Wma bulletin 8th march 2016

WMA Bulletin 8th March 2016

Need to Know What's going on in our industry?

Proposed London Stock

Flexible ISA

Exchange (LSE) /Deutsche Borse merger

From 6th April 2016 ISA customers will be

Following the announcement on 23rd February 2016 that the LSE and Deutsche Borse were in talks about a potential merger, WMA have stressed publicly that the key priority for its members when there are any proposed mergers or takeovers involving the London Stock Exchange is to ensure that retail clients can continue to trade equities and other listed financial assets as cost effectively and efficiently as possible.

allowed to replace cash they have withdrawn from their ISA earlier in that same tax year without it counting towards the annual ISA subscription limit and where the terms and conditions make clear it is a Flexible ISA. This can apply to Cash ISA's and also cash held in a Stocks and Shares ISA. A number of Associations have come together to produce a guide to the Flexible ISA. If anyone would like a copy of the document please contact Andy Thompson.

WMA hope to meet members of the senior team at the LSE in the next two weeks.

EU Referendum Campaign Law

Observations on Behavioural

The EU Referendum Act was passed on

Economics

17th December 2015 and potentially raises

An interesting observation that was made at

some difficulties for WMA and our member

an investing for retirement conference last

firms with regards to campaign activity.

week in the context of behavioural

Firms must ensure that any referendum

economics - a nudge won’t drive your

activity they undertake for the purpose of

behaviour to spend your marginal pound

influencing the outcome of the

because of the complexity of the decision

referendum does not incur costs over

e.g. do I reduce my mortgage? make more

ÂŁ10,000. Failure to do so will result in them

payments into my pension? start an ISA

having to register with the Electoral

etc? Our fluid intelligence is impacted

Commission as either for or against, and

because of lack of time and resource and

thereby make disclosures about their

the extreme complexity of financial choice.

funding base. We are trying to ascertain the

extent to which our member firms could be What does it take to be confident and

implicated.

informed? There are various approaches taken by regulators, government and the industry ranging from disclosure – disclaimers in documents involving no engagement and giving no comfort, traditional education – only really effective for the very young; to nudges – autoenrolment - negative knowledge, negative engagement and some comfort because ‘someone clever has thought about this for me’.

It was proposed that Centaur Advice i.e. man and machine (as opposed to a horse!), be the new name for Robo-advice because of the need to engage with individuals at a personal level to provide emotional comfort, help individuals respond to uncertainty, respond to individuals values and help with complexity.

Brussels Public Hearing on Retail Finance Green Paper The European Commission held a public hearing on the Green Paper on Retail Financial Services on 2nd March in Brussels which WMA attended. The general view was that there is now a good opportunity to better understand the market and develop relevant products and services. Commissioner Lord Hill acknowledged the effective absence of any internal retail financial market but said that retail consumers should lie at the heart of the Capital Markets Union project and that cross-border products and services should aim to attract them to turn savings into investments. There was some emphasis on the importance of intermediaries and distribution channels but minimal inclusion of their representatives in the process.

What's WMA up to?

Cumulative Impact Assessment

WMA in Ireland

On 24th February WMA discussed the

Dublin on 2nd March. The objective was to

follow-up to the Commission’s evidence

brief Irish firms on MiFID II/MiFIR issues

gathering on the cumulative impact of

and other areas of work undertaken by

regulation on financial services with the

WMA on behalf of wealth management

relevant Head of Unit in the European

businesses.

Commission in Brussels. We made the

We are engaging with the Central Bank of

point that without working for a long-term

Ireland and ramping up our efforts to

change in the investment culture in the EU,

represent Irish firms.

The WMA carried out a senior level visit to

the Commission would never be able to develop an active and participatory retail financial market in the way that had been achieved in the USA. Law and regulation in the EU had contributed to the failure to achieve this not merely by being excessive and even unnecessary in some areas, and badly targeted without understanding different market structures and practices in others,

FATCA/CRS Self-certification Forms The OECD’s Business and Industry Advisory Committee (BIAC) recently published separate self-certification forms for entities, individuals, and controlling persons in respect of the Common Reporting Standard (CRS).

