Here's our weekly heads-up on the stories that may have caught your clients' attention over the weekend …
The five best ISA funds that have thrashed the market
For the record, just because Professional Adviser points you towards an article in this regular start-the-week slot, it does not mean we necessarily endorse what the piece is saying. Sometimes we will offer something simply as a warning as to why existing or potential clients could be heading your way this week - and this Express article is a case in point.
Highlighting ‘the five best ISA funds' is a butch call at the best of times - doing so just days after the FTSE 100 hits another all-time high and essentially picking them by looking in the rear-view mirror at the past five years' performance is something else all together.
Chase de Vere certified financial planner Patrick Connolly is briefly wheeled out as the voice of reason, warning the stockmarket may not be an ideal place for risk-averse investors. But while even the article itself manages to cram in the phrase "past performance is no guarantee of future returns", in virtually the same breath it enthuses that the five funds' "long-term success cannot be ignored".
And even risk-averse readers may not have cared about Connolly's cautionary words after reading: "These fabulous five Isa funds have more than doubled in value over the last five years, with some returning as much as 180%."
For the record, the "fabulous five" are Lindsell Train Global Equity, Marlborough European Multi-Cap, R&M UK Equity Smaller Companies, Scottish Mortgage Investment Trust and the now almost obligatory pick Fundsmith Equity, run by Terry Smith, whom the article describes as "currently the brightest star in the fund management galaxy".
And people say there's no longer any such thing as an ISA season …
Minister softens up 11 million workers for pensions blow
Pensions minister Richard Harrington has signalled people with defined benefit pensions could have to accept reduced benefits to help relieve the pressure on struggling funds, according this Telegraph article.
In the wake of the BHS scandal and Sir Philip Green's £363m pay-out to its pension fund, Harrington acknowledged Britain is a "very different place" from when many schemes were set up. Pension fund lobby group The Pensions & Lifetime Savings Association has previously estimated there is a 50-50 chance the weakest schemes will be able to pay out to their members in full.
In an article he wrote for the paper - published on Saturday (and viewable under its premium pay-to-read system) - Harrington said: "I have a very clear set of criteria in mind when it comes to the future of the defined benefit [final salary] sector. Any changes must balance the needs of consumers, employers and schemes and I don't want to see it tipped in favour of one particular group. To restore confidence and build a more secure sector, it's vital the interests of no one group dominate."
Triple stealth tax to cost the grieving £600m
The implications of legislation passed last week in Parliament - introducing what former pensions minister Ros Altmann dubs a "stealth death tax" - are highlighted in this Sunday Times article. From 6 April, it says, the benefit received by a widowed parent will become payable for a maximum of 18 months - a significant drop from the current 20 years.
The change will leave three-quarters of grieving families worse off, according to the Childhood Bereavement Network charity, with working widowed parents expected to lose an average of £12,000 each. In addition, the article adds, the legal costs for processing a dead person's estate are set to increase from £215 to as much as £20,000 in May.
Altmann is quoted as saying: "We are hitting bereaved families in an unfair way. This can't really be called anything other than a stealth death tax. The government ruled out stealth death taxes, specifically and explicitly, to pay for social care and yet, at the same time, it is introducing just such a death tax to pay for the court system."
The chairman isn’t answering his email
Reforms not enough
An economic cocktail
To encourage consumers to shop around
Will report to Pat Shea