Wealth & Finance International | October 2016
Stirring up a New Wave of Competition We spoke to Jones Chiu at Defone Global, to find out more about their company and about their ambition of making their mark on the global investment space in 2016. PAGE 24
A Pioneer in Property We profiled Raine & Horne International to put the spotlight on their success, and find out how they continuously achieve such stellar results. PAGE 30
The Future of Private Equity
We got the exciting chance to speak to Thomas Limberger (right), founder and CEO of SilverArrow and Robert Schimanko CEO of Prime Capital, to ascertain how their ‘performance equity’ investment strategy is the way forward for the private equity industry. PAGE 28
Investments in a Complicated and Changing World
We speak to SMH Capital Advisors (SMHCA), a privately owned investment manager based in Fort Worth, Texas. PAGE 34
www.wealthandfinance-intl.com
Editor’s Comment Welcome to the October edition of Wealth & Finance International magazine.. On investment, in just seven months 100% British e-commerce start-up Simba has achieved extraordinary sales of 15,000 mattresses or £10 million with its one-type-fits-all, next day delivery, bed in a box solution. Since the inception of Gen2, an independent alternative asset management firm in Asia, it has grown to become among the industry leaders in customised Asian Hedge Funds for institutional investors and family offices. In addition, the firm is a trusted partner to help manage investors’ exposure to Asia across all alternative strategies in the region, according to a spokesperson of the firm. On wealth management, almost two-in five (37%) millennials say they prefer to enjoy themselves now rather than save or invest for the future, according to a new study commissioned by Investec Wealth & Investment (IW&I). The Wealth Management Association (WMA) recently hosted their Women in Wealth Forum at the Royal Bank of Scotland (RBS) headquarters in London. The event commenced with an overview about women in the financial services industry by Peter Ryan-Bell of RBS who commented, “we need to set ourselves the task of mirroring an industry which is diverse in order to push ourselves forward. At RBS we have made a conscious effort to ensure 30% of senior leadership roles are filled by women by 2020. We are on track in achieving this as it is important to leverage a diverse workforce to support the business.” I hope you enjoy reading this packed edition. Jonathan Miles, Editor READ THIS MONTH’S CPD ACCREDITED ISSUE TO GAIN 6 CPD POINTS The content of the following has been certified by the CPD Certification Service as conforming to continuing professional development principles Acquisition International & Wealth & Finance INTL June Edition Online Learning
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Defone Global Investments
Contents 4. News WEALTH MANAGEMENT 10. Millennials Live for Today as Thrift Wears Thin 11. Wealth Management Association Welcomes Lady Barbara Judge to Their Women in Wealth Forum 13. Go with the Flow WEALTH PRESERVATION 14. First Command Reports: Financial Confidence Holding Steady in Military Families 15. Investing Media Solutions Launches Second IMS Wealth Management Monitor ASSET MANAGEMENT 16. ETF Forum to Host New Adviser Events FollowingSuccessful Launch 17. U.S. Bank Wealth Management Names Eric Freedman as Chief Investment Officer PRIVATE WEALTH & INVESTMENT 18. UBS/PwC Billionaires Report Reveals Billionaire Wealth Facing Headwinds with Overall Wealth Declining by $300 Billion 21. Kestra Financial Wins $250 Million Firms Gotleib & Associates and Bridge Wealth Advisors INVESTMENT 22. Dream Investors Join the Lie-In Kings 24. Defone Global Investments 28. The Future of Private Equity 31. A Fully Hosted Technology Platform 32. A Pioneer in Property 35. Independent Alternative Asset Management 36. Investments in a Complicated and Changing World 38. Brazil’s Back on Track RETIREMENT 41. Happy 100th Birthday: A Record Number of Centenarians Raise Retirement Risks 43. Under 35s Lead the Way in Britain’s Pension Revival BANKING 44. Child Savings Accounts Face Gruelling Cuts 45. U.S. Bank Increases SBA Lending 7.9% to $838 million in FY 2016
MORTGAGES 46. DeVere Mortgages Partners with Al Rayan Bank to Offer Sharia Compliant Home Finance 47. UK Mortgage – Variable Rates Rising Despite Base Rate Cut SUSTAINABILITY 48. Sustained Success 51. The EBRD Expands the Concept of Sustainability TAX 52. Six Months of Success for First TaxAssist Accountants Australian Franchisee 53. Flexible Working and Tax Breaks for Start-Ups Needed to Open Floodgates for More Women in Financial Services 55. Eminent Legal Minds LEGAL & REGULATION 56. Technavio Announces Top 5 Global Players for the Legal Services Industry from 2016-2020 58. A.M. Best Special Report: Money Market Reforms —Overall Insurance Industry Impact Expected to Be Minimal 59. An International Presence PERSONNEL 60. Does Your Organisation Have a Happiness Strategy Yet? 61. New Global Careers Website Launches for the Finance Industry PRIVATE BANK OF THE MONTH 62. Fifth Third Bank Launches New Consumer Credit Cards MARKETING & PR 64. Why Emotional Bonds Are the Missing Multiplier for the Financial Sector 66. Winners’ Directory
Wealth & Finance | October 2016
KKR Selects OpsCheck to Enhance Business Operations Oversight and Efficiency OpsCheck, a powerful web-based application created to centralise, manage and warehouse business operational tasks has been selected by KKR, a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. OpsCheck also continues to enjoy significant growth with the addition of other highprofile clients as well as smaller emerging managers. Launched in April 2015, OpsCheck is led by Frank Caccio, an industry veteran with a 20+ year career that includes head of global operations for Tiger Management and Highbridge Capital, as well as serving as COO of several emerging managers.
“At KKR teamwork is at the heart of how we operate, and accountability is a core value we live by. We chose OpsCheck because it promotes individual accountability, mitigates operational risks, streamlines infrastructure oversight and further demonstrates industry best practices. We believe the OpsCheck platform will have a positive impact on scalability and operational efficiency,” said Danny Olds, director - operations, KKR.
compliance is time consuming and prone to errors. Traditional methods that rely on spreadsheets, meetings and emails are antiquated, typically decentralised and slow to react in today’s fast paced environment. OpsCheck provides the solution and offers many other benefits,” said Frank Caccio, managing partner.
“Prominent market participants continue to recognise the importance of strong centralised oversight and individual accountability, and we are honoured that OpsCheck continues to be seen as a leader in organising global operational infrastructure. Monitoring all tasks, projects and
4
NEWS
Total Number of Complaints Continues to Fall Financial services firms recorded a 2.6% reduction in new complaints between January and June 2016 compared to the previous six months, according to new complaints data published the Financial Conduct Authority. The total number of complaints was 2.05 million.
Payment protection insurance (PPI) is the most complained about product. The total number of PPI complaints was more or less unchanged at 0.93 million. Without PPI, the number of complaints was 1.12 million.
Banking and credit cards 1. Barclays Bank Plc 124,361; 2. National Westminster Bank Plc 75,736; 3. Lloyds Bank PLC 71,409; 4. HSBC Bank Plc 65,313; 5. Santander UK Plc 58,199.
Complaints about current accounts have seen the largest reduction – 46,000 or 10% - in this period. Christopher Woolard, director of strategy and competition said, “to see another six months of reduction in the total number complaints is encouraging. Firms still need to continue to ensure they are doing all they can to reduce consumer dissatisfaction, but the figures show firms are taking our feedback seriously”.
Home finance (mortgages and equity release products) 1. Bank of Scotland plc 9,894; 2. Santander UK Plc 8,760; 3. HSBC Bank Plc 6,715; 4. Landmark Mortgages Limited 5,894; 5. Barclays Bank Plc 5,272.
The total redress paid to consumers was £1.96 billion which is less than 1% lower than the redress paid between July and December 2015. • All product categories saw a reduction in redress payments in the first half of 2016 from the second half of 2015, except for home finance group of products which increased by 2% and general insurance and pure protection (including PPI) which increased by 6%. • The top ten firms paid 85% of the total redress given to consumers in the first half of 2016. This is broadly consistent with the previous period during which the top ten firms accounted for 83% of total redress paid to consumers.
General insurance and pure protection (including payment protection insurance) 1. Barclays Bank Plc 153,718; 2. Lloyds Bank PLC 140,669; 3. Bank of Scotland plc 115,121; 4. MBNA Limited 75,995; 5. HSBC Bank Plc 49,292.
The top five most complained about firms between January and June 2016 (excluding consumer credit) were: 1. Barclays Bank Plc - 287,463 (an increase of 3% since the second half of 2015); 2. Lloyds Bank PLC - 213,163 (a decrease of 7% since the second half of 2015); 3. Bank of Scotland plc - 173,646 (a decrease of 5% since the second half of 2015); 4. HSBC Bank Plc - 124,891 (an increase of 3% since the second half of 2015); 5. National Westminster Bank Plc - 121,197 (a decrease of 10% since the second half of 2015).
Decumulation, Life and Pensions 1. The Prudential Assurance Company Limited 6,161; 2. Friends Life Limited 5,874; 3. The Royal London Mutual Insurance Society Limited 4,711; 4. Aviva Life Services UK Limited 3,267; 5. Phoenix Life Limited 3,109. Investments 1. Barclays Bank Plc 3,422; 2. HSBC Bank Plc 3,269; 3. Santander UK Plc 2,453; 4. Equiniti Financial Services Limited 1,498; 5. Financial Administration Services Limited 1,474.
The FCA publishes complaints data received from firms every six months, alongside aggregated figures covering the whole industry. The FCA requires firms which receive 500 or more complaints in a six-month period to publish the information on their websites. By product group, the firms with the largest number of complaints opened in the first half of 2016 were:
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Wealth & Finance | October 2016
Eqlx Launches Innovate Brokerage Model - Full Transparency and a 50/50 Profit Split with Customers eqlx, an OTC Forex and CFD brokerage, in early October announced that its innovative new brokerage model is open to the general trading community at: http://www.eqlx.io Committed to redefining the brokerage industry, eqlx was founded to tackle some of the commonly perceived issues in the industry— lack of transparency and a general mistrust between broker and trader. eqlx will provide a high level of transparency to its clients, including a detailed breakdown of revenue and expenses incurred.
equals by actually valuing them on par with ourselves. We will literally be distributing 50% of any net profits of the company back to our fantastic group of active traders because we understand we are nothing without them” he continued. With over 900+ instruments to trade, including hundreds of single stock CFDs, eqlx comes with an exceptional offering. “Our business model is to run an incredibly lean organisation by keeping our operating costs exceptionally low with no sales staff or fancy sports sponsorship deals in order to push as much revenue back to our active traders, or what we call “the collective”, as possible. Clients will receive clean, fair, and simply awesome execution on all of our instruments, period. This truly is a place to access the markets as it should be”, Carstens added.
“For so long, traders, the lifeblood of brokers, have not been able to see how a broker truly operates. Brokers are like a black box. We are peeling back the curtain, allowing our clients to see exactly how much revenue we generate, how we generate it, and details on our expenses like actually what our core rates are— at a level not seen before. We believe this will change the dynamic between how a trader views their broker forever” aid Matthew Carstens, CEO, and co-founder of eqlx. Even more innovative, eqlx will split its quarterly net profits with its active client base; 50/50. “With this new level of transparency as a core tenant of ours, we are able to go a step further by treating our active traders as
For more information about eqlx’s offering, and to see how we’re different, visit: http://www.eqlx.io/the-difference
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NEWS
RLI investors Buys Two New Logistics Properties RLI investors (RLI), a German asset manager and fund manager specialising in logistics real estate, earlier this month acquired two logistics properties in Lower Saxony that are earmarked for the portfolio of the ‘RLI Logistics Fund - Germany I.’ One of the assets is a logistics and distribution centre in Hodenhagen, a town centrally located within the tri-city area of Hanover – Bremen – Hamburg, while the other asset in located in Achim in the Bremen logistics region. The volume of both transactions combined adds up to nearly 50 million euros.
The property in Hodenhagen has a warehouse area of 21,400 square metres plus annexed offices and staff rooms. The warehouse is let longterm to the BMW Group and used by the car manufacturer as a new distribution centre that became operational on 1st October. Starting early next year, automobile spare parts will be stored here and serve 171 car dealerships between Flensburg in northern and Hesse in central Germany. The property has been awarded a DGNB Silver sustainability certificate, and is located near junctions to the motorways A7 (Hamburg – Hanover / Kassel) and A27 (Bremen / Bremerhaven).
The acquisitions now transacted bring the number of logistics properties bought by RLI investors in 2016 up to twelve, with 282 million euros already transacted this year to date. Meanwhile, another five properties with a combined transaction volume of approximately 100 million euros are undergoing their pre-acquisition audits, and the notarisation is expected to take place before the end of October 2016. The transactions completed and the properties yet to be bought add up to a total volume of approximately 400 million euros. “This makes RLI one of the biggest investors on Germany’s logistics real estate market this year,” said Hollung. “We will take advantage of the Expo Real property trade fair to initiate our next transactions, while maintaining and deepening our good relations with real estate agents, owners and property developers at the same time.”
The property in Achim has a total usable area of 37,600 square metres, 30% of which is let long-term, to the soft drink vendor Coca Cola, who intend to set up a distribution centre that will serve the Weser-Ems region in the north-west corner of Germany. Negotiations concerning the rental of additional floor space are under way, so that the property will be fully let by the time of its scheduled completion date in February 2017. The property has direct access to the A27 motorway and is licensed for 24/7 operation. It is planned to seek a DGNB Gold certification.
For more details on RLI, please go to the homepage www.rli-investors.com
The developer and seller of either construction project is bauwo Grundstücksgesellschaft mbH, a Hanover-based property company. With 25 years in the business, bauwo counts among the most successful mid-market property developers in the metro region of Hanover, the state capital of Lower Saxony. In addition to numerous office buildings in the area and a hotel in Kühlungsborn, its most prominent projects of the past five years included the 180-room Steigenberger Parkhotel in Braunschweig and three logistics warehouses with a combined floor area of more than 95,000 square metres. “Over the past years, the region between Bremen and Hanover has gradually established itself as a top logistics location that companies use as springboard for their distribution in northern Germany,” said Bodo Hollung, managing director of RLI Investors. “Both of the assets acquired represent state-of-the-art properties marked by high alternative use potential. Accordingly, they perfectly match our acquisition profile.”
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Wealth & Finance | October 2016
Rational FX: The UK’s First Online Foreign Exchange Service With over $14bn worth of FX traded on a daily basis, London is the world’s largest FX trading centre and it is here that CEO and co-founder Paresh Davdra took advantage of a gap in the money transfer market and set up the UK’s first online foreign exchange service – RationalFX.
With over a decade of foreign exchange experience combined with dynamic entrepreneurialism, Paresh Davdra has built a multi-million-pound company that makes it easy for businesses to transfer foreign currency online 24/7, and for private customers to manage payments overseas.
The pair had no funds whatsoever to get the business going and went knocking on banks’ doors for a loan but came back empty handed each time. Finally, they told the bank that they were interested in a £20,000 car loan and used that money to get the ball rolling.
With a turnover of $1.9bn in 2015 and expectations to increase this to $2.6bn this year, it is clear that RationalFX is successfully making its mark on the money transfer industry. To date, the company has transacted $10bn, is growing organically with two offices in London and more in Birmingham and France, and are official sponsors of Birmingham Football Club.
The path to this success was not an easy one and in the early days, nine out of 10 people they approached turned them down. Identifying a spike in people’s interest in buying property overseas and knowing foreign investors will want to exchange currency, the pair got in touch with estate agents who would then recommend them to the house buyers and in return they paid a small commission. From there, it was word of mouth that helped snowball the company and bring in customers.
It all began in 2005 when Paresh, aged just 24, and Rajesh teamed up their foreign exchange and IT expertise, after Rajesh had complained that to remit money home at the end of every month was forcing him to part with a hefty chunk of his salary. They quit their jobs at the same brokerage firm, moved to Brighton and with one phone and one computer, RationalFX was created.
On their revenue model, RationalFX act like a wholesaler of money, exchanging a customer’s money in return for a fee. Customers choose RationalFX over the banks because they exchange money at a more competitive rate; RationalFX get a good rate of conversion from the banks because of the sheer volume of the money they exchange so customers win because they get a good rate for currency exchange and whilst RationalFX earn profits in the form of commission.
8
NEWS
Financial Services Veteran Dominic Capolongo Joins PrimeRevenue PrimeRevenue, Inc., the global leader in working capital finance solutions, announced on 3rd October that it has added Dominic Capolongo to its executive team as executive vice president and head of global funding. In this new position, Mr. Capolongo is tasked with leading PrimeRevenue’s bank and capital markets funding strategies and operations including the growth of PrimeRevenue Capital Management’s position in the market.
