What Going On With Gold? | IFA 81 | September 2019 by Clifton Media Lab

For todayâ&#x20AC;&#x2122;s discerning financial and investment professional

What's going on with Gold? The case for Global Listed Infrastructure

Multi-asset investing in the next ten years

September 2019

ANALYSIS

REVIEWS

Paraplanning in practice

ISSUE 81

COMMENT

INSIGHT

CONTE NTS

CONTRIBUTORS

September 2019

Ed's Welcome

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

Editor's Rant - Solid Gold Certainty Mike Wilson considers what’s going on with bullion and other sectors

Better Business Brett Davidson of FP Advance has practical tips on establishing good business habits

Richard Harvey a distinguished independent PR and media consultant.

The song remains the same Brian Tora on why advisers need to check the liquidity of open-ended funds before investing

18 Brett Davidson FP Advance

Building the modern world Alex Araujo, of M&G Investments, on infrastructure investment as a global asset class which has breadth and depth as well as liquidity

More than a negative screen King & Shaxson is a leader in ethical investing and argues here that now is the time to get to grips with the issues and opportunities that this dynamic sector presents

Michael Wilson Editor-in-Chief editor @ ifamagazine.com

Listed infrastructure: Alex Araujo of M&G Investments argues that these are essential assets for the modern age

27 Sue Whitbread Editor sue.whitbread@ ifamagazine.com

Coming up in next month’s edition of IFA Magazine

The power to protect

Alex Sullivan Publishing Director alex.sullivan @ ifamagazine.com

Mark Holt of Frenkel Topping calls for the financial services profession to unite in support of the proposal to include financial abuse in legal definition of domestic violence

Choosing the right paraplanning solution for your financial planning firm Tracey Underwood, PACE Solutions

Kim Wonnacott Technical Sales and Marketing kim.wonnacott@ifamagazine.com

Paraplanning in practice A new series of articles in which we talk to members of the PFS Paraplanner Panel about the paraplanner role

Are you ready for the Senior Managers & Certification Regime?

Georgie Davey Designer georgie.davey@cliftonmedialab.com

Compliance consultant Tony Catt reminds advisce firms of what needs to be done ahead of the December deadline

Multi-asset investing for the next ten years Jupiter

Intergenerational planning - it’s good to talk Charles Stanley

Mad World Richard Harvey with an alternative look at the threats to pensioners’ income and well being

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September 2019

GOLDEN YEARS? W

hat is the recent strength in the gold price telling us? Is this the time to be investing in the precious metal? With uncertainty overhanging so many other market sectors, it is perhaps not a surprise that investors have been increasing their exposure to gold and bullion in order to mitigate potential volatility elsewhere and seeing value in these assets as a portfolio hedge. So we’ve tasked Michael Wilson to analyse what’s going on and give us a detailed assessment of gold and bullion from an investment perspective. You’ll find his analysis starting on page 6.

Talking about analysing what’s going on, I have to confess that if you’re picking up your copy of IFA Magazine in the vain hope that we will be able to shed some light on what’s going on with Brexit, I’m guessing that you won’t be surprised to hear that we haven’t a clue either. With each day bringing a new twist or turn to the situation, it is very challenging for market watchers to make informed decisions on matters of investment. It’s no wonder that the latest Investment Association figures for July 2019 showed the biggest outflows from UK equity funds since May 2018 with £734m being withdrawn from the sector during the month of July alone. Advisers and investors are spooked by the prospect of a no deal Brexit, by the political shenanigans and the fall in the value of the pound. AND IN OTHER NEWS… But there is plenty more in this edition of IFA Magazine to get you thinking. We take a look at paraplanning – with the start of a new mini-series reporting from members

