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AKG Update Issue 19
31 March 2016
A dull thud! …the arrival of the final FAMR report

March has seen the publication of a ‘Final report’ by HM Treasury and the FCA on the Financial Advice Market Review (FAMR).

FAMR was launched in August 2015 and was stated as coming: "in light of concerns that the market for financial advice in the UK was not working well for all consumers. The aim of the Review has been to explore ways in which Government, industry and regulators can take individual and collective steps to stimulate the development of a market which delivers affordable and accessible financial advice and guidance to everyone, at all stages of their lives." [source: HM Treasury and FCA Financial Advice Market Review – Final Report, March 2016]

The report was required reading for many across the financial services sector, and beyond, and it makes some fair observations on the market and wider environment.

However, perhaps the most interesting aspect of its content was in fact the lack of any real content. Whilst full of recommendations for further consultation, investigation, development, review and exploration, there was little, if any, actual ‘doing’!

What this means for individual organisations operating in the financial services sector remains to be seen. But it is likely that forces in their own right, be they, for example, technological innovation or social change, will drive the pace and implications of market development at a speed somewhat faster than that being pursued by this regulatory framework.

Guy Vanner

AKG's Managing Director
Ageing population and financial services

On 22 February 2016 the FCA published DP16/1: Ageing population and financial services. In their background note to the Discussion Paper the FCA states that "Today’s older consumers and the ageing population of tomorrow represent both challenges and opportunities for financial services."

And this is why it should be added to your reading pile. We believe that the paper has cross-sector relevance. From an AKG perspective the challenges and opportunities referenced in the Discussion Paper could apply equally to different types of companies and operators conducting business across our core assessment and rating sectors – Life Companies, Friendly Societies & Similar Providers; Offshore Life Companies; Platform Operators. Furthermore the relevance of the Discussion Paper to professional advisers, intermediaries and other participants in the distribution chain is crucial. Each and every one of these key market stakeholders needs to consider how to navigate the challenges and opportunities as they seek to engage and do business with "today’s older consumers and the ageing population of tomorrow".

This theme was something that we identified and covered in AKG’s Pension Freedoms paper of July 2015, particularly in Section 12, 'Connecting markets in future'. If you have not yet had a chance to read this AKG paper much of the content remains relevant today and it can be downloaded from the AKG website.

The FCA has stated that their project "looks specifically at the way in which financial services meet the needs of older consumers, with a view to publishing a series of recommendations for future action in 2017" and they are inviting collaboration with and feedback from market stakeholders "so that together we can design recommendations that improve market outcomes for these consumers." If you have not already had a chance to consider the paper it can be downloaded directly from the FCA website.

Matt Ward

AKG's Head of Communications
Rating Activity

Life Companies, Friendly Societies & Similar Providers

Assurant Life Ltd
Overall Financial Strength
B- [Confirmed] Issued 23 Mar 2016

B & C E Financial Services Limited
Overall Financial Strength
B [Confirmed] Issued 14 Mar 2016

Compass Friendly Society Ltd
Overall Financial Strength
D [Confirmed] Issued 16 Mar 2016

Independent Order of Oddfellows Manchester Unity Friendly Society Ltd (The)
Overall Financial Strength
C [Previously B-] Issued 21 Mar 2016

Pharmaceutical & General Provident Society Ltd
Overall Financial Strength
C [Confirmed] Issued 23 Mar 2016

Railway Enginemen's Assurance Society Ltd
Overall Financial Strength
C [Confirmed] Issued 16 Mar 2016

Red Rose Friendly Society Ltd (The)
Overall Financial Strength
C [Confirmed] Issued 16 Mar 2016

Scottish Equitable plc
Overall Financial Strength
B+ [Confirmed] Issued 3 Mar 2016

Standard Life Assurance Ltd
Overall Financial Strength
A [Confirmed] Issued 22 Jan 2016

Standard Life Pension Funds Ltd
Overall Financial Strength
A [Confirmed] Issued 22 Jan 2016

Offshore Life Companies

Isle of Man Assurance Ltd
Overall Financial Strength
B- [Confirmed] Issued 7 Jan 2016

Platform Operators

Cofunds Ltd
Platform Financial Strength
B+ [Confirmed] Issued 9 Mar 2016

James Hay Wrap Managers Ltd
Platform Financial Strength
B [Confirmed] Issued 10 Mar 2016

Note: This section refers solely to our Overall Financial Strength Ratings/Platform Financial Strength Ratings.
Report Releases

Company Profile & Financial Strength Reports

Full Report – Issued 3 Mar 2016

Assurant Solutions
Short Report – Issued 23 Mar 2016

PG Mutual
Short Report – Issued 23 Mar 2016

Standard Life
Full Report – Issued 22 Jan 2016

Offshore Profile & Financial Strength Reports

Isle of Man Assurance
Full Report – Issued 7 Jan 2016

Platform Profile & Financial Strength Reports

Full Report – Issued 9 Mar 2016

James Hay Partnership
Full Report – Issued 10 Mar 2016
Report Withdrawals
No reports have been withdrawn since our last Update.
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