Another glimpse into the insidious nature of the Cult – the “regulation” of the UK investment management industry – a Saturday morning rant!
Regular readers will know my views that rather than the mantra of the Marxist/Maoist/Cult of Moloch that “all property is theft” combined with the WEF’s mantra of “you will have nothing and be happy”, it is my view that “all taxation is theft” and that there should be no patents on and medical
It is my view that the so called “Value Added Tax” – a European socialist imposition that adds as much as 25% to the cost of every transaction in an economy – is highly regressive, borne in large part by the poorest in society.
In the UK, this transaction tax raises as much as in personal income tax, which is largely paid by high income earners, so no-one escapes paying large dollops of tax that not only reduce their spending power and income, but also prevent the accumulation of wealth to pay for a comfortable retirement.
Nonetheless, people in the UK make as much provision for their retirement by contributing to pension funds. These can be “defined benefit” schemes run by employers that provide set pensions depending on years of service or “defined contribution schemes” where the pension is not known in advance, but contribution rates can be combined with assumptions around inflation rates and expected investment returns to provide a “pension pot” that can be drawn on in retirement. A lucky investor will enjoy a period of above average investment returns in the last five to ten years of employment that will boost the pension pot available at a time when it is the largest from decades of contributions – an unlucky one will suffer below average, even negative investment returns that will reduce the pension pot intended for “draw down” over the usual 10-30 years spent in retirement.
As with all countries, the gathering of millions of individual “pension pots” and the aggregation the liabilities of company defined pension schemes are invested. These investments are managed by tightly regulated investment managers. The UK is one of the oldest investment management industries in the world. Prior to Brexit, the UK provided much of the knowledge required to properly regulate the investment industry throughout Europe.
Now that Brexit has happened, the UK is left to its own devices, BUT, it talks with its counterparts in Europe, the US and elsewhere and applies ISO standards like these:
Previous regulations imposed by the EU – called “Dir3ctives” are also in force, though “tailored” a little since Brexit.
EUR-Lex - 32019L2034 - EN - EUR-Lex (europa.eu)
Investment management is as much about “compliance” as it is about actually providing the highest pension pot for the least risk and highest “bang for buck” on fees paid to investment managers.
By now we are all suffering from the faux science used by the Cult to increase the costs of energy by pretending that “renewables” are a solution to a “hydrocarbon” problem. Of course, there is no “climate” problem – a pollution issue, yes and one that is already legislated for.
Here is the debunking of the theories of the corrupt scientists begging for hand-outs to pay for a lavish life style from the UN IPCC to the University of East Anglia.
There is no climate crisis!
UK energy users have been subjected to massive hikes in energy prices when the underlying price of hydrocarbons is within bounds over the last few decades. They have been subjected to massive hikes in “standing charges” for no delivery of service for previous charges and no improvement in service over the last decade.
Here are a few articles about the use of complex regulations and tax schemes to prevent the UK public from discovering how they are being defrauded.
An example of the sheer unmitigated gall of the, mostly foreign, EU based, energy companies supplying UK consumers is the slogan “ you can get renewable energy for the same price as hydrocarbon energy” – that with the massive higher costs, regulations and taxes imposed by government on hydrocarbon energy and the massive subsidies given to the eyesores of forests of windmills and plantations of solar panels that destroy entire ecosystems, even before you consider the mining of the materials used to make the bloody things (for example, open cast mines using even child slaves).
To me, ALL forms of discrimination are immoral and unethical. UK companies making products and delivering services are already subject to pernicious “Cult” regulations that force “quota” hires of people less qualified than others when hiring new staff and promoting existing staff. This not only pisses off existing staff that have to take up the slack of the lower quality “quota hires” – it casts a pall over those in the pool of “quota” hires who are actually gifted, creating resentment in the “pool” and the workforce. I do not see it as any different from the negative discrimination based on an individuals colour, race, religion or sex.
The imposition of the so called “Diversity, Equity and Inclusion” policies reduces quality and profit whilst increasing costs of companies in the UK (and everywhere else these policies are imposed).
That’s the first “tort”. UK corporate profits are reduced and hence, returns on investment in those companies.
Now, finally, let’s turn to the antics of the regulator of UK Investment manages.
From here: the regulator has issued a “Please explain” notice to a dozen UK investment managers offering “green” funds to investors.
