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Former UBS chief executive Ralph Hamers has taken a position at an AI wealth management start-up in his first significant role since leaving the Swiss financial behemoth 18 months ago.
Hamers was Europe’s highest-paid bank boss when he was at UBS, but left shortly after it agreed to take over its former rival Credit Suisse last spring. He was most recently in the running to become chief executive at UK asset manager Schroders, but lost out to chief financial officer Richard Oldfield.
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Hamers has agreed to become an external senior adviser to Arta Financial, a wealth management start-up founded by several former Google employees. Based in Silicon Valley and Singapore, it aims to use artificial intelligence to offer high-end wealth management services to mid-market clients.
The company initially offered services to US customers, but has recently rolled out its offering to Singapore and plans to attract business in India, where chief executive Caesar Sengupta is from.
Hamers has also taken a stake in Arta Financial, which focuses on working with clients with assets over $1mn.
While UBS chief executive, the 58-year-old Dutchman attempted to acquire a similar business, striking a deal to buy robo-adviser Wealthfront for $1.4bn in early 2022. But UBS later aborted the deal.
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Hamers was hired by UBS for his digital expertise and set about trying to improve its technology and he stated his ambition was to turn the storied Swiss institution into a “Netflix for wealth”.
But his time at UBS was dogged by an investigation in the Netherlands into his involvement in a money-laundering case at ING, the Dutch bank he used to run.
Prosecutors are due to decide by the end of the year whether he will be forced to appear in court over the matter or if they will drop the case.
There is growing speculation that the way pensions are taxed could be changed in the Budget.
Chancellor Rachel Reeves says she needs to find £22bn and some experts say she could change the system on workplace or private pensions to find some of this money. This is separate from another debate about the state pension.
There are a number of options which could affect workers getting their first job, those already working, all the way up to those in retirement. This is what could happen and why you should care even if you’re only in your 20s.
Make employers pay more national insurance
When you get paid, national insurance (NI) is deducted and the government spends it on things like benefits and public services. Your employer has to pay a NI contribution too.
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However, money that goes into a pension is free from income tax and NI.
One option for the chancellor is to make employers pay at least some NI on the money they put into workers’ pensions.
Doing so could immediately raise billions of pounds for the government.
However, this extra cost to business owners could leave them with less money to spend on hiring and investing. It could therefore become harder to get a job.
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Businesses could also limit pay rises, hitting all their workers, or reduce the pension contributions they make for new staff.
Alternatively, employers who currently make the most of the NI break by encouraging workers to take less in pay and more in pension – known as salary sacrifice – could be stopped from doing so.
The attraction of this option for Ms Reeves is that she can raise money without a visible difference to people’s take-home pay.
The downside is it creates less of an incentive for employers to put money into their staff’s pensions. That would mean when current workers retire they wouldn’t have as much income.
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Change the rules on inheriting pension savings
Various rules exist when inheriting money from partners or parents when they die.
Inheritance tax is paid if an estate is valued at more than £325,000 but any money saved in a pension does not count towards this.
Separately, anyone who dies before the age of 75 can usually pass on what is left of their pension savings tax-free as a lump sum, or an income.
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If they are 75 or older when they die, their pension money can still be passed on, but it is treated as income and the person they leave it to may have to pay income tax. There is more on these rules here.
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Removing these tax breaks would give the government more money, but exactly how much is unclear. The vast majority of people don’t pay inheritance tax anyway because they are not left estates worth more than £325,000.
There could also be anger from people who have organised their finances under the current rules, only to find their loved ones would get a lot less if those rules changed. That anger would be even greater among those who have already retired, as they have less time to do much about it.
Tax-free lump sum could be capped
From the age of 55 (or 57 from 2028), anyone with pension savings can take a quarter of their money as a tax-free lump sum up to a maximum of £268,275.
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Some use that money to pay off their own mortgage, if they have one. Others use it to help children and grandchildren buy a first home.
The chancellor is said to be considering lowering the cap.
