Paraplanning in the Spotlight | IFA 72 | October 2018 by Clifton Media Lab

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Paraplanning in the Spotlight October 2018

ANALYSIS

REVIEWS

ISSUE 72

COMMENT

INSIGHT

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CONTE NTS October 2018

CONTRIBUTORS

Ed's Welcome

Better Business – Want a better business? Practical tips from Brett Davidson of FP Advance on how to get honest and beat the grind

Brian Tora an Associate with investment managers JM Finn & Co.

8 Running bear? Brian Tora on the nature of bull markets and what might bring them to an end

An optimistic outlook

Richard Harvey a distinguished independent PR and media consultant.

GrowthInvest’s David Lovell outlines some of the reasons behind the current optimism in the tax-efficient investment sector

Triple Point

Triple Point has announced the launch of the Venture Fund, a new share class in Triple Point VCT 2011 plc

Neil Martin has been covering the global financial markets for over 20 years.

The Personal Finance Society Personal finance society announces John White as president for 2018/19

16 Paraplanning in the Spotlight Sue Whitbread takes a look at how paraplanning is fast becoming a career choice in its own right

Brett Davidson FP Advance

CISI - Paraplanning

The backbone of all good financial planning firms. Jacqueline Lockie, Head of Financial Planning, CISI

20 Evolution of paraplanners Caroline Stuart of the PFS Paraplanner Panel sheds light on how they are actively supporting paraplanners and developing the profession

Michael Wilson Editor-in-Chief editor ifamagazine.com

Setting the standard

Michelle Hoskin on why The Paraplanner Standard is adding power to the paraplanner role

26 All paraplanners are not the same

Sue Whitbread Editor sue.whitbread ifamagazine.com

Damian Davies of The Timebank considers how paraplanners can really prove their abilities

The challenge of paraplanner recruitment

Heat recruitment, give some practical tips to boost your success in attracting the right candidates

Alex Sullivan

Publishing Director alex.sullivan ifamagazine.com

Julie Lord explains why paraplanning and cash flow modelling are key to success

Delivering excellence in financial planning

Golden years

Paul Major of BB Healthcare Trust tells Sue Whitbread why he feels that this is a golden age for healthcare investing

IFA Magazine is published by IFA Magazine Publications Ltd, Arcade Chambers, 8 Kings Road, Bristol BS8 4AB Tel: +44 (0) 1173 258328

38 Fidelity - Capitalising on change Jeremy Podger, Fidelity Global Special Situations Fund

© 2018. All rights reserved ‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com

IFAmagazine.com

Constraints, constraints, constraints

Michael Gruener of Blackrock looks at breaking the constraints to find returns

44 Going, going,gong Richard Harvey on controversial tax avoidance schemes

Career Opportunities

From Heat Recruitment

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E D'S WE LCOM E October 2018

Financial planning in the spotlight How many times do we hear those same old grumbles from those in the financial planning profession – and many others too - that the financial planning message is simply not getting across to the Great British public? Well, this year sees the ten year anniversary of the very first UK Financial Planning Week. This is a full-on attempt by the profession to join together in order to get the message about real financial planning out there to consumers. If you haven’t heard of it (shame on you!), it is the CISI campaign to reach out directly to consumers to show them the value of financial planning and how it really can change lives. It’s powerful stuff. The very first UK Financial Planning Week campaign took place back in 2008, organised by what was then the Institute of Financial Planning under the leadership of the charismatic Nick Cann, whose enthusiasm and passion for financial planning was so infectious and influential. Unfortunately, it wasn’t great timing. The first day of Financial Planning Week 2008 coincided with the collapse of Lehman Brothers. Now you don’t need me to tell you that this led to the global financial crisis, the impact of which we all know so well. Thankfully, this inauspicious start didn’t hamper progress and the campaign has taken place almost every year since then, now under the stewardship of the CISI following the merger with IFP in 2015.

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I am very pleased to say that since then the campaign has continued to gather momentum. More and more financial planning firms have got involved, reaching out to the public in all sorts of ways including offering free financial planning surgeries during the week. This year’s campaign takes place from 3-10 October. It provides the ideal opportunity for the profession to work together to put financial planning in the spotlight and to engage consumers in the most direct way possible – by showing them the considerable benefits that result. So if you can do your bit, just remember that your profession needs you!

The power of paraplanning Just as Financial Planning Week puts financial planning in the spotlight, this edition of IFA Magazine has its spotlight on paraplanning – which has firmly established itself as such an important part of the financial planning process. We’re very grateful to all the experts who have kindly shared their ideas and opinions on paraplanning in this edition and for writing so passionately on the subject. It is clear that paraplanners are a very passionate bunch, bringing a whole new dimension to the world of financial planning and advice. The entire financial planning process becomes more robust and scalable as a result. By allowing the advisers to focus their time and efforts on what they do best, which is building and nurturing client relationships, this brings huge benefits to the financial planning business and ultimately to clients too. Now that is win-win! Sue Whitbread Editor IFA Magazine

BETTE R BUSI N ESS October 2018

Want a better business? Get honest If you’re feeling the pressure of running a financial planning business, Brett Davidson of FP Advance has some practical tips to help you beat the grind and to learn to love your business again

Are you sick of reading about people saying how great it is running a Financial Planning business? In a recent survey, conducted here at FP Advance, we asked a bunch of advisers the question: “How fulfilled are you at this stage in your business?” with a satisfaction score out of 100. The average score was 74. The lowest was 12, and there were plenty of 100s. However, when I scanned the data there were a lot in the 30-60 range. Too many for my liking. Some of the comments attached to the scores made it all sound like a bit of a grind. So how do you beat the grind? Most advisers I know started their own business, leaving behind a firm they couldn’t stand, to do things right. That is, to do things right by the client. Giving advice is what most owner-advisers love to do. It’s managing the ‘everything else’ that causes them the stress, and takes the fun out of what can be a hugely fulfilling profession.

The passion killers The two biggest passion killers for adviser owners are: 1

Your team not working

The best firms think differently. They start with creating an engaging client experience at every step of the journey, and map a simple process to support each step.

When your team doesn’t work, everything bounces back to you. That can see you having to be involved in jobs that are absolutely not your skill set, such as administration work.

The focus here is on making the client experience fun and great, for you as well as the client. Creating a great client journey feels a lot more exciting than just mapping a boring old process.

It can also see you involved in work that, although you’re capable of doing it, you don’t really love. For example:

The real issue

•

Report writing

•

Data collection and fact finding

•

Building cash flow models

•

Researching product solutions

•

Creating processes

•

Managing the team

2 Weak processes

In the great financial planning businesses they know exactly what they do at each step of the process. You’ll often hear that you should map your process step by step, and you should. But it sounds as boring as hell, doesn’t it? And it is.

While it’s true that an imperfect team and weak processes are the passion killers, they are not the real issue. The root cause is often a lack of business-management skills at owner level. I don’t know about you, but when I joined the Australian financial services industry in January 1991, every single bit of training I ever received was around selling skills and technical qualifications. I see exactly the same focus on those areas right now. Business management skills are assumed, and often lacking. Your options If, for any reason, your business has become a grind, in simple terms you’ve got two options:

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BETTE R BUSI N ESS October 2018

Go and get a job within an existing financial planning firm where they have a solid foundation in place: great support team, great processes, and strong business management. 1

or Learn some business management skills that let you resolve your major issues (people and process).

What’s working and what’s not? Write it down. You’ll quickly highlight the issues that need your attention. For example, you might jot down: •

When I’m in front of clients I’m good. How do I do more of that?

•

I spend too much time getting involved in follow through and administration – why?

•

I can’t just hand off stuff to my team – the team are not skilled enough and can’t do the jobs I need done to the correct standard

•

I don’t have time to train people

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I need some new team members, otherwise it will never change

•

I’m terrible at recruiting

While option 1. is a genuine choice, most adviser-owners I know are strongly motivated by the control and freedom that running a business their way provides them. Taking a job with someone else comes with its own set of tradeoffs and compromises. With option 2. if you can master some management skills you can get the right support team around you, and then create some strong processes. Now you’re free to be the energetic, skilled, creative individual that you were meant to be. That’s when the job gets fun again, and the possibilities open up for you. But to get to that place you have to work through this phase of your business development. What got you here might not get you where you want to end up. It’s all about your vision What keeps you going as you work through the grind of assembling your great team? It’s not easy, and you might have to kiss a few frogs along the way. It all comes down to your vision for yourself and your business. Why are you doing this? What’s your goal bigger than money? Somewhere in that vision for yourself is likely to be meaningful and fulfilling work; and it doesn’t get much better than financial planning for that. Get honest with yourself The first step is to get honest about where you are at, and I mean brutally honest.

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From that quick honesty session you might realise that your first hire needs to be a great practice manager. That way you can free yourself up from managing the day-to-day stuff, like recruitment, team, process, admin etc. Alternatively, you might decide that you have to outsource, so you can keep your employees to a minimum. That might come with some compromises. Are those compromises acceptable to you? If so, run with it. If not, go back to the practice manager option. You can see how quickly you can identify the real issue when you get honest with yourself.

Don’t sugar coat it, but be honest about your existing strengths too. We’ve all got good points and bad points sitting in our businesses, regardless of our level of development. Get things done Once you know what’s got to be done and why you are doing it, then there’s nothing to do but get on with it. If it takes 12 months to get your manager in place and up to speed, so be it. One year of treading water might set you up for a decade of spectacular growth. Failing to address the real issue, or living in denial of why you’re a bit stuck, could keep you in the same uncomfortable place for years. That’s no way to go through life. It’s time to beat the grind. Let me know how you go.

Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals advise better and live better. He is recognised as one of the leading consultants to financial advisers in the UK. Professional Adviser magazine has rated him one of the Top 50 Most Influential people in UK financial services on three occasions. You can follow Brett online and via social media: Twitter: @brettdavidson Facebook: www.facebook.com/FPAdvanceLtd LinkedIn: www.linkedin.com/in/davidsonbrett Website: www.fpadvance.com

BRIAN TORA October 2018

Running bear? Ten years on from the collapse of Lehman Brothers and the global financial crisis, Brian Tora considers the nature of bull markets and what might bring them to an end The investment world is full of pithy sayings that are designed to encapsulate popular wisdom regarding how markets behave or how best to make money (or not to lose it). Indeed, I compiled quite a list of them for use in presentations to the investing public or their advisers. The seemingly unstoppable rise in the S&P 500 Index has brought several of them to mind of late. Perhaps the most relevant currently is that nobody rings a bell at the top of a bull market – or at the end of a bear market, for that matter. Some lessons from history Let’s put the remarkable performance of US shares into context. A recent high for the leading American benchmark index had many claiming this was the longest uninterrupted bull run since the end of the Second World War.

