Morning Briefing: Wednesday, 2 October 2024

Good morning and welcome to your Morning Briefing for Wednesday, 2 October 2024. To get this in your inbox every morning, click here.

Labour’s Economic Vision: Investment as the Key to Growth

In the wake of Labour’s general election victory in July 2024, the party has made it clear that stimulating economic growth is a top priority. However, as Parmenion’s chief investment officer, Peter Dalgliesh, pointed out in a recent interview with Money Marketing, achieving this growth hinges on one crucial factor: investment.

Dalgliesh emphasized that Chancellor Rachel Reeves, with her background as a supply-side economist, is inherently focused on fostering investment. Yet, there are concerns regarding the potential for increased wealth taxes, which could deter those with the means to invest. "If you put taxes up on those who can afford to invest, you will score an own goal," Dalgliesh cautioned. As the government prepares for the upcoming Budget on 30 October, the balance between taxation and investment incentives will be a critical topic of discussion.

Navigating the AI Landscape: A Cautionary Tale for Advisers

Artificial intelligence (AI) is becoming an integral part of the advisory landscape, with numerous solutions emerging to assist advisers in their work. However, as TCC Group and Recordsure chief executive Joe Norburn warns, the proliferation of AI tools can lead to confusion about their suitability and effectiveness.

Norburn highlights the importance of understanding the two primary types of AI currently available: Predictive AI and Generative AI. Before committing to any technology, advisers must carefully consider their specific needs and the capabilities of the AI being offered. This thoughtful approach can help avoid costly mistakes and ensure that the chosen technology aligns with the firm’s objectives.

In Conversation With… Jo Wall: From Corporate Climb to Joyful Wealth

In an inspiring segment, Kimberley Dondo sits down with Jo Wall, the founder of Joyful Wealth. Wall shares her remarkable journey from the corporate world to entrepreneurship, a transition made possible through the support of the Verve Foundation’s incubator programme.

During the conversation, Wall discusses her vision for financial advice and coaching, emphasizing the empowering potential it holds for clients. Her story serves as a testament to the transformative power of pursuing one’s passion and the impact of supportive networks in the entrepreneurial landscape.

Quote of the Day

A subdued tone has enveloped trading as markets brace for further repercussions from the ongoing Middle East crisis. The FTSE 100 has shown resilience in early trading, buoyed by its defensive nature and the strength of energy stocks amid rising oil prices.

– Susannah Streeter, head of money and markets at Hargreaves Lansdown, comments on the current market sentiment in light of geopolitical tensions following Iran’s strikes on Israel.

Stat Attack: Insights from Wealth Managers and IFAs

A recent study conducted by GraniteShares has shed light on the trading behaviors of clients over the past two years, revealing some intriguing trends:

• 78% of wealth managers and IFAs have reported an increase in client trading activity.
• Only 3% have observed a dramatic decrease in trading levels.
• 19% noted no significant change in trading activity.
• A staggering 97% anticipate increased volatility in the stock market over the next year.
• 87% expect to see a rise in client trading, with 27% predicting a dramatic increase.

These statistics underscore the evolving dynamics of the investment landscape and the growing engagement of clients in the stock market.

In Other News

Amundi has launched the Quantitative Global Absolute Return Bond fund, designed to invest across various global fixed-income segments using a quantitative absolute return approach. The fund aims to achieve positive returns in all market conditions while maintaining a strong ESG score, classified as an Article 8 Fund under the EU Sustainable Finance Disclosure Regulation (SFDR).

Managed by Lionel Pigeon, the fund employs a multi-factor investment strategy, focusing on liquid derivatives and high-quality short-term bonds to mitigate liquidity risks. In a climate of rising inflation and interest rates, this fund presents an attractive option for investors seeking to navigate the complexities of the fixed-income market.

US Dockworkers Strike: A Major Disruption

In a significant development, US dockworkers have gone on strike, halting half of the nation’s ocean shipping. This strike could have far-reaching implications for supply chains and the economy as a whole. Read more here.

Leadership Changes at Brooks Macdonald

Brooks Macdonald has officially welcomed Andrea Montague as its new group chief executive as of 1 October. Montague, who previously served as chief finance officer, brings a wealth of experience from her roles at Aviva, Standard Life, and Royal London Group. Her appointment follows the retirement of Andrew Shepherd, who led the firm for 22 years. Montague’s leadership is anticipated to steer the company through its next phase of growth and innovation.

Thank you for joining us for this morning’s briefing. Stay informed and engaged as we navigate the evolving landscape of finance and investment.