PrimeRevenue Capital Management, PrimeRevenue’s wholly-owned subsidiary, offers alternative funding sources for its corporate clients and investment opportunities for investors looking to access attractive, high quality assets. This venture allows PrimeRevenue to offer proprietary and flexible access to capital that allows businesses to be agile and deploy programs faster, by allowing non-bank entities such as insurance companies, pension funds, hedge funds and capital market investors access to PrimeRevenue’s supply chain finance technology and to benefit from its ability to originate and service working capital finance opportunities.
positions at RBC Capital Markets, Jefferies, Credit Suisse and other wellknown firms. He began his career as an attorney and was a partner with Kaye Scholer. He earned a JD from Fordham University School of Law and a BA from SUNY Binghamton.
As a financial services professional with over 25 years of experience, Mr. Capolongo brings a wealth of experience covering the financial services industry and a broad history of building sustainable revenue production and defining, managing and leading teams. “We selected Dominic for his expertise in developing global, scalable and highly efficient funding structures that maximise options for supporting PrimeRevenue’s programs,” said PJ Bain, CEO of PrimeRevenue, Inc. “Dominic brings tremendous strategic and capital markets experience in all areas of finance after holding senior positions at, among others, Credit Suisse, RBC Capital Markets and DLJ.” “My background in driving new ideas and tailoring capital markets solutions combined with my strategic expertise helping companies access alternative funding sources will enable me to bring immediate value and growth,” said Mr. Capolongo. “I look forward to using my knowledge of financial markets to support and advance PrimeRevenue’s goals and increase our significance to all our clients and funding partners by enhancing our existing funding channels and developing an extensive array of new and more efficient funding options.” Mr. Capolongo joins PrimeRevenue from FBR where he was Managing Director - Financial Institutions Investment Banking. Previously, he held
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Wealth & Finance | October 2016
Millennials Live for Today as Thrift Wears Thin • Two-in-five under 35s prefer to enjoy their money now rather than save and invest it for the future • Two out of three over-55s believe it is financially tougher for millennials than it was for them • Over a quarter (27%) think there is little point in investing while they remain in debt but 92% are worried about the long term consequences
A
lmost two-in five (37%) millennials say they prefer to enjoy themselves now rather than save or invest for the future, according to a new study [1] commissioned by Investec Wealth & Investment (IW&I).
The research also underlines how reliance on debt is eroding the culture of thrift among millennials; over one in four (27%) under-35s think there is little point in investing because debt is unavoidable compared to just 5% of over-55s. One in five under-35s (20%) think they will never be debt-free.
The research shows that over-55s are more inclined than the younger generation to put money aside; only a fifth of the older generation (21%) would rather spend now than save for the future. The declining appetite for saving and investing among millennials cannot be attributed to record-low interest rates as over two-thirds (66%) said this has had no impact on their behaviour.
Chris Aitken, head of financial planning at Investec Wealth & Investment, said: “The culture of thrift has declined in recent years among young people because they have become more reliant on debt to finance their lifestyles. University fees mean that debt is part-and-parcel of many young peoples’ lives long before they contemplate taking on a mortgage. But given how much is required for a deposit it’s easy to understand why so many millennials don’t see the point of saving for one. There’s a danger that this mindset becomes fixed for life. Our advice is to start saving and investing what’s affordable as early as possible.”
Instead, the majority (88%) of under-35s blame the high cost of living, which they claim makes saving and investing much harder now than for previous generations. Most over-55s also share this view; two-thirds (66%) agree that the current cost of living means the younger generation has never had it so bad. As a result, 83% of older people think they invested more than the current generation of under-35s when they were the same age.
Millennials support the idea of thrift in theory as 83% agree that they will only get the things they want by working hard and saving up for them. Over two-thirds (67%) are worried by the long term consequences of failing to save and invest and 92% agree that this would enable them to have a secure financial future.
As well as the cost of living, nearly half of millennials (48%) cite today’s ‘buy now pay later’ culture as a factor accounting for the decline of thrift. Four in ten (38%) blame unaffordable house prices and the difficulty of saving for a deposit, while one in three (33%) point to the debts they have built up from college and university, which older generations never had to face.
[1] Source: 2,071 respondents aged 18+ surveyed by Consumer Intelligence between 14 and 15 September 2016 For more information on IW&I in the UK visit www.investecwin.co.uk * As at 31st March 2016
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WEALTH MANAGEMENT
Wealth Management Association Welcomes Lady Barbara Judge to Their Women in Wealth Forum Perception, tackling unconscious bias and creating a flexible culture discussed as key issues for Women in Wealth Management
T
he Wealth Management Association (WMA) hosted their Women in Wealth Forum at the Royal Bank of Scotland (RBS) headquarters in London, with delegates from across the industry. The WMA is the leading industry body for the private client investment community whose members manage in excess of £734 billion of the country’s wealth and are the face of the financial services industry to private investors.
say. When you walk into a room, you can’t make a second first impression and so you want to take charge of other people’s impressions. For both men and women, it’s about defining yourself and not letting others define you. “To progress for men or women you need to make people aware of your career path. Everyone needs their own personal board of directors, who have their best interest at heart. If you want to get promoted, you have to voice it and make people aware of your ambitions and goals.”
The event commenced with an overview about women in the financial services industry by Peter Ryan-Bell, managing director, head of large corporate sectors, UK & Western Europe, commercial and private banking of RBS who commented: “We need to set ourselves the task of mirroring an industry which is diverse in order to push ourselves forward. At RBS we have made a conscious effort to ensure 30% of senior leadership roles are filled by women by 2020. We are on track in achieving this as it is important to leverage a diverse workforce to support the business.” WMA welcomed Lady Barbara Judge, CBE, chairman of the Institute of
A panel discussion with Peter Moores, CEO of Raymond James, and Mark Taylor, managing director of Investment Services, Equiniti, also discussed key issues around unequal pay and tackling unconscious bias to create a business culture which is more welcoming for women in traditionally male dominated environments. Practical hints and tips were also given to individuals at the event around how individuals can utilise LinkedIn to build industry relationships and as an extension of their personal brand. The day finished with a demonstration on developing physical intelligence to redefine how you view yourself, and the use of various techniques and exercises to enhance confidence and performance.
“70% of first perceptions are based on how you look, 20% is how you sound and only 10% is based on what you say.”
WMA chief executive, Liz Field commented: “We are delighted to be hosting our third Women in Wealth forum and would like to thank RBS for their support. This forum provides the opportunity to hone in on the issues the industry is facing and how we can address them. From practical hints and tips to discussion around the challenges of ensuring a culture, flexibility and leadership that will support and advance our industry for both women and men. It has been an honour to have Lady Barbara Judge share with us some truly inspirational insights”.
Directors as the keynote speaker. She talked about her own career journey and the experiences, hurdles and challenges she faced as a working woman. Lady Barbara Judge commented: “70% of first perceptions are based on how you look, 20% is how you sound and only 10% is based on what you
www.thewma.co.uk
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Real People Real Health We have been helping employers, public government agencies, and real estate properties offer award-winning fitness & wellbeing programs for over 22 years
WEALTH MANAGEMENT
Wealth & Finance | October 2016
Go with the Flow Logic Wealth Planning is a company offering a wide range of services from auto enrolment advice to their corporate clients, to cash flow and life planning for personal clients. They advise on equity release and long term care planning, along with investment and retirement advice. In an interview with the firm’s Yianni Theodorou, he reveals the extraordinarily relaxed approach they have with all their clients, and his desire for Logic Wealth Planning to be the firm everybody approaches for all their financial needs.
W
hat does your client base look like? Our client base is very diverse as Logic Wealth Planning is an amalgamation of a number of businesses from the past 30 years. We have many clients who run their own business and many who are enjoying their retirement. There are also those who are still accumulating their wealth whilst in employment in an array of roles, to those approaching retirement and planning ahead for their ‘big day’.
What factors set your firm apart from others in the same field? What sets Logic Wealth Planning apart from others in the same field is the extraordinarily relaxed approach we have with all our clients. This is only possible by way of having a team who are so well interconnected both from a personality point of view and work ethic. We do not blind people with science but try and unravel the complex world of financial services into an understandable language. Understanding our clients is key to all the above. We take the FCA principle of know your client one step further where we know our clients more than they do! What are the most interesting challenges facing your company today? The interesting challenges we face as a company right now are the ever increasing regulatory burdens thrusted upon us and ensuring we adhere and comply with them at all times. This means we have to keep a keen eye firmly on our systems and controls, which takes time and uses up resources. Ultimately our systems will be robust enough to cope with further changes making them future-proof. Looking to the future, what is the main objective for your company? We are still looking to expand the advisory personnel and are actively looking for high quality advisers. We are active in the community and would like to be the firm everyone approaches for all their financial needs. What individual in your industry and beyond do you admire the most and why? My father ran a busy high street shop in London and as a child he taught me that giving good customer service is an essential element of any successful business. My father-in-law also taught me the intricacies and operational aspects of running a business, so these combined influences have encouraged me to enhance my people and business skills in my own business. I enjoy meeting new people and debating with my peers. In fact, I get inspiration from people from all walks of life. I think that is vital in life as well as in business.
Name: Yianni Theodorou Company: Logic Wealth Planning Email: info@logic-wp.com Web Address: www.logic-wp.com Address: Sigma House, 9 Southgate, Cross St, Off Green Lane, Heywood, Greater Manchester OL10 1ND Telephone: 0808 1234 321
60-Second Interview
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Wealth & Finance | October 2016
First Command Reports: Financial Confidence Holding Steady in Military Families Despite continuing concerns over cuts in defense spending, America’s career military families are feeling confident in the future with about half expecting their financial situation to improve and to be able to retire comfortably.
S
econd quarter results of the First Command Financial Behaviors Index® reveal that 52 % of middle-class military families (commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000) expect their financial situation will improve over the next year. Forty-eight % express confidence in their ability to retire comfortably.
Service members who work with a financial advisor are more likely to contribute to: • Short-term savings (78 % versus 54 % for those without an advisor). Monthly median contributions for the two groups are $500 and $300, respectively. • Long-term savings (66 % versus 32 %). Monthly median contributions for the two groups are $300 and $213. • Retirement (74 % versus 60 %). Monthly median contributions for the two groups are $400 and $300.
Confidence levels are particularly strong in families that work with a financial advisor. Military families with financial advisors are twice as likely as their do-it-yourself colleagues to say they are extremely or very confident that their financial situation will improve in the next year (63 % versus 31 %) and in their ability to retire comfortably (59 % versus 25 %).
Additionally, those with a financial advisor report $22,000 more in accumulated savings and retirement funds than those without a financial advisor, and they carry nearly $58,000 less in debt on average.
“These heightened levels of confidence underscore the positive influence of financial advisors as they coach service members to improve their money behaviours,” said Scott Spiker, CEO of First Command Financial Services, Inc.
The financial behaviours, attitudes and intentions of career military families held steady in the second quarter. These results were reflected in the overall Index score of 134, which was statistically unchanged from the first quarter (The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.).
“We see this behavioural influence reflected in strong savings habits. Career military families who work with a financial advisor are out saving their do-it-yourself counterparts, reinforcing the value of working with a professional. Strong money behaviors are particularly important today when so many of our men and women in uniform are uncertain about how sequestration may impact their household finances” he added.
Looking ahead, positive financial behaviours are expected to continue in the third quarter. And military families who use financial advisors are more likely than others to say they will increase savings in the months ahead (40 % versus 28 %).
Seven out of ten career military households feel extremely or somewhat anxious about cuts to defense spending, and three out of four already feel financially affected by the cuts. The second quarter results reveal that most military families say they are preparing for cuts in defense spending, primarily by cutting back on every day spending and through increased saving.
“Our survey data continues to reveal that career military families can enjoy greater financial confidence and readiness by working with a knowledgeable professional,” Spiker said. “Taking action to feel better about family finances is particularly important in the current environment of military budget cuts. Families working with a financial advisor continue to show far greater resilience towards the tumultuous changes facing their financial futures.”
The Index® reveals that 73 % of middle-class military families who work with a financial advisor contributed to savings and retirement accounts during the second quarter. That is 24 points higher than those who do not use an advisor.
www.firstcommand.com/fbi
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WEALTH PRESERVATION
Investing Media Solutions Launches Second IMS Wealth Management Monitor Investing Media Solutions (IMS), one of the nation’s largest premium financial publisher groups, is releasing the second edition of the IMS Wealth Management Monitor (The IMS Monitor). The IMS Monitor is a proprietary survey of readers from across its exclusively managed publishing group, which editorially serves more than 20 million influential, Financially-Fluent™ readers monthly. With 5,880 completed responses, The IMS Monitor is one of the largest studies of its kind, providing valuable insight into the attitudes and opinions of financial professionals, corporate leadership and investors.
R
eaching and engaging influential, affluent audiences who are consuming content on a wide range of financial sites is a business-critical challenge for many advertisers,” said Josh Morris, Investing Media Solutions co-founder and CEO. “We created The IMS Wealth Management Monitor to provide a deeper level of qualitative information about our audiences for our advertisers, however, the entire financial and marketing community can benefit from these insights because of the huge amount of influence wielded by these readers.”
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Awareness of robo advising was directly correlated to the affluence of the respondent. 78 % of respondents with more than $5,000,000 in investable assets are aware of the term ‘robo advisor. 73 % of respondents with more than $1,000,000 in investable assets are aware of the term ‘robo advisor.’
Financial Professionals Optimistic About Short-term Outlook • 86 % of financial professionals believe the S&P 500 will finish the year positive. • 79 % of retail investors believe the S&P 500 will finish the year positive.
Below are select findings from the second IMS Wealth Management Monitor: Financially-Fluent™ Audiences Actively Seeking Independent Insight • 62 % of respondents prefer independent experts/specialised websites most often for actionable insight and editorial perspective on the financial markets and investing. • 64 % of respondents read investing related articles every day.
To request a copy of the IMS Wealth Management Monitor, please visit: investingmediasolutions.com/WealthManagementMonitor For more information on Investing Media Solutions, please visit: www.investingmediasolutions.com
Presidential Election Tops List of Economic Concerns • Respondents cited the outcome of the American election as their greatest economic concern. • When asked to select their biggest concern for the economy in the rest of 2016, respondents answered as follows: the outcome of the American election cycle (48 %), weak GDP and economic growth in the U.S. (36 %), terrorism and other geopolitical turmoil (23 %), interest rates (22 %), U.S. corporate earnings (15 %), economic concerns in Europe (14 %), economic concerns in Asia (7 %). Robo Advising Gaining in Popularity, Especially with Affluent Investors • 63 % of respondents said that they were aware of the term ‘robo advisor’, a 14 % increase from the first Wealth Management Monitor published in February.
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Wealth & Finance | October 2016
ETF Forum to Host New Adviser Events Following Successful Launch The ETF Forum, the newly formed independent partnership of leading exchange-traded product providers, is to run a second wave of nationwide roadshows as part of its drive to enhance the adviser community’s collective understanding of ETFs.
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he ETF Forum, founded earlier this year by exchange-traded product (ETP) and Exchange Trade Fund (ETF) issuers BMO Global Asset Management, ETF Securities, Source (in association with Legal & General Investment Management) and WisdomTree will host the first seminar in London, in partnership with London Stock Exchange on 1st November, before moving across the UK including Leeds, Liverpool, Newcastle and Bristol.
solutions for their clients’ portfolios, and ETFs are perfectly placed to meet that need; we feel providers have an obligation to explain ETFs to investors, and the Forum is part of our commitment to help them better understand ETF usage.” Simon Hynes, head of UK retail sales at Legal & General Investment Management (LGIM) added: “ETFs have captured the imagination of both retail investors and investment advisers in the US. While uptake in Europe and the UK has been slower, the trend is obvious. Innovation in index investing continues at a rapid pace and it is essential to keep up to date. The ETF Forum aims to aid adviser education in this increasingly important market.”
The free CPD-accredited workshops will feature leading speakers from the ETF industry discussing a wide variety of topics including the key characteristics of ETFs, why and how ETFs can fit into client portfolios and how best to access them.
“ETFs have captured the imagination of both retail investors and investment advisers in the US.”
This second wave of events follows the success of the ETF Forum’s inaugural roadshows in June. Feedback from the events found that 71% of advisers felt that the Forum helped their understanding of ETFs and how they could provide a solution for their clients, while two-thirds (66%) said they would change their usage of ETFs in the next 12 months.
Nizam Hamid, WisdomTree’s head of ETF strategy in Europe, said that the industry impact of the ETF Forum’s advisor events is important, especially apparent in the positive feedback of those planning to increase their usage of the products.
90% of attendees cited low costs as the main reason to invest in an ETF, followed by transparency. More than half (58%) said they would use lower cost funds for their clients in the next two years, and 62% said they would increase their exposure from active to passive strategies.
