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LIBOR to be axed at end of 2021

 

Representative LIBOR rates will mostly be axed by the end of the year.

LIBOR (the London InterBank Offered Rate) is a benchmark rate which reflects the rate major banks lend to each other for short term loans.

It is often used as a benchmark for setting other rates such as mortgage rates. It’s end has been widely flagged.

The FCA announced this week the dates after which representative LIBOR rates will no longer be available. 

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The FCA said: “This is an important step towards the end of LIBOR, and the Bank of England and FCA urge market participants to continue to take the necessary action to ensure they are ready.”

LIBOR rates will no longer be representative immediately after 31 December for all sterling, euro, Swiss franc and Japanese yen settings and the 1-week and 2-month US dollar settings.

Immediately after 30 June 2023 LIBOR will be scrapped

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John Moret: A court case that could change everything

I have spent a large part of the last three days in a virtual court room listening to the Appeal Court hearing of the Adams v Options/Carey SIPP case.

I would not describe it as riveting viewing, but it had its moments. It is probably not an exaggeration to say that the outcome of this appeal will have a big impact on the future shape of the SIPP market and might even spill over and influence other types of “execution-only” business.

I am not going to comment on the detail of the appeal nor predict the likely outcome. However, should the appeal be upheld it could well lead to the demise of several more SIPP providers and lead to significant further financial pressure on many other SIPP providers. The floodgates for claims and Claims Management Companies will really open.

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On the other hand if the appeal is rejected

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FSCS declares 14 firms in default

The Financial Services Compensation Scheme (FSCS) declared 14 firms, including six financial advisory firms, in default in January and February.

The move opens the door to the start of compensation claims from customers to the FSCS.

The firms declared in default included independent financial adviser and ISA manager Copia Wealth Management which was ordered by the Financial Ombudsman Service to pay compensation after giving a client unsuitable pension transfer advice.

Other financial advisory firms declared in default include Birmingham-based Inspired Wealth Limited, York-based Grosvenor Financial Consultants Limited, Leeds-based RHT Financial Services Limited, Manchester-based Sequence Financial Management Limited and Wigan-based Gardner Massey Wright IFA Limited.

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Liberty SIPP was also declared in default by the FSCS after being placed into administration on 27 April last year.

Other firms declared in default include Atlas Travel Insurance Services Ltd, Pembrokeshire Mortgage Centre Limited, Red Kite Finance Limited, and Prometheus Insurance Company Ltd.

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Budget 2021: Planners positive on mostly benign Budget 

Leading Financial Planners and wealth managers expect only modest changes from the Budget which most see as neutral or mildly positive.

Mike Seagrove, Financial Planner at Albert Goodman, believes the prospects for Financial Planning remain broadly positive.

He forecast: “Financial planning will remain largely unchanged over the next 12 months as Capital Gains Tax, which was tipped to increase, escapes changes. 

“The Pension Lifetime Allowance is frozen, as are Personal Allowance, ISA allowances and the amount you are able to leave on death, before Inheritance tax is payable. Corporation Tax will increase to 25% in 2023 for companies with profits over £250k but will remain at 19% for smaller companies with profits of less than £50k.

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“2021 will provide the opportunity to continue to take profits, create capital gains and diversify into other areas, and for business owners, making employer pension contributions may be more attractive for larger

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Blue Gate enters liquidation after FCA censure

Blue Gate Capital has entered liquidation following censure from the FCA over investors who lost money investing in the Connaught Income Fund.

Blue Gate had been ordered to pay £203,007 to the FCA for onward distribution to investors by the 8 January

When the FCA issued a statutory demand for payment, Blue Gate’s shareholder decided to place the business into insolvent liquidation via a creditors voluntary liquidation.

Blue Gate appointed Cowgill Holloway Business Recovery as the liquidator yesterday.

The FCA said it will make a claim in the liquidation, as a creditor, for the full £203,007.

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The Connaught Income Fund, also known as the Guaranteed Low Risk Income Fund Series 1, went into administration in 2012 and cost investors £100m in losses. 

In December, a critical report was released about the FCA’s role in regulating Connaught with the regulator accepting it had “lessons to learn.”

