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FSCS levy to soar by a third to top £1bn

 

The Financial Services Compensation Scheme is forecasting a levy for 2021/22 of £1.04bn, up £339m from the £700m raised the previous year due mainly to soaring numbers of claims.

The FSCS expects continuing failures in the SIPP sector and says the cost of compensating victims of the collapsed mini-bond firm London Capital & Finance is much higher than expected.

The FSCS said in its Annual Plan and Budget out today: “We expect further failures of self-invested personal pension (SIPP) operators. Claims in relation to SIPP operators are forecast to account for £336m of the Investment Provision’s anticipated £345m compensation costs. The compensation cost for this class is a significant (89%) increase on 2020/21, mainly due to expectations that firms in this sector may fail.”

Because of rising claims the FSCS will go ahead with a supplementary levy of £78m to be invoiced in February although the FSCS said this was

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The founder who decided to to stop fundraising and instead hold onto her equity

This is an installment of Startup Year One, a special series of interviews with founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.

Many founders fall into the trap of believing that fundraising is a rite of passage in the startup world. But it can also be hugely distracting, discouraging, and if you are a female, the odds aren’t good, to put it politely.

Former Air Force pilot and self-described serial entrepreneur Riley Rees initially went the traditional route with her startup, Sofia Health. Founded in 2019, Sofia Health is a digital platform for connecting prospective patients with physicians and specialists in western, alternative, and holistic medicine.

Estimated to be worth $120.8 billion, the mental wellness market was recently defined for the first time by the Global Wellness Institute as consisting of four sub-segments: self-improvement; meditation and mindfulness; … Read the rest

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Editor’s Column: FSCS levy reform can’t come too soon

If I was a Financial Planner I would likely be infuriated by the news today from the Financial Services Compensation Scheme forecasting a levy on regulated firms of over £1bn over the next 12 months, up 30% on the previous year.

The seemingly inexorable increase in the levy has undoubtedly left many advisers hopping mad but perhaps it’s time for some cooler thinking.

It’s too often forgotten that the levy pays for invaluable compensation for consumers who have lost money due to their adviser or provider failing.

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That seems to me a worthwhile job and I suspect most planners and advisers accept that too. Ditching the safety-net is not an option.

One could argue the protection is too generous and that consumers should take more responsibility for their investments but ultimately the FSCS underpins consumer protection in the UK. It’s not a perfect solution but for investors who

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How I tripled my money in bitcoin—then lost almost half of it

This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox. 

Fortune’s quarterly investment package came out this week and it’s filled with stories about tech.

That’s probably not surprising given that tech stocks have been surging for a while now. The S&P 500’s tech sector gained 44% last year versus 18% for the overall index. Collectively, the big six–Apple, Microsoft, Amazon, Google, Tesla, and Facebook–are now worth over $8 trillion. To some it’s an obvious bubble, to others a logical response to the winners of the year of COVID.

With tech’s big sway in the stock market, I’m benefitting indirectly and so are you, most likely. All of my investments are in mutual funds, mainly low-cost index funds, and they’re topped up with the big six and other … Read the rest

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FSCS £1bn levy warning is a ‘scandal’ – PIMFA

Wealth manager trade body PIMFA has attacked the FSCS forecast today of a £1bn compensation levy as a “scandal” which points to regulation failing consumers and firms.

The trade association said the industry has reacted with “disbelief” over the plans for a levy a third higher than the previous year amid a backdrop of soaring claims and firm failures.

PIMFA says the soaring FSCA levy highlights that urgent regulatory reform is needed.

Tim Fassam, director of government relations and Policy at PIMFA , said the soaring cost of the levy is a symptom of a system that is out of control.

PIMFA wants the Treasury to find an alternative way of funding the FSCS levy which is used to compensate savers and investors when their provider has failed.

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The levy has soared due to pensions and SIPP failures and the collapse of £236m mini-bond firm London Capital &

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A Loon comes down to earth

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox. 

It was an admittedly loony project in the first place: Loon, a much-hyped project aiming to deliver internet via helium balloons, will be shuttered, Google’s parent company Alphabet said late Thursday.

