Capita

CONTRARIAN

UK dividend payments hit another record high in Q3 2012, the latest figures from Capita have revealed, although the mood was soured somewhat as it warned it will be "much harder" to make progress in 2013.

Concentration risk in the UK equity income sector is a well-versed issue, but how can wealth managers find a way around the problem? Katie Holliday reports.

Managers are increasingly concerned about the future resilience of UK dividends as payouts hit record levels and a slowing economy prompts the need for companies to reallocate capital.

REGULATION

The Financial Services Authority (FSA) has launched a crackdown on ACDs operating in the UK in the wake of the Arch cru scandal, as one major player confirms it is pulling back from the market.

UK dividends rose 18.4% in Q2 2012 to reach a record high of £22.6bn, fuelled by special dividends and strong underlying growth, according to the latest Capita Dividend Monitor.

The estimated value of the remaining assets within the Arch Cru funds has fallen again, reducing the amount of returns to investors being offered by Capita Financial Managers, the authorised corporate director.

Capita Registrars has cut its forecast for dividend growth to 8.2% for 2012, despite payouts reaching record highs in Q1.

The FSA's director of supervision at its conduct business unit, Clive Adamson, told an investor in the Arch cru funds that complaining to their IFA was the ‘best course of action' in order to get some form of redress, as the scandal broke in 2009.