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of the PFS Paraplanner Panel – and Tracey Underwood looks at the alternative approaches of outsourced and in-house paraplanners. On another theme, Tony Catt gives a compliance-based view on what advisers need to know ahead of the FCA’s Senior Managers and Certification Regime (SM&CR) ahead of the December deadline and Brett Davidson looks at how to review your business habits to boost success. Mark Holt of Frenkel Topping discusses the implications of the proposal to include financial abuse in the legal definition of domestic violence – and why professional advisers need to be aware of it and Sean Osborne of Charles Stanley gives tips for intergenerational planning. We’re grateful to Brian Tora for his reflections on whether open-ended funds are the right vehicle for less liquid holdings and to Jupiter’s Talib Sheikh for his insight into multi asset investing in the next ten years. Finally, Alex Araujo of M&G Investments explains the merits of investing in Global Listed Infrastructure and King and Shaxson remind us why sustainable investing is gaining such a foothold in portfolio construction and asset allocation decisions. As always, we hope that you find this edition of IFA Magazine to be of interest. We are grateful to all our contributors for sharing their insight and ideas with us. Sue Whitbread Editor IFA Magazine

September 2019

E D'S RANT

SOLID GOLD CERTAINTY

Any fool can make a fortune on the bullion scene, says Michael Wilson. All you need is patience, wisdom, faultless judgement, infinite knowledge, and a good pair of time-traveller’s glasses

“Y

ou know,” said my old mate Paddy, as we downed another pint of Mother McGuire’s at the Old Duck and Bucket, “the thing about gold and suchlike is that it’s not actually about what gold itself is doing – it’s more about what everyone else is doing. And never mind whether what they’re doing is actually sensible or not? That’s really not the question. Your job, my friend, is to stay ahead of the crowd. And that means staying distant and analytical.” I nodded gently, in that agreeable way that you do after a few beers and your synapses aren’t firing particularly well. If only I’d hadn’t switched my mobile off, I’d probably have jotted down a memo to self: “Inform yourself properly about what drives currency alternatives.” Not that it would have helped me very much, because it would have been a very short Google search. For reasons I’ll explain. THE GOLD RUSH OF 2019 Whatever we might think about the virtues (or otherwise) of an analytical approach to this most emotional of investments, it’s been an excellent year for gold bugs. July saw the gold price beating $1,450 per ounce by quite a

comfortable margin, which would have made you very happy if you’d bought it at $1,200 in January, and happier still if you’d bought it, as a Briton, when sterling was stronger than it’s been during those dismal pre-Brexit summer weeks where the prospect of a sterling/euro parity was starting to look alarmingly likely. See below for more on that last depressing prospect, which has seemed a lot less likely since the US Federal Reserve has finally started to turn dovish on American interest rates. (Lower interest rates and bond yields tend, on the whole, to be bad for currency strengths and consequently good for bullion prices.)

Whatever we might think about the virtues (or otherwise) of an analytical approach to this most emotional of investments, it ’s been an excellent year for gold bugs

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But what if the gold bugs were right for once this time? What if the herd has really caught the downwind whiff of something in the distance that doesn’t smell right? But somehow it hasn’t yet identified exactly what it is that’s bothering it? The noise maybe, or the direction of travel, or just some primal animal fear? REASONS TO BE CHEERFUL Okay, let’s try and leave the fear factor aside for a moment. And let’s concede that second-quarter US profit margins do indeed seem to be confounding the doomy expectations of an imminent cyclical top. (Or at least, they did as August approached.) US unemployment figures were low, and consumer sentiment seemed to be absolutely fine.

Yes, we’ve always been told that government borrowing in a recession is a good idea, but borrowing when an economy is running at full tilt is both unnecessar y and unwise

And even though the expansionary impact of Donald Trump’s $1.6 trillion tax handout spree seemed to be slowing, there was a growing perception that he would simply launch another one in his bid to secure the 2020 election, and let the grandchildren pay for it. Oh dear. Yes, we’ve always been told that government borrowing in a recession is a good idea, but borrowing when an economy is running at full tilt is both unnecessary and unwise. But the modern reality is that Trump’s enthusiasm for busting all the system’s traditional shibboleths is becoming mainstream, for better or worse, so it’s rather hard to tell whether this phase is reckless lunacy or the start of a whole new brand of logic. We really don’t know what’s coming next, and the logical certainties of the past don’t hold up so well in this decade.