The fund

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FCA scraps exec bonuses after LCF fiasco

The FCA has scrapped performance-related pay and bonuses for senior FCA executives and is to cut average salaries for executive committee members this year following the £236m collapse of mini-bond provider London Capital & Finance.

The cuts follow criticism of the regulator’s handling of the failure of London Capital & Finance (LCF), a provider of so-called mini-bond’ investments which turned sour.

FCA chairman Charles Randell announced the pay hit this afternoon during questioning by the Treasury Committee of himself and new FCA CEO Nikhil Rathi.

Mr Randell said he was “profoundly” sorry for the mistakes over LCF and agreed that mistakes were made although said there was no serious individual culpability of FCA executives who had accepted “collective” responsibility.

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Asked about the role of FCA executive Megan Butler, he said: “The board did consider what the consequences should be for individuals and that’s why the board cancelled the

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Merian takeover boosts Jupiter AUM to nearly £60bn 

The takeover of rival Merian helped bolster Jupiter’s annual results for 2020, the company reported today.

The takeover of Merian added £16.6bn in Assets Under Management to Jupiter to push total AUM to £58.7bn.

Pre-tax profit at Jupiter rose by 10% to £179m although statutory pre-tax profits fell by 12% to £132.6m due to the cost of the acquisition.

Net outflows were £4 billion for the year, however the company reported gross inflows were “robust” at £16.5 million

Jupiter recently announced it would cut up to 90 jobs as part of a restructure as it beds in Merian.

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The ordinary dividend has been held at 17.1 pence per share and a special dividend of 3 pence per share has been proposed.

Jupiter CEO Andrew Formica said that while Covid-19 had caused disruption he was confident the fund manager would see future growth this year.

He said: “This is

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Govt backs £1bn fund to support fintech growth 

The Government is to support the creation of a £1bn fund to support the rapid growth of the fintech sector.

The measure is recommended in the Government-commissioned independent Kalifa Fintech Report published today.

The Government asked tech expert Ron Kalifa to look at ways to make the UK one of the best places in the world to launch and run a fintech (financial technology) firm.

Recommendations in the Kalifa Report include:

• Creating a £1 billion-pound fintech ‘growth fund’ to help firms grow independently

•Introducing a new ‘fintech scale up’ visa route for specialists from around the world

•Implementing a ‘scale box’ to provide regulatory support for growing firms

•Establishing a private sector-led Centre for Finance, Innovation and Technology 

The UK has more than 10% of the global market share in fintech, according to the report, and the sector is now worth more than £11 billion a year to the

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Editor’s Column: Face to face meetings should return

Should Financial Planning firms insist that staff are vaccinated before returning to face to face client meetings? It’s a question that many planners will be wrangling with but one firm has taken the lead.

Lifetime Financial has already set out a policy this week that all its Financial Planners should be vaccinated before they return to wide scale face-to-face client meetings. 

The firm also believes clients should have the right to know if their adviser had been vaccinated before any in-person meetings and wants to see this policy become an industry standard.

I haven’t seen any word from the FCA but it may be something they give guidance on. It does, however, open up a can of worms.

Can firms insist staff get vaccinated, possibly against their wishes? Is it right for firms to introduce strict rules for staff on matters such as this? What about those planners still waiting

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FCA adds 5 execs to spur 'data-driven regulator' strategy

The Financial Conduct Authority has appointed its first chief data officer among five new appointments announced today as it pushes ahead with its ambition to become a ‘data-driven’ regulator.

New hire Jessica Rusu will become the FCA’s first chief data, information and intelligence officer (CDIIO).

She will lead the transformation of the FCA’s use of data, intelligence and information. She is currently chief data officer at digital challenger bank Chetwood Financial. She was also formerly senior director of finance and analytics at eBay in Europe. 

The FCA has also recruited a new chief operating officer; executive director (markets) and executive director (authorisations) as its brings together two supervision divisions with the FCA’s policy and competition functions.

All five of the appointments are women.

Bringing the divisions together is part of the regulator’s transformation programme announced in December to build a “data-led regulator able to make fast and effective decisions.”

Recently,

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