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Why such muted opposition in the UK to Brexit?

By Simon Commander, Managing Partner, Altura Partners

• Despite mounting costs and risks, relatively few politicians have made a forthright case for Brexit to be abandoned
• Such timidity cannot simply be attributed to fear of being seen to be antidemocratic or fear of specific groups of voters or media virulence
• Rather, there is a widespread feeling of ambiguity about the EU and its direction and management, even among quite ardent Remainers
• Consequently, arguments for staying in the EU only emphasise the economic costs of leaving but fail to make a more popular (perhaps populist) case
• Making that case is made harder by the way in which the EU member states, as well as the European Commission, appear to see their role and future

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Can scientists predict the future?…

Source: BBC


…Is the underlying question that was asked at the launch of “What’s Next?” at The Royal Institution last week. The book, edited by British Iraqi theoretical physicist Jim Al-Khalili, is a collection of scientific essays, written by selected experts, on what they believe is in store for the future of the human race.

At the launch event, in addition to Jim hosting, we were fortunate enough to hear from four of the contributors; science writer Philip Ball on demographics (although he also spoke about the impact of computing, robotics and AI), former chief scientist of the Met Office, Dame Julia SlingoAarathi Prasad, a molecular geneticist and finally Anna Ploszajski, a materials engineer and part-time stand-up comedian (apparently sponsored by Heinz Alphabetti Spaghetti, hence the spelling of her name – her joke not mine!).

I will leave the book review to others (science writer Brian Clegg offers a comprehensive, if slightly mixed opinion on Amazon), however I would like to offer a few thoughts on what was said at the launch and a couple of reflections since.

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Brexit and immigration

By Simon Commander, Stratforma Network Partner and Managing Partner of Altura Partners
September 2017

Immigration vitally affects the way in which Brexit is playing out. Both major political parties in the UK have interpreted the June 2016 referendum as
primarily a vote against immigration, although at first blush hostility to immigration might appear surprising with unemployment at historic lows of just over 4%. Equally implacably, the EU27 remain opposed to dilution of the right to freedom of movement. With little apparent sign of compromise in sight, the UK will have few options but to leave the single market and customs union.

These incompatible views of labour mobility have clouded much of the debate and made it more difficult to identify the net consequences for the UK economy, particularly the direct implications of reduced immigration. This note looks at whether there has indeed to be this stark trade-off: political gain but economic pain or whether lower migration could potentially benefit, or come with limited cost to, the UK.

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Asset Management’s Groundhog Day?

The Financial Conduct Authority (FCA) published their review of the UK asset management industry last week, advocating “radical reform” of the £7tn sector. Their key findings included:

  1. A lack of price competition, especially in retail active funds
  2. Questionable “persistently high” levels of profitability across the industry, with average profit margins of 36%
  3. Neither active nor passive funds on average outperform their own benchmarks after fees
  4. There is no clear relationship in retail active funds between gross performance and fees charged
  5. Virtually all investment risk is taken by the retail investor, who are poorly equipped to select funds and typically chase past performance, which is not a good indicator of future performance (as we all should know!)
  6. A lack of transparency in communication of fund objectives and in some instances (an estimated £109bn) of active funds actually acting as closet trackers (but still charging higher, active fees)
  7. A sharp divergence in the sophistication and awareness between retail and institutional investors, in their ability understand fees and charges
  8. Concerns about the lack of competition and conflicts of interest in the investment consulting market, whose purpose ironically, is to secure a better deal for investors

In short, the asset management industry is painted as being opaque, uncompetitive, customer unfriendly, offering poor value for money and in the round, not achieving their primary purpose, i.e. offering appropriate risk-adjusted returns for the fees charged and enabling investors save for their respective futures. Not exactly a ringing indictment.

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