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The thing that also makes the current situation so difficult to call is that the allure of precious metals is generally inversely related to share prices. And, as August 2019 hove unsteadily into view, there seemed to be no obvious reason for expecting that the S&P’s bullish run was over yet. Or that the Shiller p/e on the S&P is ready to drop back toward its long-term mean of 16. (At the time of writing it was 31.5.) REASONS FOR THE GOLD RUSH? Most importantly, and most embarrassingly for the doomsayers, US inflation levels were much lower than the doomsters had expected, which was the main reason why the Fed had changed its mind on higher lending rates in the first place. So what might it have been that drove this summer’s surge in bullion activity? • Could it have been, as some claim, that the minority of analysts who forecast a catastrophic global collapse, 2008-style, had suddenly reached some sort of a tipping point? That the accelerating downturn in Chinese GDP, the threats to Gulf oil, the Brexit debacle, the Iran situation and a probable eurozone recession were all set to create a perfect storm in which the loud yahoos from an insular Wall Street might finally be forced to accept that their pink sparkly bubble was out of synch with the mood in the rest of the world? • Or could it perhaps be that demand from India and China, two of the world’s biggest gold bug nations, was set to soar still further? Hadn’t the Economic Times of India reported on 23rd July that the country’s net gold imports had outweighed the entire total for incoming foreign portfolio investment for eight solid years now – and that not even a 2.5% hike in the government tax on bullion had slowed the surge in demand. (Rather, it had provoked a short-term buying spree ahead of the deadline.) • Hadn’t China reported in June 2019 that its central bank purchases of gold had now risen for six straight months, because the People’s bank of China had been proactively trying to diversify its currency

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holdings away from the US dollar, where a looming trade dispute and the likelihood of a weaker greenback had been unsettling nerves? • Hadn’t George Soros, the arch-exponent of strategic currency positioning, just come back into gold after a two-year exile from the market, purely because he thought that Brexit would spark a surge of British bullion purchasing, from which he hoped to profit? • And hadn’t Soros’s expectations been borne out by the Office of National Statistics in June, when it dropped a strong hint that UK gold purchasing had been behind a sudden sharp rise in the first-quarter current account deficit? It’s hard to be sure of anything – but then, that’s becoming the norm these days. Either we’re entering a new golden age in which debt and the Shiller ratio don’t matter any more, or – oh heck, I’m just repeating myself….. TWO KEY QUESTIONS Let’s ask ourselves two questions, then. Firstly, what are the bond markets saying? And secondly, just for comparison’s sake, what did the bullion markets do before the 2008 financial catastrophe? The first one is relatively easy. The defining feature of the day, for many bond analysts, is that yield curves in many countries are currently turning inverted, which means in effect that short-dated bonds have a higher yield than longdated bonds. According to Morningstar in late July, threemonth US Treasuries were yielding 2.08% against 2.05% for 10-year bonds. And that, said Morningstar, ran against the usual logic because investors would usually demand a higher yield because they were tying up their money for longer. We’ve seen that the US Federal Reserve is under constant pressure from President Trump to cut interest rates, which effectively reduces bond yields, which in turn makes gold a better option for investors who might be in the middle deciding which way to jump. More to the point, perhaps, an inverted yield curve may denote a coming recession – and indeed, it generally does, but it’s never quite clear what the time lag between the two

events will be – the equities party may continue for some time yet. And some analysts insist that an inverted yield curve only suggests a recession when monetary policy is tightening, which is very much not the case at present. All clear? No, I thought not. Let’s try again with our second question. Did the gold price tell us anything useful about 2008? When we look at the gold price chart for that era, with all the benefit of hindsight, we notice something rather odd. Although the dollar price had bumbled along in the $600660 range for a couple of years through the mid-noughties, it surged in second-half 2007 to an eventual peak of $975, and then actually fell again once the September stock market rout had got properly under way. (Before assaulting the $1,200-$1,700 peak again more than two years after the event.) There are many things we could read into that price development – and the behaviour of bond yields would certainly be one of them, because tight yields do indeed tend to imply a higher bullion price, all things being equal. But what seems evident is that collapsing equity markets didn’t drive higher gold prices in 2008 – instead, they actually went retrograde for several months. The smart investors were the ones who saw the 2008 crisis coming, more than a year before it happened, and who then sat out the dance until a smashed equity scene had bottomed in early 2009. They were, in short, ahead of the rest of us. Which shouldn’t surprise us at all, given the coolly mathematical heads that drive the bond markets, and by extension the slightly less rational bullion bugs. Of course, that’s an oversimplification because there were wild cards in play during 2008 and 2009 – quantitative easing, for one, and a crashing oil market for another. But to my mind, if we were looking for evidence that the bean-counting fiscal-watchers are cleverer than the stampeding equity brigade, I’d say that we’ve got it. INTERESTING TIMES Does that suggest that this year’s sharp rise in bullion prices (and the accompanying tightening of bond yields) implies a watch-out-it’s-coming premonition from the

