Category: Investments

Barclays most complained about firm for investments

Barclays Bank had the most investment complaints referred to the Financial Ombudsman Service between July and December and had the highest proportion of investment complaints upheld against it.

For the six months to the end of December Barclays had a total of 337 investment complaints referred to the FOS. Over the same period the FOS upheld 51 per cent of investment complaints against the bank.
Bank of Scotland, part of Lloyds Banking Group, received the second highest number of FOS investment complaints with 229. Lloyds TSB, also part of Lloyds, had 206 investment complaints referred to the FOS, Santander had 190 investments complaints, HSBC had 180, and Royal Bank of Scotland had 147.

Barclays Stockbrokers, which saw 40 investment complaints referred to the FOS in the second half of last year, had 40 per cent of investment complaints upheld over the same period.

Interactive Investor Trading, which had 62 FOS investment complaints, also had an uphold rate of 40 per cent.

Santander had 38 per cent of investment complaints upheld, as did HSBC. Bank of Scotland had an uphold rate of 35 per cent and RBS 21 per cent.

The average uphold rate was 37 per cent across all investment complaints.

For adviser firms, Sesame had 67 new investment complaints that went to the FOS and St James’s Place had 32. Positive Solutions had 28 FOS investment complaints, Openwork had 24, Personal Touch Financial Services had just one.

The FOS has not provided investment uphold rates for adviser firms as it says the percentages would not be statistically meaningful.
Source: Natalie Holt Money Marketing 5th March 2013

Labour considers radical shake-up of capital gains tax

Labour is considering a radical overhaul of capital gains tax after a new report recommends a 50 per cent rate that tapers down to 10 per cent over 10 years.

The Labour-commissioned report, published today and authored by former Institute of Directors director-general Sir George Cox, suggests major changes to the UK tax regime in order to encourage long-term thinking in British business.
The report follows the Government’s own review into short-termism in the equity markets by economist John Kay, published last year.

Cox’s report states: “Taxation treatment should be changed to attract long-term investors back into the equities market and to incentivise longer-term shareholding. This should encompass both individual shareholders and funds.

“For example, capital gains tax on shares could be tapered, in a series of yearly steps, from a rate of 50 per cent in year one to 10 per cent after year 10.

“Liability for tax on dividends could be reduced, in a series of yearly steps, from the prevailing rate of income tax in year one to 0 per cent after year 10.”

The report also recommends abolishing stamp duty for shares traded in AIM-listed firms to boost the liquidity of the market. The taper for taxation on dividends could be accelerated from 10 years to five years on AIM-listed firms.

It wants to see venture capital trusts and enterprise investment schemes “enhanced”. It suggests the rules banning anyone with a 30 per cent stake in a firm and employees from investing in EIS should be scrapped.

The paper also calls for an end to quarterly reporting and more discussion about long-term strategy in firms’ results, which has been previously backed by leader Ed Miliband. It also calls for up to 30 per cent of executive directors’ pay to be deferred and based on results over five years.

Shadow chancellor Ed Balls says: “Sir George’s report sets out a clear plan for creating that more long-termist economy including radical reforms to executive pay, tougher rules on takeovers and encouraging longer-term shareholding and we will now study his detailed proposals as part of our policy review.”
Source: Samuel Dale Money Marketing 5th March 2013

New dawn for investment trusts

New dawn for investment trusts – FT.com – Investments http://on.ft.com/10N5xHF

With-profits savers set for more bonus pain in 2013

With-profits funds are expected to pay annual bonuses of close to zero in 2013, according to independent consultantcy Cazalet Consulting.

Last year, a number of major providers including Aviva, Legal & General and Standard Life either held or cut annual bonus rates for policyholders.

Analysis from Cazalet Consulting shows the average underlying return on the assets backing with-profit policyholders’ asset shares was 9 per cent in 2012. This figure does not take into account tax and charges or the impact of smoothing.

Over the last 10 years underlying investment returns on with-profits funds were 4 per cent.

However, because providers need to hold capital in reserve to support policyholder guarantees, Cazalet Consulting chief executive Ned Cazalet says these investment gains are unlikely to translate into annual bonuses.

Cazalet says: “The impact of life offices needing to cover guarantees embedded in with-profits contracts means that, notwithstanding generally positive underlying investment returns on with-profits funds over the medium to longer-term, bonus rates will remain constrained in most cases, with many providers set to continue to apply reversionary bonus rates of zero or close to zero in the upcoming 2013 bonus declarations for WP contracts with the most onerous guarantees.”

Source: Tom Selby 17th January 2013