatility, diminishing returns and high inflation have seen a growth in demand for Private Assets. But maximizing the opportunity for attractive returns requires specialist knowledge and operations due to their more complex and illiquid nature.

As a result, many of our clients are facing key issues when looking to expand their exposure to the Private Assets market, which broadly fall into four common themes; Operating Model, Technology, Data and ESG.

To help you navigate the complex world of Private Assets, our Wealth & Asset Management Team have combined client-tested tools and solutions – and their decades of experience and insight – into this guide to create a single point of contact for your use in your organisation.

Thanks for reading. If you’d like to discuss any issues relating to the newsletter that are specific to you or your company, do get in touch

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