PIMFA Weekly News Bulletin - 26 July 2021

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PIMFA WEEKLY NEWS BULLETIN | 26 July 2021 Dear Nigel,

Welcome to the PIMFA Bulletin; grab a coffee and take 10 minutes to read the latest industry news impacting you and your firm.

Talent, Diversity and Inclusion within the Wealth Management and Advice sector

Talent, Diversity and Inclusion are a high priority for CEOs in the sector, according to CEO sentiment surveys PIMFA have conducted over the past 18 months. In order to understand the make-up, challenges and current activities of firms, we have compiled a simple survey, based on data that we believe firms may have gathered. The questionnaire is timely given the publication of the Discussion Paper from the FCA/PRA/BoE on diversity and inclusion.

Data is key to understanding the picture in the sector and any required action.

We would really appreciate if HR colleagues or other individuals in the wealth management sector firms would provide responses to our survey. All information received will be aggregated and anonymised by PIMFA staff. Individual company data will be stored securely and not shared in any way. The data required by the questionnaire will be harder to provide for some firms, particularly smaller ones. However, even incomplete data will be useful. No matter where your organisation finds itself and how advanced your people data or diversity and inclusion initiatives are, providing responses will help obtain an accurate

picture.

The purpose of gathering this data is to inform initiatives we can undertake together as an industry, to promote the sector more broadly and to identify gaps where collective action can be undertaken. The link to the survey can be found here. If you have any questions, please get in touch with Maja Erceg.

UK to seize Brexit opportunities and reform the framework for better regulation

Following our exit from the EU, the UK has more freedom to make and implement rules that put UK businesses and consumers first and that aim to boost competition, innovation and growth across the economy. A new consultation from the Department for Business, Energy and Industrial Strategy, launched on 22 July, is as an initial response to the report by the independent Taskforce on Innovation, Growth and Regulatory Reform (TIGRR), exploring a number of recommendations on the UK’s regulatory framework post Brexit, looking at ways to dispense with unnecessary red tape that no longer meets the UK’s needs and enabling innovative companies to trial ground-breaking ideas safely.

The consultation sets out 5 principles that will underpin the government’s approach to regulation: A sovereign approach; the UK will use its freedoms to take a tailored approach to setting rules in a way that boosts growth and benefits the British people; Leading from the front: the UK will act nimbly to support the development of new technologies; Proportionality: UK will use non-regulatory options where possible, while acting decisively to put in place strong rules where they are needed; Recognising what works: regulations will be thoroughly analysed to ensure they work in the real world; Setting high standards at home and globally; the UK will set high standards at home and engage in robust regulatory diplomacy across the world, leading in multilateral settings, influencing the decisions of others and helping to solve problems that require a global approach.

PIMFA intends to provide a response to the consultation which closes on 1 October 2021.

PIMFA and CISI School Leavers Program

PIMFA are collaborating with the CISI to develop and implement a school leaver program to help increase gender and ethnic diversity within financial planning, financial and investment advice roles in the financial planning and wealth management profession. This program provides access to firms from a broader base of students, something which we know many of you are considering as part of your recruitment plans and drive to increase diversity of new intake to your firms.

Many of you already actively promote the career pathways in schools and as you know, PIMFA worked with a pilot of firms and The Brokerage this last year to do just that. This collaboration will go one step further and facilitate entry-level job roles for school leavers with a training pathway.

Please register the interest of your firm in participating in the program and offering one to two students a two year paid job placement, which is integral to the program’s success.

How will it work?

Read more about the program and register your interest here.

FCA guiding principles on ESG design, delivery and disclosure

The FCA has published a letter to the chairs of authorised fund managers, setting out expectations on the design, delivery and disclosure of environmental, social and governance (ESG) and sustainable investment funds. ESG funds are a fast-growing segment of the funds market and the FCA is concerned with a number of poor-quality fund applications for authorisation with a sustainable focus that fall below expectations.

If consumers find it difficult to assess whether funds meet their needs and preferences, there is potential to undermine trust and deter consumers from investing.

The aim of guiding principles is to help ensure that fund disclosures accurately reflect the nature of funds' sustainable investment strategy in both pre-contractual documentation and on an ongoing basis. The guiding principles do not introduce new rules but clarify how fund

managers are expected to comply with existing rules.

