Press Release

PIMFA Statement on the Cancellation of Preference Shares at Par          

 21st March 2018

PIMFA has been following closely the developing situation regarding the Aviva proposal to cancel preference shares at par value, the effect of this on the price of preference shares in general, and the impact on the value of portfolios held directly by retail private investors or on behalf of retail clients by PIMFA discretionary investment managers.

We have seen the letter to the FCA Chief Executive, Andrew Bailey, from the Chair of the Treasury Committee, The Rt Hon Nicky Morgan, MP.  We strongly support the requests made in that letter regarding aspects of the case and the FCA’s approach to it. We shall be interested to know the response.

It is for the FCA and legal profession to determine whether breach of law or rules has occurred with regard to such questions as irredeemability and misleading information to clients.

For PIMFA and its members it is of paramount importance that an ethical approach should at all times inform proposed or implemented actions in relation to retail investors, and that such actions should, as required by law, always be in the clients’ best interests.  These principles apply even more strongly at a time when austerity has bitten for some years and incomes need supplementing, when lifespans are lengthening and the need to support the vulnerable or elderly for long periods of retirement has never been greater, and when the role of trustworthy professional advice is indispensable in securing investments of a quality enabling these objectives to be met.

The decision to cancel preference shares at par value does not further the excellent work of our member firms in ensuring that private investor interests are properly and ethically catered for and feature fully alongside those of major institutions in investment decisions.

PIMFA CEO Liz Field said: “It is of the utmost importance that, in major decisions that have an effect on the valuation of key assets in which individuals and families have invested for the long term, the position of the private investor is properly taken into account. The role of ethics is paramount where conflicts of interest emerge and competing interests have to be met. There are times when decisions advised by ethical rather than immediately commercial considerations must take precedence.”


Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

  • PIMFA is the UK’s leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
  • PIMFA represents both full and associate member firms.
    Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.
    Associate members provide professional services to the PIMFA community.
  • PIMFAleads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena.  Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
  • PIMFA was created in June 2017 as the outcome of the merger between the Association of Professional Financial Advisers (APFA) and Wealth Management Association (WMA) – read more.


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