Formed nearly ten years ago within the tech giant’s “moonshot”-focused research lab, X, the hope was to use the balloons to send internet service into areas that have limited to no internet access. While the numbers are hard to come by, an estimated 3 billion to 4 billion people in the world today still can’t shop online (or read this newsletter).

So it makes sense that many tech giants and flashy billionaires view the practice as a major business opportunity: Elon Musk has Starlink; Richard Branson and SoftBank have OneWeb; Jeff … Read the rest

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FCA proposes CMC fee price cap

The Financial Conduct Authority (FCA) has proposed a price cap on the fees claims management companies (CMCs) charge their customers in relation to claims for financial products and services.

The proposed cap would restrict CMC feeds to 15-30%, depending on how much redress a consumer is due.

The maximum charge under the proposals falls into five redress bands, with the maximum percentage falling the higher the consumer redress obtained.

The cap will apply to all claims where a consumer is awarded monetary redress other than PPI claims which are already subject to a 20% cap set by Parliament.

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Some consumers currently pay fees of more than 40% of their compensation, according to the regulator.

Under the proposals CMCs will also be required to disclose key information, including giving consumers more information about how the fees they pay will be calculated and better signposting to the free alternative routes

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How will the pandemic reshape corporate travel?

The valuation of Airbnb soared to new heights in its debut in public markets, even while the pandemic kept revenues depressed.

Now another unicorn startup focused on the travel space is also getting an upround: TripActions, a maker of corporate travel and expense software, announced that it had raised $155 million in funding Thursday, bumping its valuation up from $4 billion in 2019 to $5 billion today even though revenue remains below pre-pandemic levels. The Series E round was led by Andreessen Horowitz, Lee Fixel’s Addition Ventures, and investor Elad Gil. Zeev Ventures, Lightspeed Venture Partners, and Greenoaks Capital also participated.

It’s an upround that would have been hard to imagine at the start of the pandemic. Multiple startups in the space took action to cut expenses, and TripActions laid off a quarter of its 1,100 employees as bookings and usage among its customers dropped 90%.

But … Read the rest

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Jupiter reshuffles sustainable funds team

Fund manager Jupiter has reshuffled its sustainable investing team in a move which sees the exit of 20 year Jupiter veteran Charlie Thomas for a new role outside the company.

The changes include:

  • Abbie Llewellyn-Waters appointed head of sustainable investing
  • Rhys Petheram appointed head of environmental solutions
  • Charlie Thomas has left to become CIO at EdenTree Investment Management
  • Jon Wallace appointed fund manager of Jupiter Ecology, Jupiter Responsible Income, equity segment of Jupiter Global Ecology Diversified and Jupiter Green Investment Trust 

Ms Llewellyn-Waters has 15 years of sustainable investment experience and has managed the Jupiter Global Sustainable Equities fund since launch.

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In her new role, she will lead the firm’s sustainable investing capability while continuing to focus on managing the global sustainable equity strategy.

She will work with Jupiter veteran Edward Bonham Carter who has taken on a new role focusing on the company’s stewardship and corporate responsibility

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Tech and crypto funder Andreessen Horowitz wants to replace the media. That might be bad news for investors.

If you have even a passing familiarity with Silicon Valley or cryptocurrency, you’ve likely heard of Andreessen Horowitz, one of tech’s highest-profile venture capital firms. The firm, which tech insiders call a16z, is famous in part because of its investments—Facebook, Coinbase and other familiar names—but also because of its mastery at charming (and manipulating) the media.

So perhaps it’s no surprise that a16z is building a media empire. The details are still trickling out, but the short version is that, after a decade of cultivating journalists over intimate cocktail affairs, the firm has decided it no longer needs them. Instead, a16z is hiring a large editorial team to cover stories about crypto, fintech and other topics with an upbeat slant. (If you want the long story, read this excellent piece about a16z’s press whisperer, Margit Wermachers, and how media, money and power really work in the Valley).

One reason that … Read the rest