6th January 2025

Key Highlights:

?? FTSE and pound falter as UK recession fears grow

?? UK businesses plan price increases as Budget drives up costs

?? Wren Sterling chair Darby exits after a decade

?? Hurst Point Group names new CEO for Hawksmoor

?? Apollo Insurance Brokers joins network as it looks to expand through acquisitions

?? UK Broker Griffiths and Armour rebrands as Aon completes acquisition

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UK Macroeconomics

06 January 2025: FTSE and pound falter as UK recession fears grow

-?????????? The pound has dropped to a nine-month low below $1.24, reflecting mounting concerns about a potential UK industrial recession

-?????????? UK factory activity in December fell at the fastest rate in 11 months, with the purchasing managers' index (PMI) showing a reading of 47, marking the third consecutive month of contraction

-?????????? The FTSE 100 has shown a tentative start to 2025, with concerns about global trade and uncertainty about interest rate cuts keeping optimism in check

-?????????? Economic data revealed that the UK economy contracted for a second consecutive month in October, prompting fears of a potential recession

-?????????? The economic downturn has affected various sectors, with mining companies and gold prices experiencing declines, while banks and insurers showed slight gains

05 January 2024: UK businesses plan price increases as Budget drives up costs

-?????????? Over half (55%) of UK businesses expect to raise prices in the next three months, primarily driven by increased labor costs and taxes following the recent Budget

-?????????? Business confidence has declined significantly, with only 49% of firms anticipating turnover growth over the next year, down from 56% in the previous quarter

-?????????? The main factors contributing to cost pressures include an increase in employer National Insurance Contributions (NICs) from 13.8% to 15%, a lower NIC threshold, and a rise in the National Living Wage

-?????????? Concern about taxation has surged to 63% among responding firms, up from 48% in the previous quarter, reaching the highest level since 2017

-?????????? The impact varies across sectors, with retail and hospitality showing the lowest confidence levels, while manufacturing and labor-intensive industries face particular challenges in managing increased costs

03 January 2025: UK heading for tax rises despite return to growth, economists say

-?????????? Despite recent economic growth, the UK is likely facing tax increases in the coming years due to high government debt and stagnating productivity

-?????????? Economists suggest that growth-enhancing tax policies should focus on innovation and investment rather than savings, as investment and innovation are crucial for long-term economic growth

-?????????? The fiscal space for large tax reductions is limited, meaning that any tax reforms may need to increase growth without significantly reducing government revenue

-?????????? Current forecasts already include substantial increases to income tax, fuel duties, council tax, and stamp duty land tax, indicating that any additional tax hikes would be on top of these planned increases

-?????????? While cutting corporate tax rates is often proposed, some economists argue that providing tax stability and certainty for businesses over the next 5 years might be more beneficial for economic growth

UK Wealth Management

06 January 2025: DFM makes ￡3m redress provision

-?????????? Tatton Asset Management, a discretionary fund manager (DFM), has set aside ￡3 million for potential redress following a Financial Conduct Authority (FCA) section 166 review

-?????????? The review, conducted by a skilled person appointed by the FCA, focused on Tatton's processes for onboarding clients and ensuring the suitability of its model portfolios

-?????????? Tatton reported that the review is now complete, and the company is working with the FCA to address the findings and implement any necessary changes

-?????????? Despite the provision, Tatton's financial performance remains strong, with the company reporting a 25% increase in adjusted operating profit to ￡18.5 million for the year ending March 31, 2025

-?????????? The company's assets under management (AUM) grew by 26.7% to ￡17.5 billion, driven by net inflows of ￡1.8 billion and positive market performance

06 January 2025: Wren Sterling chair Darby exits after a decade

-?????????? Ian Darby has stepped down as executive chairman of Wren Sterling after nine years, having originally established the private equity-backed financial planning firm and led its buyout from the Towergate Group in 2015

-?????????? Darby oversaw a significant secondary buyout by Lightyear Capital in December 2021 and will remain a "significant" shareholder in the business, with his executive chairman position not being directly replaced

-?????????? The departure comes after Wren Sterling secured additional financial facilities to fund its ongoing mergers and acquisitions (M&A) programme, positioning the firm for continued growth

-?????????? James Twining, Wren Sterling's chief executive, praised Darby's leadership, noting that he helped make critical changes to the firm's strategy, structure, and organization that have strongly positioned the business for future success

-?????????? Clementine Vaughan from Magnus Financial Discretional Management is set to step up as non-executive chair (subject to FCA approval), signaling a smooth leadership transition for the Nottingham-based financial planning firm

03 January 2025: HSBC keeps UK overweight into 2025

-?????????? HSBC maintains an overweight position on UK equities for 2025, citing attractive valuations and potential for growth in the UK market

-?????????? The bank sees positive signs in the UK, including measures to boost infrastructure investment and support for the energy transition, which could drive economic growth

-?????????? HSBC's optimism for UK stocks is part of a broader bullish stance on global equities, with the US market receiving their largest equity allocation

