It’s Edinburgh Festival time up here, and that means that actual Edinbuggers are in a foul mood for at least a month. You used to be able to get T-shirts that said “NO. I LIVE HERE” that you could point to whenever anyone asked if you’d like a flyer, or to go on a special walking tour of the city or something like that. We’re a welcoming bunch really… 

…and actually it’s kind of nice. This is the busiest Festival season I’ve seen for many a long year already and it’s only just getting going. Town is full of folk having a relatively nice time, all things considered, and even my blackened, twisted soul, or what’s left of it, can’t be too grumpy. So I’ll make an exception for you lot; get yourself up here and do some Fringing. But for the love of all that’s holy, make it about more than another ****ing stand-up comedy show.  

Sunshine and flowers aside, it’s been a busyish week given Augustian doldrums, and probably the biggest bit of news is the booting into the heather of the ‘core investment advice’ regime mooted in November last year by the FCA. This was a sort of half-a-loaf pushmi-pullyu stakeholdery sort of ISA sales regime which no-one liked very much and which it appears is now being introduced to the woodchipper round the back of the woodshed. This is all part of the advice/guidance boundary review which will be a focus for the autumn – just a month or so away boys and girls! – and so we can look forward to lots more. 

It’s good that something the industry thinks is bobbins isn’t going forward, and it’s good that FCA acknowledges that “any solution will rely on support being provided on a commercial basis”. Selling ten pound notes for a fiver in an industry with stringent capital adequacy requirements doesn’t sound like too much fun to me.  

That ‘commercial basis’ thing is interesting though, and what constitutes commerciality is shifting all the time. As I wrote last week, that east wind is blowing (oh, and congrats to Simon who wins the Rolos. The answer was Arthur Conan Doyle, and not Sherlock Holmes who is – and I don’t want to spoil anything – a fictional character. We need to talk about literary education in this country.) 

Things are tightening. Cinches are being pulled. It happens first with consumers, who are increasingly assuming the position for a right old doing after the summer; one last break before things get seriously stretched. Then the ripples happen. A quarter point rise last week isn’t the end of the story, and with 800,000 fixed rate mortgages still due to expire this year and 1.6m next year, there is a lot of pain to come. Financial planners will get an excellent opportunity to demonstrate that their plans have flexibility built in and that financial freedom – whatever it means to each individual – is still achievable despite all that’s going on. 

And so difficult results start to turn up – we only read about the big guys of course, as most adviser firms are small and don’t have to publish full accounts, but stories like this and this are going to be more common in the months ahead. Businesses which need to attract capital will have to be more creative – not least because the price of money has shot up. It’s not just ISA investors; big money can get 5% risk-free too, so everyone will be wanting more certainty of strong risk-adjusted returns. The dumb money and the daft valuations are, I suspect, away. 

Not everyone is bearish; there are warchests out there and deals will still be done. But it’s going to be a buyer’s market for some time to come.  

Interesting links are below.

And your music choice this week is exactly what you need – a big slab of feel-good rock’n’roll. Wolf Van Halen is carrying on the family business and while it’s far from avant-garde it is good fun. Here’s Another Celebration At The End Of The World. The video is funnier when you understand that he plays all the instruments on the record.