Good morning and welcome to your Morning Briefing for Thursday 21 November 2024. To get this in your inbox every morning click here.
IHT receipts rise by £500m
The Treasury collected a total of £5bn in inheritance tax (IHT) receipts in the first seven months of the 2024/25 financial year.
This is an increase of £500m (11%) compared to last year.
The latest figures are the first to be published since Rachel Reeves’ controversial first Budget last month, where significant reforms to the IHT regime were announced.
CII and PFS ‘no longer fit for purpose’
Over the last decade, financial planning has matured into a profession with higher standards, better reputation and better client outcomes, writes Ed Dymott, CEO of Benchmark Capital.
As such, a fully functioning professional body is more imperative now than ever before.
Currently, the public discord between the Chartered Insurance Institute (CII) and Personal Finance Society (PFS) overshadows the space where promoting the profession should be the focus, he adds.
AI ‘trust gap’ between wealth managers and clients
Despite the majority (87%) of UK wealth managers believing AI will be integral to the future of their profession, 55% of investors refuse to use any form of AI for investment advice.
This is according to research from Avaloq, which also found 65% believe AI can help create automatic summaries of client meetings, automated compliance monitoring (64%) and automated regulatory checks (61%).
Still, enthusiasm for AI is far from universal; 24% of wealth managers believe their clients could never trust AI for investment and 27% said their clients would never trust AI when it comes to financial planning.
Quote Of The Day
Anyone who declared ‘mission accomplished’ in Britain’s battle against inflation last month spoke too soon
–
– Peter Stimson, head of product at MPowered Mortgages, comments on UK inflation creeping back up
Stat Attack
The Investment Association, alongside WTW’s Thinking Ahead Institute, has published its second annual Culture, Talent and Inclusion Report.
The report: ‘A Demographic Snapshot of the Industry’ is the most comprehensive demographic dataset for the investment management industry in the UK.
This year’s figures show:
34%
The industry’s workforce is relatively young, a feature consistent with last year’s data, with just over a third aged under 35.
41%
of investment management employees are female, a two-percentage-point increase since 2022.
53%
are male.
62%
of employees are white.
10%
are Asian.
3%
are black.
2%
are from a mixed ethnicity background.
70%
of executive leaders hired in 2023 were White/White British,
80%
This is compared with eight in ten in 2022.
13%
the proportion of individuals hired with mixed/multiple ethnicities rose to this figure.
50-64
Female representation in this age bracket has declined.
Source: Investment Association/WTW
In Other News
Close Brothers Asset Management (CBAM) has chosen Objectway to support its growth strategy.
The solution will enhance the functionalities available to CBAM, enabling proactive compliance, effective risk management, scalable dealing practices, optimised returns, and consistency in performance reporting for clients.
By leveraging Objectway’s best-in-class user experience, CBAM will also see improved front-office efficiency, allowing investment managers to focus more on efficiency and client relationship management.
CBAM said its aim is to become “the best place in the UK for wealth management professionals and their clients”.
It added that Objectway’s portfolio management solution represents a “significant step forward” in the firm’s digital transformation.
CBAM is an investment management and financial planning firm with over £20bn of assets under management.
Quilter Investors has introduced a number of new asset classes to its Monthly Income and Monthly Income & Growth portfolios.
Portfolio managers Helen Bradshaw and CJ Cowan have brought in local currency emerging market debt as an asset class within the fixed income portion of the portfolios.
This provides the portfolio with another income stream and a diversified driver of returns.
The emerging market debt exposure will stand at 1.25% in the Monthly Income portfolio and 0.75% in the Monthly Income & Growth portfolio.
To get this exposure the portfolios have invested in the L&G Emerging Markets Government Bond (Local Currency) Index Fund.
Also, within fixed income, and aligned with the WealthSelect and Cirilium portfolios, the SAA of the Monthly Income range has broadened out its fixed income exposure by breaking it down into four component parts rather than using a single broad fixed income index.
This gives the optimisation process more freedom to vary the weighting between UK and global corporate and government bonds to help take advantage of opportunities within this asset class.
To reflect these changes the portfolios have introduced the Premier Miton Corporate Bond Monthly Income fund and the Vanguard EUR Government Bond ETF.
Within the alternatives part of the portfolios, the team has introduced hedge funds as an asset class within the asset allocation model, to replace UK property,
Government borrowing higher than expected in October (BBC)
Nvidia’s revenue nearly doubles as AI chip demand remains strong (Financial Times)
Wealth hubs go on charm offensive to lure UK super-rich (Bloomberg)
Did You See?
The average age of retirement for women in the UK has increased by seven years in the last 30 years,
According to Phoenix Group’s longevity think tank, Phoenix Insights, both men and women now retire, on average, at age 64.
Ten years ago, women retired at age 56 and men at 61.
Phoenix Insights said: “People are starting and stopping work later in life, remaining in education for longer than previous generations and delaying retirement.”
In 1994, 27% of 18-year-olds were students, whereas in 2024, this number has risen to 48%. Additionally in 1994, 73% of 65-year-olds were retired, compared to 39% in 2024.