Certainly, it has been a remarkable period for investors, with the rise in share values now having continued for the best part of a decade. Moreover, the returns have been greater than those we normally expect from a bull market, though in fairness it did start after a rapid and startling fall in share prices in the aftermath of the financial crisis. This brings to mind another saying that has relevance here. Markets always travel too far – in either direction. In other words, the peak of a bull market occurs when investors start to realise that valuation levels have become unsustainable, just as bear markets end when prices are sufficiently cheap to tempt back the bargain hunters. It may be an event that crystallises the change in sentiment, but that is too often only recognised in hindsight.

At the beginning of 1975, a leading oil company went bust. This marked the turning point for the most savage bear market of my experience, when shares lost 70% of their value in little more than two years. Triggered by the Yom Kippur war of 1973 and a subsequent quadrupling of the oil price, shares suffered further through social and economic unrest (the miners’ strike and the three day week), political uncertainty (there were two elections in 1974, both lost by the Conservative administration), and a secondary banking crisis. By the end of 1974 there were fears that our high street banks could become insolvent and major companies, like Shell, as an example, stood on valuation levels that would appear impossible today.

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BRIAN BRIAN TORA TORA October 2018

Then Burmah Oil, our third largest oil company, announced its financial predicament late on New Year’s Eve, so when trading commenced on the first day of 1975, the UK stock market stood at a 20 year low. That marked the bottom. Within three months of the company’s collapse, our domestic index had risen by 150%. Up, up and away So what of conditions today? Since March 2009, shares on Wall Street have risen by a staggering 325%. The duration of this bull market has been not far short of 3500 days. Contrast this with the average rise and duration of the 12 other bull markets that have taken place since 1946 of plus 150% and around 1650 days and you start to see why this time around does feel different.

But it is worth bearing in mind what one veteran investor, the late Sir John Templeton, gave as key advice for investors. He said, “this time it's different are among the most costly four words in market history”. It is not just the US equity market that has enjoyed a long bull phase. Germany, Japan and the UK have all rewarded investors handsomely, if by somewhat less than in America. Only emerging markets have failed to maintain momentum, though this is a relatively recent phenomenon, brought about by the protectionist policies of the new White House administration. Markets no longer move together automatically, though in truth we all depend on the maintenance of robust world trade and consistent economic growth, which could be in danger if the present tariff wars are stepped up.

Us and them It used to be said that if the United States caught a cold, the rest of the world would go down with pneumonia. While this would be less true today, I doubt the markets of the developed world could shrug aside a serious retrenchment in US equities. Presently they are buoyed by stronger than expected economic data, including record levels of employment there. Valuation criteria, whilst high, are not at the stratospheric levels that have characterised some previous bull market turning points. Moreover, some analysts point to the fact than not many of the traditional warning signs to go risk-off have yet appeared. But bull markets cannot continue indefinitely. Something could well trigger a change in sentiment. It is worth turning again to the wisdom of Sir John Templeton. One of his maxims, published in a short book entitled Ten Principles for Investment Success which I keep by me at all times, runs as follows. “Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria”. Fortunately I do not see too much euphoria around at present, but when it arrives, watch out!

Brian Tora is a consultant to investment managers, JM Finn.

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GROWTH I NVEST October 2018

An Optimistic Outlook David Lovell, Operations Director at GrowthInvest outlines some of the reasons behind the optimism being shown by the industry in the GrowthInvest Adviser Series currently airing six months after rule changes came into force

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GROWTH I NVEST October 2018

The dust is now beginning to settle on the regulatory changes that came out of the Patient Capital Review and which were brought into law in March 2018. The initial collective relief that the government had seemingly listened with some intelligence, and not taken a wrecking ball to a key element of a successful UK economy in the coming years, has gradually given way to a cautious optimism that the tax-efficient investment industry, can continue to impress, hold its own, and move forwards at some pace.

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The changes The Patient Capital review (PCR), and the rule changes last year, looked to refocus EIS and VCT tax breaks towards their original intentions which was to help young companies attract funding they might otherwise struggle to raise. This is the so-called “spirit of EIS”. Having raised over £18bn for UK companies, EIS has been repurposed over the years for raising huge funds into renewables, as well as less risky capital preservation strategies, where the investment itself was less of a driver than the tax break

and the predictable return of the investors’ original outlay. The Patient Capital Review has resulted in a clear and fair strategy that has refocused the investment on qualifying growth companies. The government is sharing the risk alongside the investor via the tax advantages, and wants to make sure it is helping to encourage investment in the areas which can drive the UK economy forward. Indeed, certain qualifying companies which are considered to be “knowledge-intensive” have been given additional incentives, as investment limits have been raised on both sides.

GROWTH I NVEST October 2018

Room for expansion Whilst we will all be interested to see what happens, the exact impact of the change in regulation and removal of capital preservation schemes on the flows this year remains to be seen. It is probable that there will be at least a slight dip down from the record years £1.8bn for EIS and £700M for VCTs that we have seen over the last couple of years. The amount invested in the now outlawed “Capital Preservation” investments, which looked to lower risk to the investor by investing in areas with theoretically more stable returns such as solar panels, anaerobic digestion plants or storage facilities, has been estimated to be in the region of £0.75-£0.9 BN. This is a whopping 50% of the overall market, and certainly at least 50% of the flows from the advised marketplace. The expectation in some quarters was that a large proportion of this may simply disappear from the market, leaving the EIS industry altogether, but this seems far from the case. Many managers are reporting near record flows in the first six months of the year, even before we get into the traditional

business end of the tax year – traditionally from September to April. Likewise multiple VCTs have launched in the first few weeks of September, and, at the time of writing, are seeming to benefit from decent weekly flows. They look likely to close early, recalling the rush for capacity of last year’s record £728M. So what is driving this? For some it will be simple timing factors, and a fear of missing out on the best products, some may be the result of the long term messaging of the industry that investing in tax efficient products does not necessarily need to be left until the last minute. But there is more at play than calendar management. Real investment returns There is certainly an attractive investment proposition here, as real returns amongst the star performers in an EIS portfolio can commonly be double digit. We have already seen one 100 x return - including tax relief - this year, and several more headline grabbing higher exits are rumoured to be waiting in the pipeline.

Real growth opportunities are hard to find these days for a client portfolio. For the right client, a tax-advantaged, small percentage of their portfolio that takes a riskier approach should be much more common. Moreover, many clients actively enjoy learning about the investments, which are typically more tangible and transparent, with many fund managers now hosting “meet the company days” or similar. The feeling of being involved and ownership can sit alongside a feeling of supporting UK PLC, something that will be increasingly required in the coming months. Advisers typically embrace principles of diversification across their traditional client investment portfolios. By applying the same logic to a tax efficient portfolio, they can help to mitigate the risk. EIS portfolios diversify across a group of typically 10-15 companies, but increasingly we are seeing advisers diversify further across different fund managers. They are used to advising on equity investments, and understand that these are the same products, whilst younger, riskier and less liquid.

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GROWTH I NVEST October 2018

Pension caps These changes are leaving an estimated 300,000 high earners in the UK with a reduced annual pension allowance on an annual basis. Once this and the ISA allowance has been taken into account, the obvious next ports of call for tax efficient investments are the EIS and VCT markets, both of which can be an excellent addition to a retirement solution for the right clients. And this is a potentially much bigger market: there are around 2.5 million “advised clients” currently investing in the UK marketplace, and while this number will not include all of the 300,000 UK tax payers in the top 1% of earners that earn more than £160,000 income, or the estimated 600,000 or so households with more than £1 million in liquid wealth, it will certainly include a very significant percentage of them. Capital gains on property Advisers are reporting a significant uplift in EIS as a means of deferring capital gains on property sales. This is perceived as potentially

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driving a huge increase in flows over the next few years. With a generation now approaching later life that sits on significant value creation on their property assets, they will be looking to decumulate both due to their life stage and due to the unlikelihood of further capital appreciation post-Brexit and with the BOE on a tightening bias. The guests on the GrowthInvest Adviser Hour, were cautiously optimistic throughout series one, and seem to be growing in confidence that the industry has emerged stronger than ever during the current Autumn Series two.

Whilst it’s probably a topic for a subsequent article, it is notable than none of the fund managers interviewed feel that Brexit will affect their current optimism. The GrowthInvest Adviser Hour is a live webinar series on Thursday at 11am, and is available on demand via www. growthinvest.com. It is hosted by Lawrence Gosling, and features a panel of industry experts, including investment managers, advisers, consultants and politicians, discussing the latest news views and opinions on the EIS, VCT, and BR industries, as well as in depth interviews, Q& A and investee company insights. David Lovell David is an experienced strategic director who has worked in UK financial services for over 20 years, in a variety of distribution and consultancy roles. He joined GrowthInvest in 2016 and has been working on developing and evolving all aspects of the tax efficient investment platform's client offering, whilst leading a growing product and development team.

TRI PLE POI NT October 2018

Triple Point launches new venture fund share class Triple Point has announced the launch of the Venture Fund, a new share class in Triple Point VCT 2011 plc. The Venture Fund’s challengeled investment approach draws on the reach and expertise of the Triple Point Venture Network. It encompasses a range of corporate innovators, growth consultants and entrepreneurs and has a base of some 5,000 innovative companies, which have the potential to help in excess of the 100 large corporations already working with the Network. The Venture Fund looks to maximise financial returns by investing in innovative businesses already working with the Network, that have, or soon will, contract with large corporates to help them solve some of the key business issues they face. By focusing on growth businesses that have effectively established a market fit for their products and services with large corporates, Triple Point believes that the Fund addresses one of the most significant risks of early stage venture capital. Each investee company must have a UK focus and significant addressable target market, with an innovative product or intellectual property. The Fund targets businesses with a strong management team, aligned appetite for growth, and a clear pathway to long-term profitability. The Venture Fund will typically expect to take 5-20% equity stakes in these businesses.

The Venture Fund is targeting a substantial deployment of investment funds over a 12 to 24 month timeframe. It is seeking to raise an initial £15m with potential for a further £15m over-allotment facility and will offer investors a portfolio of 20+ innovative companies which the managers believe have significant growth potential and the possibility of generating 5x to 10x money multiples. Triple Point seeks to align its interests with investors and maximise returns by limiting costs. The Venture Fund’s annual running costs are capped at 3.5% of net asset value (NAV). The Fund targets a 3p per share dividend in the first two years and up to 5p per share per annum in the years thereafter, subject to successful realisations. The Venture Investment team is led by Ian McLennan a partner of Triple Point and supported by a team experienced in venture capital investing. Triple Point, with over £900 million in assets under management has a strong track

record in tax efficient VCT and EIS investing, and a 14 year history of delivering target returns for its clients. This will be Triple Point’s 19th VCT fund raise and the firm has supported 44 EIS and 18 VCT Share Classes in that time, with £250m of successful VCT and EIS exits. In 2017 VCTs raised £728 million in aggregate, the second highest amount since the VCT market’s inception and 30% up on the previous year. This probably reflects increasing restrictions on pension investments, and strong and early demand for VCTs is expected again this year. Belinda Thomas, Head of Sales and Investor Relations at Triple Point, commented: “The Venture Fund builds on our strong track record of early stage investing with a distinctive approach which matches the propositions and solutions offered by innovative, growth business with the challenges faced by large corporations. The Venture Network already has a track record of success in this area, having helped a range of blue-chip businesses source innovative companies to help them address key issues. By investing in growth businesses once they have secured such contracts, the Venture Fund seeks to mitigate the risk of venture investing and helps to underpin investors’ returns.”