The principles are intended to compliment the EU Sustainable Finance Disclosure Regulation (SFDR) for firms with EU cross border business, the new climate related disclosure requirements for asset managers, portfolio managers, insurers and pension providers, which the FCA is currently consulting on. It also plans to introduce economywide Sustainability Disclosure Requirements and sustainable investment labels that allow consumers to compare the impact and sustainability of their investments. The principles are aimed at authorised funds but they also provide guidance on the lens that the FCA will apply when assessing the integrity of financial products with ESG labels.

Latest PIMFA Press Releases

Coalition of consumer groups, charities and industry bodies calls for inclusion of paid-for online advertising in Online Safety Bill PIMFA welcomes FCA business plan proposals to prevent harm arising in the market faster and more effectively FCA must come forward with tangible, tested proposals to strengthen the financial promotions rules

Latest PIMFA Press Coverage

Money Management: Adviser lessons from the UK

FT Adviser: Industry unites to put pressure on govt over online scam ads

MoneySavingExpert (MSE ): Martin Lewis and MSE among coalition of organisations renewing calls for Government action to tackle online fraud

PIMFA welcomes reduction in proposed FCA fees

Professional Adviser: Coalition including PIMFA and IA call for Online Safety Bill to cover paid-for internet ads

PIMFA Passport App

We are pleased to announce that our new web based application - the PIMFA Passport has been launched for beta testing. Containing high quality CPD learning material across webinars, videos, guides and podcasts - on subjects such as regulation, leadership, ESG,

cyber, compliance, innovation, operations and other hot topics - the app tracks individual’s CPD learning by logging what they listen to, watch or read as they go.

Look out for further announcements coming soon!

Seventh meeting of the PRA and FCA’s joint Climate Financial Risk Forum

The FCA and PRA hosted the seventh meeting of the Climate Financial Risk Forum (CFRF) in July 2021. Since the last Forum in March, the working group chairs, members and secretariat have been progressing their respective topics of risk management, scenario analysis, disclosure and innovation, whilst also further developing the cross-cutting workstream on climate data and metrics.

The Forum discussed the progress made by each working group to date, including outputs for Session 2 (July 2020 – December 2021), with a launch event being planned at or around the 2021 United Nations Climate Change Conference (COP26). Members discussed the challenges facing the financial services industry and particular sectors in relation to climate-related financial risks. The discussion also focussed on potential future areas of focus for the CFRF.

The next meeting will take place in October 2021, where working group outputs will be signed off prior to publication at an online launch event which will coincide with COP26.

EVENTS & LEARNING

Diversity & Inclusion Awards Entries Close: 17 August | Event Date: 20 October 8 Categories 15 Judges 3 weeks remaining to submit your entry FREE to Enter WHY ENTER? •

High profile FREE opportunity to raise awareness of the fantastic work you and/or your firm have been doing over the last 12 months

•

Build the credibility and diversity of your industry while showcasing your firm and staff

•

Attract the best talent you need to push your business forward and gain a competitive advantage

•

Showcase your new initiatives while gaining inspiration and ideas from your peers

•

Gain recognition for your expertise and share your experiences and insights.

We are encouraging all organisations - large or small - at whatever point they are on with their D&I Journey to enter. Whether you are just starting out with a small pilot or initiative, or are further along in your journey, and you can share experiences and insight, and we want to hear from you about the work you are doing - all 8 of the categories are available to enter here.

Find out more and start your entry

View upcoming PIMFA Events and Learning here.

PARTNER EVENTS

WEBINAR How to Die Well - A practical guide to death, dying and loss 29 July 2021 | 18:30 - 19:30 In partnership with Royal London, photographer and filmmaker Rankin and host Andrea

Fox will be joined by Guardian columnist and bestselling author Rhik Samadder, palliative care expert Dr Kathryn Mannix, and financial expert and broadcaster Sarah Pennells.

Since the outbreak of the COVID-19 pandemic, the subject of death has become more prominent in our daily lives than ever before – and yet we still find it incredibly hard to talk about. This is understandable, but important to overcome if we want to better prepare ourselves and our loved ones.