“The Forum is committed to promoting awareness of ETFs and educating the adviser and wealth management market on their usage,” he said. “Following the success of the first series, we would like to maintain momentum by continuing to focus on education including the latest ways in which intermediaries can allocate their clients’ assets to these increasingly popular and flexible products.”
Christine Cantrell, UK ETF sales director at BMO Global Asset Management, added: “While access of ETFs through platforms is improving, we will continue to use feedback from events like these to speak to working groups and demonstrate that there is a clear demand for ETFs which could be facilitated better. We are committed to improving this infrastructure so more advisers and professional investors are able to access ETFs and obtain the benefits they bring by adding them to client portfolios.”
As part of the ongoing initiative, ETF Forum roadshows will be hosted twice a year, with new speakers and an evolving range of educational content. In addition to the series of roadshows, the ETF Forum also has dedicated a website to provide ongoing information to advisers, which can be found at www.etf-forum.co.uk
Liz Wright, director of UK intermediary distribution at ETF Securities, expects the demand from advisers to grow further as increased scrutiny is put on costs. “Investors are consciously looking for lower cost fund
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Ken Wolter / Shutterstock.com
ASSET MANAGEMENT
U.S. Bank Wealth Management Names Eric Freedman as Chief Investment Officer U.S. Bank Wealth Management announced on 11th October that it has named Eric Freedman as its new chief investment officer (CIO) to replace previous CIO Tim Leach, who recently retired. U.S. Bank Wealth Management manages $133 billion of assets for clients and is ranked among the top 20 wealth management firms* in the country.
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or the past 10 years, Freedman has been CIO, managing director and global market strategist for CAPTRUST Financial Advisors, where he reported to the CEO and was responsible for helping grow the company into one of the largest RIAs in the country, with $180 billion in assets under management. Prior to that, he was a senior portfolio manager for Franklin Street Partners, and vice president of equity derivatives with Goldman Sachs.
Freedman will direct U.S. Bank Wealth Management’s Asset Management Group, leading its investment management business strategy and policies. Freedman earned a bachelor’s degree in economics from Colgate University, and an MBA in finance and management from the Wharton School at the University of Pennsylvania. He is active in his community, including serving on the investment committee of the Diocese of Raleigh, the board of directors and finance committee of the Ronald McDonald House of Chapel Hill, and the board of advisors for the Monday Life. He and his spouse, Jamie Freedman, have three children and enjoy sports, reading, and being involved in the community.
“Eric represents everything we were looking for in our next CIO. His drive, deep knowledge of the markets, and commitment to exploring comprehensive investment options on behalf of clients aligns very well with our culture,” said Mark Jordahl, president of U.S. Bank Wealth Management. “We are excited to welcome Eric to our leadership team. Culturally, he is a great fit for U.S. Bank and represents our core values extremely well. I am confident he is the right person to guide us toward our goals and deliver on client expectations.”
“U.S. Bank has an incredible team-based culture,” Freedman said. “Helping our clients achieve the outcomes they work hard for is a humbling opportunity, and to do so alongside so many dedicated and focused colleagues is a privilege.” Visit U.S. Bancorp on the web at www.usbank.com
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Wealth & Finance | October 2016
UBS/PwC Billionaires Report Reveals Billionaire Wealth Facing Headwinds with Overall Wealth Declining by $300 Billion UBS Group AG and PwC recently presented their joint annual billionaires report, ‘Are billionaires feeling the pressure?’. The report examines wealth creation within the billionaire segment in 2015 and singles out the transfer of $2.1 trillion in billionaire wealth that is expected over the next two decades.
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015 saw a pause as total billionaire wealth fell by $300 billion to $5.1 trillion. Headwinds such as the transfer of assets within families, commodity price deflation and an appreciating US dollar, have impacted the growth of billionaire wealth. Average billionaire wealth dropped from $4.0 billion to $3.7 billion and the US added only five net new billionaires in 2015. In contrast, Asia produced one billionaire every three days, with China alone accounting for over half of the 113 additions.
Michael Spellacy, global wealth leader at PwC US added, “as the shockwaves from regulatory upheaval in the EU continue to trigger global currency fluctuations, strategic planning becomes even more crucial for wealth preservation. Those who control assets face tough investment questions. Encouragingly, this year’s report shows that Europe’s billionaires were the most resilient with many of the 60 individuals from Europe inheriting their fortunes in 2015 for the first time. “The US, which boasts the biggest collection of billionaires by region, sets the trend. Total US billionaire wealth fell, but ‘new money’ fared better than old, falling by just 4%, from an average of $4.7 billion per individual to $4.5 billion.”
The findings build on UBS/PwC’s previous billionaire reports, released in May and December 2015. According to the new report, we are about to witness the greatest transfer of wealth in history. Approximately 460 billionaires will transfer $2.1 trillion, the equivalent of India’s GDP, to their heirs over a period of just 20 years. For most of Asia’s young economies, where over 85% of billionaires are first-generation, this will be the first-ever handover of billionaire wealth.
Key findings from the report include: A $2.1 trillion inheritance The past 20 years of exceptional wealth creation will soon be followed by the largest-ever wealth transfer. We estimate that less than 500 people (460 of the billionaires in the markets we cover) will hand over $2.1 trillion, a figure equivalent to India’s GDP, to their heirs in the next 20 years. For most of Asia’s young economies, where over 85% of billionaires are first generation, this will be the first-ever handover of billionaire wealth.
John Mathews, head of ultra-high net worth, UBS Wealth Management Americas, commented on the new report and said, “the U.S. has always been a standout for creating wealth, and this report shows that the American dream is alive, with the wealth of the self-made billionaires outweighing that of the multi-generational billionaire.
The Gilded Age pauses After more than 20 years of unprecedented wealth creation, the Second Gilded Age has stalled. The transfer of assets within families, commodity price deflation and an appreciating US dollar have emerged as significant headwinds. In 2015, in the markets we cover, 210 fortunes broke through the billion-dollar wealth ceiling and 160 billionaires dropped off, leading to a net increase in the billionaire population of 50 to 1,397. Yet
“As we head into the greatest period of wealth transfer we’ve ever seen, there is much insight that we can gain from the experience of the successful wealth transfer and legacy planning that takes place in Europe. The findings of this report help UBS stay ahead of the issues that matter in order to better advise our clients, which include over half the world’s billionaires.”
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PRIVATE WEALTH & INVESTMENT
their total wealth fell from $5.4 trillion to $5.1 trillion. Average wealth fell from $4 billion in 2014 to $3.7 billion in 2015. It is still too early to tell if 2015 signals a pause in the Gilded Age or something more. Old legacies’ lessons for new billionaires Of the billionaire fortunes that have fallen below the billion-dollar mark since 1995, 90% were not preserved beyond the first and second generations. At a time of economic headwinds and imminent wealth transfer, Europe’s old legacies are a model for new billionaires to avoid this fate. Germany and Switzerland, in particular, are the countries with the greatest share of ‘old’ wealth. Asia’s family-orientated billionaires may wish to adapt the European model of wealth preservation to their own needs. New philanthropic models In the first half of the 20th century, entrepreneurial families such as the Carnegies and Rockefellers funded significant advances in areas such as education and health. By doing so, they displayed many traits associated with billionaires – chiefly business focused and smart risk-taking – to drive success. After over three decades of this new Gilded Age, billionaire philanthropy is growing all over the world. New philanthropic models are emerging (loans, guarantees, contracts, impact investing etc.) and the millennial generation is putting philanthropy at the heart of their family values. In spite of this the current Gilded Age may not match its predecessor’s record. To find out more, we invite you to read the full report here: www.ubs. com/billionaires Methodology This year, the report has analysed data covering 1,397 billionaires and looking back two decades. The database includes the 14 markets, which belong to the largest markets in the US, Europe and APAC and account for around 80% of global billionaire wealth. Furthermore, we conducted over 20 interviews with billionaire advisors, as well as face-to-face interviews with more than 30 billionaires and approximately 30 of their heirs. UBS and PwC advise a large number of the world’s wealthy, and have unique insights into their changing fortunes and needs. A number of sources were utilised to research and profile the characteristics of wealthy individuals. These were blended into a mosaic analytical framework from which we conducted extensive modelling and analysis. This information and data is part of PwC proprietary data and analytics structures, non-commercial in nature and specifically non-attributable regarding the identity of any individual or family.
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PRIVATE WEALTH & INVESTMENT
Kestra Financial Wins $250 Million Firms Gotleib & Associates and Bridge Wealth Advisors Independent advisor platform Kestra Financial, Inc. recently announced the addition of Gotleib & Associates and its affiliate Bridge Wealth Advisors.
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ed by Leo Gotleib, CFP, the professionals of Gotleib provide comprehensive wealth management services, including preand post-retirement planning, to corporate employees. Gotleib has conducted business for over 30 years and recently formed a new entity with Matthew Bagell, CPA called Bridge Wealth Advisors, whose financial advisors focus on financial planning and wealth management primarily for medical professionals. Both firms are based in Southern New Jersey. Collectively, the two firms bring approximately $250 million in assets to Kestra Financial’s platform.
The relationship exemplifies Kestra Financial’s steadfast mission to empower advisors by giving them the opportunity to leverage a leading independent advisor platform and state-of-the-art technology. “From the start of our selection process, it was paramount that we partner with an established firm that could propel our advisory business forward while truly valuing the client-advisor relationship,” said Leo Gotleib. “Kestra Financial will provide us with the technological resources and support to expand our services while retaining a focus on giving our clients the individualized attention they deserve.”
“The experienced teams at Gotleib and Bridge Wealth are well-positioned to take advantage of Kestra Financial’s vast resources, including next-generation technology, practice enrichment, business management, and marketing support,” said Daniel Schwamb, SVP of business development at Kestra Financial. “As we continue to aggressively expand our national footprint, we are seeking to work with sophisticated, growth-oriented advisory practices, and we’ve found like-minded partners in Leo, Matt, and their firms.”
For more information www.kestrafinancial.com
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Wealth & Finance | October 2016
Dream Investors Join the Lie-In Kings The UK’s fastest growing high-tech mattress retailer Simba is market leader by 20% ahead of rivals Eve and US brand Casper.
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In just seven months 100% British ecommerce start-up Simba has achieved extraordinary sales of 15,000 mattresses or £10 million with its one-type-fits-all, next day delivery, bed in a box solution. • As brands race to claim their share of the stagnant UK mattress market - currently estimated to be worth circ. £1 billion - UK public have been targeted with a series of ads across TV, social and the underground from the likes of Eve, Casper and Simba. • Simba’s investors now include a growing A-list cohort of business leaders including Tom Teichman (made.com; lastminute.com; notonthehighstreet.com), Nigel Wray (formerly Domino’s Pizza; Saracens; Prestbury Investment Holdings; Franchise Brands Plc); Richard Reed, Adam Balon and Jon Wright (Innocent Drinks), The Jatania Family (formerly cosmetics giant Lornamead – Vosene, Yardley). • Simba’s market leader position is testament to its premium product innovation – the Simba Hybrid® mattress is the first dual spring and memory foam mattress of its kind in the UK. • Its cutting-edge innovative technology offers the comfort of four layers of propriety cooling foams with the support of 2,500 patented conical pocket springs and was tested with the Sleep to Live Institute who have compiled data taken from 10 million people. • Simba has also secured an exclusive deal with John Lewis. Simba mattresses are now on sale and display in all of the 45 stores.
The total investment in the company now stands at £8.5m. Simba initially secured backing from a series of heavyweight UK investors including Richard Reed co-founder of Innocent Drinks, who engineered Innocent from a small stand at a music festival to an internationally renowned and respected giant. The brand has also secured an exclusive deal with John Lewis. Simba mattresses are now on sale and display in all of the 45 stores. CEO and co-founder of Simba Sleep, James Cox says, “this year has been incredible. Whilst Casper may have rushed to launch in the US with its memory foam based bed in a box offering – we knew from our research that we could create a premium offering which offers more comfort and support for over 95% of the British public. “We were the first to develop the hybrid dual spring and memory foam mattress – which was then rigorously tested with the Sleep to Live Institute who have compiled data taken from 10 million people. We know the Simba mattress is the best on the market and our low returns rate speaks for itself in comparison to our competitors.” Simba’s pioneering online ‘bed in a box’ concept allows your mattress – ingeniously rolled up and boxed – to be delivered to your door the next day. Simba are so confident in their product that they are also offering a 100-night no hassle return service.
Simba, the London-based 100% British high tech mattress retailer on 13th October closed a £5,000,000 investment round from Spark Ventures and The Garage Soho, alongside a group of angel investors Tom Teichman, Nigel Wray, Richard Reed, the Jatania family, Adam Balon and Jon Wright. The proudly British business was founded in August 2015 by serial start up investor James Cox, Steve Reid, founder of Tribesports.com and mattress veterans McClements family.
Nigel Wray, an entrepreneurial investor in both public and private companies commented, “since launching in February, Simba’s remarkable growth is a testament to its product innovation and premium high–tech positioning. Simba has a clear product differentiation at an attractive price with a customer friendly mattress-in-a-box format. I’m really pleased to be involved in the Simba evolution.”
Fuelling the race to innovate and demystify the often confusing and archaic sleep category with a one-type-fits-all, next day delivery, bed in a box solution, Simba is storming ahead of rivals in the Battle of the Beds. The seven-month old ecommerce start up is now UK market leader by 20%. The new investment will be used to grow sales internationally having successfully tested its approach in the UK, France, Germany and the Netherlands. The money will also be used to strengthen the company’s market leadership in the UK.
Cox concludes, “Casper was only founded in the US in 2014 yet has achieved staggering results turning over circa. $100 million+ last year alone. We are now leaders in the UK and will have launched across Europe, Asia and North America by the end of the year. We love the challenge and embrace the competition”. A proudly British family and friends’ business, Simba was co-founded in 2015 by James Cox and his good friend Steve Reid alongside the McClements Family. Before Simba, James worked with start-ups, advising them on growth and strategy, and investing in their innovations. Steve founded Tribesports.com, expert performance wear.
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James was introduced to Andrew McClements, who had been selling thread used for the making of mattresses since 1979. In 2002, he started making them himself. Andrew is the innovator and product developer. Simba has the stamp of approval from some of the UK’s most respected heavyweight investors. Tom Teichman is Simba’s chairman who’s backed Made.com, Lastminute.com and Notonthehighstreet.com (to name just a few). Richard Reed, founder of Innocent Drinks, Nigel Wray, formerly Domino’s Pizza, the Jatania family, formerly cosmetics giant Lornamead and advertising supremo, John Hegarty, founder of Bartle Bogle Hegarty, all invest their time and money. For the eight years prior to co-founding Simba, James focused solely on advising technology companies on strategy and growth. As the founder of Stonebridge Private Platform and JXC Ventures, James has advised, funded and invested in a range of tech companies from concept up to multimillion monthly revenues including SuperAwesome, now the world largest kids marketing platform, Jinn, the on-demand delivery service and miDrive, the UK’s leading learner driver app to name a few. Before entering technology James started his career in the City as an institutional equity trader. He then co-founded Xenfin FX, an FX business advising clients including asset managers and hedge funds. The Xenfin Group now trades in excess of $30 Billion of foreign exchange per month. www.exposure.net
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Wealth & Finance | October 2016
Best New Broker (Australia & Greater China), Most Promising Broker (Australia & Greater China), Most Robust IT Infrastructure Broker (Australia & Greater China).
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Defone Global Investments Based in Australia, Defone Global Investments Limited is a highly innovative investment firm who specialise in the trading of FOREX and precious metals to both retail and institutional investors. We spoke to Jones Chiu at Defone Global, to find out more about their company and about their ambition of making their mark on the global investment space in 2016.
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ne of the most impressive aspects of Defone Global is their ‘Straight Through Processing Model’, which is used to avoid manipulation and provide stable execution. Through this strategy, they eliminate repeated quotes, and clients will be able to receive the most transparent quotes and operate with the lowest spread.
“The function behind this is so clients and partners we serve can view various real time information such as transactions and trade position, commission and rebate, deposit and withdrawal,” says Chiu. “What’s more, clients can also update their personal particulars, and can access this at any time or day.” Additionally, Defone Global also provide the MetaTrader4 (MT4) trading platform on PC, iOS and Android system. More specifically, they also provide two professional features: a ‘Multiple Account Management System’ and ‘Copy Trading’.
Furthermore, Defone Global is committed to ensure fund security of every client. As such, they work with global banks such as HSBC, Citibank and DBS, to ensure that client funds are segregated and secured. In terms of regulation, Defone Global is regulated by the Australian Securities and Investments Commission (ASIC) with an “Australian Financial Services License”. ASIC is an independent government institution that administers stringent regulations to companies, investments, products and services as ordained by law.
“The Multiple Account Management System (MAM) features the integrated management function, allowing trade managers to manage multiple accounts with a single interface,” says Chiu. “It enables asset managers to assign trade parameters to multiple personal accounts with precision and efficiency. The same trade parameters and strategies may also be allocated to each individual account according to a pre-set ratio. The MAM assists you with trade management while also enhancing your management experience.
As a result of their wealth of expertise, Defone Global cater for a highly diverse range of clients, including retail, institutional and white label. Regardless of the class of client, Defone Global ensures that each and every one of them receives the very best possible service.
“As for Copy Trading, this enables traders to automatically copy positions opened and managed by a selected trader. Simply select a trader you trust, and the system will manage your account according to the trader’s advice.”
“Defone Global has always upheld our ‘client first’ motto, by providing clients with a fair, open, just and transparent trading environment,” says Chiu. “Clients will be able to review the strike price and execution time of each order via the firm’s back office. All transactions are guaranteed to be open and transparent, ensuring clients’ interests are not compromised. We also provide supplementary educational tools and resources, which further enhances our clients’ trading experience.
Defone Global is made up of professionals from the financial industry, including insurance, bank and securities firm, with years of experience and proven track record. They also embrace the industry’s core values, such as professionalism, loyalty, responsibility and practicality. The team will propel Defone Global into the next phase of growth. “Our key to success is the all-star team here; Defone Global is empowered to provide value-added and innovative services, thus achieving stable growth in the competitive and ever-changing financial landscape.”
“Moreover, Defone Global has an in-house risk management department to ensure all trades are executed on a timely basis. We adopt the internationally acclaimed trading platform MetaTrader4 (MT4), and we also contract professional IT companies to provide 24-hour support for the trading platform, ensuring its security, stability and reliability. As such, Defone Global puts investors first via enhancing client experience with services such as providing live global market data, FOREX market analysis and FOREX trading strategies. All of these services combined form a strong support system for investors.”
2016 is the year which Defone Global commences their global expansion plan, where they endeavour to increase their reach to potential clients from various geographical locations. As Chiu explains: “A very important foundation for expanding the firm’s international footprint is to ensure that we subject ourselves to a comprehensive regulatory regime, adhere to stringent regulation and ensure strict compliance. We have achieved this through our registration with ASIC. The next step would be to operate under the Markets in Financial Instruments Directive (MiFID). This will give even more emphasis on fund security, which would further strengthen investor confidence.”
Clients are at the heart of everything that Defone Global does, which is why they are fully aware of client and market demands, as well as the importance of maintaining a technical edge. The firm’s back office is an advanced backend support system developed by Defone Global exclusively for their clients. The functions of this personalised system are highly intuitive and value-adding, thus providing much more effective and convenient account management support.
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Wealth & Finance | October 2016
“Despite the many hurdles Defone Global Investments will need to overcome in order to achieve success, we are confident that we are well equipped to meet the challenges and continue to innovate and develop our services.�
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According to Chiu, Defone Global has competitive advantages that could potentially stir up a new wave of competition; “We have an innovative business model and multi-modular commission scheme, which we see ourselves as a pioneer. With our commitment to the STP model, Defone Global aims to become a major channel for the small-medium forex platform provider, futures providers and even banks, thus achieving high liquidity.” More specifically, Defone Global have their eyes set on expanding in China, due to its ever-increasing influence in the global economy. “We understand that the Greater China region is a huge growing market, and it is playing an increasingly important role in the global financial market, which has seen foreign investments pouring in. As such, Defone Global will be entering into the Greater China market, as part of our strategic plan. “Alongside this, Defone Global have been preparing for educational events and contesting for different awards in the financial industry, so that more Chinese investors can gain a better understanding of Defone Global. We will also be participating in the 14th Shanghai Money Fair (2-4 Dec 2016), this will mark our debut in the Greater China market.” Greater China is a highly competitive environment, and FOREX trading is no exception. As Chiu explains: “Due to the rising of the Greater China market, many forex trading platforms have emerged. As a result of many major events that unfolded, only the fittest have survived. Hence, there is a need for sustainable development and providing a comprehensive suites of services, so as to provide innovating and value-adding services to investors, such as enhanced platform and customisable software, and tapping on rich international resources to provide a comprehensive financial management solution for clients, coupled with providing sound advice and tailor-made investment plans. This will provide an even more value-added solution.” Although Chiu is optimistic about their investments, he is still cautious considering the unpredictability that surrounds the financial markets at present. “2016 is a year of uncertainty, be it real estate or the stock market,” says Chiu. “With this uncertainty, investors have remained cautious by allowing funds to idle. However, the forex market has outshone the industry. As an international platform provider, we are exploring how we can market Defone Global’s professional and quality platform, as well as improving our service delivery to retail, institutional and white label clients. By providing small-medium platform providers liquidity and system, only then can Defone Global become a market innovator. After the financial crisis, black swan events have become more frequent, causing big and small financial service platform providers to crash. It is therefore essential to find a solution to survive and outlast such events. “In the current climate, the STP model has overtaken the Market Maker model, and coupled with mature risk management, service providers will be able to withstand a black swan event, and providing an innovative and sustainable model.
Company: Defone Global Investments Name: Jones Chiu Email: admin@dgifx.com Web Address: www.dgifx.com Address: Level 36, Gateway Tower 1 Macquarie Place Sydney NSW 2000 Telephone: 61 2 80513030
“Despite the many hurdles Defone Global Investments will need to overcome in order to achieve success, we are confident that we are well equipped to meet the challenges and continue to innovate and develop our services.”
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Wealth & Finance | October 2016
Best in Funds 2016
The Future of Private Equity
SilverArrow Capital is a group of private investment firms - focusing on industrial growth sectors, real estate and infrastructure projects - supported by a leading global advisory and operations team. We got the exciting chance to speak to Thomas Limberger, founder and CEO of SilverArrow and Robert Schimanko CEO of Prime Capital, to ascertain how their ‘performance equity’ investment strategy is the way forward for the private equity industry.
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ince SilverArrow’s inception in 2010, the company has seen continued success, now with offices in London, Munich, Dubai. Alongside these operations, their asset management branch Prime Capital Management operates out of Switzerland, taking care of their various funds under management, headed by Robert Schimanko.
Schimanko. “In addition, we handle larger commercial real estate investments mainly in Germany, Austria and Switzerland, including financing advice and packages though our global banking network.” In terms of sectors, SilverArrow focuses on industrial and high-tech quoted companies in which they see substantial value added through their active involvement, where the responsibility becomes a motivating factor to drive them towards further success. “We recognise that the active use of our shareholder voice carries an infinitely greater responsibility,” says Limberger. “We regard ourselves as entrepreneurs, adopting a handson approach to our investments. We acquire mid to long-term strategic stakes, devise detailed, long-term plans and are committed to creating long-term value.
When asked about the secret behind their steady growth since inception, Limberger says that “basically, we bring value to our private investors and partners by executing a proven activist investment strategy in industrial growth companies. We provide qualified investors selected exposure to real estate through a focused range of investments tailored to their requirements. “Furthermore, our investment and operation professionals are deeply committed to our partners and clients by applying our tremendous inhouse expertise in complex financial strategies, as well as leveraging our truly global industry knowledge. The result of this knowledge pool is our specialised advisory group giving high-quality industrial and financial advice to our clients.”
“Moreover, active ownership implies constant interaction and collaboration, focusing on the internal business drivers to unlock long-term value,” Limberger comments. “We proactively share with management and other shareholders our vision and ideas about how to catalyse future sales and profit potential. We drive value creation, by engaging in proactive dialogue with management on an ongoing basis, in order to implement the required fundamental changes as rapidly as possible. As owners, we are prepared nonetheless to enforce our rights over company managers and directors.”
SilverArrow are specialised in activist investments in EU and US public equity, which they like to call ‘performance equity’. Their approach is to have maximum flexibility for both their partners and themselves. This proven approach in this asset class, includes a number of different attributes. As Limberger outlines, “we are specialists in public equity, and have a ‘skin in the game’, so to speak. We average between 30-40%, and have no lock-up for our investment partners due to having a project timeframe, that is usually less than three years. “
In an economic climate that, in the wake of Brexit, could best be described as highly reactive and unpredictable, SilverArrow’s level of research and hands-on approach has been fundamental to any of the blips that have hit any other companies during this period. “In essence, we are value investors focused on long-term fundamentals”, Schimanko reveals. “However, we do more than identify valuation gaps. The cornerstone of our value creation approach is to identify the strategies required to help companies fulfil their potential. We facilitate the initiatives that will increase their sales and improve their operational, financial and organisational capabilities.
“The returns simply speak for themselves”, Schimanko added. “In our recent investment (NASDAQ company) we have achieved a return of over 40% within 14 months.” SilverArrow’s successful industrial fund vehicle (Pluto), which they have managed since 2014, has seen an outstanding performance over the past years. With their conservative but focused investment strategy, the fund has returned on average 12% - 18% annually (ISIN-EURO: VCP7924J1096; ISIN USD: VCP7924J1179).
“Our intensive research and analysis allows an intimate and unrivalled knowledge of all our investments. Before investing, we become the leading external authority on each company by conducting in-depth, 360-degree due diligence. After investing, we increase transparency further thanks to our ongoing interaction with company management and directors. In accordance with best management practice, we closely monitor all relevant internal and external developments and adapt our plans
“We are very proud of this achievement, which underlines our exceptional analysis expertise and strategy of our investment council,” says
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on an ongoing basis. As circumstances change, we develop and facilitate new strategies and initiatives to ensure value maximisation. “Ultimately, we recognise that the creation of sustainable value requires patience and determination. We will not abandon solid long-term investments when confronted with short-term issues. Neither will we wait forever. If change is too slow, we try to accelerate developments from the inside and the outside.” With 2016 being such an exciting year so far for SilverArrow, Limberger is quite understandably optimistic about the end of 2016 and beyond. With an approach that served them so well, coupled with their appetite to innovate and adapt, they believe that they are well equipped for any challenges that come along the way. “Our business model has clearly shown that we are capable of successfully executing our activist strategy with a truly premium performance. Our clear goal is to intensify the fund raising process, which in part fuels our acquisition pipeline. In order to accelerate this effort, we are actively looking at the USA as a platform for SilverArrow.” All in all, Limberger and Schimanko believe that the traditional model of private equity, where investors are inactive, is becoming a thing of the past. And this is where SilverArrow’s approach will continue to see impressive results. “Large investors are looking for more control, direct investments and less of the classical PE “black boxes”. With its ‘Performance Equity’ approach, SilverArrow delivers a new alternative asset class tailored to the needs of the progressive investors. We are very confident that the challenges of others are the opportunities of SilverArrow.”
Company: SilverArrow Capital Name: Thomas Limberger, Founder & CEO Robert Schimanko, CEO Prime Capital Mgmt Email: limberger@silverarrowcapital.com schimanko@silverarrowcapital.com Web Address: www.silverarrowcapital.com Address: 3 More London Riverside, London SE1 2RE, United Kingdom Telephone: +44 203 283 4062 29
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Carmichael Associates USA Financial Services Top 100
2535 Townsgate Road, Suite 213, Thousand Oaks, CA 91361 USA 001 805 379 9374 Stan@Carmicassoc.com
INVESTMENT
60-Second Interview
A Fully Hosted Technology Platform
Equinoxe provides a range of services to the alternative investment space. In an interview with the firm’s Alan McKenna, he reveals that Equinoxe’s primary business is providing fund administration services to a wide variety of vehicles and structures, including both onshore and offshore funds. They also offer a full range of middle office services and a unique product offering such as their partnership with Calypso Technology, offering a fully hosted technology platform for all of their clients.
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hat does your client base look like? We have a wide and varied client base with all hedge fund strategies covered as well as private equity and pension funds. We do not have a typical client in terms of strategy or fund structure, however all our clients have a requirement for the highest quality product combined with a real value-added proposition.
What individual in your industry and beyond do you admire the most and why? Rather than one individual in the industry, it is rather a specific set of character traits that I admire in quite a few managers that I have had the pleasure to meet. I would define these as curiosity - some of the best fund managers I have met are infinitely curious; tenacity in that they have to keep going and be there in the long run, entrepreneurship as it takes a lot to leave a 7 figure job to launch your own business and they are interesting, some in odd ways but that’s what makes it admirable.
What factors set your firm apart from others in the same field? We have a high focus on customer satisfaction through servicing. This stems from making sure we have a best in class product. In the fund admin space this means doing the basics right, no NAV restates, increased timeliness of NAV delivery, investor satisfaction through our shareholder servicing process. In addition, our unique partnership with Calypso from a systems perspective and the range and breadth of middle office services we provide through our global footprint really sets us apart as a full service value-added service provider.
In daily life as a sports fan, someone like Sarah Storey who has won 12 Paralympic gold medals which is quite incredible.
What are the most interesting challenges facing your company today? Like everyone else in the industry we are acutely aware of the challenges facing the hedge fund space in general. There has been a raft of regulations brought in which is making it more difficult for our clients to operate. This, in combination with the downwards fee pressure our clients face, means that as their service provider we need to add more value. Name: Alan McKenna Company: Equinoxe Alternative Investment Services Email: amckenna@equinoxeais.com Web Address: equinoxeais.com Address: Equinoxe house, Marina Village, Malahide, Co. Dublin Telephone: +353 1 854 8101
We need to be innovative and supportive and above all, provide a quality product so that the managers can concentrate on delivering performance for the end investor which is when you have perfect alignment and goal congruency amongst all participants in the market. So the challenges for us and the industry, are to innovate and move forward and evolve to be that business partner our clients need. Looking to the future, what is the main objective for your company? I think this is really answered through the last question. In the future we need to continue to evolve and add value for our clients. At the moment this means working in a co-sourced model where we deliver systems and people so that they can operate to the best of their ability by concentrating on fund management and allowing us to provide them an institutional scalable infrastructure that evolves with them.
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Wealth & Finance | October 2016
International Real Estate Excellence
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A Pioneer in Property Incorporated in 1982, Raine & Horne International Zaki + Partners Sdn. Bhd. is a firm of chartered surveyors and registered valuers. We profiled them to put the spotlight on their success, and find out how they continuously achieve such stellar results.
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erhaps the most distinguishing factor of Raine & Horne is the diversity of services they provide in the real estate arena. The practice covers a wide range of services including property valuation, project management, property management, real estate agency and corporate advisory in property consultancy.
They pride themselves on setting the highest possible standards in property management and maintenance. As such, Raine & Horne International Zaki + Partners Sdn Bhd provide a full range of services to meet the needs of the most discerning developers, owners, joint management bodies and corporation.
Since its inception and establishment, Raine & Horne International Zaki + Partners Sdn. Bhd. has enjoyed an outstanding and enviable reputation and success. The firm has received wide recognition from all quarters, nationally and internationally.
Another function of Raine & Horne is their services as a real estate agency. With offices and affiliates around the world, Raine & Horne International Zaki + Partners Sdn Bhd offers a full suite of specialist property services with international coverage to buy, sell and rent real estate for commercial or investment purposes. Their dedicated offices for project sales and marketing are supported by our dynamic team of agents who will strive to assist our clients in the best way possible.
Behind this success is their client-centric approach, which is at the heart of everything they do. Raine & Horne International Zaki + Partners Sdn. Bhd. aims to provide their clients with quality professional services as well as committed to the quality management system required by ISO 9001:2008 Standards.
As for auctioning, their auctioneers are licensed professionals with experience in auctioning all types of assets from properties, vehicles, goods and chattels to commercial plants and equipment. They also deliver specialised auction services involving the exhibition of their asset in the best possible light in order to positively influence potential buyers.
In order to provide the very highest quality of service, Raine & Horne’s staff all have a wealth of experience and expertise that allow them to achieve the very best results, as well as innovate and adapt to their clients’ ever-evolving needs. Their experienced team of property valuers provides independent property valuations to enable their clients to make an informed property decision.
Alongside this expertise, they conduct and prepare market research for the purpose of determining the highest and best use of land and ascertaining appropriate development proposal. Preparing feasibility studies relating to new development projects, subdivisions and/or renovation and refurbishment to existing buildings.
Raine & Horne’s Corporate Advisory Services (RHCAS) division specialises in providing corporate real estate solution to corporate clientele. Through a professional and diligent process, they seek to gain detailed understanding of the business objectives of our clients before they embark on any consulting process.
Furthermore, whenever there is dissatisfaction involving fraud and irregularities, they can also provide independent advice as well as expert witness and if an agreement cannot be reached, follow the case through to Court.
The firm recognise that their clients have individual goals and objectives, and through working closely with their clients they develop tailor-made real estate strategies devised specifically for them. They have extensive local knowledge and experience as well as broader experience gained through managing national, regional and global projects. The team also provides a balance between tactical opportunities and strategic corporate objectives.
Ultimately, Raine & Horne are a company who have adhered to a set of business practices which have resulted in growth and achievement. These practices are based on Raine & Horne’s expertise and total commitment to clients’ property needs across sales, leasing, management and consulting services for all types of property.
In terms of property management and maintenance, their team are armed with vast industry knowledge and years of proven property management experience, and their staff are able to deliver hassle free experience and return on investment. They dedicate themselves to achieve client goals innovatively and passionately together with proactive service and communications; enabling them to develop long term client relationships.
Company: Raine & Horne International Web: www.raineandhorne.com
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Green Sands Equity A Global Investor Building Impactful Companies At GSE, we invest in companies and management teams whose ideas and products contribute toward human progress and strong economy. We invest in visionary, able leaders and favor companies that have the potential to grow globally, especially in emerging markets. We find investment opportunities that bring benefit, social and financial impact, locally. Green Sands Equity (GSE) is a boutique private equity investment advisory firm. Headquartered in San Francisco with offices in Dubai, Frankfurt and Singapore, we both lead and co-invest alongside the world’s leading institutions. We focus on Growth Capital, Financial Advisory and strategic Buyouts. Through our M&A and JV services, we aid growth and globalization of companies to capture new markets. We believe in a global perspective through local partnerships. GSE was established in June 2015 as a result of the affiliation of a group of companies. While GSE is a new entity, its team’s track record can be traced back over a century.
info@greensandsequity.com
www.greensandsequity.com
INVESTMENT
60-Second Interview
Independent Alternative Asset Management
Gen2 is an independent alternative asset management firm in Asia, offering a range of innovative investment products to investors across the APAC region. Since the firms’ inception it has grown to become among the industry leaders in customised Asian Hedge Funds for institutional investors and family offices. In addition, the firm is a trusted partner to help manage investors’ exposure to Asia across all alternative strategies in the region, according to a spokesperson of the firm in this absorbing 60 second interview.
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hat does your client base look like? Sovereign Pension Fund, Sovereign Bank, Global Bank, Asset Management Co., Investment Management Co., Asian Family Office characterise our client base.
country has a lot of money internally, particularly invested in its pension funds, some of which are the third largest in the world, which is still growing rapidly. Looking to the future, what is the main objective for your company? We would like to increase our investor base and grow our assets under management by delivering uncorrelated decent absolute returns to our investors.
What factors set your firm apart from others in the same field? Our culture successfully combines an entrepreneurial partnership structure with a disciplined institutional investment process. We align the interests of the investment team with our investors as much as possible.
What individual in your industry and beyond do you admire the most and why? We respect Mark Kingdon who I used to enjoy working for him. Kingdon Capital has been managing global equity L/S fund since 1986 and delivers an outstanding 13.9% of net annualised returns.
Another differentiating factor is our proprietary risk management system. This system constantly monitors investment breaches by our portfolio managers. As such, our independent risk monitor firm and in-house risk team together produces monthly risk reports using state of the art risk management system, IMAGINE, that many of global banks and asset managers relying on.
C 2 GEN2 PARTNERS
Risk teams produce more than 30 different kinds of risk reports per fund and tracks over factors, including VAR (value at risk), scenario analysis, sensitivity analysis, cross correlations, underlying asset performance, risk factor exposure (equity, fixed income and country risks), P/L attribution, liquidity analysis, tracking versus our peer group and so on.
Company: Gen2 Partners Email: info@gen2ks.com Web Address: www.gen2ks.com Address: 7702B, ICC, 1 Austin Road West, Kowloon, Hong Kong Telephone: (852) 3727 4500
What are the most interesting challenges facing your company today? We are in the process to set up on-shore hedge fund management firm in Korea to better service Korean institutional clients and potentially bring more talents who can contribute to generate alpha and achieve absolute returns regardless of market directions. We are looking for an investment opportunity in an established asset management firm in the country, looking to become the second largest shareholder in this business. This is an exciting opportunity for our firm as the Korean investment market is currently very strong, and the
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Wealth & Finance | October 2016
Most Innovative in Wealth & Money Management
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INVESTMENT
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Investments in a Complicated and Changing World SMH Capital Advisors (SMHCA) is a privately owned investment manager based in Fort Worth, Texas. SMHCA has been managing money since 1991 under the direction of Dwayne Moyers, president and chief investment officer. Since then, the firm has expanded from a small bond shop to a firm with international clients, offering strategies in a wide variety of asset classes.
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MHCA started as a firm specialising in high yield debt, but has since expanded into many different asset classes. The original business was built on a high income strategy, which consists of a focused portfolio of 25-40 positions. When evaluating high yield bonds, Dwayne Moyers, chief investment officer and Daniel Rudnitsky, senior portfolio manager, want to look at them like a banker, examining the balance sheet for assets to cover the liabilities. The ultimate goal is to generate a high level of income over full market cycles of five to seven years. More recently, SMHCA has expanded its offerings in equity, municipal income, and alternative investments.
Dwayne Moyers elaborates, “clients and investors alike have realised that the historical allocation of 60% equity and 40% investment grade bonds is dead. Where many are still uncertain is how to allocate their investments in the complicated and changing world. I have been utilising high yield with my retail client base for 25 years now. I run a credit barbell for most of the clients, which aims to provide them a higher level of income than traditional bonds, but with less volatility than a pure high yield portfolio. SMHCA knows that this strategy works, as they have been consistently ranked by Lipper Marketplace as one of the Best Money Managers, including several number 1 rankings in 2016.”
Looking forward, SMHCA believes that these new strategies will continue to perform well and will operate as a stepping stone into significantly expanding our business and our clientele. “Over the next twelve months, I think that our new strategies will be a primary source of growth for the firm; particularly when you notice that most of them will reach their threeyear track record in January 2017. When you look at the performance of some of these strategies, combined with being consistently ranked as a top manager for our high yield strategy in 2016, I expect to see significant growth for the firm in the next 12-24 months,” Dwayne Moyers said.
SMHCA also launched 13 new strategies recently, and these will reach their 3-year track record in January 2017. “We understand that many investment managers want to wait for an established track record before investing in a new strategy, and that timeframe is usually 3 years for most managers. So far we have a lot of interest in a few standout strategies, that we think will take off and do very well once they meet the certain criteria most managers have before they will look at us for due diligence, with a three-year track record being a big one.” SMHCA manages money for an international client base, focused on institutional and separately managed accounts, but also working with investment companies, pensions, profit sharing plans, pooled investment vehicles, charitable organisations, corporations and state or municipal government entities. SMH Capital Advisors encourages investors to look at their strategies with a long term perspective, as they should ideally stay invested for a full market cycle for each strategy.
“Over the next twelve months, I think that our new strategies will be a primary source of growth for the firm.”
Furthermore, SMHCA is looking to continue to expand internationally, particularly with UCITS funds. Negative interest rates in countries around the world have changed the game for fixed income investing, providing new opportunities to firms who can provide higher levels of income to those who seek it. We believe that investing is changing, and there are many new opportunities that must be evaluated given the current context of the markets. Many investment portfolios are biased towards their own domestic investments; however, as the economy becomes more global with each passing day it is important to look at international investments equally. It is this reason that SMHCA sees international investors in their new strategies as the biggest area of growth moving forward.
The current investment world is overrun with money managers offering identical strategies, with no way to differentiate themselves from one another. SMHCA realises that these investments are not what every investor is looking for, particularly high net worth and institutional investors. SMHCA looks to provide value added investment strategies that will diversify a client’s portfolio from their current investments. For example, SMHCA’s high income strategy, consisting of a focused portfolio of high yield bonds, fills a gap between traditional fixed income and equities for many investors. Due to the fact that high yield has a slight negative correlation to treasuries, this portfolio adds a diversified income component. Diversifying income can play an important role in certain situations, such as rising rate time periods.
Company: SMH Capital Advisors Email: info@smhca.com Telephone: +1 817-569-7000
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Wealth & Finance | October 2016
Best in Funds 2016
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INVESTMENT
Brazil’s Back on Track Based in Brazil, Prudent Group are a highly renowned investment firm who provide working capital to SMEs across the country. It is a company that has a broad range of experience and expertise. The team has gradually come together over an extensive time period; in some cases the team members have worked together for more than two decades. We initially set up in 2010, and today have offices in both Porto Alegre and Sao Paulo. The firm’s Brazilian headquarters are in Sao Paulo, and we conduct most of our collateralized lending activities in the southern part of Brazil, which is the economic powerhouse of the country. In fact, something like 80% of Brazil’s GDP is generated in the regions where we are located.
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hroughout the years, Prudent has financed a high volume of short-term secured commercial transactions with the typical receivable maturing in 60 days. We participate in the supply chain financing of businesses through receivable transactions with recourse (recourse means we have personal guarantees by the owners of the company). We firmly believe that our non-banking financial industry, is playing a vital role in the recovery of the Brazilian economy, whereas the banking sector continues to shrink their loan books.
Looking to the future, we are confident that we will continue to expand our current client portfolio. We offer many different products to different type of investors from high net worth, family offices to smaller and larger institutional investors. This includes open funds, separate mandates, uninsured or insured products and separate note programs. Our analysis concludes that supporting the entrepreneurial spirit of the economy, the growth engine of tomorrow, and to partake in the prosperity of these companies is not only a safe, predictable but also a profitable strategy. With this in mind, we will continue to introduce products that meet the increasing regulatory requirements, while at the same time be allowed to offer enough flexibility to maintain their attractiveness. Generally, the issue boils down to finding an attractive trade-off between liquidity and return on one hand and enough regulatory structure and visibility on the other.
A continuing trend in our economy is that the demand for working capital is increasing as suppliers who have survived the great recession look to fill a growing order book. However, the banking sector is reluctant to increase their credit exposure to small and medium sized companies, and therefore this has provided the big opportunity for Prudent to grow and generate superior returns.
On a final note, I would just like to say that we sincerely appreciate this award by Wealth & Finance International. For any of your readers that are interested in investing with us, feel free to enquire about more information at: info@prudentgroup.us.
As such, the volume of commercial transactions that we can finance is growing. At Prudent, we provide a variety of entry points for global capital to participate. For equity investors, we have the Prudent Investment Fund domiciled in Luxembourg. For alternative fixed income and private equity investors, we have the Prudent Enhanced Yield Note Program also domiciled in Luxembourg. By providing an alternative to the traditional banking sectors support of working capital, Prudent provides a chance for the clients we work with to add more employees, increase velocity of capital, and simply take in and fill more orders.
Please note that we do not offer any products directly to retail investors and only offer our services through regulated products and distribution channels. We currently operate through a Luxembourg Fund Structure and have local registration in Sweden and Germany. Over time this will change as we are pursuing a wider range of market opportunities in different continents. Watch this space!
As CEO, I split my time between our office in Porto Alegre and our main office in Sao Paulo. I am also a director of the fund vehicles domiciled in Luxembourg. The challenge that I face every day, is to run the business in a way that meets global standards, while at the same time is consistent with how Brazilian employees are used to working effectively. Our local staff in Brazil is almost exclusively Brazilian, except for our chief investment officer. Furthermore, there are capital controls and a myriad of administrative rules which complicate some aspects of our business. At the same time, I am very excited about our opportunities and our operation’s growth potential. With Brazilian banks pulling back and cutting credit lines, the field is open for us to expand the volume of commercial financing that we are doing. Furthermore, we have recently initiated an insured business, where the receivables that we work with are insured by one of Europe’s leading insurance companies. This is a validation of our operation and provides additional protection for our investors.
Company: Prudent Investment Fund Name: Giovanni Cataldi, CEO Email: Info@prudentgroup.us Web Address: www.prudentgroup.us
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www.alliedwallet.com
RETIREMENT
Happy 100th Birthday: A Record Number of Centenarians Raise Retirement Risks Figures from the Office for National Statistics [1] (ONS) show that there are a record number of centenarians in the UK. This population has quadrupled over the past thirty years. In 1986, there were estimated to be 3,640 centenarians. The latest figures put the number at 14,570.
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agingly, over 200,000 savers have used the tool in the past year - http:// www.aviva.co.uk/retirement/tools-and-calculators/my-retirement-planner/
o put this in context, 14,570 people equates to 234 London buses. To bring this transformation to life, the British monarchy began the tradition of sending telegrams to centenarians in 1917. In 1917 King George V sent just 24 congratulatory messages. Our longer lives are to be celebrated, but they also have implications for how we plan for and manage our retirement.
“For a typical man to fund for an unexpected three-and-a-half years of life expectancy could require more than an £35,000 in extra pension savings .”
Women are better at guessing life expectancy then men Aviva research found that we are very poor at estimating our life expectancy [2]. Men in Britain guessed that they would live for another 15 years beyond the age of 65. Official statistics put the actual estimate at 18.5 years [3]. Men therefore underestimated by 42 months. Women in Britain guessed that they would live for another 19 years beyond the age of 65. Official statistics put the actual figure at 20.9 years. Women therefore only underestimated by 23 months.
Sources [1] http://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/bulletins/estimatesoftheveryoldincludingcentenarians/2002to2015 [2] http://www.aviva.com/media/news/item/uk-how-long-will-ilive-17458/ [3] http://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/20132015 [4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/540393/Pensions_Flexibility_July_2016.pdf [5] Aviva’s calculation: Median gross salary in the UK is £27,600. Targeting two-thirds of this sum in retirement equates to £18,200 each year. c£8,000 of this could be provided by the state pension. Aviva’s research indicates that men are likely to live for three-anda-half years longer than they expect. A simple calculation indicates that £35,700 would be needed to fund the unanticipated threeand-a-half years of life expectancy.
Thousands need to guard against running out of money Latest government figures [4] showed that 159,000 people took flexible payments from their pensions in Q2 2016 under the new ‘freedom and choice’ rules. This was a record high. The new pension flexibilities combined with our growing life expectancy increases the need for us all to carefully manage our retirement plans to avoid running out of money. Commenting on the figures, Alistair McQueen, savings & retirement manager at Aviva said: “A record number of centenarians is a cause for celebration. It also increases the need for us to plan for and carefully manage our retirement. Aviva welcomes the new pension freedoms. We welcome choice and believe our customers should be trusted with their own money. It also raises the need for greater support for savers to guard against the risk of running out of money in retirement.
www.aviva.co.uk
“For a typical man to fund for an unexpected three-and-a-half years of life expectancy could require more than an £35,000 in extra pension savings [5].” Free tools are available to help savers. For example, Aviva’s online Retirement Planner gives an indication of life expectancy and helps savers calculate how much they may want to save to fund their later life. Encour-
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RETIREMENT
Under 35s Lead the Way in Britain’s Pension Revival New figures released by Her Majesty’s Revenue and Customs [1] challenge the perception that the younger generation are living for today and neglecting the need to save for their future. Under 35s now represent the largest group, making up 34% of all those who contribute to personal pensions. This is the biggest percentage of all age groups. 35-to-44 year olds represent 24%; 45-to-54 year olds represent 26%; and over 55s year olds represent 16%.
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.7 million under 35s are reported to be contributing to a personal pension. This is the highest number since records began in 2001, and up a staggering 30% on the previous year.
billion. This is nearing the peak of £20.9 billion contributed in 2007-08 ahead of the financial crisis and the downturn in the UK economy. One area of concern is the decline in saving amongst the self-employed community. The number of self-employed people saving in a personal pension has fallen to 380,000 in 2014-15. This is lowest number since records began in 2001, and down from a peak of 1.2 million in 2002-03.
There is more encouraging news. The figures show that more individuals are now contributing to personal pensions than since records began in 2001. The figures show that in 2014-15 7.9 million individuals contributed to a personal pension. The previous high was 7.8 million in 2002-03. The total amount contributed to personal pensions in 2014-15 was £20.3
Commenting on the figures, Alistair McQueen, savings and retirement manager at Aviva, said: “This is a good news story for pensions. The number of people saving in personal pensions is up and the amount being saved is nearing an all-time high. The financial challenges facing the younger generation are well reported – including rocketing property prices, student debt and job insecurity. It is therefore hugely to their credit that they are leading the way in Britain’s pension revival. “As the number of people who are self-employed continues to increase – reaching 4.7 million in the latest official statistics [2] – it is concerning to see the number of savers in this community continues to fall. “Automatic enrolment has played a big part in this pensions revival. In 2017, the government will review the future of automatic enrolment. Aviva is committed to its continued success and has launched its own Pre-Review ahead of the government’s formal review. We will present our findings at a summit in London on 15 November. This will be led by Aviva’s UK Life Chief Executive, Andy Briggs, and will be joined by leading stakeholders from across the industry, including Pensions Minister Richard Harrington MP.” [1] https://www.gov.uk/government/statistics/personal-pensions-statistics-introduction [2] http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/september2016 www.aviva.co.uk
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Wealth & Finance | October 2016
Child Savings Accounts Face Gruelling Cuts It is unusual to see a mass of rate cuts on children’s savings accounts, but the latest research by Moneyfacts.co.uk reveals this is exactly what’s happening. More than 100 rate cuts have been made over the course of 2016 to child savings accounts, so much so that some deals are now paying as little as 0.10% per year.
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isappointingly, some of the fixed rate regular child savers have faced cuts of up to 2.00% this year, while some JISAs have had cuts of up to 2.25%. Furthermore, variable rate child savers have been reduced over the last few weeks due to the base rate cut, with some cut by as much as 0.55%.
“If a good deal turns bad then it’s wise to consider switching to another account. For example, for Junior ISAs, Coventry Building Society currently offers a ‘best buy’ deal paying 3.25% and accepts transfers in - just keep in mind that this is a variable rate so it could change over time. “Some fixed regular savers still offer considerably higher rates than alternative child savers. For example, Halifax and Saffron Building Society have a 12-month fixed regular saver paying 4.00%, which is the highest rate around. Maxing out this account will earn £48.97 in interest over one year on a £1,200 investment compared to £36.05 in interest from the best child’s easy access account paying 2.96% from HSBC.
The best Junior ISA thankfully retains a Best Buy rate of 3.25%, which is a much more competitive return than the best easy access child saver, which pays 2.96%. Average children’s saver rate* Best JISA rate Best variable children’s saver rate Lowest variable children’s saver rate
Oct-14 Oct-15 Oct-16 1.54% 1.61% 1.39% 3.25% 3.25% 3.25% 2.97% 2.97% 2.96% 0.20% 0.10% 0.10%
“Next month will mark the five-year anniversary of the launch of Junior ISAs, and while these have brought some decent deals into the market over the years, now would be a good time to review any stagnant deal and consider moving the cash to something more competitive.
Source: Moneyfacts.co.uk “Unfortunately as the majority of child savers pay variable rates, they are in danger of rate changes at any moment, so it’s worthwhile to be diligent in checking the savings pot on a regular basis and not put up with any paltry interest.”
Rachel Springall, finance expert at Moneyfacts.co.uk said, “it’s hugely disappointing to see children’s savings accounts facing the same treatment as adult accounts, but this just shows how important it is for parents to review the rate regularly to make sure the account remains competitive. More bad news is yet to come, with Halifax slashing its 4% existing customer JISA to 3% for those who hold its adult ISA, and we are unlikely to have seen the last of these JISA cuts.
*Interest rates shown are gross rates. The average children’s savings account rate is based on a £1,000 deposit and includes all variable and fixed term children’s accounts, but excludes regular savers and Junior ISAs.
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BANKING
U.S. Bank Increases SBA Lending 7.9% to $838 million in FY 2016 U.S. Bank ended the 2016 Small Business Administration (SBA) fiscal year on 30th September with $838 million in SBA loan volume, an increase of 7.9% compared to fiscal 2015. The fifth-largest bank in the country, U.S. Bank maintained its rank as the third-largest SBA lender by volume and fourth-largest lender by units, with 3,285 total loan commitments.
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.S. Bank ranked first in both units and volume in four SBA districts: Iowa, Kentucky, Portland and Seattle/Spokane. U.S. Bank was also first in units in Kansas City, North Dakota, St. Louis and Tennessee, and first in volume in New Mexico. It was first time that U.S. Bank rose to the number-one position in Iowa and New Mexico. U.S. Bank was in the top three in either units or volume in a total of 28 SBA districts, up from 24 last year.
employees and strengthen their communities.” SBA-backed loans can be used for variety of business expenses from equipment and real estate to working capital.
“Even though we’re the fifth-largest bank in the country, we’re the third largest SBA lender, which is remarkable,” said Ross Carey, head of business banking at U.S. Bank. “The results affirm our commitment to small businesses and the communities we serve. Our bankers are local. They are part of the community and building relationships with business owners they know both personally and professionally.”
Small business owners also benefit from the information and free resources U.S. Bank provides, including its small business site, U.S. Bank Connect(TM), which includes helpful advice, resources and networking opportunities. Follow U.S. Bank Connect on Facebook and Twitter. For more information on U.S. Bank’s full service offering to small businesses visit usbank.com/smallbusiness.
“With more than 3,100 banking offices in 25-states, the impact of U.S. Bank’s SBA lending can’t be underestimated,” said Erik Daniels, head of the SBA Division at U.S. Bank. “Our SBA lending activity made it possible for thousands of small business owners to grow their companies, hire
U.S. Bancorp (NYSE: USB), with $438 billion in assets as of June 30, 2016, is the parent company of U.S. Bank National Association, the fifth-largest commercial bank in the United States. The company operates 3,122 banking offices in 25 states and 4,923 ATMs and provides a comprehensive line of banking, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com
In addition to SBA lending, U.S. Bank meets the needs of small businesses with a wide range of products and services that include deposit accounts and cash flow management, card payment and acceptance tools, equipment leasing and wealth management.
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Wealth & Finance | October 2016
DeVere Mortgages Partners with Al Rayan Bank to Offer Sharia Compliant Home Finance deVere Mortgages and Al Rayan Bank on 11th October 2016 announced that they have entered into a strategic partnership to offer Sharia-compliant mortgage alternatives to the growing number of expats looking to purchase property in the UK.
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he alliance follows deVere Mortgages’ reporting of an average 55% week on week increase in mortgage enquiries since the UK’s EU referendum, with the majority of these applications from people living in Qatar, the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain, and Oman (GCC countries).
He continues, “the tie-up with Al Rayan Bank will add real value to our core market, which is Muslim and non-Muslim buyers based overseas who are looking to purchase property in Britain. “This is because, being an Islamic Bank, Al Rayan Bank’s home finance does not involve interest, which is prohibited in Islam; additionally, they do not charge arbitrary fees to customers, meaning that up-front costs tend to be significantly lower than with many conventional banks. Also they do not automatically assume that those living overseas are ‘high risk’ as many other banks do; and they don’t insist on clients being employed by large multinationals.
Mike Coady, managing director of deVere Mortgages, comments, “we have seen growing demand from our Group’s 80,000 clients around the world for Sharia-compliant mortgages. We have been consistently impressed by the products and services delivered by Al Rayan Bank, and we look forward to expanding together as a result of this partnership.”
“There’s a clear synergy in the partnership, with Al Rayan Bank - the UK’s largest Islamic retail bank, having increased its expat financing by 141% since 2013, and with deVere Mortgages - backed by one of the world’s largest independent financial advisory organisations, being launched as a standalone brand in 2015 due to soaring demand from overseas clients.” Sultan Choudhury, CEO of Al Rayan Bank added, “I am delighted to announce the strategic partnership between Al Rayan Bank and deVere Mortgages. As one of the world’s leading independent financial consultancies, deVere Mortgages will help us to reach an even wider group of people who are looking for ethical, Sharia compliant home and property finance. “We will focus in particular on British expats who, for a variety of reasons, can find it difficult to obtain home finance in the UK whilst they are working overseas. We identified the expat market as an underserved sector some time ago, targeting resource towards it accordingly. As a result, we have experienced significant growth in this area of our business.” Al Rayan Bank is founded on faith-based, ethical principles that derive from trade, entrepreneurship and risk-sharing, in which the customer and bank work together as partners towards a mutually profitable end. Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and is a member of Financial Services Compensation Scheme. www.devere-group.com
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MORTGAGES
UK Mortgage – Variable Rates Rising Despite Base Rate Cut Moneyfacts UK Mortgage Trends Treasury Report data highlights that the average two-year tracker rate has increased by 0.07% in just one month, bringing the figures back to July 2016’s level and cancelling out the ‘base rate effect’.
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“With the fixed rate mortgage market highly competitive and lenders preferring to lock borrowers in for a longer term, there is no wriggle room to increase rates in this area. So, the variable rate market is an easy target for increased rates. The current popularity of this type of product remains to be seen, but anyone looking for a mortgage should seek financial advice to ensure they obtain the best deal regardless of type.”
harlotte Nelson, finance expert at Moneyfacts commented, “after the average two-year variable rate reached an historic low in September following the Bank of England’s cut to base rate, a logical assumption would have been for the market to stabilise at this new low. Instead, it has increased back to the level it stood at shortly after the EU referendum. This increase has effectively offset any reductions that may have occurred after the base rate announcement on 4th August.
The Moneyfacts UK Mortgage Trends Treasury Report provides an indepth monthly review of today’s changing mortgage trends, including all the relevant facts on the UK’s residential and buy-to-let markets.
“This increase to the average two-year tracker rate reflects the uncertainty in the market. Providers are facing heightened risks as a result of the wider economic issues such as house price stability and a potential increase to the inflation rate, which may affect household expenditure. This has likely made the low level seen in September unsustainable.
www.moneyfactsgroup.co.uk
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1610WF08
Large Cap Top Fifty
Wealth & Finance | October 2016
Sustained Success
As we enter 2017, Bee’ah successfully completes 10 years in the industry. It was founded in 2007 through an Emiri decree by His Highness Sheikh Dr Sultan bin Mohamed Al Qasimi, Member of the Su¬preme Council and Ruler of Sharjah as a Public Private Partnership (PPP) with the Sharjah City Municipality. Since then, Bee’ah has taken great strides to adopt the best practices and has become a beacon for innovative waste management solutions in the region.
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aste Management Solutions We owe our success primarily to our sustainable waste technology and are constantly in search of new solutions that can improve current waste management techniques, whilst positively effecting the environment. One example is the automated route optimisation system, which is a GPS-mapped technology that allows waste collection vehicles to receive signals from full bins, in order to rapidly dispatch and collect the waste from the relevant bin.
For example, we signed a contract last year with Burj Khalifa, the tallest skyscraper in the world located in Dubai, to manage the collection, trans¬portation and processing of its waste. We have also been tasked in implementing recycling logistics and integrated waste manage¬ment services for the tower. Expansion Looking towards the end of 2016 and beyond, we are optimistic that our tenth year will deliver even greater results for our business. We are currently in discussions with key entities in Saudi Arabia, particularly in Jeddah and Riyadh, to lead and deliver environmental change in the Kingdom. Other countries within the GCC region are also being considered. Additionally, our waste to energy facility is now in the pipeline. This facility will greatly reduce energy usage in Sharjah and provide an al¬ternative source of energy for the local community. Alongside these services, we offer our consultancy to the American University of Sharjah and Wharton School, University of Pennsylvania, as well as professional and practical advice to improve their students’ knowl¬edge on waste management in the UAE.
Furthermore, Bee’ah’s Waste Collection and Cleansing department – Tandeef, boasts a fully electrical fleet comprising of public cleansers, sweepers, washers, leaf collectors, and litter pickers – that are easy, convenient, low noise, and completely sustainable. Most of Bee’ah’s vehicles now use low sulphur diesel to curb emissions and help preserve natural resources. Additionally, we have vehicles that are powered by CNG. Innovation in Waste Management The introduction of Bee’ah’s Wi-Fi bins, is our way of champi¬oning innovative 21st century technology, whilst keeping an eye on the future. The Wi-Fi bins offer an open internet connection to the public and are dou¬ble-streamed for increased solar capacity. They also come equipped with sensors to detect when the bin is full. The solar panels on the bins provide energy to an internal compactor, which allows the bins to collect five-times more refuse before needing to be emptied.
Achievements All of our contributions combined have helped us in collecting numer¬ous accolades for our efforts. For example, we have been the recipients of the Facilities Management Awards from 2011 to 2015, Green Middle East Award from 2011 to 2013 and The Green Era Award in 2015. We were also placed in the Top 50 Chief Information Officer ranking in 2013. In total, we have won more than 20 awards in less than 10 years. Although we might come across as a technology-centric organisation, we still consider ourselves a very people-orientated company. Our staff are the building blocks of our success and without them we would not be renowned for our effi¬ciency, technology and high standards. Therefore, we do our utmost to ensure that our employees are properly trained to fulfil their roles in this burgeoning industry.
Growth Over the past nine years we have experienced a significant amount of growth, both internally and externally. For example, Bee’ah started with only a handful of passionate professionals but now operates with more than 4000 skilled employees. Operationally, Bee’ah has more than 100 ac¬tive commercial contracts in different emirates and geographically, we have reached into Abu Dhabi, Ajman, Dubai and Saudi Arabia, amongst others. Commercial Services In terms of clientele, we have a large portfolio of acclaimed clients in a vast array of industries, ranging from major banks, legal, insurance, logis¬tics and education to hospitality, telecommunication, medical and retail.
We are the Future Ultimately, Bee’ah is committed to improving and enriching the quality of lives in the UAE and the region. We want the best for our community and our future communities and we hope to lead the path to environmentally-friendly practices in the Middle East and around the world.
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SUSTAINABILITY
Company: Bee’ah Name: Fahad Shehail, Chief development officer Email: info@beeah.ae Web: www.beeah.ae Address: 1st floor, Lagoon Tower, Corniche Street, Al Majaz 1, Sharja United Arab Emirates Phone: +971 6 572 9000
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People who left a gift in their Will to the GLFB in the past are playing a significant part in the lives of people dealing with sight loss.
Help us Build a Brighter Future
Although some of these supporters may have passed on, their foresight in leaving a legacy is making a real and lasting difference to visually impaired children and adults today. This is because gifts left in Wills are helping to provide services that reduce the isolation sight loss so often brings, enabling people to live much happier, more fulfilling and independent lives.
Insight
Isn’t that the kind of legacy we would all love to leave? Please accept our heartfelt thanks if you have already remembered the work of the GLFB in your Will. If you haven’t already done so, please do consider whether you could support our work in this very special way once you have made provision for your loved ones. All legacies, be they large or small, help to change lives. If you would like more information about gifts in Wills, please call us on telephone number 020 7620 4918 or by writing to us at the address below.
3
Issue Three Autumn 2015
Every day 100 people in the UK start losing their sight – that’s one person every 15 minutes. Sight loss affects people of all ages this edition of Insight you andIn it can strike at any time. A legacy giftfind: to the GLFB will help will ensure that we can provide specialist care from the point • News of how your donations of diagnosis. Thank you.
have helped to fund local blind welfare services
• The positive and lasting difference your support is making to the lives The Greater London Fund for the Fund was established in 1921 to provide blind welfare services in London. of people withthrough sightvoluntary loss donations including gifts in wills, enable us to reach 50,000 people every year. Today, the services we fund,dealing made possible Greater London Fund for the Blind, 12 Whitehorse Mews, 37 Westminster Bridge Road, London, SE1 7QD. • Legacies: leaving a gift of a lifetime Email: info@glfb.org.uk Website: www.glfb.org.uk Registered charity number 1074958.
SUSTAINABILITY
The EBRD Expands the Concept of Sustainability The Green Economy Transition (GET) approach is part of the EBRD’s overarching aim of protecting the environment and encouraging more sustainable use of resources. Here, two senior members of the EBRD’s Environment and Sustainability Department describe the EBRD’s broader sustainability work.
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With the adoption of the Green Economy Transition approach comes an explicit acknowledgement that climate change and environmental degradation represent a systemic market failure, one that impedes economic activity and human wellbeing.
ollution prevention, gender, economic inclusion, stakeholder engagement, environmental infrastructure, green cities, climate mitigation, road safety, food security, SME and micro-lending … if you start mapping the activities that could reasonably fit under the banner of “sustainability”, you quickly find that there are very few parts of the EBRD’s work that are not linked to it in some way.
Our sustainability agenda aims to achieve economic growth and recognises that resilience and stability must be built on balancing the economic, environmental and social dimensions of sustainable development.
This goal both drives what we do and how we do things. We report annually on these issues in our Sustainability Report. This is not new. The EBRD was established when its region was facing an environmental crisis, carrying the communist era’s legacy of environmental neglect and wasteful use of energy. Many legacies of this time are still with us, the Chernobyl Shelter project being a stark reminder of the long-term consequences of short-term thinking. The EBRD was created partly to help address these problems and mandated to promote environmentally sound and sustainable development.
As the video above shows, in 2015 this meant, for example, financing effective waste water treatment for 1.8 million people or supporting renewable energy projects that will generate 3.5 Terawatt-hours of clean energy each year without compromising the affordability of these basic services to people. That’s enough electricity to power 750,000 homes. Closer to home it means buying green electricity for our offices and paying at least the London Living Wage to contractors and suppliers working at HQ. We are now being asked to build on our success, founded on linking the public and private finance, to implementing high-level policy goals through concrete projects on the ground.
Recent events, from the financial crisis of 2008 to natural disasters, have caused growing global uncertainty. We face an unprecedented challenge to put our world on a sustainable path. The 17 Sustainable Development Goals (SDGs) and 169 targets accepted by all countries last year demonstrate the scale of this new universal agenda. The need for ambition was underlined at the Paris COP21.
