Loganair relaunches with improved customer service

After almost 25 years of operating as a franchisee, Scottish airline Loganair will commence running flights in its own right from 1 September 2017.

From 1994 to 2007 Loganair operated as a franchisee of British Airways. The carrier then flew under the Flybe brand. In August 2016 Flybe announced it would be terminating the relationship from 2017, citing ‘a failure to agree future operational standards and commercial arrangements.’

The airline operates flights from Scottish cities including Glasgow, Edinburgh, Aberdeen and Dundee as well as routes between the mainland and the islands, including the Highlands and Islands.

Loganair has announced changes to customer services to coincide with the relaunch of the brand. These include online check-in from four days before departure and airport check-in desks opening 90 minutes before departure at all airports, extended from the previous 60-minute period.

Customers will be able to use mobile boarding passes on flights from the Highlands and Islands. Mobile boarding is already in operation from flights departing from major airports including Glasgow, Edinburgh and Aberdeen.

Passengers will no longer be required to show photo ID at boarding gates to board Loganair flights. For security reasons, photo ID will still be a requirement to check in baggage at check-in desks.

Loganair operations director Maurice Boyle said: “We spent a lot of time looking at every aspect of the customer’s journey with Loganair, and working out how we can make travel more convenient and straightforward.

“The ability to check in online earlier, use boarding cards on mobile phones and the removal of ID checks at boarding gates are all designed to make our customers’ journey through the airport much easier than today.”

Investment advisory costs rise 17% in three years

Asset management has become less profitable as investment advisory costs rise while management fees fall, according to a new report from fund research body Fitz Partners.

According to the ‘Investment Advisory Fee Benchmarking Report’, the average advisory fee, which covers services such as asset allocation and stock selection, has risen 17% over the last three years, from 35bps to 41bps. The average management fee reduced 4% in the same period, from 106bps to 102bps.

Increased investment advisory fees mean that the share of fund costs paid for investment advisory services has increased 22%. This is impacting the profitability of fund firms.

Hugues Gillibert, CEO of Fitz Partners said: “We are seeing a further increase in one of the components of fund fees impacting fund profitability. Internal discussions in fund houses are becoming more focused.[…] Fee benchmarking is not only a question of overall level of funds cost for investors, it is also about good business practice and margin preservation.

“When looking at trends in investment advisory fees and management fees for UK and European cross-border funds, we can see clearly that both charges are not moving in the same direction. Over the last three years, management fees overall have gone down slightly while investment advisory fees have increased substantially.”

Gillibert recommended that close monitoring of bundled fees is especially important when advisory services are delivered outside of a fund’s domicile.

The researchers asked 16 cross-border asset management firms about their confidential fee schedules in order to compile the report.

 

Millennials Reject Workplace Pension Opt Out

Millennials have embraced the new automatic enrolment in a workplace pension, according to research by Royal London. A survey found that 71% of Millennials decided not to opt out of the plan. A further 8% initially opted out but then returned to their workplace plan.

The news may ease fears that younger people do not see pension saving as important. Three quarters of Millennials said they would increase their pension payments automatically in line with a pay rise, while 40% plan to increase pension payments next year.

However, almost one third (28%) of Millennials do not know how much is being paid into their pension pot. More than half (57%) say they know they should be saving more towards retirement.

The ratio of contributions made by employees and employers also impacted on Millennials’ willingness to save. Around three quarters (74%) said they would continue to contribute 2% if their employer gave 3%; but if contributions rose to 8% with employees paying 5% and employers paying 3%, that figure dropped to two thirds (62%).

However, if employees and employers both gave 4% then 76% of Millennials would be willing to save on those terms.

Jamie Clark, Pensions Business Development Manager at Royal London said: “Providers, employers and financial advisers all have a duty to ensure employees are engaged in their future pension planning as soon as possible and fully understand the consequences of opting out of their workplace pension.”

The government is in the process of reviewing the automatic enrolment programme, in a bid to increase the number of people saving into a workplace pension. Royal London has recommended that contributions should be more than 8% of salary.