This livestream event will blend personal stories with emotional, practical, & financial guidance to show that dying well can be a fundamental part of living well.

Find out more and register here.

FCA CP21/23 : Proposed amendments to the UK PRIIPs regime

CP21/23 consults, to 30 September 2021, on changes to UK PRIIPs legislation aimed at clarifying the application of the regime and addressing areas where the PRIIPs KID might mislead or confuse investors. These proposals do not affect UCITS or NURS using UCITSstyle KIDs, both of which will remain outside the PRIIPs regime until the end of 2026.

The proposed amendments will: •

clarify the scope of the PRIIPs regime, specifically for corporate bonds;

•

clarify what it means for a PRIIP to be “made available” to retail clients, so as to rule out

of scope products specifically designed for non-retail investors; •

replace performance scenarios in KIDs with a narrative description of the factors likely

to affect future performance; •

modify how Summary Risk Indicators are presented in certain circumstances, e.g. by

requiring KIDs for VCTs to show a SRI no lower than 6 and by requiring manufacturers to upgrade a product’s SRI if they believe that the calculated rating is too low; and •

modify the slippage methodology used to calculate PRIIPs transaction costs where

funds apply anti-dilution mechanisms and for transactions in OTC bonds and index-

tracking funds.

PIMFA will be responding to CP21/23. To provide feedback on the proposals and on PRIIPs issues generally, please contact Sarah McGuffick.

FCA publish FAQs on Vulnerable Customers

On the 19th July 2021, the FCA published a document setting out responses to FAQs in relation to the FCA’s recent webinar on its Finalised Guidance for firms on the fair treatment of vulnerable customers. The answers link to chapters in the guidance and make reference to the consultation on the new Consumer Duty (CP21/13). There is also a link to the FCA’s webinar held in May and a short summary of the guidance.

To read the document in full, see here.

HM Treasury publish consultation and call for evidence on the Money Laundering Regulations

On the 22 July, HMT published the following documents: •

A consultation on a statutory instrument seeking views and evidence on the steps that the

government proposes to take to amend the Money Laundering Regulations (MLRs) to allow the government to make some time-sensitive updates to the MLRs, which are required to ensure that the UK continues to meet international standards set by the Financial Action Task Force; •

A Call for Evidence on the MLRs to take a broader look at effectiveness of the regulations

and the AML supervisory regime and consider options for reform.

The consultations close on the 14th October. PIMFA will be responding to these consultations and welcomes any views and comments sent to Alexandra Roberts.

FCA Covid-19 Impact Survey #5

Many of you will be aware that the FCA issued the first phase of the Covid-19 Impact Survey in June 2020, covering around 13,000 firms across 15 Supervision portfolios (Tranche 1), and then rolled this out to a further 9,500 firms in 21 portfolios (Tranche 2) at the beginning of August 2020. Since then they have repeated this survey for both Tranches three more times to understand the change in firms’ financial positions with time.

The survey has helped them obtain an accurate view of the impact of Covid-19 and supported their work to mitigate risks of harm to consumers, the market and competition within it.

They are now repeating this survey for a fifth time and are planning to send this survey to the relevant firms in Tranche 1.

Batch 1: to be sent on 2 August 2021 - response due by 23 August 2021 Batch 2: to be sent on 3 August 2021 - response due by 24 August 2021 Batch 3: to be sent on 4 August 2021 - response due by 25 August 2021 Batch 4: to be sent on 6 August 2021 - response due by 27 August 2021 They will send a warm-up/introduction email to all the firms at least 1 day prior to them receiving the survey.

Completion of the survey is mandatory under section 165 of the Financial Services & Markets Act (FSMA) 2000 and FCA may exercise their powers under FSMA for firms who do not respond. They have designed this survey so that it is quick and simple to complete.

However, if due to exceptional circumstances a firm cannot access its financial information, they will need to ensure that they complete the questions where the relevant information is available.

PIMFA's Consultation Responses

PIMFA’s latest Consultation Response is to the FCA's CP21/9 on the changes to UK MiFID’s conduct and organisational requirements.

Read this and all other PIMFA consultation papers here.

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