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Regulation blocking new forms of financial services

The regulatory framework is a barrier to new streams of financial services entering the market. according to Aegon head of public affairs Francis McGee.

At an Aegon and Social Market Foundation event at the Labour conference, McGee said although the retail distribution review will address a lot of issues in the market, it will not increase potential new channels of engagement for consumers.

He said: “There are a whole bunch of different types of services that people want but cannot get because of the regulatory framework and because of the way that the industry has thought about these things.”

McGee said Aegon and the Chartered Insurance Institute carried out research a year ago which identified five key types of financial services concepts that consumers would like to see in the market. They were: a financial guru, akin to a post-RDR IFA; a financial drop-in centre, much like money guidance; a personal shopper; a financial superstore and a financial coach for groups, based on the Weight Watchers’ model. But McGee says the problem is that the people providing these services would almost all have to be regulated to give advice.

He said: “It is no good just providing people with more of the stuff we think they would like, we have got good, hard information about what people would approach, would engage with and we need to find a way in which the ind- ustry and the regulator can create an environment to let this happen.”

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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.

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