The Morning Briefing: Weird Economics and 12 Questions About Consumer Duties

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Hello and welcome to your Morning Briefing on Friday, August 5, 2022. To receive it each morning in your inbox, click here.


strange times

The economy is behaving oddly. In contrast, inflation is skyrocketing, borrowing costs are rising, and growth is weak.

On the positive side, employment remains strong for now and wages have increased in some sectors.

This fueled Royal London’s first half results released today (August 5), where repo sales are up and protection sales are down.

Talk to Money Marketing Royal London chief executive Barry O’Dwyer said the results were shaped in a “really unusual” environment.

He pointed out that workplace pension plans work well in an inflationary environment because wages are higher in some sectors and employment remains strong.

The reverse was true at the height of the pandemic, when protection sales were very high.

O’Dwyer added: ‘Covid introduced a peak in 2021 and it’s hard to decide what drove that: was it more advisor attention or consumer demand? However, there is still work to be done. Half of the people who take out a mortgage do not take out life insurance and we need to change that. »


12 questions

Last week’s Consumer Duties Policy Statement confirmed that we are entering a new period of ambitious regulatory requirements.

At over 160 pages, the new Consumer Duty document is a lot to take in. But no advisor can afford to ignore it.

Luckily for advisors, Rick Eling, Manager of Advisor Proposals at Quilter, offered these 12 questions advisors should ask themselves about it.


August edition

The August edition of the magazine is here with great content and you can get a preview here.

Our coverage delves into the era of platformers that began in 2000 and has gone through many changes.

It is alongside other essential content.



quote of the day

It is likely that we are closer to the end of the game on rate hikes, it would be very brave to push interest rates much further when they are already forecasting a recession.

– James Lynch, fixed income manager at Aegon Asset Management, comments on the BoE’s interest rate decision



Stat Attack

Clear Currency analyzed the cost of living around the world and found the UK to be one of the most expensive places to live.

21,220

Searches for people wishing to move abroad reached 21,220 in June

8.2%

The consumer price index rose 8.2% in the 12 months to June, with the largest upside contributors being household services (heating, water, cooling, electricity) , transport and fuel.

9.4%

UK inflation is at 9.4%, its highest level in 40 years

€1,493.32

A recent analysis of household services, combined with average rent and grocery shopping, shows figures amounting to £1,493.32 a month in the UK.

£2,246.96

The average net salary amounting to £2,246.96 per month

20th

UK ranks 20th out of 50 countries for highest cost of living based on household services, food shopping and fuel

£401.27

In the UK, household services and food purchases now average £401.27 per month, with an average rent of £1,092.05 per month.

Source: Transparent Currency



In other news

Canaccord Genuity Wealth Management released its first quarter 2023 financial results today (August 5).

Commenting on the results, Managing Director David Esfandi said: “This quarter we completed our acquisition of Punter Southall Wealth and we are delighted to say that the integration is continuing at a solid pace.

“However, our priority this year has been to support our clients through the recent market turmoil and help protect their portfolios and take advantage of any investment opportunities that may arise.”



By the way

UK hiring slows amid economic uncertainty (BBC News)

Truss says UK recession can be avoided (Financial Times)

Twitter says Musk is ‘conjuring up’ an excuse to escape takeover deal (The Guardian)


Have you seen?

Consumption duty is not popular with everyone according to this report by Momodou Musa Touray.

The Transparency Task Force (TTF), a pro-consumer lobby group, has denounced the Financial Conduct Authority for its consumer duty, saying it does not adequately protect consumer interests.

Its founder and consumer activist Andy Agathangelou told Money Marketing.

“In the Transparency Task Force, we are very disappointed with this development. We are aware that the consumption obligation is a step in the right direction. But it does not go far enough to include a private right of action.

“If it had a right of private action, it would allow consumers to seek redress and compensation in the event that they were treated badly by a financial company.

“Because it has no private right of action, it means consumers, investors and pension savers etc. are already dependent on the FCA to arrange compensation if companies have done wrong.”

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