-?????????? The bank's strategy involves expanding geographically to unlock growth opportunities, with the UK being one of the markets they favor alongside the US and select Asian markets

-?????????? HSBC's overweight position on UK stocks contrasts with their underweight stance on Eurozone equities, reflecting a preference for the UK market within the European region

03 January 2025: Hurst Point Group names new CEO for Hawksmoor

-?????????? Hurst Point Group has appointed Michael Bishop as the new managing director of its investment management division, which includes Hawksmoor Investment Management

-?????????? Bishop succeeds Sarah Soar, who stepped down after leading Hawksmoor for five years

-?????????? The new appointee brings over 20 years of experience in wealth management, including leadership roles at UBS and WH Ireland

-?????????? This change in leadership comes as part of Hurst Point Group's ongoing strategy to develop and grow its investment management business

-?????????? The appointment reflects Hurst Point's commitment to strengthening its position in the UK wealth management sector, following its acquisition of Hawksmoor in 2021

02 January 2025: HL eyes ex-SkyBet CEO as new chair

-?????????? Richard Flint, former CEO of Sky Betting & Gaming, is reportedly the preferred candidate to become the new chairman of Hargreaves Lansdown

-?????????? The appointment is part of a leadership transition following Hargreaves Lansdown's ￡5.4 billion takeover by a private equity consortium led by CVC Capital Partners

-?????????? Flint's experience in highly regulated markets and his previous connections with CVC Capital Partners are seen as key factors in his potential appointment

-?????????? The new chairman would replace Alison Platt, who guided Hargreaves Lansdown through its final year as a publicly listed company

-?????????? Flint's appointment is subject to approval from the Financial Conduct Authority (FCA), reflecting the regulatory scrutiny in the financial services sector

UK Insurance Broking

06 January 2025: Broker joins network as it looks to expand through acquisitions

-?????????? Apollo Insurance Brokers has joined the Brokerbility Network to support its growth?? strategy, which includes making strategic acquisitions while maintaining independence

-?????????? Managing director Lee Caraher emphasized the importance of partnering with a network like Brokerbility to help grow the business across the North West, benefiting from its insurer relationships and strong leadership

-?????????? Brokerbility, a community network of independent brokers, will provide Apollo with valuable support as the company seeks to expand

-?????????? Brokerbility's managing director John Dunn highlighted that Apollo's addition is a prime example of how the network can assist smaller brokers in achieving their growth objectives, especially in a challenging market

02 January 2025: Broker rebrands as Aon completes acquisition

-?????????? Aon has completed its acquisition of UK-based broker Griffiths and Armour, which will now operate as Griffiths and Armour, an Aon company

-?????????? The acquisition, announced in November 2024, went through on 1 January 2025, enhancing Griffiths and Armour's offerings with Aon's resources

-?????????? The move aligns with Aon’s strategy to expand its presence in the UK and Ireland, leveraging Griffiths and Armour’s expertise in professional indemnity insurance

-?????????? Aon’s UK CEO Jane Kielty expressed confidence that the acquisition would deliver market-leading expertise and create unparalleled offerings in the region

02 January 2025: Arag Group completes DAS UK integration

-?????????? Arag Group has completed the integration of DAS UK into its operations, launching its own insurance company, Arag Legal Expenses Insurance Company, and law firm, Arag Law, in the UK

-?????????? The company is consolidating its Bristol-based staff into a central location while keeping offices in Bedwas and Lime Street, London

-?????????? CEO Tony Buss emphasized that the integration represents a new era, merging two respected legal expenses insurance providers and creating significant opportunities for business partners and policyholders.

-?????????? Arag updated its logo and visual identity to reflect its expanded UK presence, with Buss expressing confidence in the future of the company and its mission to broaden access to justice

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02 January 2025: Top six UK brokers peel away from revenue peloton with billions under belt

-?????????? The aggregate brokerage across the Top 50 Brokers for 2024 has increased by ￡2.6bn to reach ￡16.1bn, marking the largest jump in revenue since the ranking began over 20 years ago, driven by industry consolidation, inflation, and higher commissions

-?????????? The growth in the Top 50 Brokers is significantly influenced by cross-border M&A, with UK brokers expanding overseas, particularly in Ireland, reflecting a shift towards international business operations

-?????????? The top six brokers in the 2024 list, including US firms Marsh, WTW, Aon, and Arthur J Gallagher, account for 62% of the total revenue, highlighting a widening gap between the largest firms and the rest of the industry

-?????????? Five new firms entered the Top 50 Brokers list this year, all private equity-backed, showing the increasing role of M&A in shaping the rankings, with some businesses already being acquired or up for sale

-?????????? The biggest movers up the rankings for 2024 were Lloyd and Whyte and Aventum Group, both of which grew significantly, with the latter achieving growth largely without M&A

-?????????? Private equity-backed brokers now account for 42% of the total revenue in the Top 50 Brokers, with increasing interest from overseas buyers looking to acquire UK businesses as platforms for further growth

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Sources: Financial Times, The Straits Times, Rankia Pro, Citywire, Financial Planning Today, Finance Magnates, Insurance Times