If you were to connect the dots between the Sustainable Development Goals and sustainable waste management in the Kyrgyz Republic, there is a good chance the line would pass straight through an EBRD office. We are well placed to incubate and try new ideas, for example working with clients to find new ways of doing something positive about gender equality that also adds value to the business.
Estimated financing needs are enormous. Governments around the world are looking to the EBRD and other multilateral development banks (MDBs) to lead in supporting the implementation of the SDGs and COP21 resolutions. The key is bridging public and private sector policies, interests and finance. As well as using more of their own resources for sustainable investments, MDBs have also led the development of the green bond market to help mobilise private sector financing for climateand environmentally-friendly investments.
We are also being asked to be more transparent about what we do. Good governance sits at the heart of sustainability, and accountability sits at the heart of good governance. That applies as much to the EBRD itself as it does to the clients and countries we work with. We face continuous requests to provide more quantitative and qualitative information on the impacts and outcomes of our work.
For 25 years, the EBRD has expanded the concept of what sustainability means, from a narrow focus on pollution control to a more holistic and integrated consideration of environmental, climate, labour, safety and social issues through the implementation of the Environmental and Social Policy.
Finally, we are being asked to act now. Climate change is one challenge that is definitely easier and cheaper to mitigate quickly than adapt to its consequences slowly. As Martin Luther King said, albeit in a very different context, “We are now faced with the fact, my friends, that tomorrow is today. We are confronted with the fierce urgency of now. In this unfolding conundrum of life and history, there is such a thing as being too late”. www.ebrd.com
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Wealth & Finance | October 2016
Six Months of Success for First TaxAssist Accountants Australian Franchisee TaxAssist Accountants’ business model has helped its first franchisee in Australia, Avendra Narayan, enjoy a highly successful six months providing small business services to Sydney’s Liverpool district.
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ince opening his welcoming and highly accessible shopfront on Scott Street, in March 2016, Avendra along with his daughter Priya Narayan and two members of staff, have already signed up more than 20 small businesses. With a fee bank in excess of $30,000, Avendra’s shop is already well ahead of his one-year target projections.
Terry Murphy, the master franchisee for New South Wales, Queensland and ACT has been delighted by the success of his first franchisee. He said, “I have been most impressed by the exceptional start Avendra has made. He really is a great ambassador and standard-bearer for the TaxAssist Accountants’ brand as we begin our expansion across New South Wales and beyond.
Avendra said: “I could not be happier with the way my business is growing. Following TaxAssist Accountants’ shopfront business model has worked superbly as having a highly visible business encourages walk-in clients. The shop concept combined with the high referral rate from clients who have been impressed by the level of service they have received, means that my business continues to grow.
“Avendra has taken on board all of the training and advice provided to him, and has networked with enthusiasm, building strong working relationships within his local community. I could not have asked for a better example for other franchisees to take inspiration from. “We are also delighted that two more franchisees have joined TaxAssist Accountants in Chatswood and Sydney CBD since Avendra started trading, with further expansion planned in the near future.”
“The marketing and technical support I have received from the TaxAssist Accountants’ team has been excellent, and I am keen to expand my business further by acquiring a second exclusive territory and shop in the near future.”
www.taxassistfranchise.co.uk/international/australia
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TAX
Flexible Working and Tax Breaks for Start-Ups Needed to Open Floodgates for More Women in Financial Services
The introduction of compulsory flexible working hours would open the floodgates to more women working in the UK financial services industry, according to Sturgeon Ventures, the leading regulatory ‘incubator’ or ‘umbrella’ firm that submitted its four pledges to HM Treasury’s Women in Finance Charter in today’s release by the Government.
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Sturgeon Ventures’ four pledges include: • Support five women into senior management/board level roles at the financial services clients we work with, and maintain at least 50% of their own senior management team as women • Support five women who wish to continue their financial services careers to be retained in consulting, contracting and other permanent positions in the sector. This includes encouraging and supporting continual training of these women • Support five women, who would have otherwise been lost to the industry, to continue or return to careers. This would likely include giving working mothers flexible hours with the option to work from Sturgeon’s office or at home • Support Schools in the United Kingdom - to speak to at least two schools from Year 11-13 in the next financial year on gender diversity in financial services and encourage aspirations to work in front-office roles with no gender bias
turgeon is also launching a campaign for the government to initiate tax breaks for those start-up companies in which women account for at least half of senior management.
Seonaid Mackenzie, managing partner at Sturgeon, commented: “there are many women all across the UK with a tremendous amount of experience and who could re-enter the financial services industry but can’t because of the insurmountable difficulties of juggling family care with inflexible nine to five working hours. “Financial services start-ups could benefit enormously by tapping into this overlooked workforce and the government should be actively encouraging this by offering them tax-breaks, especially for start-up financial services companies appointing women to 50% or more of their senior management roles. Such moves would add substantial dynamism to the UK financial services industry, which is especially relevant in the wake of the Brexit vote.
Sturgeon also encourages those start-ups that it provides with regulatory to exploit the ‘Gender Dividend’ by implementing similar measures to its own.
“At Sturgeon we firmly believe that diversity amongst our team improves innovation, decision-making and the way we deliver our services. Women today represent 80% of our workforce and we aim to always maintain 50% in senior management in accordance with our Charter pledges. We take immense pride in the fact that our endeavour to be a responsible organisation ties in so well with the aims of the UK Government’s Charter and we are delighted today to release our initial four pledges as a charter signatory.”
The number of regulatory ‘incubator’ or ‘umbrella’ firms in the City of London’s institutional financial sector has grown to 52,1 according to Sturgeon Ventures LLP, which was the first such firm to launch 18 years ago. “Regulatory incubators”, also known as FCA Umbrella or Regulatory Hosting, provide third-party investment management, investment advice and compliance and eventually direct authorisation support to start-up financial services businesses until they can be directly regulated in their own right. The service has been particularly in demand since the global financial crisis, with many individuals leaving large institutions to set up their own operations.
Sturgeon was among the first signatories to the treasury’s Charter and the only regulatory incubator to do so. It was one of only 13 signatories to pledge to have 50/50 women in senior management roles, alongside Virgin Money, Legal & General and the FCA. The 72 signatories range from international firms such as Mizuho Bank to start-ups such as Affinity Capital, which is managed entirely by women.
Sturgeon’s analysis1 estimates that there are currently around 800 firms that are appointed representatives of wholesale incubators in the UK.
The Charter requires signatory firms to formulate a strategy for achieving greater diversity within their organisations, particularly at the senior and executive levels, set Internal and Externally reportable targets to improve diversity in the workforce and publicly report on these goals.
For further information on Sturgeon’s four pledges under the Charter, see: www.sturgeonventures.com/about-us/equality-diversity-policy/ [1] Source: Register on Financial Conduct Authority website, as at 1 April 2016 53
1610WF05
Wealth & Finance | October 2016
The Tax Avoidance Root-Out
One of the UK’s Top 40 Accountancy Firms
In the UK Budget 2016, HM Treasury indicated that it would explore options to sanction those who ‘enable’ tax avoidance. HM Revenue & Customs (HMRC) followed this up on 17 August 2016 with a consultation document, Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document.
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• Acting as a “middleman” – arranging access and providing introductions to others who may provide services relevant to evasion
he document, Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document is divided into four areas:
• Providing planning and bespoke advice on the jurisdictions, investments and structures that will enable the taxpayer to hide their money and any income, profit or gains
Penalties for enablers of tax avoidance that is defeated; Penalties for those who use tax avoidance that is defeated; What constitutes tax avoidance and; Further ways to discourage avoidance.
The debate around the definition of tax avoidance has exercised eminent legal minds for decades. Many cite the 1936 Duke of Westminster decision, where Lord Tomlin stated:
• Delivery of infrastructure – including setting up companies, trusts and other vehicles that are used to hide beneficial ownership; opening bank accounts; providing legal services and documentation that underpin the structures used in the evasion, such as notary services and powers of attorney
“Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue and his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.”
• Maintenance of infrastructure – providing professional trustee or company director services, including nominee services; providing virtual offices, IT structures, legal services and documentation that obscures the true nature of the arrangements, such as audit certificates
Over the last five years, what is regarded as acceptable tax avoidance has changed, reflected in recent decisions of the courts and governments, providing HMRC with ever stronger sanctions.
• Financial assistance – helping the evader to move money or assets out of the UK, and/or keep it hidden by providing ongoing banking services and platforms; providing client accounts and escrow services; moving money through financial instruments, currency conversions etc.
What effect will the latest proposals have on tax advisors? The vast majority of tax agents, intermediaries and others who provide services in relation to the taxation consequences of commercial arrangements, or who facilitate their implementation, (including Larking Gowen) operate within the spirit of tax law and do not enable tax avoidance. However, a minority of firms do enable or promote tax avoidance.
• Non-reporting – not fulfilling their reporting, regulatory or legal obligations, which in itself helps to hide the activities of the evader from HMRC The intention behind these proposals is to discourage promotors of tax arrangements which, arguably, comply with the letter of the law but not the spirit. However, there is a danger that ‘innocent’ advisors could find themselves at risk of financial sanctions, as the proposed definition of tax avoidance arrangements does not appear to be confined to mass promoted schemes or those that have large amounts of tax at stake.
In HMRC’s view, the people who introduce taxpayers to avoidance schemes, or facilitate their implementation, bear limited risk or downside when these arrangements are defeated in the Courts. The government wants to deter enablers of tax avoidance with financial sanctions. The purpose of a penalty is to influence behaviour and discourage the design, marketing and facilitation of tax avoidance generally. It should penalise everyone in the supply chain who has enabled avoidance arrangements that are defeated.
The meaning of reasonable care The government has signalled that it will clarify what constitutes the taking of reasonable care in relation to the penalty provisions introduced in the Finance Act 2007, when a person uses tax avoidance arrangements which HMRC later defeat. This is to ensure that penalties are chargeable in all appropriate circumstances where tax avoidance is defeated.
The proposed definition of ‘enabler’ in the consultation document is extremely wide. It could include those involved in the following:
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TAX
As with a number of HMRC’s recent proposals, it appears that the only defence for the taxpayer (and enablers) is to show that one has taken ‘reasonable care’. If a taxpayer, with no tax training, has taken advice from a reputable professional, with no obvious reason to doubt its credibility, HMRC should recognise that this constitutes ‘reasonable care’. Tax simplification It is said that the tax code in the UK now comprises more than 10 million words. This increasing complexity does not sit well with the introduction of ever more severe financial penalties and the increased prospect of criminal action. A number of chancellors have acknowledged this issue and promised to address it. The Office of Tax Simplification has been constituted but invariably the amount of new legislation passed each year is greater than the amount which is removed. Perhaps Philip Hammond will be more successful. Being able to navigate the inherent complexity of our tax rules, whilst adhering to the principle established in the Duke of Westminster case, means that seeking tax advice on any meaningful transaction is essential.
Company: Larking Gowen Name: Richard Proctor, Partner Email: taxpractice@larking-gowen.co.uk Web Address: larking-gowen.co.uk Telephone: 01603 624181 This article is designed for the information of readers. Whilst every effort is made to ensure accuracy, information contained in this article may not be comprehensive and recipients should not act upon it without seeking professional advice. ©Larking Gowen.
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Wealth & Finance | October 2016
Technavio Announces Top 5 Global Players for the Legal Services Industry from 2016-2020 Technavio’s latest market intelligence report has listed the top five leading suppliers for the legal services market until 2020. These suppliers implement the proprietary approach to differentiate themselves from competitors as well as to help clients save on costs. Their expertise and wide service portfolios gives them the ability to provide proprietary services that can cater to specific buyer requirements in specific subcategories
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ompetitive landscape Although, the legal services industry is largely dominated by global players, the small service providers have an advantage over the global players in terms of regional expertise. The major buyers of legal services are mostly from industries such as large pharmaceuticals, healthcare, automotive, FMCG, media and entertainment, and retail sector.
DLA Piper tops the charts in terms of the number of mergers and acquisitions on a global scale for the fifth consecutive year. Recognised as a top global outsourcing advisory by the International Association of Outsourcing Professionals in February 2016, the firm demonstrates expertise on in dealing with a wide array of legal issues of corporates and businesses. Over a thousand lawyers from DLA Piper have been termed as ‘the best’ by several directories in their respective areas of legal practice.
To stay ahead of market competition, suppliers are adopting various approaches, some of which include operating on low profit margins, offering proprietary products, and expanding product portfolios to evolve into one-stop shops that can cater to all legal service requirements of large organisations.
Some of the key services provided by the company include: • Capital markets • Emerging growth and venture capital • Fund formation and investment funds • Mergers and acquisitions • Private equity • Administrative law • Latham & Watkins
About the top five legal service providers Baker & McKenzie Baker & McKenzie has the capability to provide legal services to various industry sectors including energy, government services, healthcare, and automotive. The company has strong financial backup and is best known for its work in mergers and acquisitions, corporate restructuring, and financial services.
Latham & Watkins operates across industrial sectors such as aerospace, defence and government services, communications, oil and gas, and mining and metals. The company provides and online portal with a wide selection of education programs on various legal practices, accessible at any time. Some of the key legal advisory services provided by the company include antitrust, joint ventures, and strategic alliances.
Some of the key services provided by the company include: • Antitrust and competition • Banking and finance • Dispute resolution • Energy, mining, and infrastructure • Environmental • Mergers and acquisitions • DLA Piper
Clifford Chance Ranked the number law firm in the Global Top 30 Chambers list of 2015, Clifford Chance demonstrates its expertise across various legal practice areas. The company’s services cover clients across industries such as banks, consumer goods and retail, energy and resources, and healthcare and life sciences.
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LEGAL & REGULATION
The company provides expertise in the following areas: • Capital markets • Corporate • Finance • Litigation, dispute management • Real estate • Tax, pensions, employment, and incentives • Allen & Overy In January 2016, Allen & Overy was ranked the top legal advisor for private equity buyouts in Europe. The company offers several online platforms that have enhanced security features and simplify clients’ access to legal documents. Some key services offered by the company include: • Corporate governance and compliance • Emerging markets • Environment and regulatory law • Public international law • Intellectual property • Corporate consulting services, and mergers and acquisitions www.technavio.com
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Wealth & Finance | October 2016
A.M. Best Special Report: Money Market Reforms —Overall Insurance Industry Impact Expected to Be Minimal New rules governing money market mutual should have minimal financial impact on the insurance industry as a whole, although many companies may need to reassess strategic liquidity planning based on exposure levels, according to a new A.M. Best special report. In 2014, the U.S. Securities & Exchange Commission adopted amendments to the rules that govern money market mutual funds, which in October 2016, will go in effect.
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them to maintain a constant share price of $1.00. While floating NAVs will result in taxable gains and losses, the Internal Revenue Service is proposing new rules to address the treatment of gain/loss calculations and reporting, as well as wash sale rule situations.
he Best’s Special Report, titled, ‘Money Market Reforms— Overall Insurance Industry Impact Expected to be Minimal’ states that the new rules require a floating net asset value (NAV) for institutional prime money market funds, which allows the daily share prices of these funds to fluctuate along with the changes in the market-based value of fund assets. In addition, the new rules provide the boards of non-government money market funds new tools to address runs in the form of liquidity fees and redemptions gates, which can be used in conjunction during times of duress.
A further change stemming from the new rules is the ability of fund issuers to apply a liquidity fee against redemption proceeds, which would be retained by the fund. Such fees are intended to be a disincentive for shareholders to redeem shares of a fund in distress, and also to help bolster the liquidity levels in a fund by infusing the fund with cash withheld from redemption proceeds.
With a floating NAV, institutional prime money market funds (including institutional municipal money market funds) are required to value their portfolio securities using market-based factors and sell and redeem shares based on a floating NAV. These funds no longer will be allowed to use the special pricing and valuation conventions that currently permit
According to the report, the insurance industry’s exposure to Class 1 Money Market Funds, which contain a mix of government and non-government funds and will likely be affected by the new rules, has declined 11.7% to $40.4 billion in 2015 from $45.7 billion in 2010. This largely was driven by a 36.2% decrease in the property/casualty segment from 2010-2011. However, since the new reforms were announced in 2014, the property/casualty and health segments have seen allocations increase 26.8% and 11.0%, respectively, while the life/annuity segment has decreased its holdings by 10.3%. A.M. Best believes prime funds likely will continue to play a vital role in serving many insurers’ cash and liquidity needs; however, companies may need additional planning as the hourly liquidity benefit may now be lengthened to a few hours or following day depending on the transaction time. Overall, A.M. Best urges companies to be aware of the changes and potential challenges in accessing their historically very liquid money market funds. A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com
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LEGAL & REGULATION
60-Second Interview
An International Presence
Michael Kyprianou & Co LLC has established an enviable reputation as a broad based legal practice, indeed they have grown to become one of the largest law firms in Cyprus with offices in Nicosia, Limassol and Paphos. Their international presence has expanded with fully fledged offices in Greece, Athens and Thessaloniki, Malta, Birkirkara and Kiev (Ukraine). We caught up with the firm’s Savvas Savvides to find out more about this respected company, and their dedication to providing clients with the most practical and cost effective services.