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fiscal watchers and a bandwagon that we surely ought to be joining? Not automatically. We do, after all, live in exceptional times. America is being run by an economic illiterate (and proud of it!) who doesn’t hesitate to dictate his (ahem) unconventional policies to central bank economists who are paid to know better. Britain is entering a period of considerable economic uncertainty in which alternative currencies such as gold must surely seem an attractive hedge against a violently volatile pound. Europe is in the doldrums, China is refocusing, and everywhere is the prospect of global trade wars which are never going to be a zero sum game. CRYPTOS Oh, and then there are the crypto-currencies which may yet have the power to lift the money supply completely out of the political control of national governments, and which have no accountability to economics because they have no fundamentals whatsoever. Unlike fiat currencies, of course, whose fortunes are at least vaguely related to national economic performance, political power and trade bargaining.

You’ll have noticed that this year’s erratic surge in the bitcoin price has been impressive, and you’ll also be watching the progress of the new Libra currency which Facebook proposes to release before very long. Unfortunately, you may have missed the more telling event, which is that dozens of smaller cryptos are being squeezed

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out of business by their bigger rivals, and that they tend to disappear with a loud pop that leaves absolutely nothing behind them. In cyberspace, as Ridley Scott (Alien) might have said, nobody can hear you scream. THE IRRATIONAL ALLURE OF SCARCITY Owning gold is a little like holding some of the tickets to the lifeboats on a cruise liner. As long as the sea remains calm and blue, and as long as everyone’s enjoying the ride, everyone will think you’re nuts for missing out on the party. It’s when the wind gets up, and the tide’s running the wrong way, and you’re too near the rocks, that you’ll start to look like a smart operator. Even if the boat doesn’t actually flounder. And that’s when the inverse logic of holding something that’s in strictly limited supply comes into its own. When the barometer says storm and the world is beating a path to your door, you’ve achieved a level of gearing that owes absolutely nothing to the intrinsic qualities of what you’re holding. That’s when a true gold bug stops minding that his investment hasn’t ever brought in any dividends; that a gold bar costs money to store safely (assuming that it’s physical and not some sort of gold-backed paper or ETF); and that sometimes it may have attracted additional costs such as VAT. (Very much more so for physical silver, which is often touted as a gold proxy but which hardly moved at all during the first seven months of this year.) So should we be worried that cryptocurrencies might suck all the surplus liquidity out of a bullion-loving world where the Chinese in particular have a lot of spare cash, but where gold isn’t necessarily the favourite place for investing it? Should we fear the fact that some governments (Japan, Switzerland, Germany, Sweden and even Britain) have been seriously studying the masked marauders, and that a few (Venezuela, Senegal, Tunisia, Uruguay and probably Russia before long) have actually launched cryptos of their own? I don’t know, and nor does anybody else. All I know is that, given the choice between a physical asset that they aren’t making any more, and a row of digital ones and zeroes that they most certainly are, I’ll go for the one I can properly own, every time.

September 2019

BETTE R BUSI N ESS

HOW GOOD ARE YOUR

BUSINESS HABITS? Even the best financial planning firms can benefit from a practical review of their business habits in pursuit of excellence. Brett Davidson of FP Advance has practical tips you can use to review your own business habits and take steps to boost business success

he outcomes we experience in our businesses are directly correlated to the decisions we make, and the actions we take, on a daily basis.

