Pensions, trusts, tariffs & markets, taxes, estate planning, fintech, and debate on the future of products, investments and cross border advice all featured at the II Connect 2025 event, that took place on 20 May in London.
Starting the day was a the session featuring Michael Crowe, CEO, Finance Isle of Man, who provided updates from the jurisdiction. He highlighted the ongoing attributes that are attracting product and services providers, including the regulatory environment and its links to UK hubs such as Manchester, Liverpool, Leeds and London and positioning through partnerships with professional networks.
Sustainable finance developments outlined include establishment of a Sustainable Finance Roadmap, establishment of a private carbon credit exchange, and collaboration with the City, Luxembourg and HM Treasury.
Insurance and pensions have grown, with some 1,200 retirement schemes based there. Growth targets include creating and filling an additional 5,000 jobs by 2032 with infrastructure capacity to support a population of over 100,000.
SIPP points
Moving on to discuss SIPPs, James Floyd, Managing Director Alltrust and Co-owner and Director The UAP Group provided an update and overview of key developments around SIPPs - a market of £567bn in assets across 5.3m consumers - which is in the spotlight as the market is set to double by 2035 he said. Consumer Duty is putting additional spotlight on the sector.
While the opportunities to access bespoke and cost effective SIPPs is growing, he also touched on fees, pointing out the discussion around break even points for providers, particularly when dealing with clients of sophisticated needs. In turn, he noted that 'Self' could be replaced by 'Sophisticated' in SIPPs dicussions to distinguish between standard consumer needs and those of the type of long term saver who could significantly benefit from the full breadth of investment options with such a pension.
Regarding assets, he touched on commercial property. Held within a pension it is immune to CGT and can be leveraged among other benefits, he argued, therefore should be considered. The discussion around the impact of IHT is valid, but the industry is responding to the pending IHT challenge he added. Solutions will vary depending on the end client needs but it is possible to handle multi-jurisdictional living, planning for multi-generational family needs.
"SIPPs remain the best place for your clients' investments for the next couple of years and thereafter."
Trump tariffs
Justin Oliver, Chief Investment Officer, Canaccord Genuity Funds, spoke on the state of the markets that have been impacted by Trump tariffs and the uncertainty seen in the early part of 2025. This matters, he noted, because "there is a whole cohort of investors who have never experienced the US underperforming."
The market data shows that Q1 2025 saw the largest underperformance of US since 2009, largely due to Trump, he said. The question is what is the objective of Trump? Tariffs are needed to pay for the tax cuts he promised through the election - estimated at some $8trn - on top of the significant fiscal deficit and debt growth. Tariffs may be part of policy to deal with the debt, but there are significant dangers, such as the risk of a second wave of inflation - that would further unsettle markets.
Trump's approach to making deals also suggests ongoing volatility as markets react to the different stages of his negotiating style.
What matters, however, for markets over time is the profitabilty of US companies. Earnings growth for the Mag7 will continue, but slow down according to forward estimates on themselves versus the broader S&P index. Tech might therefore not keep leading earnings despite the current share of all earnings they account for. Also, investment history suggests that the Mag7 might no longer be as dominant.
AI investments, gold, healthcare may be areas worth looking at over time, also in regards to Trump policy - such as efforts to reduce the cost of healthcare in the US versus the very low per capita expenditure on healthcare in a country like India, which is fast growing
US exceptionalism
Nathan Sweeney, CIO of Multi-Asset at Marlborough Group, continued the review of the impact of Trump policies by noting the current US president outlined his interest in global trade flows as far back in the 1980s - when he published The Art of the Deal.
He raised the point of view of Trump that countries which have not previously contributed to costs such as defence should do so. That may seem fair - 'going Dutch' - but there is arguably a failure in the way the change has been communicated, and in the expectations around economic growth in the wake of tariffs announced on Liberation Day.
The objectives seem to be to force countries to the negotiating table, tackle government debt and boost US domestic activity.
US is being fundamentally changed by the slow death of the career politician being replaced by technology industry leaders introduing efficiency into government. But the US may have little choice given the level of debt and the ongoing deficit in government spending - often driven by an increase in regulation.
However, US exeptionalism remains in the different approach to regulation generally. Significant investments into new ideas are ongoing, and coupled with the clear lead in tech available from the US, it bodes well for returns over time. Uncertainty is driving the risk of interest rates going up - say, based on inflation driven by tariffs. But "volatility is the price you pay for return", and markets tend to go up more than they go down: bull markets tend to last four years, bear markets a single year.
Marlborough's cental case currently is for a moderate slowdown in the US economy, with a gradual decline in rates.
Technical details
John Chew, Technical Specialist: Pension, Tax, Trust and Estate Planning, Canada Life, joined the Connect event again to run his expert eye over latest developments across the UK and international cross-border retirement and trust and estate world.
He picked out the non dom rule changes as a particular area, given the timings of pending changes, and how it seems that "8 years is the new 12-14 years" period for non doms considering residing in the UK.
Additionally he delved into IHT and pensions issues that he feld make planning more challenging. He also noted that the key principles of the residency test have not changed in past half decade, however, issue such as double tax treties from pre 1975 may need reviewing by practitioners. There is little indication they are going to be changed - which offers opportunity for clients.