FCA to ESG funds: Do more to explain oil and mining holdings (citywire.com)
“The Financial Conduct Authority (FCA) has delivered a critical assessment of ESG funds with holdings in the oil, gas, mining and manufacturing sectors, questioning whether firms are doing enough to explain why they are holding polluting stocks in sustainable strategies. “
Fair enough you might say! If investors want to NOT invest in hydrocarbon and “mining and manufacturing” stocks and choose a product that facilitates that wish, they should get that product.- just what a regulator is supposed to “police”.
Note though, this:
“The Financial Conduct Authority has told fund firms to get their house in order ahead of the final release of SDR rules.”
SDR rules? What are these?
“The UK Financial Conduct Authority (FCA) released the latest consultation paper on its Sustainable Disclosure Requirements (UK SDR) and investment labels in October 2022, having first raised the proposal in November 2021.”
“The UK SDR builds on both the FCA’s implementation of the Task Force on Climate‑related Financial Disclosures (TCFD), which came into effect in April 2022, and the FCA’s “Dear Chair Letter” from July 2021 that addressed greenwashing concerns, warned firms against exaggerating the sustainable characteristics of their products and services, and provided guidance on how to mitigate these issues.”
And just what is the TCFD?
TCFD and related UK reporting regulations | ICAEW
“The TCFD is the Task Force on Climate-related Financial Disclosures. The Task Force was convened by the Financial Stability Board to produce a common global framework for companies to report how climate change will affect their business.”
Ah hah! Now what methodology and science will be used to determine that climate change impact and its effect on their business?
The UK investment industry is nowhere near as large as that of the US, but it still invests all over the world and with a larger percentage share of pension fund investment portfolios.
From here: chapter4.pdf (theia.org)
“In 2020, pension funds accounted for more than half of the UK institutional client base (64%), with assets totalling £2.9 trillion. The majority of pension funds were managed by corporate pension funds schemes, responsible for £2.4 trillion.”
Out of interest, UK pension funds have been frantically “de-risking” from equites – perhaps because of lower expected returns with more risks and higher costs!
“Equities account for just 21% of DB scheme investments compared with 75% twenty five years ago. In particular, the allocation to UK equities has fallen dramatically since 1996 from 53% to just 3% of the overall asset allocation in 2020.
Even though government bond yields are around 5%, there have been few ten year periods when equities would not have outperformed bonds by 2-3% per annum. The investment returns )and pension pots/liabilities of defined benefit schemes) will suffer horribly over the coming years/
Back to the regulations that are about to throttle corporate profits and equity market returns still further.
The regulations will impose new controls on what investments are permissible, based on flawed metrics.
Now, of course, the ESG regulations already in place should cover this. An investment manager should not invest in companies like Nike that use child slave labour, or companies that dump toxic waste into oceans like TEPCO. Of course, TEPCO’s methods for disposing of Fukushima’s nuclear waste are sanctioned by the IAEA, so might still qualify as a permitted “environmental” investment.
Will there be lots of requests for information and analysis by those corrupt and quack scientists that have adopted the “faux science of UN IPCC climate models?
Ok, not much more now. Check this out from last year about the regulator itself:
FCA and PSR climate and environmental targets and metrics | FCA
“Our targets and metrics show the steps we’re taking to become a more sustainable organisation and keep us accountable for our progress.”
“Our targets support more wide-ranging environmental objectives, including our Transition to Net-Zero by 2045 with interim targets for 2027, and our Environmental Management System (EMS), which is certified with the ISO 14001 standard and which provides the framework for achieving environmental sustainability in our operations. “
These are the objectives of the regulator itself. Fully on board with the Cult. Woe betide those who prefer a different approach based on common sense and the truth about climate change.
The UK investment industry has become “woke” – a very dangerous position that is just one half of the expression “get woke, go broke”. Its belief in the Cult will reduce pension pots of its savers and destroy the investment industry.
The UK investment industry has always had its issues, but now it is on the path to becoming a “seeker of the lowest common denominator” of quality, regulated to the brink of non-existence. Its star operators for whom the pursuit of excellence and the beating of competition are being and will be dimmed and dumbed down.
/
Onwards!
Please subscribe or make a donation via Ko-fi – any amount from 3 bucks upwards. Don’t worry and God Bless, if you can’t or don’t want to. Ko-fi donations here: https://ko-fi.com/peterhalligan - an annual subscription of 100 bucks is one third less than a $3 Ko-fi donation a week!
The gay abandon displayed by the executives as they wreak havoc on ordinary people is astonishing! Stunning that we hear crickets in response to these mental rules, perhaps due to their location?
Quite a ‘wretched hive of scum and villainry’ we have infesting the top floors… may crickets infest their pants.