Clearly, if you make good decisions and do what you say you will do every day, your chances of achieving your goals increase dramatically. CLEAR THE WAY In a recent blog from James Clear, master of all things habit, he gave an example of a simple process to become aware of your habits, to then evaluate them and change the ones that don’t serve you.

“To create your own Habits Scorecard, start by making a list of your daily habits. Here’s a sample of where your list might start: • Wake up • Turn off alarm • Check my phone • Go to the bathroom • Weigh myself • Take a shower • Brush my teeth • Floss my teeth

Unless you are a process geek, and I’m not, the thought of working on your processes can make you feel slightly ill.

• Put on deodorant • Hang up towel to dry • Get dressed • Make a cup of tea … and so on.

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Once you have a full list, look at each behaviour, and ask yourself, “Is this a good habit, a bad habit, or a neutral habit?” If it is a good habit, write “+” next to it. If it is a bad habit, write “–”. If it is a neutral habit, write “=”.”

September 2019

Unless you are a process geek, and I’m not, the thought of working on your processes can make you feel slightly ill.

I love this. And you can apply it to your business as well.

Although I’m not a process geek, I care deeply about customer service or the customer experience. Many advisers and planners are cut from the same cloth.

Almost every business I know wants to either establish great processes or streamline and improve the business processes they’ve got.

The way to consider process improvement is to forget process improvement as a concept. Simply focus on the client journey; the client experience.

Why? Because great processes are the key to consistently delivering an amazing customer experience. They are your institutionalised good habits. When we’re starting out and operating as a one-person business we can do this via the magic of our own efforts and personality. However, as all one-person businesses eventually find out, once you get full, that is once you have as many clients as you can handle, maintaining your standards of delivery gets tougher and tougher. Either you work all the hours under the sun, or things get missed occasionally. And no one wants to be the business that makes silly mistakes. What’s the solution to this problem? It is processes IMPROVING YOUR PROCESSES Here’s a methodology that might help you on your quest to improve your processes. Let me cover two angles; the philosophy and the practical execution.

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• How do you want the client to feel as they move through the advice journey with you? • What are the steps the client moves through to go from initial enquiry to becoming a client? • What would you do in a perfect world at each of those steps to make people feel like you want them to feel about you, your business, and the process of receiving financial planning advice? When I think about things from that point of view I find I have more enthusiasm for the task at hand. A PRACTICAL APPROACH This is a whole-of-business exercise. If you’re a smaller business, up to say six staff, including yourself, I’d just get everyone around the table to have the conversations I’m about to describe below. If you’re a larger business, you might select representatives from the different parts of your business, so that you are capturing perspectives and input from all angles. For

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BETTE R BUSI N ESS

example, there might be some advisers, paraplanners, administrators, and your practice manager.

• Are there any obvious issues that I could feed back to the process-improvement team?

Having established a team to consider this issue here are the steps to take:

• If it were my business, what changes might I make to this task or process?

1. Set the agenda and thought process:

• Could this be done more simply?

Brief everyone in the business to make sure you are all aware of the aim of the exercise.

• Am I the best person to do this task?

• What are you trying to do in reviewing your processes? • What impact do you hope it will make? It’s also vitally important to let people know that the aim of this process is to simplify things as much as possible for everyone’s benefit. Process improvement isn’t going to make them redundant, sometimes a concern for your staff, but will allow the current team to work to the top of their skillset. It will keep them from getting bogged down with lower-level jobs. 2. Have team members look at their own processes: During the course of each week have all team members, even those not on the process-improvement team, notice the work that they touch and ask themselves these questions:

• Is there some form of training that would allow me to do an essential task better? 3. Weekly process-improvement meetings: Meet weekly for 60 minutes (or 90 minutes if this is a massive challenge for your business right now).

Processes in your business are like personal habits in your life. A closer look at both of these areas may lead to some tweaks or changes that could change the outputs you’re generating for the better.

• What jobs am I touching or getting involved in? • Is the process working as it should? • Does doing this specific task add value to the end client?