He addressed TRF and CGT, noting that for any UK based or UK focused clients tax remains a key issue, thus the discussion around wrappers such as bonds will remain highly useful.
Panel Session: Pensions and Retirement
Featuring guest speakers Rachel Meadows, MD IFGL Pensions, David White, MD and Owner QB Partners and James Floyd, MD Alltrust and Co-owner and Director The UAP Group, and chaired by Investment International Associate Editor Jonathan Boyd, the session discussion delved into four key areas. These included: recent changes by the UK government affecting retirement savings and pensions, and how to mitigate these; identifying the greatest challenges and opportunities for the cross border pension industry; considering how best to encourage younger people to consider the value of pensions; and considering the advice gap findings of the recent IFGL Pensions and II and IA Global Advice Study.
Key points made by the panelists in response to these issues included not to panic about the UK changes to pensions rules, and that there will still be demand for advice on cross border pensions needs. Education was stressed as an element that could both help more younger people to consider the benefits of long term savings into a pension, as well as tackling downsides of the advice gap. The panel agreed that there is clearly a significant gap between what many people expect to have by way of income in retirement versus what they have saved in a DC world.
Case Studies and Breakout Groups
The afternoon saw delegates break out into groups to consider solutions for a case study focused on a German couple considering moving to the UK. The objective was to encourage insights into the Long Term residency rules introduced in the UK Budget 2024, and the Foreign Income and Gains regime, as they would impact on the case.
Guided by David White, MD and Owner QB Partners, the two working groups considering the case split out to consider the tax and pensions implications, including questions such as: What are the advice considerations for the couple in the current tax year? What are the domicile and residency considerations for the couple should they move to the UK? How can the couple readjust their assets to fit their new life? What will the future implications be if they remain in the UK or leave to establish residence in another country?
John Chew, Technical Specialist: Pension, Tax, Trust and Estate Planning, Canada Life, contributed to analysing the responses of the working groups.
Fireside chat: Fintech, Insurtech and the rise of AI
In a fireside chat led by Gary Robinson, Publisher of II and Co-Owner of Money Map Media, Simon Pickering, Head of Insurance & Pensions, Isle of Man Finance, outlined the 2025 Innovation Challenge Fintech Finalists, including Binder (Malta), Spixii (UK), Zumo (UK), Own Group (Isle of Man), Staple (Singapore), ahead of the final taking place on 26 June on the Isle of Man.
The Challenge presents an opportunity to both host several of the leading innovators, but also flag up the Isle of Man as a place to set up shop for those targeting different functions within different sectors, including insurance, with solutions to improve efficiency.
Looking forward, he also urged delegates to consider the impact that artificial intelligence (AI) will increasingly have across the value chain of the international life and pensions world.
Panel session: Pensions and Retirement
Wrapping up the event, the final session constituted a panel session guided by II's Gary Robinson, considering the long term future of international cross border advice, products and investments amid ongoing regulatory and geopolitical changes. The panel considered the key question: How much life is there left in the cross border advice world?
Taking part were Tom Pewtress, Head of Proposition, Skybound Wealth Management, Mark Chubb, Executive Chairman, TEAM Plc, Jonathon Jay, Managing Director (UK) Hoxton Wealth, Gavin Pluck, Group MD, Blacktower Financial Planning, and John Westwood, Group Chairman, Blacktower Financial Planning.
Panelists consider the state and quality of advice coming out of the UK relative to other jurisdictions. There was general agreement that the UK has been a leader historically, but that the people and markets served are changing and other jurisdictions are reacting through, for example, improving the local regulatory environment. Demand for advice for internationally mobile clients will remain, but it is less easy to know how and where they will move in future.
One argument put forward was that a 'cookie-cutter' approach, or sales-led approach, is no longer good enough, and that it may be possible to generate higher returns from serving clients in a more transparent and audited way.
Regarding the use of life industry wrappers, it was put foward that they offer highly flexible outcomes that suit international clients, and that they may be less challenged today than some have positioned them historically - as a highly priced sales driven solution.
The debate touched on the scope and role of profit making by financial advisory firms. It was noted by way of example, that in countries relying on Napoleonic Code-based law, that there is a different approach to contracts between adviser and client. Overall, however, for good advice to flourish there is a need for practitioners to earn money.
Noted too was heterogeneity of regulators. For example, it was stated that there is no specific regulator for financial planners per se. Elsewhere, in the EU, those providing advice may run into multiple regulators depending on what they are regulating. In the Middle East, growth in regulation has raised the barriers to entry into the industry, in turn driving up operating costs and pushing adviser firms to review their books and increasingly avoid the mass affluent and even certain high net work individuals. This is creating an advice gap that is driving clients to seek out unregulated entities. And there may be a growing need for a 'regulator of regulators'.
Technology and the use of AI was noted as a solution both to supporting advice industry margins as well as broadening access to advice.
On dealing with bad actors in the industry, the panel consider the concept of a list of those who have been negatively labelled by regulators, ombudsmen or are visible in records such as Companies House as having been involved in multiple cases of companies being disolved.
Networking Drinks
Delegates rounded out the day with networking drinks and a further chance for questions and answers from the speakers and panellists taking part.
Further coverage of the event is available here:
