7IM's inBrief - Edition 1 2019 by Seven Investment Management LLP

Edition 1 2019 | Wealth into words

Working back from the end

Rebecca Price, Frank Bright & Abel talks about how she’s planning for the future... backwards

What’s on?

Join us for our jam-packed events series in 2019

Could you be an angel investor? New year – new start

Six suggestions for a new year campaign

Interview with Sarah Turner

Wills, wealth and inheritance tax Do you have any concerns? Wednesday 13 February 2019 18:30 – 20:30 // Richmond Wednesday 6 March 2019 18:30 – 20:30 // London Thursday 4 April 2019 18:30 – 20:30 // Edinburgh 7IM research highlights that just under half of the UK population want to leave behind an inheritance. Meanwhile, the number of Wills being contested is on the rise. Adam Shaw, Business Journalist and Television Presenter, will be joined by a panel of experts from 7IM, to discuss what you should be aware of when planning your finances, to help the next generation.

To register for any of these events Call us on 020 3823 8678 Go to www.7im.co.uk/events The value of investments can go down as well as up and you may get back less than you originally invested.

Welcome Welcome to the latest edition of inBrief magazine. As always, we’ve packed it with easy to read articles, covering the topics that we are discussing with clients. Investments can quickly become complex given how deeply personal they are. Most people think you have to be (very) wealthy, about to retire, really busy or just not interested before you pay someone to help you make a financial plan and manage your money. Our experience is different. Our clients come from a variety of backgrounds, and often ‘just’ want reassurance and straightforward advice on the technical stuff. We hope, therefore, some of it strikes a chord with you. We would appreciate any comments you might want to make – please just give us a call.

Stewart Sanderson, Head of Private Clients

Contents 04

Working back from the end

Rebecca Price, Founder and Strategy Partner of design agency Frank, Bright & Abel.

New year, new start – get smart for 2019

Make a fresh start with your finances.

Let’s make a plan

A carefully considered financial plan could change your life. Could some financial planning help you?

Interview with angel investor Sarah Turner

Angel investing isn’t just for multi-millionaires. Find out how you could get started.

Our 2019 upcoming events

Have a look at the first leg of our events calendar for 2019 and register today.

Call us or your private client manager on 020 3823 8678 & we’d be happy to answer any of your queries. Edition 1

www.7im.co.uk

@7IM_Private

Working back

from the end

Rebecca Price, Founder and Strategy Partner, Frank Bright & Abel

If you control your money, you control your life. It sounds so simple doesn’t it, but is it? For me, getting on top of and proactively managing my finances was, for far too long, relegated to the ‘leave it to the tomorrow never comes’ pile. It’s not that I’ve been totally irresponsible and reckless with my finances. But there’s a big difference between being in control of your money, as opposed to doing what needs to be done and letting those things that need to be done, control you.

My finances began to get more proactive attention as I rolled through various life events: getting married, having a baby, managing school fees, moving up the housing ladder and so on. When my grandmother reached 100 and kept going until nearly 107, you could almost hear the penny drop, as I realised whatever money I accrue, might have to last for quite a long time. Ironically, it wasn’t my family and loved ones that really triggered me beginning to get in control of my finances. It was setting up my own business and tying my fortunes to my business partner – not a family member and someone not only very much in control of his finances, but someone who actively relished it too. However, the biggest trigger was that invisible but perceptible moment, when I reached the age where I suddenly realised that I’d stopped thinking forward from where I’d started, and I’d started to work back from the end. If you’re south of a certain age, you won’t have a clue about what I’m rambling on about. If you’re north of it, you surely will. So for me, money is emotional. It’s not just because it eventually forces you to face up to your own mortality. That’s just a detail. It’s not just because of the discomfort of feeling I’m not knowledgeable enough, wealthy enough or sufficiently financially astute, at an age and a career stage when I feel I should be. People like the good folk at 7IM can help with that. It’s really about finally realising that my financial goals aren’t really financial at all.

