As Hoxton Group is a British expatriate-focused financial advisory firm, we use UK best practice and standards when offering our services to clients, says Paul Tate, Hoxton Capital Management's compliance director.
With an FCA-regulated firm within the group, changes in the UK regulatory environment tend to affect the wider group's systems and controls as we look to implement changes within its core.
An example of this is the work currently underway to meet the FCA Consumer Duty requirements, which results in duplication across the multiple businesses within the Group. In this instance, there are wide-ranging benefits to clients in jurisdictions whose regulatory environments are not as evolved as the UK.
The Hoxton Group welcomes the FCA's Thematic Review into Retirement Income Advice, as the point of accessing pensions for the first time, and beyond, is a critical stage of consumers' financial lives as more is required to manage the risk of depleting assets for the remainder of their post-retirement lives due to defined benefit pensions being phased out by corporates.
We believe the outcome of this Thematic Review will lead to widespread adoption of best practices following the FCA recommendations and will ultimately lead to huge positive impact in consumers' later life years.
Generally, the FCA is a standard-setting regulator, and in many cases, other regulators tend to follow trends set by the FCA. As a result, and looking at global regulators' evolution mapped against the path set by the FCA, the results and outcomes from this review will waterfall down across other jurisdictions.
In the long run, this will benefit not just UK consumers but other jurisdictions' consumers too. Many firms have historically focused on clients within their accumulation years in the run-up to retirement, as this is where most of the revenue has historically been found within the industry and what a lot of financial advisers can relate to being in the working years themselves.
The industry is facing a demographics shift due to baby boomers leaving accumulation and heading into drawdown to fund retirement. The bulk of global wealth sits with this demographic and requires financial advisers to become more astute in managing the risk of depleting assets as their clients shift.
Likewise, as older financial advisers retire, their succession plans tend to involve younger advisers taking over their clients. It becomes critical that younger advisers upskill in this area in preparation.
In the run-up to the Thematic Review, the Hoxton Group is evaluating its offering, conducting gap analysis within systems and controls, and broadly initiating training in cashflow modelling and other skills required to equip our advisers for this critical stage in our clients' lives.
This ultimately spreads across our global operations and will positively impact our clients' lives, not just in the UK.
By Paul Tate, compliance director at Hoxton Capital Management
Hoxton Capital has offices in London, Dubai, Sydney and the US.