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PFS October 2018

Personal Finance Society Announces John White As President For 2018/19 The Personal Finance Society (PFS) recently elected John White as its president for 2018/2019 at the professional body’s Annual General Meeting (AGM)

John has spent over 26 years in financial services, 17 of those connected to professional services firms. He is a Chartered Insurance Practitioner and has significant experience advising and consulting on private client financial planning, investment management, corporate pensions and employee benefits. John is Chief Executive Officer of Sanlam UK’s Wealth Division and prior to this he was Chief Operating Officer at Arthur J. Gallagher & CO. Previously he has held management positions at Baker Tilly, RSM Tenon, RSM Bentley Jennison and RSM Robson Rhodes. John was appointed to the Personal Finance Society board of directors in September 2015. Interestingly, the PFS has introduced electronic voting for the AGM for the first time this year. This was in addition to members still being able to send hard copy votes or vote at the AGM with the result that thousands more votes were registered from across the membership.

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Commenting on his election, John White said: “This is an interesting time for the profession and I am really looking forward to my year as President of the PFS. My theme for the year will be the promotion of financial education and awareness whilst also raising the profile of professional advice and the role it plays in society. The launch of the Society’s new educational outreach programme, ‘discover fortunes’ will be at the heart of my presidential theme.”

John takes over from outgoing president, Sharon Sutton, who has stepped down from the board after completing a 12-month rotation as President of the professional body. Vanessa Barnes and Caroline Stuart were also appointed as Directors at the AGM. Keith Richards, Chief Executive Officer of the Personal Finance Society, commented: “We are delighted to welcome John as President of the PFS. His broad experience of both our profession and of working with us over the past couple of years as a board member, will be invaluable in supporting our ongoing commitment to evolve as a modern professional body. I look forward to working with him over the next twelve months.” “I would also like to thank past President Sharon Sutton for her contribution to the profession over the past year. Her theme of financial planning good practice including the use of new tools and techniques and practitioner experience has helped more members to adopt new processes and achieve better outcomes for clients’ life planning. We will continue to build on this.”

I N TH E SPOTLIGHT PARAPLAN N I NG

October 2018

Paraplanning in the spotlight Is paraplanning now seen more as a career choice in its own right, or simply as a step to becoming an adviser? Sue Whitbread reflects on the rise of paraplanning and finds this dynamic profession in excellent health

As the paraplanner role gains importance and recognition, is it likely that in future we’ll see increasingly more paraplanners who intend to remain in the role and develop their skills still further? In my opinion the answer to this question is yes. I see it as a logical development within a rapidly growing, dynamic group within the financial planning profession. In fact, if we lift the lid to check what is going on here we’re already seeing this happening. Before we look ahead, let’s reflect on where paraplanning has come from. Years ago the term “paraplanner” was often loosely used to describe anyone working in a support role within an advisory business. Whilst some people were clearly operating in what we now recognise as a paraplanner role, others were providing what was really more of an administrative support role. Thankfully, there is greater clarity now as roles have been clarified and streamlined to reflect the underlying activities undertaken. So what’s changing? At its most basic, paraplanning requires a rather different skill set to that of an advice role.

The activities in which Paraplanners tend to be more dominant could be said to be more “left brain” orientated, that is a mindset which is more logical, detail orientated and analytical. These are skills well suited to due diligence, building financial plans, generating client reports, carrying out reviews all of which are associated with the paraplanner role. The fact that more and more firms are seeing real, tangible business benefits from having an effective paraplanning function means that demand for experienced, well-qualified paraplanners is on the rise. As the demand for their services increases, in the short term the supply of Paraplanners is unlikely to keep up leading to pricing pressure. Longer term, the increased respect and recognition that paraplanning is getting - and fully deserves – should in turn lead to more highly skilled new entrants seeking a rewarding career as a paraplanner. The salaries that firms are now having to offer to attract the high calibre candidates they seek are already increasing. This reflects the fact that paraplanners are often qualified not just to level 4, but to level 6 and beyond.

Although there is currently no requirement to do so, many Paraplanners, albeit still the minority, are registered individuals with the FCA and regulated as such. Whether regulated or not, and who knows what the future may hold by way of changes in regulation, paraplanners take their professionalism extremely seriously. Ongoing CPD is positively welcomed and seen as an essential part of their development. We shouldn’t forget the part being played by the many excellent outsourced paraplanning firms out there, offering a high quality, flexible service to firms which for whatever reason have decided not to bring the paraplanning function in-house. Getting access to such valuable expertise which is kept up to date (the firm doesn’t have to think about building or maintaining their paraplanner’s technical knowledge or competence), available as required means more and more advisers and planners can get the support they need - as and when they need it - to run the business effectively. Whether they decide to employ paraplanners directly in house or not – or even combine the two - is their choice.

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I N TH E SPOTLIGHT PARAPLAN N I NG

Having made the decision, it will allow the financial planners to refine and develop their client service; to spend more time with clients, building deeper relationships based on trust that will stand the test of time and will be more likely to result in them having the clients for life that they aim for. So, if we dig out our crystal ball and could look ahead into the future, perhaps to 2025 or 2030, what might the financial planning profession look like by then? We can all hope that greater consumer recognition of the value of the financial planning process which puts clientsâ&#x20AC;&#x2122; needs first will finally have won out.

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October 2018

That consumers will see financial planning as a necessary and important part of their lives, not just something thatâ&#x20AC;&#x2122;s aspirational, nice to have, or only for those with lots of money to invest. Perhaps Iâ&#x20AC;&#x2122;m getting carried away here, but with paraplanners providing the impetus, more and more advisers and planners can deliver the kind of service for consumers that will change not just hearts and minds but lives too. So many great financial planning firms and professionals are already well aware of how rewarding this can be. I for one am looking forward to that day!

CISI PARAPLAN N I NG

October 2018

Paraplanning – the backbone of all good financial planning firms Jacqueline Lockie, Head of Financial Planning, CISI and a former paraplanner herself, highlights some of the ways in which the CISI is helping to build the paraplanning profession

The work of a paraplanner has certainly changed since I was one in the late 1990s. Back then, paraplanning was seen as a role which was a stepping stone to becoming a financial adviser. However, I was not alone in enjoying the technical nature of the role and not wanting to be in front of clients. I was always convinced that I would bamboozle them with my technical knowledge. When I eventually did become an adviser, I found out how wrong I was, but that’s another story. The profession has also changed over the last two decades and is moving away from the very sales-orientated environment it once was, to giving clients a long-term financial planning service. In this environment, individual professionals who work hard to give those clients a great service are valued. This extends to paraplanners and support staff who find that they can flourish in these roles.

Many paraplanners are now coming to the fore and voicing their opinions, not hung up on sales targets, but more interested in offering a good quality, long-term financial planning service to their firm’s clients. We have also seen many females coming back into the workplace after having a career break. Typically these women are more than adequately qualified, but not all have the desire to be client facing and so have forged their own path as great paraplanners. The paraplanning function is now widely regarded as the backbone of all good financial planning firms. CISI and paraplanning I’m pleased to say that CISI has a wide-ranging programme to support paraplanners in growing UK and international recognition of paraplanning.

The Professional Paraplanner Interest Group is a group of paraplanners, members and non-members of CISI, who come together to help guide and support the CISI to grow the paraplanning community and profession as a whole. They are represented by the Interest Group Committee and that Committee is also represented on the Professional Financial Planning Forum Committee to ensure all our ideas are joined up and that we make the most out of them all. The Interest Group meet regularly throughout the year and work together to help create the content and speaker suggestions for our Paraplanner Conference held in the Midlands in June each year. This year’s conference was a big success with passionate and relevant speeches from paraplanners who were speaking about their experiences on a main stage for the very first time. Although nervous about public speaking, they all spoke admirably, and I believe this is testament to the friendly and supportive environment that

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CISI PARAPLAN N I NG

the conference created and to the sharing nature of the paraplanner community itself. We also covered new technical topics as well as updates on legislation and advice technical areas. It was a great mix of content. We also hold two Professional Paraplanner Interest Group half day events around the country. Later this year we will be in Bristol. Content advice is sought from our Interest Group Committee and the events are run by them as well. What I think is important is that these are free events for paraplanners, whether members of the CISI or not and clearly demonstrates our commitment to all paraplanners and to building the profession. Strategic direction Members of The Interest Group are also helping refresh our Paraplanning Professional Refresher module that is free to view for all members and helps them understand what paraplanning is all about. They also help guide CISI in what they think are important changes to the profession and give ideas on how CISI can support them. At the moment, for example, we are working on the refresh and relaunch of the Accredited Paraplanner Professional designation which the Institute of Financial Planning started in the 2000s. CISI has hundreds of paraplanning members who are not currently using this designation (which is free to members who are paraplanners who meet certain criteria). We will be explaining our

October 2018

new plans at the Annual Financial Planning Conference in October and we will be asking our members and their financial planning firms to encourage their paraplanners to use this designation more widely. A caring, sharing bunch I also write regular articles on paraplanning and share the collective ideas as well as lessons we can learn from my experiences as a paraplanner. Itâ&#x20AC;&#x2122;s funny how some aspects of paraplanning have changed, and others have not altered one bit in all this time. I have been pleased to see how the articles which have contained statistics and related tech research which Iâ&#x20AC;&#x2122;ve done, can help paraplanners develop their thinking and skills development over the years. We arenâ&#x20AC;&#x2122;t just technical people, we do have a sense of humour too you know! CISI also supports paraplanning on an international level. In my role as Head of Financial Planning, I am helping the Financial Planning Standards Board, owner of the CFP licence, to understand how paraplanning standards can be explored, which feeds into the requirements for Certified Financial Planner designation. I share best practice and ideas with all other 25 countries in the CFP community. This will encourage worldwide recognition of paraplanning as a profession alongside financial planning. Bring it on!

About Jacqueline Lockie Jacqueline is the Head of Financial Planning at the Chartered Institute for Securities and Investment (CISI). She has worked in the financial services sector since 1988 in technical and training roles and also as a financial planner. She is a Fellow of the CISI and holder of the internationally recognised Certified Financial Planner Licence, for which she was one of the first examiners in the UK. Jacqueline was previously Head of Training at the Association of Investment Companies and Director of Training and Education for the Institute of Financial Planning, where she designed, wrote and delivered new courses for financial advisers wishing to enhance their investment and planning skills and paraplanners to learn the methodology of financial planning.

