What did we learn from PIMFA Virtual Fest 2020?
Throughout the COVID pandemic, technology has enabled us to maintain a programme of events and learning that have allowed our members to continue their professional development, maintain strong lines of communication and provide insight on how members can help their clients navigate the many challenge of the last year. Among these events was PIMFA’s enormously successful Virtual Fest which was held last June, and which returns on March 9 and 10 2021.
The two-day event will see keynote speeches from the Economic Secretary to HM Treasury, John Glen, and the Financial Conduct Authority’s (FCA), Director of life insurance and financial advice, Debbie Gupta, that will give our industry a sense of the future shape of the economy as we emerge from the pandemic and of course, the conclusion of Brexit.
Among some of our expert speakers at Virtual Fest will be Chair of the Work and Pensions Select Committee, Stephen Timms MP and senior figures from the FSCS, Which?, OECD and numerous industry heavyweights, tackling subjects such as the Future of work, operational Resilience, the future of regulation, all promising to be interesting and illuminating.
Highlights from the 2020 event included:
John Glen, Economic Secretary to the Treasury and City Minister – Government Priorities for Recovery Following COVID-19
The Minister stressed the importance of financial advice and support as a critical element of the government’s priorities for recovery following the pandemic, saying that our industry is at the core of their response and that it has performed well. “We need to think thoughtfully and creatively but with an eye on growth in financial services … fusion of capital markets and the consumer working together is key”.
He added the he believe the UK Financial Services Industry remains world-class and that the Government stands ready to do ‘whatever is needed’ to support it.
Mark Carney, ex-Bank of England chief & UN Special Envoy for Climate Change – Meeting the UK Climate Change Goals
Carney set out what steps he believes can and should be taken across the retail finance sector to contribute to meeting the UK climate change goals.
In observations on lockdown #1, he cited a significant reduction in global energy use, an increase of 20% in capital inflows to ESG and sustainable funds and sees climate change as the central issue going forward, economic recovery notwithstanding.
One big issue is the management of systemic risk, applying particularly to banks, insurers and regulators, which he divides into two types – Physical (wildfires, floods etc) and Transitional (he cited ‘the end of the combustion engine’ as a good example of this).
The rules will develop as we move forward and anyone investing or lending in the future will need to observe and take account of this, along with the legislative processes which accompany the changes.
Mr. Carney suggested that the financial industry had now “jumped ahead” of government in leading the way to a sustainable future, that younger people are particularly focused on sustainability and that good advice on how to invest their money would correspond with these values, saying “You (the financial services sector) are absolutely central to this, you are serving your clients in a way that serves society ultimately.”
Industry Panel: Saving & Investment in a Post-COVID World
The panel expressed their acute concern for many about short-term finances, with 24% of the workforce furloughed and a further 19% working less hours and the linked worry that some may cash in part of their pension savings, turn to, or be susceptible to scams to cover the shortfall or recoup losses.
Sustainability and ESG Investment was also a key theme will experts agreeing that the growth of responsible investing relied on educating advisers on bringing the topic to life for clients.
2020 saw ESG go truly mainstream, with significantly increased capital inflows to sustainable investment funds and many more asset managers announcing their intention to integrate ESG into their investment processes, as returns on investment appear to be better than expected.
Further, there are regulatory changes afoot, including the integration of sustainability risk into MiFID II, plus ESMA is proposing an amendment to Article 25 of MiFID II, which is all about integrating ESG considerations into suitability assessment. This is expected to come into effect in the latter half of 2021 and will have a fundamental effect on the advice process going forward.
There are no global standards for terminology yet and advisers now need to learn the basics of how to discuss this issue with clients. To aid this process, PIMFA has launched our ESG Academy and a Wealth Management version begins shortly.
Tim Fassam – “Brexit – What Next?”
Closing the day’s proceedings, PIMFA’s Director of Government Relations and Policy stated that, whilst it may take up to a decade to play out, the UK ultimately wants to move to a principles-based, rather than a rules-based, system. This also highlights that the differences between the two sides are philosophical as well as political.