If you’re south of a certain age, you won’t have a clue about what I’m rambling on about. If you’re north of it, you surely will.” They’re deeply cherished life goals – for me and those around me – whether it’s finally learning the tango in Buenos Aires, surprising my mum with tickets to the New Year’s concert in Vienna, buying the designer sofa I’ve always wanted whilst I’m still capable of getting out of it without a winch, freeing up enough time to learn to tap dance before my knees give in, see the sunrise at Stonehenge, or to go backpacking with my teenage son. Maybe getting in control of your finances feels like a piece of cake to you. But if like me, it doesn’t, then perhaps start by thinking about what life goals you had as a younger you. It might just be enough to spur you into finally doing something tangible to realise them all.

Speak to someone today

020 3823 8678 We’d be happy to help you with any questions.

New year, new start – get smart for 2019 Have you heard the line about April being the cruellest month? Many of us disagree. It’s definitely January, which increasingly seems to involve forgoing things you like, or embarking on things that hurt. We suggest a better resolution for 2019: making a fresh start with your finances. Firstly, it doesn’t involve going out in bad weather, or wearing Lycra. Secondly, it could take you closer to your financial goals.

Below are six suggestions for a new year campaign:

1 3 5 2 6 4 Get filing

It’s the self-assessment deadline on 31 January, so kick off 2019 by getting your paperwork ready to file promptly. It’s not the most exciting way to launch the New Year, but it’s great to have it sorted.

Get up to speed on dividends

Get ready for the unexpected

Until April 2018, up to £5,000 of dividends were tax-free. Then the annual dividend allowance was slashed to £2,000. Dividends above this are taxed at:

Life is uncertain, and the things that happen aren’t always good.

7.5% for the basic-rate tax band

Get smart on your allowances

With your 2017/18 paperwork marshalled, you’re ideally placed to plan for the current tax year. The key task here is to calculate whether you’re maximising your tax-efficient investment options, such as the £20,000 allowance for ISAs (and the £4,260 Junior ISA allowance for children under 18).

Another key allowance is your CGT allowance for non-ISA investments. Unlike ISAs, you can carry over this allowance from previous tax years.

32.5% for the higher-rate

38.1% for the additional-rate

It doesn’t take a huge portfolio of shares to exceed the £2,000 limit – a £50,000 portfolio could do this – so this is a major change. It’s also another reason to maximise ISA allowances.

Get your pension in shape

Any review of your finances needs to cover retirement planning.

Are you saving enough? Could saving more reduce your tax bill, as well as help to meet your retirement goals? Or are you even saving too much? The standard lifetime allowance for a pension pot is currently £1.03mn. Topping this could lead to a tax shock.

Even if you’re already furnished with life assurance, critical illness cover and income protection, check that your cover suits your current circumstances. This is especially important if you’ve had (more) children, taken on new mortgages or loans, or set up a business.

Get on with it What’s the greatest enemy of good financial planning? Inflation? Instability? Perhaps, but for most people the real threat is procrastination. Undeniably, financial planning doesn’t grab the imagination, but getting the right help makes it easier. Speak to our team, and we’ll get you started. Or, if you already have these covered, come and talk to us. We can offer some further ideas to suit your circumstances. We can’t run a triathlon for you or give up carbs, but we can help put your financial planning on a better footing. That’s a great start for 2019.

Let’s

make a plan Most of us make plans all the time, often without even noticing. What’s for dinner, what are we doing at the weekend, where are we going on our summer holiday – the list is endless. But some plans deserve more care than others. Key areas where some financial advice could help: Pensions and retirement planning Are you on target for your dream retirement? Do you even know what your target is? Maybe you’d like to retire early to pursue other ambitions. Or perhaps book regular visits to the family in far flung places. We can help you plan and achieve your goals, as well as taking care of the technical details.

Investing a large lump sum Whether you’re looking after a family legacy, or celebrating the sale of a successful business, you’ll be keen to see your capital grow. Our team can advise on appropriate investments and arrange them in a tax-efficient way. Keep in mind that investing will mean your capital is at risk, and the value of your investments can vary, so you may get back less than you invested.

Inheritance tax Whatever your priorities are – family members or favourite charities – we can help make sure more of your money goes where you want it to after you’ve gone. Tax rules often change and taxation depends on individual circumstances, so we can help you stay on top of the regulations.

