Latest articles on The Money Debate

Friday thoughts – Out of date portfolio theory/ Pension fight pen / China’s misselling risk

June 21st, 2013

Chris Gilchrist has slated modern portfolio theory in Money Marketing this week because it can’t cope with financial crises which is, obviously, a slight problem at the moment. But it is the following point which catches our eye at the Money Debate.

“I regard it as unfortunate that the exam creators at the CII and elsewhere continue to regard MPT as holy writ. More than 10 years of increasingly sceptical academic commentary has yet to make it into the exam syllabus.”

Er quite. But isn’t it time the CII justified itself? If the papers are behind the curve or worse just propounding something that is wrong, then surely it is time to adapt things or if not to explain why not. “Theory used as basis of much investment advice is out of date” is not a great headline for the sector. Last thing it needs in fact. Views welcome.

At the Money Debate we can’t help but refer readers to a rather fiery pensions argument ..read more

How can the FCA become smaller if its remit keeps getting bigger?

June 19th, 2013

The Parliamentary Commission on Banking Standards wants a slimmer FCA focusing on the big issues. Here’s the relevant quote.

“A strategic aim of the FCA should be to become a smaller, more focused organisation. The commission recommends the FCA replicate the Bank of England’s stated intention for the PRA to operate at a lower cost than its equivalent part of the FSA, excluding what is required to fund new responsibilities. The FCA should set appropriate timescales for implementation of this recommendation.”

But short of dumping the RDR what exactly, can the FCA do to achieve this focus?

One can look to history of course, to see how focus was lost. In the run up to the banking crisis, I heard countless IFAs say that FSA was looking in the wrong places. The advisers said it was the bigger players and usually the banks where things were going wrong. I suspect a lot of these comments were referring to the industrial scale fast-tracked lending, ..read more

Amid the direct to consumer headlines is this a genuine USP from Standard Life?

June 14th, 2013

Standard Life gave a briefing this week about its platform plans at its wee offices in the Gherkin in the City of London. The Money Debate attended. Among other things, it has announced a D to C platform which made a few headlines this afternoon. This has traditionally been a tricky move for insurers with IFAs worrying about losing clients to a business partner which is also a rival. Standard may have come up with the perfect way to sugar the pill. Certainly from what it said this week, it will harness its  asset gathering operation through things such as auto-enrolment, try and use that to encourage other investing, and when customers have enough assets to need advice they plan to refer them on to advisers who use the platform.There will be some details to be thrashed out of course. No doubt Standard will want to ensure the advisers it refers business to, don’t suddenly shift the assets to Transact ..read more