By limiting the tax-free limit, people will eventually pay more in income tax when they take their pension. However, there are questions over how much extra money that would raise for the government and when.
Making arrangements for those who have already exceeded the limit, or were planning to, could also be complex, and reduce how much extra tax the Treasury gets.
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Introducing a single rate of pension tax relief
The build-up to every Budget usually sees speculation about changing pension tax relief.
When you pay into a pension, some of the money that would have gone to the government in tax goes into your retirement savings instead, known as pension tax relief.
You don’t pay tax when putting money into a pension but you do when you come to take that money as income.
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Under the current system, you receive pension tax relief at the same rate as your income tax bracket – meaning basic rate taxpayers receive relief at 20%.
Some economists say it would be fairer to give the same level of relief for everyone.
Setting a flat-rate of relief at, say 25%, could benefit lower-earning employees who currently get 20% relief, by further reducing their tax bill.
However, higher rate taxpayers with an annual income of about £50,000 or more would lose out, because tax relief would be lower than now.
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An added, but important, complication is that a huge group of public sector workers, and some in the private sector too, have so-called defined benefit (DB) pensions.
Ensuring the correct level of tax relief is applied to higher-rate taxpayers with these pensions would be highly complex.
It may mean they are automatically given 40% or 45% tax relief, then later handed a tax bill – possibly for thousands of pounds – to pay some of that back.
Tom Selby, from investment platform AJ Bell, says this would likely provoke “a blistering row” with NHS staff, teachers and civil servants who could fall into this bracket.
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Given that ministers have said they will not raise taxes for working people, that would become a tricky policy to sell – and reports suggest changes have now been ruled out by the Treasury.
UNILEVER is finally calling quits on selling ice creams to Russia, two and a half years after Putin’s invasion of Ukraine.
The FTSE 100 giant has come under pressure for funding the Kremlin’s war by remaining in the country.
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Unilever, which also makes Dove, is finally calling quits on selling ice creams to RussiaCredit: Eyevine
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The giant has come under pressure for funding the Kremlin’s war by remaining in the countryCredit: Getty
Unilever had been branded an “international sponsor of war” by the Ukrainian government — puncturing the woke firm’s self-styled reputation for social purpose and values.
The backlash included protests outside its London HQ.
However, Unilever stayed put. The company, which also makes Dove, has now made a reported £430million selling its Russian assets to billionaire Alexey Sagal, who bought Heineken’s Russian subsidiary for €1.
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Unilever did not say what it would be doing with the sale proceeds or whether it would donate them to Ukraine.
Rival KitKat-maker Nestle justified staying in Russia with slimmed-down operations of “essential products” such as baby milk.
But Unilever was still making products such as Magnums, Cornettos and Ben & Jerry ice cream from four factories in the country.
By remaining in Russia, Unilever contributed millions of pounds in taxes to the Russian government.
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The Moral Rating agency had estimated Unilever’s business propped up the Russian economy to the tune of $650million (£498million) a year, which it said was “enough to pay for an Iranian drone every 17 minutes”.
Nataliya Popovych, a co-founder of the B4Ukraine coalition, said: “We are pleased to see Unilever make the right move, even though such a decision comes two years too late.”
McDonald’s to PERMANENTLY leave Russia and will sell all 850 stores after 30 years in response to Ukraine war
Hein Schumacher, Unilever’s boss, previously said remaining in Russia was the “least bad” option, which avoided handing over its workforce, factory and assets.
Yesterday Mr Schumacher said the sale to Mr Sagal’s Arnest Group “ends Unilever presence in the country”.
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He said: “Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale.
“This work has been very complex, and has involved separating IT platforms and supply chains.”
SELLING UP TO BEAT BUDGET
FEARS that the Chancellor will hike capital gains tax in the Budget have prompted many business owners to fast-track selling their firms over the past year, figures show.
A poll of 500 owners by wealth advisers Evelyn Partners found 23 per cent of those to accelerate selling up had done so because they feared a hit from CGT relief.
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A fifth were driven by concerns over inheritance tax relief, making it more costly to pass family firms to the next generation.