At these meetings all staff can give feedback to their representative on what they notice every week; e.g. the administrators feed back to their admin representative,

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Discover alternative income opportunities the paraplanners feed back to their paraplanning representative etc. What you will find is that by chipping away at your issues every week, you start to see some wins; greater efficiency or speed of processing. You may even see some steps in the process disappearing completely, as someone realises that they don’t actually make any difference to the end client.

bassetgold.co.uk/IFA 0800 249 4555

About Brett Davidson Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals to advise better and live better. He is recognised as one of the leading consultants to financial advisers in the UK. You can follow Brett online and via social media: 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

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Risk Warning and Disclaimer

Your capital is at risk when investing in unlisted bonds and Bond repayments are not guaranteed under the Financial Services Compensation Scheme. Basset & Gold is a trading name of B&G Finance Ltd and Basset & Gold Plc., which are both companies in the Basset & Gold Group. Promotion of the bonds and arranging investment is through B&G Finance Ltd. and the bonds are issued by Basset & Gold Plc. Only B&G Finance is authorised and regulated by the Financial Conduct Authority (“FCA”) in the UK as FRN 788684. ISA rules apply.13

September 2019

BRIAN TORA

THE SONG

REMAINS THE SAME Brian Tora goes on a personal journey of reflection as he considers why advisers need to check the liquidity of an open-ended fund before investing clients’ money

he investment world can be full of surprises. On the other hand, you could say that nothing really changes in the financial world – only the names and nature of the securities involved are different. This is certainly true of financial scandals, of which there have been quite a few during my career. It is more than 56 years since I first stepped out of a train at Liverpool Street Station to start work as a contracts clerk in a firm of leading stockbrokers. Then the firms were partnerships, the functions they provided clearly divided into two – brokers (dealing with clients) and jobbers, which dealt with the brokers. The stock exchange was fragmented, London dominating, but regional cities having their own exchanges, while brokers located in smaller, provincial towns had their own Provincial Brokers Stock Exchange – arguably a forerunner of the virtual exchange that exists in London today.

TRADING TITLES The terms “Wealth Manager” and “Independent Financial Adviser” were unheard of then. Wealthy private investors might have their portfolios looked after by a merchant bank, although brokers were getting into the business of providing an ongoing management service, rather than just acting as the conduit through which shares were bought. Those with less means would probably be buying an insurance product from an insurance salesman. I know many IFAs who started out this way. In January 1964 I had the good fortune to be posted by my firm to the floor of the London Stock Exchange as an unauthorised clerk – or bluebutton as they were known because of the colour of the badge they wore to denote the firm for which they worked. Our job was to run messages for the dealers and members of our firms. We could check

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September 2019

share prices but were not authorised to deal – hence the job title. I was 18 when I started, nervous because of the overpowering feel of the trading floor. And at the end of my first week as a bluebutton, a member firm was “hammered”.

meet its financial obligations. In other words, it was bust. The term “hammered” was because the announcement was made by one of the Exchanges Waiters (as these servants of the London Stock Exchange were called in deference to its origins as a coffee house in which share trading took place) by bringing down a gavel from one of the podiums on the floor. The noise was guaranteed to bring an instant hush to what was usually a very noisy workplace.

Not all asset classes are suitable for an open-ended approach. Along with private equity and venture capital, property springs to mind – or, at least, physical property

TAKING STOCK

GETTING ‘HAMMERED’ This practice was to draw to the attention of those present in the Stock Exchange that a firm of brokers was unable to

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I mention this as probably the first experience I had of something going wrong in the financial world. Plenty of other examples were to arise during my long career. Just a few years later the collapse of Bernie Cornfeld’s IOS group precipitated the first bear market I experienced. The scandal of Norton Warburg occurred when I was investment director of one of the first new breed of wealth management firms – though we called it financial management at the time. This was important to us as, on the face of it, our business models were similar and they were in the spotlight because of clients like Pink Floyd and Bank of England pensioners. Barlow Clowes followed soon after, while the fall from grace of star fund manager Peter Young gave me my first scoop as

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an investment commentator on the airwaves. Not all these financial failures were the consequence of fraud. Some demonstrated poor business management or, in some cases, simply a lack of understanding of the issues involved. Arguably the failure of many split capital investment trusts nearly two decades ago falls into this category. The similarity between them all is that investors faced losing money. In recent times, the problems that faced Neil Woodford highlights another issue that can create difficulties for investors. In order to enhance performance, he concentrated a lot of his firepower in unquoted and smaller companies where he became a major shareholder. Arguably this is not good practice for an open-ended fund as meeting redemptions can prove tricky, as proved to be the case.

