PIMFA – the UK’s Personal Investment Management and Financial Advice association – on Thursday hosted their Annual Summit. PIMFA’s CEO, Liz Field, welcomed over 270 senior industry figures to the conference which addressed key issues for the industry such as Brexit, the future of the UK economy, regulatory attitudes and how climate change will affect investment strategies.
The afternoon session began with the two breakout sessions. Session A saw Marc Michaels, Director of Strategy & Insight from Paragon discussing the use of data to fuel smarter communications, while Andrew Foster, Head of Private Wealth Management for Iress, presented Session B on the subject of industry challenges facing wealth managers heading into 2019 & beyond.
Following this was a ‘fireside chat’ between Richard Grenfell-Hill, the Chief Economist at Diageo and Edward Smith, Rathbones’ Head of Asset Allocation Research, who discussed the current economic position, low levels of growth and the outlook for the future, heavily oriented towards the ongoing Brexit negotiations.
On the subject of “Deal or No Deal”, Edward suggested that there would be a deal but that it would contain little substance as far as our sector is concerned – all the detail will be worked out in the transition period. “Meanwhile, the prices of financial assets are already being widely discounted – look at the pound. This will continue . . . .”, adding that “the Department of Trade has around 300 people working in the front office but that’s only 300 to deal with the whole world”. Richard Grenfell-Hill, on the other hand, said “No deal is, in itself, a deal. Post No Deal, we are working closely with the Department of Trade on various issues but it will take time”.
Brexit was unsurprisingly a prevalent theme for a day looking at the investment horizon and a panel of PIMFA’s Deputy Chief Executive, John Barrass; Paul Killik, Senior Partner, Killik & Co; and Dr Kay Swinburne MEP, Vice-Chairman of the Economic & Monetary Affairs Committee of the European Parliament discussed the challenges and opportunities for business inherent in our departure from the EU.
Ahead of PIMFA’s dedicated Brexit Conference on the 14th November, John Barrass stated that the retail sector will inevitably be subject to change because of the termination of passporting rights and the lack of equivalence possibilities for retail investors. There was also a question over what investments would be available to retail customers. “Deal and No Deal are the same for our sector, except that if we crash out on March 29th without a transition arrangement the firms will have to make changes very quickly to continue servicing clients in the EU. If we get transition then the changes will be exactly the same but can wait until 1 January 2021 or longer.” Whilst Paul Killik pointed to the opportunities in having a relevant rule book for retail investors, Dr Swinburne pointed out the considerable influence the UK Regulator has had in writing the regulations that emanated from the EU and concluded with a crystal ball prediction that the Brexit negotiating process would end with the temporary parking of the UK in the EFTA/EEA fold. .
The impact of climate change on investing was the subject for PIMFA Chairman John Gummer, Lord Deben, also Chair of both the Committee on Climate Change and Sancroft International. He began by saying that, unlike Brexit, climate change is a global issue where we know the direction of traffic.
“Some small Pacific islands are buying land on bigger islands in order to house their populations in the future. All of Bangladesh, with a population in the region of 190 million, lies below sea level. If you have nowhere to go, you will act in desperation”.
He was also optimistic about the opportunities which climate change could provide for investment in companies which embrace the need for change and can profit from it, but finished with “Compared to when I was 20 years old, spring now starts 17 days earlier. Buds open before the pollinators arrive. We’ve got out of kilter & this process is accelerating”
To close the day, journalist and broadcasting legend Sir Trevor McDonald OBE entertained a packed audience with his anecdotes on a long and well-travelled career, including fascinating insights from interviews with the likes of Saddam Hussein, Colonel Gaddafi and Nelson Mandela.
PIMFA Chief Executive Liz Field said this on the day:
“”The range and variety of issues that member firms need to consider were all given a thorough airing at our conference with discussion with and questioning of our experts and influential speakers. Brexit aside, there is plenty to be getting on with for both PIMFA and our sector”.