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PFS PARAPLAN N I NG

October 2018

Evolution of Paraplanners Paraplanning is a profession which is really on the move says Caroline Stuart, a member of the PFS Paraplanner Panel. So what is going on?

Over the last few years, the paraplanning profession has grown strongly. Grown in numbers, in its position in the financial planning profession and in the value it can bring to businesses and clients alike. This growth is largely down to paraplanners being a tenacious bunch, having a real thirst to learn and share what they know with their peers, determined for the profession to flourish and above all being dedicated to giving the best possible service to their clients.

Over the last fifteen years, the paraplanner role has evolved from what was seen by many as simply an administrative function into a recognised profession within financial planning. With this evolution, the respect for paraplanners and the acknowledgement of the value that they can bring to a business has increased exponentially. This is a profession that is on the move, driven from within by the people and the dynamic paraplanning community it has created.

Paraplanners at the Personal Finance Society It wasnâ&#x20AC;&#x2122;t that long ago when an event which was put on just for paraplanners would have been virtually unheard of. However now we have our own conferences, forums, websites and magazine. The fantastic thing about these is they are, more often than not, put together and run by paraplanners themselves.

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PFS PARAPLAN N I NG

Take the Personal Finance Society Paraplanner Panel for example. We were set up in 2015 following Cathi Harrison’s appointment as the Society’s first Paraplanner Board Member, to help them have a more tailored offering for their growing paraplanner membership. A number of paraplanners volunteered for the panel – including me - and we met for the first time in March 2015. We were made up of both in-house and outsourced paraplanners, in a range of roles with varying levels of experience and qualifications. We were a really mixed bag meaning that pretty much most parts of paraplanning were represented. We had a very productive session, tons of ideas were generated, plans were made and loads of coffee and sandwiches consumed. Before long, we had arranged the first round of Purely Paraplanning Conferences.

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These were a great success with lots of paraplanners attending three sessions spread over the country. These are now run twice a year, have been to various different locations around the UK, reaching hundreds of paraplanners and have all been great successes. Three years later and after a short break, the Paraplanner Panel is back. Our line up has changed a little; our members are now Tom O’Hara from Warwick Financial Solutions, Alan Gow from Argonaut Paraplanning, Martin Green of Chadney Bulgin, Caroline Stuart of DB Wood, Becca Tuck of Magenta Financial Planning and Robert Harper. We are all ably herded and wrangled by Lee Travis, Partnerships and Member Engagement Director of the Personal Finance Society. Coming back after our break, we have been working very hard this year and are really excited with what we’ve already got done and what we have on the horizon.

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We are working hard on producing some really useful stuff to give paraplanners practical help with doing the day job, enable them to meet with other paraplanners, and help move their career on in the direction they want. Purely paraplanning roadshows At the moment, we are arranging this year’s second round of Purely Paraplanning Conferences. The roadshows are visiting Glasgow and Birmingham, with the Personal Finance Society London headquarters being home for the final conference of the year. For those unable to make any of the dates, we’re also repeating the very popular Livestream that we trialled at the London session earlier this year. Full details of the sessions and tickets can be found here: http://events.thepfs.org/public /?address=&range=&from=& to=&keywords=paraplanning

PFS October 2018

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https://www.facebook. com/PFSParaplannerHQ/ videos/2171153309796934/

The panel on social media To make ourselves more accessible to paraplanners we have created our Facebook page: https://www.facebook.com/ PFSParaplannerHQ We’re now also on Twitter: https:// twitter.com/PFSParaplanHQ We are using these tools to let paraplanners know about any events we are putting on, news we have and let them know the things we are working on. These are proving to be a really popular way both to speak to paraplanners and to get their thoughts and feedback, making it a real two way street, which is something we’re really pleased about. Please do check them and out and join in. Reaching out But our activities are not just limited to events and social media; we’ve also been working on material to attract more people into the profession as well as helping those who are new or recently joined and are still not quite sure what paraplanning is all about. We’re trying to help to build the profession from grass roots level and inspire enthusiastic new entrants to discover what a fulfilling and rewarding career is open to them through paraplanning. One example of this is our Paraplanning Pathways mini movie. This gives details on what paraplanning is and routes into it. This can be found on the Facebook Page:

We’re also working on a career pathways document giving a roadmap of the skills, qualifications and attributes someone may need to become a paraplanner, and the range of possible options a career in paraplanning could offer. We’re hoping to have this ready to release in the very near future. It’s all very exciting stuff.

Caroline Stuart

Where next for us? As a profession, we have come a long way in a short space of time. It’s no longer seen as an administration role or a stop on the route to becoming a financial planner. Paraplanning has now become a recognised career in itself that adds value to the financial planning business and, most importantly of course, to the client’s experience. However, the key issue for us is that as recognised and valued as we are, there are simply not enough of us. When it comes to paraplanners, demand outstrips supply. Those employers who value a good paraplanner are making sure they look after them and keep them, thereby reducing the pool for new roles even more. Some firms ‘grow their own’ which takes time and commitment but is usually well worth the effort. The home-grown paraplanners will be trained to that firm’s specification and needs. They are less likely to move on if they have been nurtured from a paraplanner seedling and feel valued by the team around them. The Panel are keen to help here. If we can show more people outside of financial services what a great career this is, attracting more new individuals in, we will continue to grow and flourish and have an even brighter future for this fantastic profession of ours.

Alan Glow

Becca Tuck

Tom O'Hara

Martin Green

Robert Harper

Lee travis

As a profession, we have come a long way in a shor t space of time. It’s no longer seen as an administration role or a stop on the route to becoming a financial planner

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M ICH E LLE HOSKI N PARAPLAN N I NG

October 2018

Setting the standard Why The Paraplanner Standard is driving clarity and positive change in the growing profession of paraplanning. Michelle Hoskin, Founder and Director of Standards International

The last few months have thrown up some interesting developments in the world of paraplanning. There has been much interest in The Paraplanner Standard but also at the same time there has also been a huge misunderstanding about what it is. We have had interest from inhouse and outsourced paraplanning teams in South Africa, Canada, the United States and India and it is great to see the focus on ‘quality’ across the global is certainly on the rise. Here in the UK, it has been great to see so many forward thinking and entrepreneurial financial planning firms and paraplanners embracing the intentions of the standard. At Standards International we have engaged in some fruitful and fascinating discussions around the future growth of the role.

We are thrilled to see that so many who are equipped with this foresight are preparing themselves for a very different marketplace where the paraplanner role will look quite different to the one we see today. Definition of the paraplanner role Some of the primary and most fruitful discussions we’ve participated in have been around the sector’s definition of the paraplanner role – what it is, what paraplanners actually do and what role paraplanning plays in the financial planning firm as a whole. It is apparent that this can be vastly different from firm to firm, and from paraplanner to paraplanner, so the role purpose as defined in the standard is proving to be a huge help.

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M ICH E LLE HOSKI N PARAPLAN N I NG

In September, whilst at an event in the UK, I bumped into a financial planner who runs a very successful and growing business. We started discussing the paraplanner role and he proudly said to me that he had four paraplanners working within his team. However, after a more detailed discussion I uncovered that, in fact, he had one apprentice who was just starting on their journey, two post-sales support administrators (who had their old style FPC 123 plus one or two passes at level 4) and one ‘soon-to-be-level-4 report writer’. Honestly, this is not helping! The use of the correct role definitions is essential if we are to bring some clarity to the profession of paraplanning. It will help us to equip both the firms with the road map to recruit successfully for this role and also the paraplanners themselves to lay down a clear path for their own personal development and growth.

The technical ‘knowledge drum’ is really the only one that as an ‘industry’ (and I use that word on purpose) we have been banging over the past ten years. There is no doubt that we have been blindsided and once again seem to be missing the point. As the sector develops over the next decade it will need much more focus on other key and essential attributes for those individuals fulfilling this role effectively. Essential attributes for paraplanners Let’s take a look at these individually: Alert The paraplanner must demonstrate a keen interest in the role and in the financial services sector as a whole and remain alert to the needs of the client and the organisation at all times. Curious

Tipping the balance The main challenge here is in tipping the balance in the UK from our over-reliance and obsession towards academic technical knowledge and qualifications. Whilst these are essential as the foundation of the role, we are thrilled to see that so many of the early adopters of the standard agree that there is so much more than this to being a paraplanner.

The paraplanner must demonstrate a continued desire to expand their knowledge and understanding of the client’s needs and requirements, as well as of the financial services sector as a whole. Responsive The paraplanner must remain responsive to and supportive of the client’s needs and requirements

October 2018

at all times, while having the authority and autonomy to confidently put forward their own ideas and opinions. Resourceful The paraplanner must strive to work as efficiently and effectively as possible at all times while maintaining the highest standards of professionalism and levels of confidentiality. Each one of these is a specific requirement as defined in The Paraplanner Standard and as part of the official assessment evidence of these (as well as other key skills) must be gathered to ensure they are, and remain at the heart of, the paraplanning role. As the journey unfolds we will continue to learn more about the value that paraplanning brings to the profession globally, but one thing is for sure, without full adoption of the standards I believe that valuable time will be wasted for the paraplanners of the future and for firms whilst… yet again… we try and reinvent the wheel. For a deep dive insight into The Paraplanner Standard visit our website http:// standardsinternational. co.uk/certification/ theparaplannerstandard/”

About Michelle Hoskin Michelle Hoskin (aka Little Miss WOWW!) is well known for her endless enthusiasm and energy, infectious personality and unique outlook on what she describes as a “magical profession”. With over 20 years’ experience working alongside some of the world’s most successful financial services organisations, Michelle is an internationally recognised author, speaker, coach and leading expert in the design and implementation of international frameworkbased best practice standards. Michelle is pioneering a drive towards increased professionalism and operational excellence through her continued work at Standards International – the UK’s premier certification body for British and international financial services standards – of which she is the founder. She also most recently led a sector committee whose objective was to develop and launch an exciting new international standard for professional paraplanners. Relentless in her pursuit of a global movement of change within financial services, Michelle is fully committed to supporting financial professionals worldwide to achieve things they only dreamed were possible, and to working with them so that they become the best possible version of themselves.

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DAM IAN DAVI ES PARAPLAN N I NG

October 2018

All paraplanners are not the same Damian Davies of The Timebank is in a reflective mood as he considers an effective way for paraplanners to show their credentials and prove their abilities Everyone looks forward to reading another article about paraplanning, right? Oh, just me then!

The reason is that I see the paraplanning role from both of these perspectives.

I can understand that articles about paraplanning can go on about how the profession is developing, how important paraplanners are and how wonderful the world is with paraplanners in it.