BRIAN TORA

While a closed-ended investment trust can be a suitable investment vehicle for less liquid asset classes, in the particular case of Woodford, the extent of common holdings between the closed and open-ended funds placed pressure on the investment trust because of selling depressing share values of these companies and a perception that the board was insufficiently independent. I have mentioned before that investors today are fortunate in having access to a variety of asset classes that simply were not available when I started out in investment management. Or, if they were, it was only to the wealthiest in society. Private equity, infrastructure, property, hedge funds, venture capital – all are available in some measure through a variety of vehicles to pretty much any investor, though whether it is wise for many to venture off the well beaten path of equities and bonds is debatable.

September 2019

But not all asset classes are suitable for an open-ended approach. Along with private equity and venture capital, property springs to mind – or, at least, physical property. Many years ago, a leading fund management house – still around today, though in a different form – launched a residential property unit trust. Meeting redemptions proved to be a problem so, guess what, redemptions were suspended. It pays to check the liquidity constraints of an open-ended fund before committing clients’ money. Brian Tora is a consultant to investment managers, JM Finn.

September 2019

M&G I NVESTM E NTS

BUILDING THE MODERN WORLD As the backbone of the global economy, infrastructure plays a crucial role in development, and ultimately prosperity. Yet not enough is being invested in the assets that provide society’s essential services. That’s the view of Alex Araujo, Fund Manager at M&G Investments, as he argues the case for advisers to consider infrastructure investment as a global asset class which has breadth and depth as well as liquidity

n the developed world, spending on the care, maintenance and expansion required for the adequacy of our existing infrastructure has fallen woefully short of the mark, leaving our critical assets creaking and bursting at the seams. We can all relate to this in our daily lives. Infrastructure investment in the G6 members – US, Canada, UK, Germany, France and Japan – has been in a multi-decade decline and the

current 3.5% of GDP is the lowest level since 1948 (see Figure 1). Today’s 70-year low is half the level it was at its peak in the 1960s – which also highlights the ageing nature of these assets. With government finances under pressure and limited expertise in the public sector, the private sector will play a significant role in the restoration and upgrade of our critical infrastructure.

FIGURE 1. Infrastructure spending in the developed world G6 Government Gross Investment as % of GDP 7%

2% 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2112 2017 2022

Source: BofAML, The Long View, 16 September 2018.

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Global spending on economic infrastructure, which covers transport, electricity, water and telecoms, was US$2.5 trillion in 2015. This contrasts sharply with the required amount of investment estimated at US$3.7 trillion per year (see Figure 2). The resulting US$1.2 trillion shortfall needs to be addressed to ensure that the world stays on its economic growth path. Investing the annual requirement of US$3.7 trillion to the year 2035 – a typical infrastructure investment cycle – would result in aggregate spending of around US$69.4 trillion. Owing to rapid urbanisation and fast-growing populations, emerging markets account for more than 60% of the demand. China alone makes up a third. From China and India to Latin America and Africa, building the infrastructure which is required to ensure higher living FIGURE 2. The Infrastructure investment gap Global spending requirements for economic infrastructure 2017 – 2035

-$400bn

-$300bn

standards and support economic growth remains a work in progress. In the developed world, the US and Canada require the most investment, with 20% of the global target – double the amount required in Western Europe. The important role to be played by the private sector in addressing the infrastructure gap should create a meaningful tailwind for certain businesses. In particular, we believe that companies with existing physical infrastructure assets (which provide a strategic barrier to entry) and growth opportunities are best placed to earn a financial return on the required capital investments. Crucially, we invest in companies based on the quality of their assets and growth opportunities, not simply in order to follow an infrastructure ‘concept’. In the developed world, the US and Canada require the most investment, with 20% of the global target – double the amount required in Western Europe. IMPORTANT INFORMATION

