PIMFA Weekly News Bulletin - 27 September 2021

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PIMFA WEEKLY NEWS BULLETIN | 27 September 2021 Dear Nigel,

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

Diversity & Inclusion Awards Ceremony 2021

20 October | 16:00 - 19:00 Click here to register for the FREE Virtual Ceremony

Join us on 20 October to celebrate the winners of the very first D&I Awards!

All of the entries have now been collated and are currently going through the judging process with our expert panel of judges. To read about our judging panel, or to view the categories, please click here.

If you have any queries, please get in contact.

BOOK YOUR FREE PLACE

PIMFA Asset Allocation Survey – now OPEN!

The 2021 Q4 Asset Allocation Survey is now open for submissions.

Members can complete the survey in just 30 seconds and then receive their firm’s complimentary portfolio comparison report and survey summary.

To find out more email indices@pimfa.co.uk.

Latest PIMFA Press Releases

PIMFA Comments on FCA’s plan to tackle investment harm

Latest PIMFA Press Coverage

The Daily Telegraph: Bitcoin price falls on China crackdown – is it safe to buy?

PIMFA launches ESG Academy for Wealth Managers Government proposals for social care merit further consideration – but system remains highly complex and may lead to significant costs for individuals FCA Consumer Duty must be accompanied with clarity for firms and understanding of their business models

The Daily Telegraph: Millions of us have been scammed, so why has anti-fraud spending been cut 99pc?

Citywire Wealth Manager: PIMFA: Our diversity awards will showcase industry leadership

PIMFA welcomes FCA proposals to streamline decision making

Professional Adviser: Industry Voice: The responsible investment advice journey

IFA Magazine: Meeting client demands around sustainability

Citywire New Model Adviser: PIMFA demands FCA end policy deluge and calls for Brexit IFPR delay

PIMFA Roundtable Series: The Risk and Reward of Messaging for Client Interaction 2021

14 October | 10am Members only | To Register your FREE place, please click here.

Technology has dramatically shaped how people engage and interact in recent years with digital forms of communication continuing to be a pervasive channel that clients desire This interactive roundtable will offer attendees to join the discussion with the panel and explore the following questions: •

How are advisers responding to this growth in demand and change in communication behaviours?

•

How are risks being mitigated?

•

And are advisers seeing this as an opportunity to differentiate?

BOOK YOUR FREE PLACE

View other upcoming PIMFA Events and Learning here.

Talent, Diversity and Inclusion within the Wealth Management & 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 response to the 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 MajaE@pimfa.co.uk

Take the short survey

HMT responds to Consultation on the Economic Crime Levy

On the 21st September, HMT published its response to the consultation on the Economic Crime Levy. The purpose of the levy is to help fund new government action to tackle money laundering and ensure delivery of the reforms committed to in the 2019 Economic Crime Plan. HMT held a consultation on the design of the levy from July to October 2020.

The consultation sought views on: the levy principles; what the levy will pay for; how the government can ensure there is transparency over levy spending; how levy liability will be calculated, and which entities should be paying the levy; and how the levy will be collected and enforced.

The key points of HMT’s response are: •

The government has decided that AML regulated entities will first be charged the levy during the year 1 April 2022 to 31 March 2023. The first payment of the levy will only be due after that year ends. This means the first set of levy payments will not be made until the year 2023/24 (running 1 April 2023 to 31 March 2024).

•

the levy will be calculated on entity size based on just UK revenue.

•

Revenue will be defined as turnover – as defined in the Companies Act 2006 – plus any other amounts (not included within turnover) which, in accordance with generally accepted accounting practice (“GAAP”), are recognised as revenue in the entity’s profit and loss account or income statement.

•

The calculation will not include an additional money laundering risk metric

•

Entities will pay different levy amounts depending on the size of their UK revenue.