I get contacted by adviser business owners enquiring about our services. If they employ paraplanners, somewhere in the conversation, they will invariably say, ‘I really like working with my paraplanner, but I do feel that they aren’t doing as well as they could’

They sometimes read a bit like Gareth Cheesman looking in a mirror saying, ‘You’re a tiger…… RRRAAHRRR!’ With that in mind, I am going to try to write a useful article for anyone who: • Works as a paraplanner • Employs paraplanners

At the other end of the process, I get contacted by applicants looking to become Timebank Paraplanners. Somewhere in our conversation will be the line ‘I like my boss, but I just feel they don’t really appreciate what I do in my job’

Communication is key The reason for this is neither side is communicating well about what they expect. This is exacerbated by over excitable recruitment consultants encouraging paraplanners to move roles for loads more money. I genuinely had a chap contacted by the recruitment consultant who placed him six months and a day after he started with me telling him about new opportunities! This is because everyone is looking for ‘a paraplanner’, but no-one really knows what a paraplanner is or does. Some have argued for years that a paraplanning standard will fix

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DAM IAN DAVI ES PARAPLAN N I NG

this, but I am not convinced, because I believe a paraplanner should be whatever their employer wants them to be. Maybe a highly technical financial planner needs a highly organised paraplanner who is better at keeping a file straight but isn’t necessarily the most technically strong? They can keep them tidy and organised and help with some research and report writing, but don’t need to be the most hardcore technician. At the same time, very personable, relationship driven advisers may be hugely productive in the work they can generate. They may be better to work with a very well-qualified, highly-experienced paraplanner who acts as a critical friend to them. They can keep the adviser ‘clean’ from a compliance and technical perspective and make sure they don’t miss something really important, which can be easy if you are really busy. A paraplanner obtains information, analyses information and produces some form of report or documents. As such, both of the roles above are paraplanning.

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The problem is that a CV on its own will not really help the advisory firm know the type of paraplanner they are really getting. Most CVs just have experience and qualifications, and these are just not enough to know the real person. There are lots of ways of reducing the risk of getting the wrong person through the recruitment process, but it is only once the two start working together that they know if they have made a mistake. A paraplanning passport So, I suggest that paraplanners start to build themselves a personal record to accompany them through their career. A ‘Paraplanning Passport’ or something like this. This will be separate to the CV and also separate to the T&C scheme within the firm. A paraplanner’s passport could accompany the CV. At the same time, the paraplanner can be probing the adviser about how the passport can be built on whilst working with the firm. The idea is that the paraplanner can demonstrate realistic measures about their performance, and the adviser can best match the role to the candidates.

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Here are a few ideas about what could be in the passport: • Time Time recording is vital to demonstrating efficiency. An elegant summary of a working year can help the paraplanner demonstrate their strengths. Very productive people also tend to be very well organised so this will demonstrate good diary management. This can be broken down at a high level to the split of time spent on client facing tasks, research tasks and admin tasks. How the remaining time is spent will demonstrate the paraplanners proactivity. Without time records, the employer can feel they are not getting the most out of a paraplanner as they don’t realise how long some tasks take. By contrast, a paraplanner cannot fully demonstrate their value in terms of productivity. Firms that do not time record tend to be the ones that don’t appreciate each other as well as they should.

DAM IAN DAVI ES October 2018

• Quality

• Feedback

Time measures are nothing if they are not cross referenced to quality.

Feedback is never personal. It is the only way to develop professionally. As we all know, people are more inclined to voice feedback if it is negative, as it is a stronger emotion.

Most businesses have mechanisms of grading work. Summarising this will help a paraplanner demonstrate how good their work is. If a paraplanner is producing enormous volumes of work but has poor quality might simply mean they are being given the wrong types of tasks where they are. As a paraplanner, you can use these measures to ensure you go to the right place. • CPD CPD helps a paraplanner to demonstrate what they learn and how they learn. As an employer, it is much more useful than a list of qualifications. A summary of lifetime CPD and the last 12 months CPD will help them demonstrate whether they are a hardcore technician or someone more practical. Qualifications are often an empty pot if they are not backed up with practical experience and CPD.

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If you establish a process whereby every case needs to have feedback, you will start to encourage people to leave both positive and negative feedback. Recording this and summarising it in a passport will help the paraplanners prove their quality. For the employer, they are not having to guess whether the individual is as good as they say they are. If you have feedback from clients, that can be even more powerful. • Client meetings The proportion of a paraplanner’s day spent with clients is an important measure.

A simple, 1 page summary for this paraplanners passport can give a really simple to understand snapshot of what type of paraplanner is behind the CV. As regular readers will know, I’ve been guilty in the past of the odd Gareth Cheeseman style article. Nonetheless, this idea of the passport is a great chance for paraplanners to really prove their value to prospective employers and show them exactly what their skills and capabilities are.

About Damian Davies Damian established The Timebank in 2003 after being an adviser and discovering the need for outsourced paraplanning first hand. Since then Damian has directed The Timebank to be the largest paraplanning provider in the UK and is starting to grow the business internationally.

Some paraplanners just don’t like speaking with clients and others love it. It is essential you are not in a role where you are being expected to talk to clients when it is something you don’t enjoy. Likewise, a gregarious, relationship-driven paraplanner will need to find themselves in a role that suits those character traits.

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H EAT RECRU ITM E NT PARAPLAN N I NG

October 2018

The challenge of paraplanner recruitment Heat Recruitment has been partnering with several of the UK’s financial services providers for over 12 years yet finds that recruiting paraplanners remains one of the hardest roles to fill. Here they give some practical tips to boost your success in attracting the right candidates

Recruiting paraplanners is no easy task in the current market. With most financial planning firms looking to have paraplanners with the Level 4 Diploma or candidates willing to work towards this, there is a shortage of experienced and qualified candidates available. This is partly due to the RDR, where hundreds of professionals decided to take a different direction or take a step back from some of the more technical roles within the profession. Also a factor is that there seems to be a lack of understanding of the paraplanner role, with some still seeing it as little more than a varied administrative role and a route into advice and others as a highly technical, crucial part of the financial advice process. When it comes to recruiting paraplanners, there is a real shortage of qualified candidates. As a result, there has been quite an increase in paraplanner salaries over the last few years as demand exceeds supply. Candidates are often left with multiple job offers from firms and have the luxury of picking which firm to join. Whilst that is great news for the candidates themselves, it can mean that firms are having to really pull out all the stops to secure the paraplanner they want to recruit.

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We are now beginning to see more firms offer increased flexibility or home working options for these types of roles given that it is not necessarily a client facing position. And finally, financial planning firms know how competitive the paraplanner market is. They are doing whatever they can to keep their existing support staff and paraplanners happy and fulfilled so that they stay working within the business. Of course, if they sense that they may want to be on the move, it means it can be even harder to attract top talent to fill the position once someone leaves. The growing shortage of paraplanners at all levels will continue to push salaries upwards, with even partqualified paraplanners now able to command significant uplifts on their current basic earnings. So, how do you recruit a paraplanner? Here are a few factors you may wish to consider: •

Salary - Understand the range of salaries offered within the market place. As this is ever changing and highly competitive, it can be surprising to discover what other firms may be offering.

•

Benefits & Perks – Are there unique factors for being a paraplanner within your business? Examples of attractive features you might consider offering may be things like being able to attend client meetings, flexible working, progression to advising, exam support, etc.

•

Time – Move quickly. Often good paraplanners will have several interview requests within a few days of deciding to see what options are around. It is imperative that you try and speak to them and also to see each candidate as soon as possible before they set their heart on joining another firm.

•

The interview process – Paraplanners can end up with multiple firms wanting to see them or pushing them to come along for interviews and discussions. We often see candidates leaning towards those financial planning firms that they get a ‘good feeling’ about as they aren’t looking to keep jumping from job to job, but rather to find a firm that will fit well with them for the long term. Be patient if they want to weigh up different options as often candidates are surprised at ending up in a position with multiple interviews/ job offers available to them.

PRESTWOOD October 2018

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Delivering excellence in financial planning Sue Whitbread talks to Julie Lord CFPCM FCSI FPFS, Director at Prestwood Software and CEO at Magenta Financial Planning about why paraplanning and cash flow modelling are key ingredients for success in financial planning SW: Julie, you’ve got many years of experience running great financial planning firms. What would you say is the secret to your success? JL: There are lots of reasons why I’ve been successful but principally it’s having the right people to support me and having the right tools. I love doing what I do – giving lifelong financial planning advice to clients. I think this involves a wide-ranging skill set. As planners, we have to be technically qualified whilst also sticking to a rigorous regulatory framework. But, we also have to have exceptionally strong interpersonal skills. My clients really value me because I instil in them trust and confidence. So, it makes sense for me to focus on that area and use my team of paraplanners and administrators to take care of the others. I also ensure that we all have the right tools to do our jobs properly.

SW: Have you always run your business the same way? JL: I used to have a financial planning business many years ago, where we had a top-heavy, inverted pyramid of the advice model: many planners at the top, effectively working for themselves, supported by a small number of paraplanners and administration staff. Advisers had their clients and would tend to complete everything involved in the planning process with the exception of processing any applications (though in many instances advisers did this themselves also). As the boss, I realised that actually, managing lots of advisers kept me away from doing what I love – advising clients. So, I inverted my pyramid and created a business with just two planners at the top, supported by a team of paraplanners. In this way, I have been able to become far more profitable. Using a paraplanner has freed up more of my time to focus on giving advice, and therefore accurately charging for that advice.

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PRESTWOOD PARAPLAN N I NG

SW: Do you recommend recruiting a paraplanner directly to work in house, or is outsourcing this job just as effective? JL: Paraplanners do not need to be employed at a financial planning firm. There are now a number of outsourced solutions offering services to firms, as and when they need them, which can be more convenient and cost-effective. Outsourcing paraplanning can be useful, especially if you are thinking about taking on a paraplanner full time and are looking to see

how and where they might work with you. However, it is important that even if you outsource, you and the paraplanner are using the same financial planning systems. A highly technical and qualified individual who can offer skills in addition to those of the adviser is expected, but at my firm, for example, we use Prestwood’s Truth cashflow modelling tools - why would I want a paraplanner who insists on using a different tool? Or indeed, is not technically proficient in using the cashflow system itself?

October 2018

SW: Why is it so important for paraplanners to use cashflow modelling tools? JL: Paraplanners do all the research and planning before any meeting with a client. Whatever kind of meeting I’m having, the paraplanner is responsible for looking through the various cashflow scenarios that might affect the client in advance of the meeting. This is so I can be fully apprised of all situations when face to face with the client. They build it, input data, analyse the output, review the cashflow. If the client has a specific goal they build a scenario to see if it works or not and then I go through it. Because the paraplanning has produced real scenarios that can take place if the client takes one particular action or another, it gives the client a reality check. SW: Could you give us a recent example? JL: Yes sure. One of my clients wanted to retire from work at 55, but their DB pension scheme did not pay out until aged 65 and they were thinking of transferring out of the scheme. From the cashflow prepared by the paraplanner, you can see how the rest of their life might look if they were to take advantage of the generous DB transfer offer: on the face of it they were better off transferring, right up to about age 96. If they survive beyond this, they’ve got less to spend, but still, die with money in the bank. It’s the job of the paraplanner to stress test the cashflow scenario. During the 2007-8 financial crisis, markets fell 21% in a single day. On Black Monday (October 19th 1987) markets fell 28.3% and we always use this as a talking point for clients.

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PRESTWOOD October 2018

Using the Truth’s Market Crash Simulator, we can see what would happen if the client took the DB transfer, got the agreed x% return up to retirement, but then suffered a 30% loss on their portfolio (i.e. worse than either of the crashes mentioned above): They would run out of money in their late 70s. The transfer starts to look like less of a good idea - but it is an important lesson to show how much of the stress-testing and research was eliminated from my job because of the work my paraplanner did beforehand. SW: Do the paraplanners actually attend your client meetings? JL: Yes, this is something I’ve introduced fairly recently and it seems to be working well. Previously, I used to feel that if the paraplanner was in a client meeting alongside me, it was simply an unnecessary waste of time (and a cost to the business). However, I found that there were times when my paraplanner came up with solutions and options during their research or preparation of a client report, that the client didn’t actually want. Even though my notes were clear, from a technical perspective, my paraplanner thought more scenario planning was better than just one or two. Was this a case of showing off technical skills or failing to follow direction? Either way, I decided having my paraplanner in the client meetings with me made our service seamless. Having a team approach ensures that there is always a point of contact for the client, and ensures that by using each individuals’ strengths the sum of the whole is greater than the sum of the individual parts.

PARAPLAN N I NG

The paraplanner role most cer tainly brings greater productivity to financial planners and the cost of having this suppor t is less than the cost of not having it

SW: In your view, how has the role of the paraplanner changed over the last 10 years? JL: We are seeing an increase in the general number of paraplanners who are exceptionally qualified and skilled. At the various paraplanning events I attend around the country, I’m always delighted to see more and more paraplanners demanding their planners use the best financial planning tools but there is still some way to go persuading business owners about a) the role of paraplanners and b) how they should do their job. There are still some business owners who use paraplanners for part administrative/back office rather than for straightforward paraplanning. Often, they are not given the right tools for the job.

Scenario planning and cash flow forecasting are essential tools for paraplanning and client servicing. Paraplanners are now essential for most financial planning businesses. There is an established role definition and a career path with qualifications just as there is for financial planners. The paraplanner role most certainly brings greater productivity to financial planners and the cost of having this support is less than the cost of not having it. Our paraplanners typically work on everything the planner works on and each day can be different: in one week it can go from helping clients with SSAS property purchase to searching for shareholder protection required by two partners of a limited partnership. Some clients will require little time spent but for clients needing more complicated, tax-planning scenarios such as SSAS buying a property, takes many months. The nature of paraplanning has changed remarkably over the past ten years as has the planners’ role, especially with the advent of RDR. The planner must maintain the client relationship while the paraplanner, increasingly qualified to the same level as the planners, must be given the tools to allow for professional planning and research. The right cashflow software is vital for client planning.

About Prestwood Prestwood pioneered lifelong cashflow modelling over 30 years ago. Whatever the scenario, from retirement planning to gifting money or selling a business, our powerful, simple-touse software enables you to take clients on their future journey. Why not try a free month’s trial? Visit www.Truthsoftware.co.uk

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BE LLEVU E October 2018

Golden years Biotech and healthcare are dynamic sectors with opportunities for high growth potential. Sue Whitbread talks to Paul Major, manager of the BB Healthcare trust about why he feels that this is a golden era for healthcare investing

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BE LLEVU E October 2018

SW: Can you give us some background to the business of Bellevue and to the BB Biotech and BB Healthcare Trust itself, as these are names that some advisers might not be familiar with? PM: The Bellevue Investment Trust franchise has a storied history; Swiss-listed BB Biotech is one of the oldest and arguably most successful biotechnology investment funds, dating back to 1993. With a market value today of £3.0bn, it is also one of the largest listed investment companies. Whilst it may be less familiar to UK advisers, Bellevue is very well known in the healthcare arena and has more than $6bn of healthcare investments across public and private equity and a highly experienced team of Portfolio Managers- with extensive academic backgrounds in relevant fields. Although the Trust team continues to see the biotech sector as the engine of innovation in the pharmaceutical arena, we feel strongly that healthcare in the wider sense must undergo a revolution to meet the needs of an ageing population across the developed world. In December 2016, we launched a sister vehicle, the £400m UK-listed BB Healthcare Trust, to capitalise on the investment opportunity arising from this inevitable disruptive innovation.

SW: When they are researching investment opportunities in these sectors, why should advisers consider using Bellevue? What is different in the structure of the trusts and in your approach to investing in these sectors? PM: BB Biotech and BB Healthcare prosecute very similar strategies within their respective mandates, namely to own a concentrated portfolio of companies that maximise exposure to compelling thematic opportunities: companies whose products are potentially transformative to the healthcare paradigm. In the case of BB Biotech, that is offering novel treatments that serve unmet medical needs, often delivering curative therapies for serious diseases. The Healthcare approach is similar, but the remit broader: we are looking across all aspects of care from drugs to devices to the whole ‘consumer’ experience of delivering healthcare to the patient and this includes companies that would be outside of the remit of most other healthcare funds (consumer, technology etc.), because the sources of future innovation are likely to come from very different places to the traditional players in the healthcare marketplace.

A confluence of long-hoped for positive factors have coalesced into an environment that is highly supportive of innovations in products and services across the healthcare space

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BE LLEVU E October 2018

Because they are unconstrained, both funds are free to invest across any market capitalization range and geographical area, as long as companies meet our rigorous due diligence requirements. There is some overlap between the two funds, but it is fairly limited. Again, we feel this unconstrained approach is important, as large conglomerate companies that we do not expect to lead the next wave of innovation dominate healthcare benchmarks. As such, they are likely to underperform the smaller, more innovative ones and we are able to ignore these companies and focus on the innovators. There is as much alpha opportunity versus a benchmark or ETF strategy in not owing underperforming companies as there is in picking the outperformers. SW: Where are you seeing the best opportunities for investment across biotechnology and healthcare and how do you carry out due diligence activities? PM: Trite as it may seem, we feel strongly this is a golden era for healthcare investing. A confluence of long-hoped for positive factors have coalesced into an environment that is highly supportive of innovations in products and services across the healthcare space. Firstly, new tools to explore the molecular and genetic basis of various diseases have accelerated the rate at which we identify the pathology of disease, opening up new opportunities for therapy. Secondly, new approaches such as controlling the expression of genes involved in diseases (e.g. gene therapy, RNA silencing, gene editing) are allowing us to target diseases that would be inaccessible to traditional pharmaceutical approaches.

Never has it been so easy to re-imagine the healthcare paradigm and deliver care in new ways that are demonstrably better or cheaper

Finally, electronic patient records and genetic screening allow us to identify patients more rapidly and analyse the real-world effectiveness of treatment. This latter point is critical for the inception of BB Healthcare; never has it been so easy to re-imagine the healthcare paradigm and deliver care in new ways that are demonstrably better or cheaper. As exciting as the above all sounds (and timely too, given the relentless negative headlines about the state of healthcare provision here in the UK and the lack of affordability for new approaches etc.), one cannot get carried away. We are very evidence-focused in our investment approach and due diligence (scientific, competitive and financial) is crucial. For example, we hope as much as anyone else that the spectre of Alzheimerâ&#x20AC;&#x2122;s will eventually succumb to scientific interrogation but, for now, the evidence base supporting any of the current

approaches to treatment is uncompelling and so we are not invested in this area. Furthermore, there is a big distance between an interesting scientific idea and commercialising a product or service, with many potential pitfalls along the way. Even the most experienced companies in this industry can see high levels of project failure and it is important to have realistic expectations of eventual success factored into any investment scenario. Both BB Biotech and BB Healthcare have highly experienced boards with relevant knowledge in these areas and we draw on their knowledge and extensive networks of contacts when considering potential areas of investment. We see this as a key area of difference to most of our peers and a competitive advantage.

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BE LLEVU E October 2018

About Paul Major Paul has 20 years of experience in the healthcare sector on the sell-side and was top-rated by a number of institutional investment clients. He was one of the first research partners at Redburn, Europeâ&#x20AC;&#x2122;s leading independent research firm. His work there included bespoke projects on healthcare portfolio construction for several institutions. Paul was previously an analyst and corporate financier at UBS Warburg and studied biochemistry.

SW: How is healthcare investing different to other sectors of the market PM: At Bellevue, we feel that healthcare has a number of unique attributes that favour active rather than passive investment strategies. Most important is the due diligence aspect; inevitably one needs a degree of relevant background knowledge to interrogate the strategy and product developments of healthcare companies, often spread across the globe. In addition, the competitive dynamics can be highly complex, with dozens of companies racing to develop products or register intellectual property in a given area. This is in contrast to many other industries, where there is typically a smaller group of companies that are competing in a given field. One also cannot understate the human element. With development timelines that can span a decade, the emotional investment made by project leaders in these areas is significant and they are often the

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last to see that the field has moved on and the current project is no longer best in class etc. We often hear impassioned pitches for ideas that we simply cannot back, but it is the collective experience of the team that gives us the perspective to take a view that is contrary to a companyâ&#x20AC;&#x2122;s management team or received wisdom. SW: So can we talk about the risks? Are there particular areas of caution for you at the moment? PM: Healthcare in general and drug development in particular, are areas where incumbency and historical track records are of little value; each project must be assessed on its own merits. The pharmaceutical industryâ&#x20AC;&#x2122;s long-declining R&D productivity is testament to this. As I mentioned previously, we will only invest in areas where we have some clinical data that supports the development of a particular type of therapy or device.

The rapid speed of development is probably the greatest challenge to stay on top of. Haemophilia is a great example, where we have seen companies like Shire pressured by perceived obsolescence of Factor VIII therapy by novel approaches like Hemlibra (from Roche), only for the debate now to move on to the potential risk to both approaches from gene therapy, where various players are racing to bring a product to market. All of this has unfolded in less than two years. SW: How can advisers find out more about Bellevue and its investment products? PM: Our websites (www.bbbiotech. ch/en/bb-biotech/ and www. bbhealthcaretrust.com/en/bbhealthcare-trust) offer a wealth of background information on both Trusts, including our monthly factsheets. In addition, advisers can contact Claude Mikkelsen, who is responsible for investor relations on both Trusts (cmi@bellevue.ch).

FI DE LITY October 2018

Capitalising on change Identifying beneficiaries of corporate change such as M&A or spin-offs is a key part of Fidelity Global Special Situations Fund portfolio manager Jeremy Podger’s three-pronged investment approach. Here he reviews a widening opportunity set of corporate actions across global markets and reveals how this is creating overlooked potential at a time when others are focused on macro factors.