Our approach to shaping your financial future: Understanding you and your goals We’ll start with a chat to find out all about you. Perhaps you have a long list of travel destinations to tick off in retirement? Maybe you’d like to fund your children’s education or help them into their first home? We’ll ask about what’s really important in your life. Reviewing your current situation It’s time to put your money under the microscope. Income, savings, investments, capital, tax, ongoing expenses, commitments, all of it. This helps us really understand where you are now and how we can help you reach your goals. Creating your plan By combining our expert knowledge with what we’ve learned about you, we’ll come up with a plan that’s tailored to your situation and goals. We’ll talk you through it, including risks and implementation costs, and carry on fine-tuning until you’re happy. We don’t expect our clients to have an investment dictionary at hand, so we explain things in clear, jargon-free language. Putting your plan into action Once you are happy with the advice and services we have recommended, we will implement your plan. Reviewing your plan regularly The world never stops changing, and neither do you. We’ll check in with you regularly to make sure you’re still on track and making the most of your money.

A carefully considered financial plan could change your life. For something this crucial, you should call in the professionals. If youâ&#x20AC;&#x2122;d like to have a chat about financial planning, call us on

020 3823 8678.

Interview

with angel investor Sarah Turner Angel investing is a way for small and start-up businesses to raise investment from private individuals in the way that large companies do from the stock markets. Sarah Turner is the co-founder and CEO of Angel Academe – an award-winning angel investing network. We asked her to share her experiences of being an angel investor. What do you get out of angel investing? Hopefully a good return on my investments! But that’s not all of course. It’s great fun, intellectually challenging and soul enriching. It’s also an opportunity to work with incredibly talented people – both my fellow investors as well as the entrepreneurs we’re backing. Many of them, if successful, will transform their sectors. It’s a real buzz to help founders think about the different aspects of their business – from talent to strategy to cash flow and operations, and support them through the most critical stages of growth and capital raising. I've also learnt a huge amount that helps me professionally, made great new connections as well as obtaining a couple of advisory roles. How did you get started as an angel investor? I started by joining various investing groups. These are a great way for investors who need to tap into a steady flow of new ventures actively seeking funds, meet the entrepreneurs behind those ventures and collaborate with experienced investors to assess them. I wanted to be able to challenge entrepreneurs on their plans and ambitions – constructively of course – and invest alongside other investors with complementary experience to my own. So digital platforms weren’t an option for me. Eventually I started Angel Academe because I didn’t feel I belonged in the heavily male-dominated angel groups and large, impersonal networks I tried out. I thought an opportunity existed for an angel network that would appeal to women as well as men, and where collaboration was supported. So our focus at Angel Academe is on female investors and founders. How does angel investment fit into your overall portfolio? I have some property investments as well as a pension and the usual things such as ISAs. But I reserve some of my available cash to make two to three angel investments per year as well as following-on in the companies I’ve invested in previously. They tend to need several rounds of investment to achieve growth and an attractive sale. I’m aiming to build a portfolio of about 20 over time, so I’m diversified within my angel portfolio as well as in my overall investment portfolio. 10

Don’t you have to be a millionaire to invest? Many people are discouraged from investing because they think you have to be super wealthy, have some specific expertise or lots of spare time. In fact, it requires a series of individual stakes of £5,000£15,000, so it is well within reach of many financially successful people. At Angel Academe, our investment minimum is £10,000 and we encourage members to make two or more investments per year. Our members come from all walks of life: from entrepreneurs, to senior professionals to people on career breaks or with portfolio careers. Some of us have a background in technology, others in finance, HR, marketing or law. And while it does take some time to review documents and contribute to due diligence, most of us are working full time so we share the tasks to make things more efficient and play to our individual and collective strengths. Isn’t it very risky? Only a small number of the companies I’m investing in will succeed, hence my ‘little and often’ or portfolio approach, where the big exit will more than make up for the failures. Luckily the generous tax breaks that UK angel investors receive through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) also help minimise the down side and maximise any gains. What advice would you give to someone thinking about becoming an angel investor? Find a network, especially when you’re starting out. Group investing is much less risky than going it alone. Well-known groups will attract more and better quality opportunities and have good processes for filtering them. Pooling expertise and funds often results in enhanced due diligence, superior investment terms and improved support for the businesses. Investing with a group you like and trust is also very stimulating and great fun!