Evelyn tax partner Laura Hayward said: “The PM’s statement that the upcoming Budget would be ‘painful’ has put owner-managed businesses on edge.”
Charles Hall, of broker Peel Hunt, said rumoured changes to business relief would “fatally undermine” London’s junior Aim stock market, destroying up to £21billion of shareholder value and risking jobs.
SHARES in GSK briefly rose by 7 per cent yesterday as it agreed to pay £1.7billion to settle a legal dispute with 80,000 Zantac users.
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The heartburn drug was pulled in 2019 amid fears of carcinogens. GSK did not admit liability. Shares closed up 3 per cent.
IKEA IDEA ON PRICE
IKEA’S decision to cut prices has led to lower revenues at the Swedish furniture giant.
It posted a 6.8 per cent drop in UK sales to £2.3billion after investing £117million in lowering prices by around 20 per cent on 3,481 products.
More than half of its sales this year have been online, compared with 38 per cent two years ago. Ikea UK boss Peter Jelkeby said: “Continuing to lower prices remains our long-term priority.”
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TSB FINED£10M FOR BAD HELP
TSB has been fined £10.9million for its unfair treatment of customers.
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TSB has been fined £10.9million for its unfair treatment of customers, one staffer suggested a borrower removed the £20 a month they had allocated for children’s clothes and made sandwiches instead of paying for school meals.Credit: Paul Tonge – The Sun
The Financial Conduct Authority said the bank had “woeful systems and controls” and created unrealistic repayment plans.
A TSB staffer had suggested a borrower removed the £20 a month they had allocated for children’s clothes and made sandwiches instead of paying for school meals.
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In another case the bank applied arrears to a dead customer’s mortgage payments.
It also applied arrears to a customer after an Alzheimer’s diagnosis and did not flag another as vulnerable despite them making repeated references to suicide in calls.
The failings took place between June 2014 and March 2020.
TSB agreed to resolve the issues identified, which meant the fine was cut by 30 per cent from £15.6million.
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DAWN OF THE A.I. BOSS
WORKERS will soon be right when complaining that their boss is a robot — with video call firm Zoom creating artificial intelligence avatars for conference calls.
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1992 sci-fi film The Lawnmower Man could be inspiration for managers of the futureCredit: IMDB
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One of Zoom’s realistic AI avatars
Its latest AI software means that bosses can use a digital version of themselves, or a generic avatar, to deliver brief video messages to workers on calls.
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Zoom’s boss Eric Yuan has previously talked about creating a “digital twin” of himself as a way to solve busy people’s problem of how to be in two places at the same time.
The rise of remote working has meant bosses are increasingly delivering news of lay-offs via video calls — meaning workers could find themselves being let go by a robot in the near future.
This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to receive the newsletter every weekday. Explore all of our newsletters here
In today’s newsletter:
Iran warns of potential change in its nuclear doctrine
Lai’s Taiwan National Day speech
South Korea’s Han Kang wins the Nobel literature prize
Good morning. A senior adviser to Iran’s supreme leader has warned Tehran could change its nuclear doctrine if Israel targets the Islamic republic’s atomic facilities.
As Iran and the wider Middle East brace for the Israeli response to last week’s Iranian missile attack on Israel, Brigadier General Rasoul Sanaei-Rad told Iranian news agency Fars: “Striking nuclear sites could certainly have an impact on the calculations during and after the war.”
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Iran fired a barrage of missiles at Israel in retaliation for the assassination of Hizbollah leader Hassan Nasrallah and other militant leaders. Afterward, prominent right-wing Israelis called on Prime Minister Benjamin Netanyahu’s government to target Iran’s nuclear programme.
But western diplomats have warned that would be the most extreme retaliation. The US has urged Netanyahu against targeting Iran’s nuclear sites or its oil infrastructure.
Middle East news: Israeli forces fired a tank shell at the UN peacekeepers’ headquarters in southern Lebanon yesterday, the UN said, injuring two international troops.
And here’s what else I’m keeping tabs on today and over the weekend:
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Economic data: Malaysia reports August manufacturing sales and the industrial production index. The US publishes September PPI inflation rate data for September.
Monetary policy: South Korea announces its interest rate decision.
Chinese economy: A press briefing on Saturday with China’s finance minister has fuelled investor expectations that the government will announce more stimulus measures.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. Taiwan’s President Lai Ching-te has urged Beijing to co-operate with Taipei and the international community to maintain peace in his first National Day speech yesterday. Lai asserted that China had “no right to represent Taiwan” but said he was willing to work with Beijing to protect peace and prosperity for people on both sides of the Taiwan Strait.
2. South Korean writer Han Kang has won the 2024 Nobel Prize for literature. Han — the first Asian woman and South Korean writer to win the award — was recognised for her “intense, poetic prose that confronts historical traumas and exposes the fragility of human life”, the Nobel committee said.
3. Seven & i Holdings plans to split its convenience store operations from non-core businesses as the Japanese retail conglomerate faces an unsolicited $47bn buyout proposal from Alimentation Couche-Tard. The 7-Eleven owner said it would separate 31 subsidiary businesses — including supermarkets such as Ito-Yokado — and put them in a new holding company. Here’s more on the reorganisation.
Hurricane Milton: Rescue operations were under way in Florida yesterday as officials sought to assess the damage inflicted by the storm, which triggered widespread flooding and left millions without power.
5. Exclusive HSBC’s new chief executive plans to target the lender’s expensive layer of senior bankers in a cost-cutting move aimed at saving as much as $300mn. Georges Elhedery is drawing up plans to merge HSBC’s commercial banking unit with its global banking and markets unit. Here’s what else we know.
Russia has created a “shadow fleet” of more than 400 vessels moving about 4mn barrels of oil a day, circumventing western sanctions to create billions of dollars a year in additional revenue for its war in Ukraine. The FT’s latest investigation shows how complex arrangements involving a British accountant, a London-listed broker and Dubai-based companies helped one of Russia’s biggest oil producers buy ships while hiding its involvement.
We’re also reading . . .
Activist battle: A seemingly misfired email has embroiled Pfizer chief executive Albert Bourla and his company in a high-stakes activist campaign.
Trump biopic:The Apprentice has been hit with legal threats that scared off Hollywood studios. Screenwriter Gabriel Sherman reveals the wild inside story of his new film.
80-hour weeks: Wall Street’s moves to cap weekly hours for entry-level bankers are butting against the reality of a competitive industry.
Chart of the day
A scramble for Chinese equities united the global investment industry last month, just as attitudes towards European and Japanese stock markets became heavily bifurcated along geographical lines. Despite strong domestic enthusiasm, foreign exchange traded fund investors turned their backs on European and Japanese stock markets in September.
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
An offer from US private equity firm Clayton, Dubilier & Rice has beaten rivals, pursuing French pharmaceutical company Sanofi’s consumer healthcare division, in what is set to be the largest European healthcare deal this year, according to five people with direct knowledge of the process.
The American group on Thursday edged out a submission from a consortium led by French private equity firm PAI as it nears a deal with the French seller. Negotiations between Sanofi and CD&R will now continue, the people said. A deal could be reached within days but is not yet finalised.
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CD&R’s offer values the business, which makes over-the-counter pain management and allergy medications, such as Doliprane and Allegra, at €15.5bn. Sanofi would keep a stake of about 50 per cent in the business with a view to selling it in the next few years, the people said.
Sanofi did not immediately respond to a request for comment. CD&R and PAI declined to comment. The offer was first reported by French newspaper Les Echos.
A transaction would be the latest of several sales of consumer divisions by pharmaceutical companies, as large groups in the sector seek to dispose of steady but low-earning businesses to focus their resources on the riskier but more lucrative field of drug development.
Sanofi has been exploring options for a sale or a potential float since it announced plans to separate the division a year ago. The Opella consumer division accounts for a tenth of the group’s total sales.