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hat products and services does your company provide? Banking and finance, conveyance, intellectual property, litigation, immigration and tax law are the services that our firm offers to our clients. In addition, our international presence with fully pledged offices in Greece (Athens & Thessaloniki), Malta (Birkirkara), Ukraine (Kiev) and Dubai provides us with the opportunity to offer products and services to our clients which distinguish us from other firms.
Name: Savvas Savvides Company: Michael Kyprianou & Co LLC Email: savvides@kyprianou.com.cy Web Address: www.kyprianou.com.cy Address: 19 Kinira Street, Michael Kyprianou House, 8011 Paphos Cyprus Telephone: 00357 2693 0800
What does your client base look like? Our clientele are high-net-worth individuals (HNWI) as well companies and organisations. What factors set your firm apart from others in the same field? Efficiency, integrity and professionalism is the cornerstone of our work. What are the most interesting challenges facing your company today? Our challenge is to continue meeting our client’s expectations and provide our services with proficiency and at a reasonable cost. Looking to the future, what is the main objective for your company? Our objective is to expand further in other jurisdictions around the world, but to also continue in offering a high standard of service to our clients. What individual in your industry and beyond do you admire the most and why? Lord Denning. In his 38-year career as a judge, he made enormous changes to the common law and in particular in the Court of Appeal as several of his judgments were confirmed in parliament and passed as statutes in accordance with his judgments.
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Wealth & Finance | October 2016
Does Your Organisation Have a Happiness Strategy Yet? NEW BOOK: Unlocking Happiness at Work reveals how a winning happiness strategy will fuel purpose, passion and performance, with case studies including Virgin, TOMS and the Body Shop
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e all want to be ‘happier’ in life, but for many people, being both ‘happy’ and ‘at work’ might feel like an unrealistic dream. For employers and business leaders, happiness of individuals will often be a secondary concern, sitting way down the list of priorities below productivity and revenue. However, as an insightful new book, Unlocking Happiness at Work argues, happiness has been proven to be intrinsic to success, and businesses that understand and embrace this can gain a sustainable competitive advantage.
upon stories from world-famous organisations, such as Zappos, Virgin, TOMS and The Body Shop, backing up anecdotal evidence with real-time data and exclusive access to Plasticity Lab’s own cutting-edge employee happiness research. Combining the latest thinking in positive psychology and neuroscience, Unlocking Happiness at Work gives readers a true understanding of the science of happiness both at home and at work. It gives practical advice to enable individuals to build solid neural pathways and happiness habits for themselves, and emotional intelligence techniques and management strategies leaders to gain the benefits of compassionate capitalism.
The author, Jennifer Moss, is co-founder of Plasticity Labs, a pioneering technology company that produces software to measure organisational culture and the social and emotional state of a business. Her ground-breaking work draws upon decades of scientific research, data, statistics and psychological and neurological studies to not only prove that happiness fuels high performance but also provide practical tools that will enable a billion people around the world to harness the sense of purpose and passion that comes with happiness.
Lively, persuasive and insightful, Unlocking Happiness at Work is an exploration of how to be happier and make others happier through the power of ‘gratitude’, emotional intelligence and an innovative approach to work/life flow. An essential resource for leaders who want to increase sustainability, attract new talent, improve their brand and boost profitability, Unlocking Happiness at Work, provides the tools to achieve these goals in a way that is life-enhancing for everyone involved.
Unlocking Happiness at Work features powerful real-life case studies, including Jennifer’s own thought-provoking story that lead to her realising the importance of ‘gratitude’ following a family tragedy. The book draws
Unlocking Happiness at Work by Jennifer Moss is available now, priced £14.99 from Kogan Page.
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PERSONNEL
New Global Careers Website Launches for the Finance Industry XPATJobs, the UK’s biggest online careers website for international jobseekers, has launched its new online Finance-specific jobs board which allows users to search for, and place, new jobs and find the skilled professionals they need no matter where in the world they are based, all via a single portal.
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“Using the knowledge, expertise and of course the technology that powers XPATJobs, employers and hiring managers will have access to a wider pool of available talent without having to purchase additional licenses to search databases of candidates outside of the UK.”
indajobinfinance.com is a one-stop shop that links skilled professionals in the finance sector with organisations across the world. Supported by the company’s industry-leading XPATJobs.com site, which sees 100,000 jobs posted each day, findajobinfinance.com will provide employers and hiring managers with access to a network of more than 1 million registered jobseekers across 150 countries.
The site offers easy job posting at highly competitive rates as well as access to the largest network of candidates searching industry-specific overseas roles.
Rhys Maddocks, managing director of XPATJobs, said: “With skilled talent in short supply, employers continue to look beyond national boundaries to secure the talent they need. “But with an ever-growing number of online sources available, the actual sourcing of that talent is increasingly becoming a logistical nightmare for many hiring managers.
www.xpatjobs.com
“We have spent considerable time working on providing a solution that is both highly targeted and has a global reach. This significantly reduces the employers time-to-hire as they can quickly find the right person for the right role at the right time – it is a recruitment solution that extends beyond their immediate geographical boundary. “Conversely, job seekers can easily find the right role with the right company and in the right location. The site will provide them with unrivalled access to the latest and largest choice of finance jobs that are available for skilled professionals looking for their next role both here in the UK and overseas.” The new job board will serve as a leading careers destination for jobs across the full range of disciplines and incorporate the same functionality as the XPATJobs.com site: Their intuitive systems enable users to conduct a quick search for their ideal role, while the simple registration process offers easy CV uploading and a straightforward application process in addition to providing daily or weekly (depending on their preferences) alerts featuring jobs that match their specific requirements. “XPATJobs has enjoyed strong growth in recent years and launching this Finance-specific careers portal is a critical step in our plan to strengthen and grow our existing position in the market,” said Mr Maddocks.
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Wealth & Finance | October 2016
Fifth Third Bank Launches New Consumer Credit Cards Fifth Third understands that consumers want simplicity in their financial lives. Fifth Third is introducing two new credit card products, TRIOSM and Truly SimpleSM, that are easy for consumers to understand, use, and maximise their benefits.
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RIO makes it easy to earn more rewards. Customers are automatically enrolled to earn rewards for every dollar they spend, including earning additional rewards at restaurants and gas stations, grocery stores and drug stores - the places people tend to visit most often. A recent NerdWallet survey shows that almost one-third of rewards credit card holders don’t understand how they earn or redeem their rewards.
1. See Rewards Terms and Conditions at 53.com/rewards for additional details. 2. New Account Bonus Offer: Offer not available to existing Fifth Third consumer credit card customers or those with a Fifth Third consumer credit card account that has been closed within the last 12 months prior to account opening. To qualify for the new account bonus worth $100, you must make purchases totalling $1,000 or more during the first 90 days from account opening. Upon reaching the purchase qualification, you will receive 10,000 Real Life Rewards Points which can be redeemed for $100 cash back. Qualifying purchases are defined in disclosure #2 above. Please allow 6 to 8 weeks after reaching the purchase qualification for points to be awarded. Your account must be open and in good standing at the time the bonus points are awarded. Bonus points awarded may be subject to tax and you should consult your tax advisor to determine tax requirements.
“Understanding rewards programs should be simple,” Jimm Bell, director of consumer and small business payments for Fifth Third Bancorp, said. “Customers don’t want to stand at a register trying to remember which card they should use based on rotating categories that change every month. They want a single card that earns great rewards where they tend to spend most. That’s why we created TRIO.” Rewards can be redeemed for cash back as a statement credit, deposited into a Fifth Third checking or savings account, or even to pay down a Fifth Third loan or mortgage. [1]
3. Trio product terms: Variable APR will be 14.24% to 23.24%, based upon your creditworthiness. Variable APRs change with the market based on the prime rate. Cash advance variable APR: 25.24%. annual fee: None. Balance transfer fee either $5 or 4% of the amount of each transfer, whichever is greater. Cash advance fee either $5 or 4% of the amount of each cash advance, whichever is greater. Convenience check fee either $5 or 4% of the amount of each check, whichever is greater. International transaction fee: none. Late payment fee of up to $35. Minimum interest charge is $1.00.
TRIO features include: 3% cash back rewards for every $1 spent at restaurants and 2% cash back rewards for every $1 spent on gas, and at grocery stores and drug stores, up to $1,500 spend per quarter in these combined purchase categories. [1] • Unlimited 1% cash back rewards for every $1 spent on all other purchases. [1] • $100 bonus when a new cardholder spends $1,000 in the first 90 days from account opening. [2] • No international transaction fees on purchases. [3] • No annual fee. [3]
4. Truly Simple product terms: Variable APR will be 12.24% to 23.24%, based upon your creditworthiness. Variable APRs change with the market based on the prime rate. Cash advance variable APR: 25.24%. Annual fee: none. Balance transfer fee either $5 or 4% of the amount of each transfer, whichever is greater. Cash advance fee either $5 or 4% of the amount of each cash advance, whichever is greater. Convenience check fee either $5 or 4% of the amount of each check, whichever is greater. International transaction fee of 3% of each transaction in U.S. dollars. Late payment fee of up to $35. Minimum interest charged is $1.00.
For consumers looking for a lower rate on their cards for large purchases or for paying down balances, the Bank now offers the Truly Simple Credit Card. Truly Simple features include: • 0% introductory offer on purchases and balance transfers for 15 billing cycles from account opening. After that, your variable APR will be 12.24% to 23.24%, based upon your creditworthiness.4 • No annual fee. [4]
Credit cards subject to credit review and approval. Rates determined by creditworthiness of applicant.
“Consumer habits show that people don’t want to switch cards all the time,” Bell said. “The Truly Simple Credit Card offers a competitive rate and no surprise fees.”
www.53.com
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PRIVATE BANK OF THE MONTH
63
Wealth & Finance | October 2016
Why Emotional Bonds Are the Missing Multiplier for the Financial Sector Simon Glynn, director of EMEA, Lippincott, explains how you can quantify the strength of consumers’ attachment to your brand.
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This strategy is attractive because it is often simple to measure. Although benchmarking energy and spirit of staff might be trickier, it might well prove more of an influence on how consumers feel and respond to your brand. If a strong emotional bond multiplies the impact that the operational levers have on customers, then focusing only on the levers is missing a vital trick.
usinesses in the financial sector are putting renewed effort behind strengthening the emotional links between their brands and consumers. From Atom Bank offering its consumers the opportunity to design its logo, to NatWest’s ‘We are what we do campaign’, brands are working to reach customers on a level well beyond the rational. And the reason? Emotional bonds act as multipliers on everything the company does, giving a greater lift from the same customer experience.
Leadership teams across the board should therefore be asking themselves the following three questions: how does investment in emotional bonds raise business profitability? Which associations matter most in raising profitability? Finally, what can we do to improve these associations?
Research company Motista has demonstrated that emotionally-connected customers drive up to double the value that a merely satisfied customer delivers. Our own work shows that a marginal pound of advertising has a greater impact on customer perceptions when those customers are already emotionally engaged. Emotional bonds create a confirmation bias that means customers are more open, believing and trusting of a message that comes from a brand they believe in versus one that they don’t.
The best way to get data like this for your business, where resources allow, is to use primary research linked with your customer data to quantify the influence of brand versus other elements in driving customer choice and delivering customer value. Even simple correlations of brand perception versus market performance will give a good indication of the size of the prize in a transparent and understandable way.
Across industries, we find that the brand typically accounts for 10 to over 50% of a purchase decision (and upwards of 90% in the case of bottled water). But even 10% matters and its quantification fundamentally changes the brand conversation.
We have found that the system of refining your emotional connections with consumers involves three important steps. Firstly, you need to know what really matters to consumers in the sector that you operate in – the associations that make a brand stand out. In the airline business, for example, the service given by the cabin crew disproportionately influences brand preference.
Knowing where and how to invest in brand based on the data can yield substantial financial upsides. For a financial services company, we found that every point of brand improvement is worth $30 in the lifetime value per customer. For another company, increasing the brand score by two points was worth $600 million in annual profit — enough to get the whole management team’s attention.
The second task is to define the small number of associations that make a brand distinctive within those industry-specific aspects. These are defined by the brand strategy and drive meaningful differentiation through the culture of the organisation and innovation across the experience. NatWest succeeded in making its ‘helpful banking’ claim more than just a tagline, when it delivered it through retrained and re-incentivised staff and extended opening hours.
When the brand is expressed in financial terms, it creates buy-in. Brand measurement that captures economic impact helps to create a common language and frame of reference, not just for marketing, but for everyone. The challenge for many businesses is that this financial focus is often associated with the rational, operational aspects of the brand offering, measured with operational metrics such as the Net Promoter Score. However, this is based on a mistaken belief that only hard levers drive hard numbers. So, for example, a retail bank might perhaps spend a lot of time working out how to reduce queue time, rather than attend to how the tellers and sales and service staff interact with customers.
Finally, find ways to track the cause and effect of how these associations impact brand perception so you can work out how best to invest your marketing budget. Delving into these links can yield some surprising results. For example, one brand learned that digital service channels have twice the impact on perceptions as physical ones. A consumer packaged goods company found that signage was at least three times more
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MARKETING & PR
effective than either brand blocking or increasing shelf share in creating perceptions of the product as ‘readily available’. Armed with all of this data on how you can effectively strengthen the emotional bonds between your brand and consumers, you are in a much better position to make decisions about marketing strategy – and achieve backing from the board. We are all consumers and know instinctively that we are more willing to buy from a brand we feel connected to. This system of analysing how a brand can be reconstructed to maximise this process allows us to show how this works, proving a common vocabulary that all senior directors can focus on.
Company: Director of EMEA, Lippincott Name: Simon Glynn Email: simon.glynn@lippincott.com Web Address: www.lippincott.com Address: 499 Park Avenue, New York, NY 10022, United States 212 521 0000 Telephone: +44 20 7852 7911
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Wealth & Finance | October 2016
Winners’ Directory Best in Financial Communications & Investor Relations 2016 Company: Capital Link, Inc. Name: Nicolas Bornozis Email: awards@capitallink.com Web Address: www.capitallink.com Address: 230 Park Ave, Suite 1536, New York, NY 10169 Telephone: +1 (212) 661 7566 Business Elite - CEO of the Year Company: Company Fusion Ltd is a leading UK Recruitment Company (Head Hunters/Search & Selection) WORLDWIDE Name: Company Fusion Ltd Email: mike@companyfusion.com Web Address: www.companyfusion.com Address: 3rd Floor, Tring House, 77-81 High Street, Tring, Hertfordshire HP23 4AB United Kingdom Telephone: +44 (0)207 993 3368 International Real Estate Excellence Company: UK Legal Estates Name: Mohammed Usman Email: m.usman@uklegalestates.com Web Address: www.uklegalestates.com Address: 99-101 Wolseley Road, Sheffield S8 0ZT Telephone: 0114 2585750 International Real Estate Excellence Awards Company: Zest Sales Lettings & Investments Name: Glenn Perry Email: happytohelp@zestlovesproperty.com Web address: www.zestlovesproperty.com Address: 1a Mile End, London Road, Bath, BA1 6PT Telephone: 01225 481010
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RICHARDTYLER
®
I N T E R N A T I O N A L
Richard Tyler - Best-Selling Author, Top Sales and Management Expert and Entrepreneur Richard Tyler International, Inc.® is one of the world’s top Sales Training and Management Consulting firms. Richard Tyler International, Inc.® has been profiled on national television, in articles, magazines and newspapers. Richard Tyler International, Inc.® has earned a worldwide reputation for delivering powerful sales education programs and management consulting services. Richard Tyler International, Inc.® teaches success philosophies and techniques in such areas as Sales, Leadership, Management, Customer Service and Quality Improvement.
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At the heart of Richard Tyler International, Inc.® is a group of proven professionals with extensive experience ranging from Fortune 100 companies to business start-ups. Our team can increase growth and sales for large corporations as well as , small to medium-sized businesses. We can help you to drive your business in a more profitable direction.
Remember, your success tomorrow is in direct proportion to your ‘Commitment to Excellence®’ today.™
Richard Tyler International, Inc.® 5773 Woodway Dr., Suite 860, Houston, TX 77057-1501, USA Tel: (+1) 713.974.7214 | Web: www.RichardTyler.com
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