Turning the spotlight on companies that have undergone meaningful change can throw up some great investment opportunities. The market is often slow to realise the benefits of major structural changes such as spin-offs, M&A, postbankruptcy re-listings and IPOs. Many investors prefer to watch and wait until the perceived risk of the transition has passed, so any value that is created by big structural moves can take a while to be reflected in share prices. We operate somewhat differently, specifically homing in on such opportunities. In fact, corporate change is one of the three key categories of investment in the Fidelity Global Special Situations Fund and has been a strong contributor to the fund’s performance. We tend to define such change relatively broadly, looking for a potential impact of over 20% of a business in revenue terms, and an anticipated revaluation of 15% or more over a 12 to 18-month period.

Our efforts are always to use fundamental research to identify the ‘gems’ early on, before they attract a new investor base waiting for confirmation that the change is proving successful. Such businesses tend to move from a situation where a high implied discount rate is replaced by one that is more in-line with the peer group in analyst models. If our analysis is correct, many such stocks also offer limited downside, with managements focused on avoiding an alienation of existing investors. A diverse opportunity set Looking around the world today, we are seeing a widening opportunity set with interesting pipeline of corporate action opportunities. This is especially true in Europe, which has traditionally been quite sleepy on activism, but has seen a spurt of spin-off activity and restructurings recently.

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FI DE LITY October 2018

This follows heightened interest from US activists, such as Elliott Management, that are finding relatively slimmer pickings at home. Spin-offs can often represent good buying opportunities for both fundamental and technical reasons. Fundamentally, change that allows for the business to become more focused, more nimble, attract the right talent and create better incentivisation and currency for M&A, can create value. Technically, such stocks are often attractively priced as many holders are forced to sell because of size, country limits, liquidity and because such names may fall out of the index. Our recent participation in the spin IPO of Siemens Healthineers, which has a leading position in imaging and diagnostics, is a good example of profitable change. A belief that the new structure would bring more transparency and help accelerate growth from the new Atellica platform has paid off so far. More broadly though, the IPO market has been relatively subdued recently, with the exception of China, where retail demand has created somewhat bubble-like conditions. Prominent planned IPOs of large new economy names such as Huawei, Didi Chuxing, Ant Financial, Tencent Music Entertainment will continue to dominate headlines but conditions seem to be cooling off at the margin now. Getting an edge We have been spending quite a lot of time looking at opportunities in this arena, where we have the advantage of long-term company relationships and access starting from a pre-IPO/roadshow stage. Many investors in the marketplace tend to avoid such stocks, given limited data availability and asymmetric information

(versus insiders). Our efforts are to use research to identify the winners of the future and, equally importantly, to avoid the small group of stocks that tend to underperform dramatically and give IPOs a bad reputation. We also have a continued focus on M&A activity, where we have found that the combination of synergy benefits in combined cost bases and financing cost advantages can be powerfully value-enhancing. Recently the fund has benefited from its holdings in Andeavor (itself formed from the merger of Western Refining and Tesoro), which has received bid interest from Marathon Petroleum, and Twentyfirst Century Fox, which has been the subject of a much-publicised bidding war between Disney and Comcast. New additions include the likes of Worldpay formed from the merger of Vantiv and Worldpay to create a truly global payment solutions business, with a leading position in the US, Europe and global e-commerce. Our research efforts are focused on differentiating between deals that are value enhancing rather than value disruptive, particularly as deal sizes get larger and more industry defining, and we get closer to late cycle, with more stretched balance sheets and rising interest rates implying higher financing costs.

In all of this, one of our key advantages remains the dedicated analysts within Fidelity who monitor the pipeline of corporate change activity in real time and have developed good relationships with special situations desks across the industry, allowing us to form views in a time sensitive manner. At a time when most of the market place is focused on macro and geopolitical risk, they allow us to identify true corporate transformation that can bring exceptional performance almost regardless of market conditions. Important information: The value of investments can go down as well as up, so you may not get back what you invest. Past performance is not a reliable indicator of future returns. Investors should note that the views expressed may no longer be current and may have already been acted upon. The Fidelity Global Special Situations Fund uses financial derivative instruments for investment purposes, which may expose it to a higher degree of risk and can cause investments to experience larger than average price fluctuations. Subject to currency fluctuations. Investments in small and emerging markets can also be more volatile than other more developed markets. Reference to specific securities should not be interpreted as a recommendation to buy or sell these securities, but are for illustration purposes only. Investments should be made on the basis of the current prospectus, which is available along with the Key Investor Information Document, current annual and semi-annual reports free of charge on request by calling 0800 368 1732. Issued Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. UKM0918/22453/SSO/NA

Jeremy Podger joined Fidelity in February 2012 and manages the Fidelity Global Special Situations Fund and the Fidelity World Fund (SICAV). He is an experienced investor and has been managing global equity mandates for more than 20 years. His dedication and expertise has led him to be named Morningstar’s Global Equities Fund Manager of the Year in 2017 and an FE Alpha Manager in 2018. Prior to Fidelity, Jeremy was Head of Global Equities at Threadneedle, a fund manager at Investec for seven years and a global and pan-European fund manager for Saudi International Bank. Jeremy has a degree from Cambridge University and an MBA from London Business School.

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BLACKROCK October 2018

For Professional Clients Only

Constraints, constraints, constraints Michael Gruener, Head of Blackrock EMEA retail looks at breaking the constraints to find returns Most conversations I have with clients evolve around constraints. Risk constraints, cost constraints, benchmark constraints and other investment considerations typically frame investment conversations â&#x20AC;&#x201C; and we excel at using our technology, experience and expertise to provide solutions. But is that enough? Investors have grown increasingly sophisticated in deploying different investment approaches to achieve their goals. Our view is that the full investment toolkit should be considered: a blend of indexing and alpha-seeking strategies often meets the investment objective.

Many objectives can be achieved by having broad-based market exposures, but we believe some require skilled navigation of the opportunity sets across markets. The search for yield Events in 2018 have reminded us that volatility can be triggered by different events, and can create dislocation and relative value opportunities. In fixed income, investors are increasingly turning to alphaseeking strategies to help mitigate risks and capitalize on opportunities. Over half (57%) of all 2017 flows into alphaseeking strategies went to fixed income strategies, according to Broadridge Saleswatch, and this trend has extended into 2018. The reason for this is well known: the search for yield remains challenging. It requires a skilled and nimble approach to achieve consistently. Investors now have more indices at their disposal and can be a lot more selective about their benchmark. Yet they still need to anticipate which indices are likeliest to help them achieve their investment goals â&#x20AC;&#x201C; and need to understand the drivers of that benchmarkâ&#x20AC;&#x2122;s returns.

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BLACKROCK October 2018

Traditional fixed income benchmarks don’t necessarily provide positive returns all the time. They are driven by interest rates, which in turn are driven by central banks. By our calculation, more than two-thirds of the risk in most fixed income indices is driven by duration, - and duration is a risk in the current environment, we believe. Unconstrained melody Adopting an alpha-seeking strategy can help mitigate this risk, but there are different ‘intensities’. Most alpha-seeking managers are constrained by their stated benchmark. Further along the spectrum you have ‘high-conviction’ approaches, which loosely refer to a benchmark. Finally, ‘unconstrained’ strategies aim to achieve positive returns irrespective of what market benchmarks do. Unconstrained strategies have the ability to seek out opportunities across a wider spectrum than most benchmarks allow. They can achieve a higher yield and lower interest rate sensitivity compared with traditional fixed income investments, while maintaining a similar level of overall portfolio risk. This is key for the objective of achieving attractive riskadjusted returns across interest rate environments. Our fixed income team’s central thesis for the rest of this year is that there is little upside in duration risk because the upward trajectory on interest rates remains firm in the US, even if there are hiccups along the way; that there are opportunities to selectively add risk in emerging markets and exploit specific credit opportunities in Europe; and that the short-duration part of the US curve is attractive.

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That being said, we believe it is prudent to maintain some duration as it has historically functioned as a buffer against a risk-off events. An unconstrained approach is able to act on this investment thesis and exploit numerous additional opportunities identified by the investment teams. As investors think more holistically about their portfolios and seek to minimise correlations and risk exposures, unconstrained funds may have a greater role to play.

The search for yield remains challenging. It requires a skilled and nimble approach to achieve consistently. Investors now have more indices at their disposal and can be a lot more selective about their benchmark

Important information: This material is for distribution to Professional Clients (as defined by the FCA or MiFID Rules) and Qualified Investors only and should not be relied upon by any other persons. Unless indicated the fund information displayed only provides summary information. Investment should be made on the basis of the relevant booklet together with the Prospectus and Key Investor Information Document, which are available from the Fund Manager. Reference to individual investments mentioned in this communication is for illustrative purposes only and should not be construed as investment advice or investment recommendation. The number of shares quoted for each fund are indicative and actual numbers may fall outside of the ranges shown. Issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. © 2018 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylised ‘i’ logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Michael Gruener, Head of BlackRock EMEA Retail

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RICHARD HARVEY October 2018

Going, going, gong Risk comes in all sorts of different forms says Richard Harvey as he reflects on the impact of certain types of advice

Advisers advise, clients decide. The first time I heard this phrase was when I was a PR man, enthusiastically urging a client to take a particular course of action. In other words, he was making it clear that whatever I recommended, he was going in a different direction. Having been put back in my box, I learned that no matter how persuasive the advice, the one who pays the bill has the final say. Even if it does lead to catastrophe.

Caveat emptor At the moment, consumer financial pages are regularly awash with horror stories of pension holders being scammed by crooks into withdrawing their funds from safe havens and switching them into fanciful offshore locations from which they promptly disappear.

But for most savers, the world of investments is as opaque as a Scottish moor on a foggy February morning, and the consequences of making just one foolish decision are way more serious than for my PR client (who, it turned out, was quite right to boot my recommendation into touch).

Those of a hard-nosed demeanour might take the view that if on the advice of an oily conman (or woman - no sexism here) you to take your money out of an established pension scheme and transfer it to a Bermudabased outfit building theme parks in Paraguay, then more fool you.

Which is why I have some small sympathy for those celebrities caught up in schemes such as Ingenious, whereby investment in film production was deemed to qualify for favourable tax treatment. Or so it was thought, until HMRC came calling with vast back tax bills.

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RICHARD HARVEY October 2018

For most savers, the world of investments is as opaque as a Scottish moor on a foggy Februar y morning

Comedian Jimmy Carr, Take That's Gary Barlow and Robbie Williams, and soccer stars Wayne Rooney, Rio Ferdinand and David Beckham all took professional advice to shelter money in schemes such as Ingenious, Invicta 43, Scion and similar, perhaps unorthodox, funds.

This is notwithstanding that these people almost certainly acted in good faith on the advice they were given, unaware their investments were being put into schemes which could later be deemed by HMRC to cross the line between tax avoidance and evasion.

Behaviours which cause concern

And also ignores the fact they give time, money and profile to good causes - Ferdinand has set up a foundation to support young people in deprived communities, Williams is a UNICEF ambassador and Barlow organised one of those big Buckingham Palace bashes for the Queen (so the thought must have crossed his mind he was on the fast track towards a knighthood).

Now comes an allegation in The Times that not content with hoovering up millions in reclaimed back tax, HMRC is whispering into the ear'oles of the Cabinet Office that it might be, er, inadvisable to dish out knighthoods, CBEs or even lesser honours to those who could have exhibited "behaviours which cause concern".

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It might also explain the claim that David Beckham erupted in fury when he found out that his anticipated knighthood - which many feel was his just reward - was not to be. Although he still might win a lifetime achievement award for services to tattoo artists. So if ever you are asked by clients to "give it some welly" and invest in some wildly ambitious fund, have a care. It could mean that they, and you, may never get so much as a Blue Peter badge, let along a Queen's Birthday Honours gong.

CAREER OPPORTUNITIES Position: Technical Paraplanner (12 Month FTC) Location: LONDON Salary: £37,000 - £49,000 Per annum The client: Our client is an award winning financial planning and investment management company with offices throughout the UK. Specialising in proving a wide range of services to private clients, corporations, HNW individuals and financial services professionals across the UK, they are a market leading firm with a rich history and great reputation for supporting their clients for over 30 years with their financial planning and investment needs. The opportunity: Due to continued growth, this company has created an exciting opportunity for an experienced paraplanner to join the team and become a vital part of the financial planning process, supporting several highly successful advisers and their HNW clientele. You will benefit from working with a highly experienced team in an environment that provides industry leading training & development as well as exam support towards chartered status. What’s needed for me to be considered? •

Previous experience within a paraplanning position within a regulated environment

•

Hold level 4 Diploma in Financial Planning or have the ambition to achieve this

•

Understanding of the full financial planning & corporate advice process

Position: Senior Paraplanner Location: CAMBRIDGE Salary: £40,000 - £60,000 Per annum The client Our client is a bespoke Chartered Financial Planning practice in Cambridge. They specialise in providing truly unique and tailored advice service to both their private and corporate clients. With a real focus on the client journey they ensure they provide only the highest standard of advice for clients. The opportunity: This is a fantastic opportunity for an experienced senior paraplanner to join a friendly and focused team. You will be liaising with clients directly and be directly involved in discussions on the financial well-being of all clients. Due to continued growth there will also be plenty of progression opportunities for the right candidate to move in to both mnagement and advice-based positions further down the line. What’s needed for me to be considered: •

Proven experience within a similar paraplanning position

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Level 4 Diploma qualified as a minimum

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Experience working within an IFA

Position: Self Employed IFA (North West) Location: LEEDS Salary: £60,000 - £120,000 Per annum The client: A fantastic opportunity has arisen for a number of qualified and driven self-employed financial advisers to join an industry leading practice, offering fully holistic financial advice to a range of high net worth clients across the UK. With this company, you will be offered strong support and benefits to ensure you can produce and write the level of business you want in order to reach the highest earning potential you can! This is done by offering a number of perks including the set-up of your very own new website, a fantastic new cutting-edge back office system to aid with all of your paraplanning, compliance and administrative duties alongside an attractive earnings split increasing in your favour as you produce more business, whilst boasting one of the highest retention rates for its advisers throughout the UK. The ideal candidate will need to be ambitious and committed to client service, and have an excellent knowledge of the financial services market place. This position would suit both IFAs with existing client banks, or those with strong lead generation skills and want to have the flexibility and freedom of running their own work load. There is also the chance for advisers that hold in excess of £10m with the firm’s DFM panel to enjoy a fee share that provides a rebate of approximately £10,000 per £10m annually thereby reducing costs significantly. Responsibilities: •

Manage and develop profitable relationships

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Provide in-depth assessments of clients’ needs, selling benefits of products

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Expected to manage client relationships proactively from initial set up meetings to ongoing service issues; building trust and responding quickly to client needs

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Generate the entirety of their leads to work from

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Committed to providing quality advice and solutions through knowledge of UK financial pensions and investments products and services

Skills and Experience: •

Level 4 diploma qualified in financial planning

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Experience of working within a financial services environment

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Excellent communication skills

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Strong understanding of the current financial market

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Strong knowledge of pensions and investments products

Position: Independent Financial Planner Location: EDINBURGH Salary: £50,000 - £70,000 Per annum The client: This is a bespoke financial planning practice which is growing one of the best names in the region for their financial planning services. They specialise in providing truly unique and tailored advice service to both their private and corporate clients, with a real focus on the client journey, they are always able to ensure they provide only the highest standard of service. The firm spends a great deal of time ensuring staff within the business are supported with their career goals and for the right candidate there will be the chance to take on a directorship or senior management level role. The opportunity: With this company, you will be offered a range of support and benefits to ensure you can produce and write the level of business you want reach the highest earning potential you can! You will have the chance to work with existing clients within the firm and supported by a strong source of inbound leads from their brand-new marketing division, however someone with business to bring, or the ability to self-generate is always useful. . The ideal candidate will need to be ambitious and committed to client service and have an excellent knowledge of the financial services market place. This position would suit both IFAs with existing client banks or IFAs with strong lead generation skills and want to have the flexibility and freedom of running their own work load. If you are looking for the opportunity to take your career to the next level, then please apply. Responsibilities: •

Manage and develop profitable relationships

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Provide in-depth assessments of client’s needs, selling benefits of products

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Expected to manage client relationships proactively from initial set up meetings to ongoing service issues; building trust and responding quickly to client needs

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Generate business from your own lead source as well as the leads provided

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Committed to providing quality advice and solutions through knowledge of UK products such as pensions, investments products and services

What’s needed to be considered: •

Level 4 Diploma Qualified in Financial Planning

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Experience of working in an IFA practice in a CF30 position

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Excellent communication skills

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Hold current SPS and CAS

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Strong understanding of the current financial market

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Strong knowledge of pensions and investments products

Position: Employed Financial Planner Location: ESSEX Salary: £30,000 - £50,000 Per annum The client: The firm is a holistic and well respected and Chartered IFA practice that seeks to build a long term, trusting relationship with their clients by providing their financial planning services to their clientele both at the outset and as an ongoing service. They provide tailored financial planning advice and really go the extra mile to provide a personalised service, where their ethos is much more about quality over quantity. Priding themselves on their highly technical approach, the client has built up a strong reputation in and around Essex and due to this, are expanding and developing organically. The opportunity: This is a fantastic position for an experienced adviser to join a growing firm that can offer genuine career development by allowing you to be a key part in the firm’s ongoing successes. What’s needed for me to be considered: •

Qualified with level 4 diploma as a minimum and working towards chartered status.

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An existing client bank to work on and grow is beneficial.

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Previous experience within an IFA practice and giving financial advice

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Understanding of FCA regulations as well as products, and their practical application

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Effective communication, both written and verbal

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Have a professional, proactive and positive attitude

Position: Employed IFA Location: CARDIFF Salary: £30,000 - £35,000 Per annum The client: Our client is a bespoke independent financial planning firm based in Cardiff. The team are highly driven to deliver a quality service to their clients, and are now looking to expand by adding two new members to the team. The opportunity: The opportunity here is for employed financial advisers, with a professional and level-headed approach to come in and help review a number of the company’s clients as well as their own moving forward. This opportunity would be suitable for any Level 4 Diploma qualified professionals, looking to work in a relaxed professional environment. In this role, as mentioned, you will have the chance to work with a number of the firms existing connections. What’s needed to be considered: •

Hold previous experience within an IFA/financial planning practice

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Must be qualified to a minimum industry standard of Level 4 Diploma Qualified

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Previous experience dealing with High Net Worth Clients - desirable but not essential

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A strong understanding of pensions and investment products advantageous

Position: Employed IFA Location: COLCHESTER Salary: £28,000 - £35,000 Per annum The client: This is a highly reputable, Chartered, independent financial planning practice that specialises in both private and corporate financial advice. This practice offers a complete holistic financial planning service alongside a specialist wealth management division. The opportunity: Due to business growth this practice would like to welcome an experienced IFA to the team. This position will offer full back office support, leads and business generation alongside a substantial client following that you can generate business from. You will benefit from a highly competitive basic and bonus structure, exams support towards Chartered status and future progression opportunities. What’s needed to be considered: •

Hold level 4 Diploma in Financial Advice

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Previous experience providing advice to private and corporate clients within a holistic environment.

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The ability to service existing client alongside new business generation

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Hold Chartered status, or have progression towards this (advantageous)

Position: Financial Planner Location: MARKET HARBOROUGH Salary: £40,000 - £50,000 Per annum The client: This is a well-respected IFA practice that seeks to build a long term, trusting relationship with their clients by providing a tailored solution for each case. They have multiple offices and is a very well-established business which is expanding quickly and they pride themselves on their professionalism and the quality of the service that they provide. The opportunity: This is a fantastic position for an experienced financial adviser to join a growing firm that can offer genuine career development by offering such a broad proposition of technical advice as well as offering exam and study support for candidates looking to further their technical knowledge and qualifications. Due to the ongoing expansion, the successful adviser will be given a strong client bank that is generating in excess of £100k in recurring income and tasked with servicing this and building on this. You will have a qualified and experienced paraplanning team to assist you and will be provided with a competitive employed salary and strong benefits being provided by a well-established firm. What’s needed to be considered: •

You will be diploma qualified

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Currently an established advisor with CAS status

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Excellent sales and presentation skills

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Excellent telephone manner and client facing skills

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Driven and motivated to achieve targets

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Track record or producing good levels of business within an IFA environment

Position: Financial Planner Location: NEWBURN RIVERSIDE Salary: £35,000 - £45,000 Per annum The opportunity: An exciting opportunity for a financial planner has opened at a highly regarded national financial planning firm that specialises in all aspects of savings, investments and retirement planning for both corporate and personal clients. They pride themselves on the highest level of personal advice and professionalism that they provide each and every client. You will be working in a supportive company which embraces the latest technology within the industry to help their employees provide the highest level of service. You will be joining a very well-established firm on their desk-based advisory team providing advice to a range of clientele. So if you are a forward thinking, pro-active person who wants to work in a national firm with strong values then this could be for you. Key Responsibilities: •

Provide holistic financial planning advice to both prospective & existing clients.

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Identifying the most suitable service proposition and making referrals

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Engaging clients and building relationships

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Delivering formal recommendations

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Following up new business initiatives

Skills and Experience: •

Level 4 Diploma Qualified

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CAS Status

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Previous experience in an adviser role

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A high level of confidence, sales & presentational skills and interpersonal skills are also key

And also… If these specific vacancies are not exactly what you are looking for, please contact us to discuss other opportunities we may be recruiting for that aren’t necessarily advertised. Additionally, refer a friend or colleague to us and receive £200 in vouchers if we assist them in securing a new career.

BRISTOL OFFICE

LONDON OFFICE

+44 117 922 1771

+44 203 207 9075

Visit the Heat Recruitment website for more details of these and hundreds of other jobs too www.heatrecruitment.co.uk

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Paraplanning in the Spotlight | IFA 72 | October 2018

Articles inside

An optimistic outlook