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Chief executive Paul Hudson told the Financial Times last year that a future as a publicly listed entity was “the most likely path” for the division, but Sanofi seems to now be moving towards a private equity-led takeover.
In 2021, GSK and Pfizer listed their joint-venture consumer healthcare business Haleon in London, while Johnson & Johnson of the US separated off its consumer company Kenvue in 2022.
In keeping a large stake in Opella, Sanofi would seek to benefit from the reliable earnings it offers. GSK and Pfizer also both maintained large stakes in Haleon on listing, which they have since sold down.
Hudson will now focus on improving the company’s research and development output. The executive took investors by surprise last October when he decided to scrap Sanofi’s margin target for 2025 and unveiled plans to spend an additional €2bn on research in 2024 and 2025, leading to a 19 per cent hit to the company’s share price.
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Sanofi is heavily reliant on income from its blockbuster asthma and allergy treatment Dupixent; developed by US drugmaker Regeneron, the drug accounted for almost a quarter of sales in 2023, but will lose patent protection around 2031.
Hudson has outlined 12 potential blockbuster candidates to shareholders in a bid to convince them that he can deliver on the company’s R&D ambitions.
Reporting by Ian Johnston, Adrienne Klasa, Ivan Levingston, Oliver Barnes and Alexandra Heal
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Britain’s Labour government came to power facing a balancing act between its manifesto commitment to offer a “new deal for working people”, and fulfilling its pledge to be pro-growth and pro-business. Employers have sounded alarms over the impact of its landmark employment rights bill; the Federation of Small Businesses called it “rushed, chaotic and poorly planned”. But by moderating some promises and committing to further consultation, Labour has shown itself ready to listen to business — even at risk of irking its union allies. It should continue to heed corporate concerns as it thrashes out how the bill will be implemented. Above all, it must not undermine the priority of boosting UK growth, productivity and competitiveness in its quest to bolster workers’ rights.
The government’s biggest concession is to soften the day-one protection for employees against unfair dismissal that has been a centrepiece of its plans. Companies had worried they could face costly employment tribunals simply for dismissing new hires who proved unsuitable — a potential disincentive to take on workers, especially for small business. There will now be a statutory probation period during which employers need follow only a “lighter-touch” dismissals process than the more onerous procedure that currently kicks in after two years of employment. The probation period is to be consulted on, but ministers have signalled they favour nine months — an apparent victory for pro-business voices in the cabinet.
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The bill will deliver day-one rights to parental, paternity and bereavement leave for millions of workers, as Labour had promised. Employers will have to pay statutory sick pay from the first day of illness, rather than after three days as now. But some promised steps are tempered or postponed. A default right to flexible working will apply only where practical. A “right to disconnect”, barring employers from contacting staff outside hours, is sensibly now expected to be addressed separately through a statutory code of practice.
Some abusive practices will rightly be curbed, including the “exploitative” use of zero-hours contracts. More than 1mn people on such arrangements will gain new rights to a contract reflecting a pattern of regular hours they build up over time — though workers, some of whom prefer zero hours, do not have to accept. Loopholes that businesses have used to fire workers then rehire them on worse pay or terms will be closed, except where companies can show they are at genuine risk of failing. Less positive is the repeal of Conservative legislation designed to preserve minimum levels of public services during strikes.
Many measures are subject to further consultation over secondary legislation required to implement them; some will not take effect before 2026. That means workers will wait two years for some rights, and businesses face further uncertainty. But it allows time to hammer out the balance between employees’ and employers’ rights, and iron out wrinkles in a bill ministers scurried to publish within a 100-day deadline.
Striking the right balance on employment rights is, however, only one part of a broader picture. Whether Labour lives up to its pro-business billing will depend, too, on avoiding burdening companies with excessive taxes in the Budget, finding money to invest in infrastructure, training and skills, and coming up with a credible industrial strategy. After a rocky start, the government will hope publishing the employment bill, on top of efforts to get a grip on its Downing Street operation this week, marks a reset. Business, much of which gave Labour the benefit of the doubt due to frustration with the Conservatives, still needs some convincing about its growth credentials.
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