The Morning Briefing: Venture capital portfolio boost and self-policing of online ads
Good morning and welcome to your Morning Briefing for Tuesday 11 January, 2022. To get this in your inbox every morning click here.
Venture capital boosts portfolios
Research by Hardman & Co shows that adding venture capital (VC) to a portfolio can improve its risk/return profile.
It also suggests that VC can suit investors with a low-risk appetite as well as those with a high-risk tolerance.
Of course, that requires advisers to look at asset allocation holistically.
Hardman & Co head of tax enhanced research Dr Brian Moretta spoke to Money Marketing about what his research found.
Self-policing of online ads won’t do
The issue of fraudulent online advertising has been rumbling on for years now, but it really has been the last two years that we’ve seen a dramatic pick-up in activity, particularly with adverts that feature an impersonation of a financial services firm.
As early as March 2020, Andrew Bailey, while chief executive of the FCA, described the challenge of tackling fraudulent online adverts as like playing a game of “whack-a-mole”.
Hampered by the perimeter and lack of legal powers, the only weapon in the FCA’s arsenal is a website warning and the hope that their own adverts warning people of the dangers of ‘too good to be true’ online ads are seen by people before it is too late.
Ensuring competitive investment markets
The Financial Conduct Authority has laid plans for two market studies to ensure investment markets are competitive.
In response to a call for input, the FCA heard concerns that limited competition in the markets for benchmarks and indices, credit ratings and trading data may increase costs for investors and affect investment choices.
Quote Of The Day
The Omicron Covid variant may have led to more restrictions but the economic recovery remains resilient nevertheless, which means stocks don’t appear particularly vulnerable to a correction
– Luca Paolini, chief strategist at Pictet Asset Management, comments on the impact of Omicron on stocks
Stat Attack
More advisory firms and wealth managers are buying investment companies on adviser platforms than ever before, according to data released by the Association of Investment Companies (AIC).
2,157
Number of firms which bought investment companies via adviser platforms in Q3 2021
1,983
Number the previous quarter
2,014
The previous record was set in Q3 2016
£968m
The value of purchases of investment companies in the first nine months of 2021
£754m
A 28% increase on the same period of 2020
The most-purchased investment company sectors in Q3 were:
17%
Global
11%
Flexible Investment
7%
Infrastructure
6%
UK Equity Income
4%
Asia Pacific
Source: AIC and Matrix Financial Clarity
In Other News
Tilney Smith & Williamson (TS&W) has expanded its team in Exeter by appointing two financial planners. Mark Newman and Stephen Read join TS&W’s office in Sterling Court.
Newman joins TS&W from Kelsall Steele Investment Services where he worked as a senior financial planner.
At TS&W, Newman will focus on covering Cornwall. He is also a chartered member of the CISI.
Read joins from Succession Wealth where he worked as mergers & acquisitions manager. His previous experience saw him progress through a series of corporate finance, treasury and accounting roles at energy, technology and investment firms both in the UK and in Switzerland.
He is a member of the Personal Finance Society and the Chartered Institute of Management Accountants.
ZEDRA has announced the acquisition of independent pension trustee and governance services provider, PTL.
Founded in 1994, PTL acts for both defined contribution and defined benefit pension schemes, group life trusts and healthcare trusts.
This acquisition, which follows the acquisition of Inside Pensions in 2021, bolsters ZEDRA’s pension services in the UK.
ZEDRA’s Pension Services now consists of five offices in London, Reading, Leeds, Birmingham and St Albans and increases headcount to 70 dedicated pensions experts and support staff.
Baillie Gifford has appointed Ross Mathison as a portfolio manager of its Global Income Growth fund and Responsible Global Equity Income fund.
He joined existing managers James Dow and Toby Ross on the funds on 1 January 2022.
Mathison started working for Baillie Gifford in 2019 as an investment manager. He previously was at Aviva Investors. Prior to that, he spent nine years at Standard Life Investments.
The £814m Baillie Gifford Global Income Growth fund aims to achieve growth in both income and capital over rolling five-year periods, while delivering a yield higher than that of the MSCI ACWI Index over rolling five-year periods.
The £312m Responsible Global Equity Income fund seeks to invest responsibly in firms which can deliver both a resilient income stream and real growth in income and capital.
Premier Miton Group has said its assets under management (AUM) ended the quarter flat at £13.9bn.
In an update on its unaudited statement of assets under management (AUM) for Q1, the group said the closing AUM includes the previously announced winding up of the £101m Acorn Income Fund Limited and £87m of net outflows.
Chief executive Mike O’Shea said it was “disappointing” to experience net outflows following four quarters of net inflows totalling £830m.
However, he said, the net flows reflect a “challenging period” for UK fund flows in general, and for UK equities in particular.
“Importantly, our investment performance remains strong, with 80% of funds in the first or second quartile of their respective sectors since launch or fund manager tenure, with both our more established and newer funds performing well.”
The group also announced it will launch the Premier Miton Diversified Sustainable Growth Fund on 1 March 2022, managed by the same investment team behind the existing range of five Diversified, directly invested multi-asset funds.
The fund will focus on investments with a strong environmental, social and governance (ESG) profile and those which we believe offer longer-term sustainable growth themes.
From Elsewhere
Minimum wage increases not enough to shield poorest from rising prices (Financial Times)
Dollar stuck as traders wait on Fed’s Powell for new policy clues (Reuters)
New mortgage deals cost hundreds of pounds more just weeks after rate rise (The Telegraph)
Did You See?
Notwithstanding the consensus on the value of advice, the issue of affordability understandably generates disagreement, with many in the advice sector falling into one of two camps:
- Those who believe it is impossible to provide ‘affordable’ advice due to the regulatory burden on advisers, such as the Financial Conduct Authority and Financial Services Compensation Scheme levies and professional indemnity insurance (PII) costs
- Those who think technology and automation, such as robo advice, digitisation and hybrid advice, could provide free or low-cost advice to the mass market.
In his cover story for Money Marketing, Momodou Musa Touray says the focus should be on demonstrating value, building trust and using tech to ‘democratise’ this vital service.
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