WMA has reviewed these forms and

but by painting an unremittingly bleak and

can report that they are compatible

negative view of the retail capital markets

with WMA's self-certification templates.

and in effect discouraging retail participation. There needs to be a sea-

We have however taken the opportunity to

change in the language used by the

further clarify Section D of the Trust and

Commission and other EU authorities to

Entity forms and these revised forms can

change this. The Commission agreed to

be found here on the WMA website. More

consider this aspect and said that a public

to follow in the next edition of Update

hearing on the Impact Assessment would be held on 17th May. WMA will attend.

Coming Up What's coming up in our industry?

Fractional Shares

First Meeting of the Industry

ETF providers are considering

Working Group on Account Transfers and Re-registrations

allowing firms to trade their shares in fractional amounts.

The requests are typically coming from those such as fund platforms that want to invest an exact amount of money on behalf of their client(s) and who do not hold client money, and so do not want small amounts of client money left over after investment, and firms accepting and operating regular (typically monthly) savings schemes from clients that they wish to invest in a range of investments under a model portfolio, and they do not want cash fractions arising from having to invest in whole numbers of

On 9th March 2016 the first meeting of the industry working group looking at account transfers and re-registrations takes place.

This follows a request from the FCA to the industry to report back within 6 months following a review of SIPP providers and platforms. WMA and representatives from member firms will attend the meeting. We plan to issue a short survey to ascertain what the key issues are amongst member firms. If anyone does want further information please contact Andy Thompson.

shares.

Minister of State for Europe A working group has been set up to

Briefing on EU Membership

better understand the true level of demand

The Minister of State for Europe, David

and WMA member firms are encouraged to

Lidington, will hold a briefing session on 9th

complete this short survey as part of that

March on the question of the UK’s EU

process.

membership. It is not clear whether this will be part of the ‘in’ campaign’s cycle of events or a more dispassionate government look at the pros and cons. WMA representatives will attend and report to the membership in the next Bulletin.

What's coming up in WMA? De-materialisation of

WMA “Tax Reform” Special

share certificates

Interest Group

On 15th March 2016 the official responsible

WMA is looking for volunteers amongst its

at the Department of Business, Innovation

members for a Special Interest Group (SIG)

& Skills (DBIS) for the consultation on de-

to help identify measures to improve tax

materialisation of share certificates will

administration for wealth managers and

attend the WMA Retail Markets Committee.

their clients. Measures like the removal of

This will provide a good opportunity for

Stamp Duty and SDRT from AIM and

WMA members to explain their role in the

equivalent markets in 2014 is a good

process and where their key costs and

example of the type of measure that we

potential benefits would be in a de-

should be seeking to lobby for.

materialised world. DBIS plan to publish a

The plan would be to identify and seek to

consultation paper although this is now

cost any proposals and discuss them in

expected later this year in view of the

person with the relevant HMRC officials to

forthcoming EU referendum on 23rd June

see whether they would be worth actively

2016.

pursuing and to discuss this with the Office for Tax Simplification.

WMA Brexit Roundtable The WMA will hold the in-house Brexit

We are looking to hold the first meeting in

discussion with members forecast in the

the second half of April. If you or one of

last Bulletin on 17th March. We will report

your colleagues would be interested in

the outcome and publish the

participating please contact Andy

summary anonymised results in a position

Thompson.

paper, partly to respond the Treasury of contingency thinking about what would

WMA Investment Conference 2016

happen in our sector in the event of an ‘out’

The WMA Investment Conference seeks to

vote on 23rd June.

tackle topics of direct interest and relevance

Select Committee suggestion for some kind

to our member firms’ front office professionals. Last year’s event was attended by delegates ranging from CEOs to CIOs, portfolio managers to investment strategists, relationship managers to graduate trainees. Book online now to secure your place.