As 2021 draws to a close, we look back at the news stories that made waves throughout the year.
Here’s our top 10 most read.
1. Parliamentary Ombudsman report ‘vindication’ for Waspi women
The Parliamentary and Health Service Ombudsman (PHSO) condemned the Department for Work and Pensions (DWP) for “maladministration” in relation to changes to women’s state pensions. The findings of the Ombudsman vindicate the years of campaigning by the Women Against State Pension Inequality (Waspi) campaign.
In a report published 20 July PHSO slammed the DWP for its decision making which, following research reported in 2004, “failed to give due weight to relevant considerations”. It accused the DWP of neglecting to take adequate account of the need for targeted and individually tailored information. The Waspi campaign will continue to lobby MPs until the women who have been impacted receive compensation.
2. Paul Lewis: Loss of private DB schemes signals the death of pension provision
The presenter of Radio 4’s Money Box said active members of private-sector defined benefit (DB) schemes had dropped below one million for the first time.
Paul Lewis added he had rattled some cages with his opinion this was a loss of “the only pension worth having”.
The most devastating figure in the Office for National Statistics pension data released in January 2021 was not the fall in the number of people in DB schemes — from 4.6 million in 2000 to just 900,000 last year. It was the collapse in the amount of savings going into pensions, Lewis suggested.
3. SJP to make 200 roles redundant
St James’s Place (SJP) planned to make 200 roles across its UK business redundant in 2021, Money Marketing learned.
An internal memo to staff outlined plans to shave some 10% off the UK headcount.
Roles would be redeployed where possible, the firm said. Voluntary redundancy would also be offered to staff.
It added the redundancies would not include SJP’s adviser force but would focus on how the firm was organised, including where roles overlapped or were no longer as relevant to areas of strategic focus.
The firm said a review of its structure had been in train since the beginning of 2020.
4. Can anything derail the Baillie Gifford train?
In the light of Baillie Gifford’s long-term solid outperformance, Money Marketing examined how the group had achieved its success over the previous decade.
Charlotte Richards, former investment editor, said the group stood out for investors, advisers and fund selectors alike.
Looking at performance for unit trusts over the past one, three, five and even 10 years, Baillie Gifford had been consistently among the top performers within the roughly 4,000 funds available to UK investors. Its investment trusts had followed suit.
The top-performing fund across all unit trusts available over the past one, three, five and 10 years is the Baillie Gifford American fund.
5. Standard Life brand sold to Phoenix
Phoenix Group purchased the Standard Life brand from Abrdn in May 2021.
Phoenix later announced plans to grow across several markets, including the later-life sector, and to launch new solutions early in 2022.
Standard Life Aberdeen, which went on to become Abrdn, said the move to ditch the brand fitted its wider strategy of focusing on its fund and platform businesses, rather than its historical insurance books.
Abrdn chief executive Stephen Bird said at the time: “The Standard Life brand has an important heritage.
“In the UK, it has strong recognition as a life insurance and workplace pensions brand.
“This is closely aligned with Phoenix’s strategy and customer base.”
Has the Abrdn unveiling been ‘a burden’ for SLA?
An independent financial adviser who had received poor defined benefit transfer advice looked likely to receive up to £160,000 in compensation.
An upheld Financial Ombudsman Service ruling gave insight into how tougher DB transfer rules were influencing the settlement of claims.
Mr R had complained about advice received from Hunter & Co (IFA) Limited in 2016 to transfer his company pension scheme to a Sipp.
The value of Mr R’s benefits in his former employer’s scheme was £857,640.52 and he also had a personal pension valued at around £26,000.
The value of financial advice was 2% a year, according to analysts who had compared returns for St James’s Place clients with those for clients who had gone it alone with Hargreaves Lansdown.
The research showed, over the past decade, an SJP pension client had received annual returns that were 2% higher after all costs compared with a Hargreaves Sipp investor.
Analysts Numis Securities had reviewed the performance of both firms to see if advised clients achieved greater returns than DIY investors. SJP and Hargreaves are regarded as bellwethers for the advice and self-directed industries, Numis said.
It had been reported the curtain was set to fall on the 200-year history of the Standard Life name as Phoenix was preparing to buy the brand.
Those reports were confirmed in July 2021 when Standard Life Aberdeen completed its renaming process and became Abrdn plc (see story five).
Standard Life Aberdeen had sold its insurance arm to Phoenix in a £3bn deal in 2018, which included the group taking a 19.9% share in Phoenix, and an extension to Aberdeen Standard Investments’ management of around £48bn on behalf of Phoenix.
Two Standard Life Aberdeen executives joined the Phoenix Group board, but the two firms later clashed over the status of client relationships between them.
In May 2021 there were rumours Embark could be taken over by Lloyds Banking Group in a transaction worth around £400m. By July the deal had been confirmed.
The eventual transaction, subject to regulatory approval, was expected to be valued at around £390m.
The deal was intended to enable Scottish Widows to “enhance” its long-term savings proposition for advisers.
Lloyds was set to acquire Embark’s subsidiary brands, including its adviser platform.
However, the sale excluded the Rowanmoor Sipp and Small Self-Administered Scheme business, which was retained by existing shareholders.
In anticipation of chancellor Rishi Sunak’s autumn Budget, Money Marketing speculated on what was in store for the pensions sector.
Cuts to pension tax relief, Department for Work & Pensions overhauls and National Insurance hikes were discussed.
Ultimately, it was hard to deny that relief cuts and tax rises were inevitable; after all, the government’s generous support schemes throughout the pandemic had to be paid for.
That said, it was deemed unfair for the chancellor to rely on the pensions industry disproportionately as a means of sourcing these funds.
Budget day was a busy one at MM Towers.
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