And remember to speak to your adviser about how angel investing fits within your overall portfolio. They’ll be able to support your wider ambitions if they have the full picture. Angel Academe run regular pitch events as well as workshops for new angel investors throughout the year. Read about them at: www.angelacademe.com

Angel investing is only accessible by high net worth investors. These are individuals with an annual salary of over £100,000 or assets, excluding pensions and your main residence, of over £250,000. Mark Endacott, Private Client Manager, shares his top tips for building up a portfolio big enough to become an angel investor: 1. W rite a financial plan, understand your goals, objectives and, aspirations. If you don’t know what you are saving for, it is unlikely to happen. 2. Get into the habit of investing regularly. 3. U tilise all available tax allowances. If you don’t use it you lose it! 4. Live below your means and pay off any debts. 5. Invest in the appropriate risk profile.

Give us a call today 020 3823 8678 11

Event

Webinar

Join us for as many events as you like throughout the year, and if you can’t make it to us, we host a smashing series of webinars that can also be watched on demand, 24 hours a day.

January Thursday 10 – The year ahead // 18:30 – 20:30 Sofitel St James, 6 Waterloo Place, London SW1Y 4AN

With some potentially big changes taking place in world economies and the political landscape over the coming 12 months, come and hear our panel discuss the potential outcomes, and how these might affect you. Our panel members: Adam Shaw, Business Journalist and Television Presenter Martyn Surguy, Chief Investment Officer, 7IM Sophie Kilvert, Private Client Manager, 7IM

Tuesday 15 – The year ahead – what to expect from 2019 // 12:00 – 13:00 With some potentially big changes taking place in world economies and the political landscape over the coming 12 months, tune in to hear Martyn Surguy, Chief Investment Officer and Nick Heath, Head of Private Client Business Development discuss how these might affect markets, and your money.

February Wednesday 13 – Wills, wealth and inheritance tax – planning for the next generation // 18:30 – 20:30 The Bingham, 61 – 63 Petersham Road, Richmond upon Thames, London TW10 6UT

Planning to leave an inheritance, but unsure where to start? 7IM research highlights that just under half (47%) of the UK population want to leave behind an inheritance. Meanwhile, the number of Wills being contested is on the rise. Come and hear our panel discuss what you should be aware of when planning your finances, to help the next generation. Adam Shaw, Business Journalist and Television Presenter will be joined by a panel of experts from 7IM.

Thursday 14 – Where there’s a Will, there’s a way – helping co-habiting couples protect their wealth // 12:00 – 13:00 Figures released in 2018 from the ONS revealed that over half (51%) of people entering civil partnerships were 50 years old and over. Coincidently, this is also the age when people start planning their funeral. So, what provisions have you made for your future, and that of your partner? What’s the financial impact of being in a civil partnership? Join Nick Heath, Head of Private Client Business Development, as he discusses the topic and how to make the most of the additional allowances.

March Wednesday 6 – Wills, wealth and inheritance tax – planning for the next generation // 18:30 – 20:30 Burgh House, New End Square, London NW3 1LT

Wednesday 6 – Tax year end housekeeping – do you need a spring clean? // 12:00 – 13:00 With the tax year end fast approaching, are you making the most of your allowances? Tune in to hear Jordan Gillies, Business Development Manager, discuss what to do when, and how.

To register for an event Call us on 020 3823 8678 Go to www.7im.co.uk/events 12 Any reference to specific instruments within this document are part of widely diversified portfolios and do not constitute an investment recommendation. You should not rely on it as investment advice or act upon it, and should address any questions to your financial adviser. The value of investments can vary and you may get back less than you invested. Tax rules are subject to change and taxation will vary depending on individual circumstances. Seven Investment Management LLP is authorised and regulated by the Financial Conduct Authority and by the Jersey Financial Services Commission. Member of the London Stock Exchange. Registered office: 55 Bishopsgate, London EC2N 3AS. Registered in England and Wales No. OC378740.