Member Update 11th January
Written on 11/01/2019

Test Question

It's the New Year and you, at the age of 45 are thinking of using your annual tax free gift allowance for the first time ever. What’s the maximum you can give within the allowance?
a. £1000
b. £4000
c. £3000
d. £6000

answer is d. £6000. Your allowance is £3000 per annum, but you can carry forward the previous year’s allowance. You can only carry forward one year’s allowance.


FCA have a busy year ahead keeping us in line.

Ring-fencing regime for UK banks

The ring-fencing regime for UK banks entered into force on 1 January 2019. It required UK banking groups to separate critical banking services from their wholesale and investment banking services.

Extending FOS to more SMEs

Currently, only individual consumers, small charities and trusts, and micro-enterprises are eligible to complain to the Financial Ombudsman Service (FOS).

From 1st  April 2019 the definition of "eligible complainant" to extend access to the FOS to SMEs with an annual turnover below £6.5 million and fewer than 50 employees, or an annual balance sheet below £5 million, will be eligible to complain to the FOS.  This will include charities and trusts and personal guarantors of loans to businesses of a comparable size. 

FCA estimates that around 210,000 additional UK SMEs will be eligible to complain to the FOS as a result.  

Increasing FOS award limit

The FCA says there are around 2,000 complaints upheld by the FOS each year where the amount of compensation the FOS determines is due is above the current £150,000 award limit. 

With effect from 1 April 2019, the FCA plan to increase the award limit for the FOS' compulsory jurisdiction (CJ) to £350,000 for new complaints (that is, complaints about acts or omissions by firms on or after 1 April 2019) and £160,000 for all other complaints.

FOS taking responsibility for CMC complaints

Responsibility for claims management regulation will pass to the FCA from the Claims Management Regulator (CMR) (a unit of the Ministry of Justice (MoJ)) on 1 April 2019.

Alongside this, responsibility for considering complaints about claims management companies (CMCs) will transfer from the Legal Ombudsman Service to the FOS.

Conduct of business

PRIIPs Regulation:  It's no secret that implementation of the KID has not gone smoothly since its introduction in January 2018, and the FCA is expected to propose changes in the second half of 2019

Consumer credit

The FCA is required, by 1 April 2019, to complete a review of retained CCA requirements and develop rule-based alternatives where possible.

Consumer credit information market study

The FCA intends to launch a credit information market study in June 2019 (delayed from Q4 2018).  This affects firms like Equifax and Experian.

Financial advice

The government will launch the Single Financial Guidance Body (SFGB) this month which will replace the Pensions Advisory Service (TPAS), the Money Advice Service (MAS) and Pension Wise. For more information, 

Extension of SM&CR

The senior managers and certification regime (SM&CR) was rolled out to insurers in December 2018.  Lucky them!  On 9 December 2019, it will finally be extended to all FSMA-authorised firms, replacing the current approved persons regime.   Goodbye CF1 -30 regime and hello SMCR .  And hopefully goodbye to registering RIs with Form As and waiting for FCA approval.  More responsibility to individuals and bit more freedom is the general idea.  The thought of simplification at FCA is almost too much to bear without going light headed, but it is within our grasp.

Firms  and Registered individuals are feeling nostalgic about the register already!  The FCA plan to come up with an alternative for marketing / information purposes - a directory of financial services workers.

FCA asset management market study remedies

The FCA's asset management market study (AMMS) has been rumbling along since 2015, but 2019 will see some changes and new FCA rules on:

  • Box profits.
  • Governance  - independent director requirements.
  • A prescribed responsibility for managers under the SM&CR.

FCA market study on competition in mortgage sector

The FCA is required, by 26 April 2019, to carry out a formal review of the impact of the implementation of changes to rules in its mortgages sourcebook (MCOB) following an earlier review of the mortgage market.


Pension transfers remain in the spotlight in 2019. The FCA will be carrying out further work on the different charging structures in pension transfer advice and, if changes are needed, it will consult on further proposals in the first half of 2019.

Transfer of claims management regulation to FCA

Responsibility for claims management regulation will pass to the FCA from the CMR on 1 April 2019 under the Financial Guidance and Claims Act 2018. The Act also extends regulation to Scotland, where firms are currently unregulated.  

The transfer of regulation will bring a new business sector and a new group of firms, CMCs, within the scope of the FCA regime under FSMA on 1 April 2019.   IFAC believe that many IFAs should register as CMCs. 


Although MIFID II came into effect in January 2018, some aspects, in particular relating to trade transparency, will continue to rumble on into 2019. The prospect of MiFID III has already raised its head.  OMG - maybe Brexit is a good idea after all!

Topic of the week was MIFID II. 

Unsurprising that, since it has generated considerable interest from advisers. To remind you, download the guide from the IFAC Doc Library or BAT if you are a member of IFAC.  IF not, click here

We now can reveal that we have updated for Mifid II ISA, ISA Transfer and OEIC SR reports in the doc library.

Several people asked if pensions and insurance bonds were part of the MIFID2 arrangements.

The answer is that technically they both are excluded, but normally inside the UK it would be expected to include them.  This shows the different approaches to things across the Channel, where insurance bonds are GI biz, and where there is no official passporting regime for pensions.  I

It is about category conventions!

Pensions is a bit strange, because if you invest money inside the pension, then surely the transaction is an investment not a pension…the pension just being the trustee (if a sipp).  But then Gabriel-RMAR and (as a result) our own BAT biz book asks you to split up your business in this way – is it pension or investment?   And so you can see the problem immediately that different members of staff may apply different category conventions. 


ICO publishes detailed guidance on contracts and liabilities under the GDPR. The Information Commissioner's Office (ICO) has published a brief test relevant for IFAs and small business owners. 
Any problem, and start exploring the GDPR section of BAT (Bottom Left!)

Data Protection - 82 breaches filed

Eighty-two people sent in reports to the Information Commissioner’s Office (ICO) about potentially undisclosed breaches in the three months to the end of August, compared with 31 reports in the three months to the end of April, according to figures compiled by law firm RPC after a freedom of information request. 

Companies can be fined up to 4 per cent of annual turnover or €20m for failing to report breaches within 72 hours.
FYI Marriott International had half a billion hotel guests’ data stolen! If you stayed on one of them, change your passwords!


Atom bank has joined the DD system to become an originator and is the fourth in under 12 months to sign up to DDs – things are brightening up in the banking-DD world!   Launched in April 2016, Durham-based Atom bank offers Fixed Saver accounts, residential mortgages, and secured business lending for SMEs – already, Atom bank claims to have lent in excess of £2 billion to small businesses and homeowners across the UK and are known as the UK’s fastest growing mortgage lender.  Atom wants to be a mobile App bank and is exclusively for tablet and smartphone users

Tax: HMRC has reported that over 10,000 Self Assessment tax returns were filed over Christmas Day and Boxing Day.

A 'Check your State Pension age' tool is available at The tool allows taxpayers to check the earliest age they can start receiving the State Pension. The State Pension age is based on a taxpayer’s gender and date of birth and is subject to change as the State Pension age increases. The tool can also be used to check a taxpayer's Pension Credit qualifying age and when they will be eligible for free bus travel.
Fun fact: It isn’t a regulatory requirement for retail investment advisers to hand over a business card to new clients.

Client best interests The FCA will review the post-RDR advice process in 2020. 

FCA as a ‘price regulator’  Expressions such as “costs” and “value for money” are increasingly being used by the FCA. Importantly, it has indicated that costs will also form part of next year’s post-RDR review. And it’s not just the regulator.

Debts! The UK’s smallest businesses are facing a bill of £6.7 billion, up from £2.6 billion in 2017 – just to collect money they’re already owed, according to research by Bacs, part of leading UK retail payments authority Pay.UK.  FCA have been helping firms collect debts from erstwhile advisers, and can help you too.


Almost 20%, or one in five, property owners saying that they would consider using equity release to unlock the wealth tied up in their homes, according to a survey conducted by L&G earlier this year.

The number of people aged 65 and over is projected to grow to a quarter of the national population by 2024,  (SOURCE Office for National Statistics)
Moreover, 69% of the UK’s housing equity thought to be owned by people aged 55 or over and the total value of property owned by people aged 65 or over estimated at over £1.1trn.

Research conducted by True Potential Investor found that people aged between 55 and 64 are currently facing retirement income deficits of around 30%.
Equity release is destined to soar over the coming 12 months and to continue doing so for many years to come.

If you have clients that you may feel will could benefit from advice in this area, and you do not have the authorisation, we have arrangements in place with a National Company, or may be able to put you in touch with an adviser near you, please contact us.
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