Overall, there will be four size bands: small; medium; large; and very large

•

Small entities (i.e. all regulated entities with UK revenue below £10.2 million) will be exempt from paying the levy

•

The government has opted to use a fixed fee system and intends to adjust the levy calculation methodology (e.g. fixed fee sizes) periodically, as this offers greater cost efficiency, certainty and predictability for all involved. The methodology is therefore not intended to change in the initial period leading up to the 3-year levy review.

•

The levy will be collected by the three statutory AML supervisors – HMRC, the FCA and the Gambling Commission

You can read HMT’s response in full here. The government has also published draft legislation and is undertaking a short technical consultation on its contents. The consultation closes on 15 October 2021.

Seizing opportunity – Challenges and Priorities for the FCA

Speaking at the Lord Mayor’s City Banquet at Mansion House, Nikhil Rathi, FCA's CEO said the regulator was collaborating with international partners to deliver a world without LIBOR, transition to a net-zero economy and maintain high regulatory standards.

He warned consumers not to take cryptocurrency investment advice from social media influencers and said that the FCA has warned repeatedly that investors in these products must be ready to lose all their money. He also said that the FCA are investing to become as much a data regulator as a financial one, working with partners to realise a future where compliance checks can be completed in near real-time.

Rathi called on the financial services sector to partner with the FCA to seize the opportunities presented by the profound forces transforming the sector and society, the pandemic, Brexit, technological change, the drive to a greener economy, demographic shifts and to ensure the UK remains a magnet for the best talent with a financial services industry that leads the way on diversity and inclusion. Rathi said the regulator will apply a bolder risk appetite in dealing with serious misconduct, including using criminal powers in the most serious cases involving financial crime or money laundering. The FCA will be publishing its third annual perimeter report next month, sharing their views on how the regulatory framework might evolve. This meets the FCA’s commitment to Parliament, a key mechanism of their accountability which will only intensify in the coming years.

JMLSG Consultation on Proposed Revision of Guidance

On the 23rd September 2021, the Joint Money Laundering Steering Group (JMLSG) published a consultation on proposed revisions of transaction monitoring (Part 1, Chapter 5.7). The consultation text of the proposed revisions to Part I, Chapter 5.7 is available in marked-up format here.

Comments on the revised text should be sent to the JMLSG by the 30th October.

Treasury Select Committee’s response to Future Regulatory Framework of Financial Services report

The Treasury Committee has published the Government’s response to its report on the Future Regulatory Framework of Financial Services. The report included the following recommendations: •

EU financial services rules that were on-shored during the process of leaving the EU should be moved into the regulators' rule books

•

regulators should not be required to share proposals with HMT before public consultation

•

while there may be a role for the Government to use ‘activity based’ principles to instruct regulators’ approach to specific business sectors, the Government should be sparing in this respect, the Committee does not see a clear need for the creation of a new committee or independent body to scrutinise financial regulations.

Making Flexible Working the Default

Under government plans to modernise the way we work, every employee in the UK will be given the right to request flexible working, regardless of time served. The BEIS consultation, which is now open, looks at cutting the current 3-month period an employer has to consider any request as well as at a range of flexible working methods such as jobsharing, flexitime, compressed, annualised and staggered hours, as well as phased retirement – not just working from home. It allows employees to balance their work and home life, including helping people who are managing childcare commitments or other caring responsibilities as well as ensuring that people who are under-represented in Britain’s workforce, such as new parents or disabled people, have access to more opportunities.

Research has shown companies that embrace flexible working can attract more talent, improve staff motivation and reduce staff turnover – boosting their business’s productivity and competitiveness. Benefits include: attracting top talent - 87% of people want to work flexibly, rising to 92% for young people; a highly motivated, productive workforce - 9 in 10 employees consider flexible working to be a key motivator to their productivity at work, ranking it as more important than financial incentives, and more competitive business environment - the CBI Employment Trends survey found that 99% of all businesses

surveyed believed that a flexible workforce is vital or important to competitiveness and the prospects for business investment and job creation.

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