Mike can you tell me a little more about the new brand Hartmoor Financial?
Hartmoor Financial is a provider of structured deposits and investments covering a variety of risk and return profiles to help customers achieve their financial goals.
While the business itself is new, we have a wealth of experience to draw upon. Our management team has been handpicked from among the best in Structured Products and bring with them years of experience and innovation.
Hartmoor’s objective is to offer products which are simple to understand and offer good value to the customer. To embed this culture, ensure simplicity and keep good value at the heart of what we do we have introduced a number of product design principles. We have put these in place to represent our values and our aversion to poor quality offerings.
Ross what role do you see Structured Products providing in the current marketplace?
Whilst there is much regulatory focus on the Structured Product market, it could be argued that the usage and application of them as a financial planning tool is as appropriate as ever. With interest rates at historically low levels, the uplift from structured deposits makes a real difference for clients looking for growth in a capital protected environment, and the opportunity cost of not buying a standard fixed rate offering is low.
There are also opportunities for structured deposits and structured investments to be applied due to the recent pension changes. From April this year retirees have full access to their pension entitlements (not all tax free), an outcome of this being the annuities market will reduce. With current market conditions, retirees looking for a secure income now face annuitising at some of the lowest levels in history. Structured products can offer an alternative home for clients looking for an income in retirement whilst also potentially maintaining the value of the pension pot for future years.
Mike why are you launching the Hartmoor brand now?
If there is one good thing to have come out of the financial crisis it is that it has brought about cultural change in the financial services sector. Product providers have been forced to recognise that they need to be more transparent, become more customer-focused and implement rigorous governance procedures in order to regain the trust of their customers. We also have a new, more proactive, regulatory system in place to make sure providers step up to the mark.
At Hartmoor we’re focused on ensuring customer needs and interests are at the forefront in all aspects of the business. Our approach is based on a sustainable ethical client franchise built on advisers’ strong client relationships.
I also believe that being a new firm and having the opportunity to start from scratch gives us a great advantage. Our guiding principle when developing the Hartmoor range of structured products has been to take a financial product and make it better for consumers by simplifying it, improving its governance and putting the customer first.
Mike do you see any regulatory challenges in the current marketplace?
The regulatory environment is challenging for the right reasons. In its recent Thematic Review of Structured Products, the Financial Conduct Authority (FCA) made it abundantly clear that it is not happy with how some corners of the market operate. It found that “some firms are producing Structured Products without sufficient regard to our previous guidance” and has raised the prospect of further regulatory action and additional rules if providers do not put their houses in order.
The FCA is asking providers to make Structured Products better for consumers by simplifying them, improving governance and putting the client first.
Firms who do not align their business model and culture to embrace regulation will not be sustainable and more importantly risk delivering poor outcomes for customers.