Annual deficit 2017 – 2035, US$ -$400bn

September 2019

-$100bn

-$1.2trn

4.0

3.7

The value and income from the fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested. TO FIND OUT MORE PLEASE VISIT: WWW.MANDG.CO.UK/INFRASTRUCTURE

3.0

US$ trillion

2.5 2.0 1.5 1.1 1.0

1.1 0.8 0.5 0.2

0.0

Transport

Power

2015

Water

0.4

0.5

Telecom

Total

20-2035 per annum

Source: McKinsey, Bridging infrastructure gaps: Has the world made progress? October 2017

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About Alex Araujo Alex Araujo has been the manager of the M&G Global Listed Infrastructure Fund since it launched in October 2017, and was appointed manager of the M&G Global Themes Fund in January 2019. Alex initially joined M&G’s income team in July 2015 and became co-deputy manager of the M&G Global Dividend Fund in April 2016. Alex has 25 years of experience in financial markets. He graduated from the University of Toronto with an MA in economics and is a CFA charterholder.

September 2019

KI NG AN D SHAXSON

MORE THAN A

NEGATIVE SCREEN

As the popularity of the IFA Magazine summer focus on matters of sustainable investing has proved, matters of environmental, social and governance as well as impact investing are becoming mainstream considerations for advisers and investment managers as well as investors. But whatâ&#x20AC;&#x2122;s in a name? King & Shaxson is a leader in ethical investing and argues here that now is the time to get to grips with the issues and opportunities that this dynamic sector presents

ver the years we have seen ethical investing move from the fringe to being a mainstay offering, with ESG (Environmental, social and governance), SRI (socially responsible investing) and Impact now being on the tip of most investorsâ&#x20AC;&#x2122; tongues.

Screening is as important to us as the investment process. It matters to our clients and their advisers that we get this right, abiding by the mandate with a rigorous process in place. In the case of our model portfolios, the areas of avoidance and inclusion is in the documentation. In the case of the tailored, bespoke portfolios, this is taken from the values-based questionnaire.

Different phrases have been coined over the years, and we endeavour to briefly cover them below, but arguably they focus on the same underlying principles, and it is these underlying principles that have formed the basis of our investment screening since 2002.

Meeting the clientsâ&#x20AC;&#x2122; ethical expectations is more than just ticking the boxes. Focussing on what companies actually do, and how they do it, is essential. A good SRI profile is important to any company, and can lead to green washing if care is not taken.

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KI NG AN D SHAXSON

September 2019

HOW THE MARKET HAS EVOLVED

THE PROCESS

Ethical investing was arguably the first building block in what is now the responsible investment universe. As time evolved, ESG and SRI followed, integrating analysis of a company’s environmental, social and governance factors as well as scrutinising business activity to ascertain what social outcome it is producing. More recently, impact investing has become the talk of the town, and it is here where we have seen a noticeable number of new launches. Impact investing focuses on companies that seek solutions to the social and environmental issues we face, where the positive outcomes can be quantified. The United Nation’s Sustainable Development Goals (SDGs) have provided a graphical framework of 17 specific areas that impact investors focus on.

As mentioned, our screening process aims to identify investments along the spectrum of capital. Our method has two parts: a process-driven quantitative screen and a more values based qualitative screen.

Meeting the clients’ ethical expectations is more than just ticking the boxes. Focussing on what companies actually do, and how they do it, is essential

Although ethical is in our name, here at King & Shaxson there has always been much more to the investment process than the negative exclusion. Whilst screening out the ‘evils’, such as tobacco, armaments, pornography and fossil fuels to name but a few, we were early adopters of positive inclusion such as forestry and microfinance, which by its very nature finances solutions to social and environmental issues.

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We examine investments from an ESG perspective provided by third party screeners (currently MSCI). This include a quantum of hard data, a screen on activities, a comparison to peers and information on an controversies that have arisen and whether these issues have been addressed in a manner we would expect from a company our investors would want to own. Beyond this, the qualitative screen is where we look to truly understand what a company or fund does; we like to call this ‘going under the bonnet’ and this takes a more human approach. We seek to identify areas of positive impact to ensure portfolios are contributing to solutions to the social and environmental issues that we face today. We also flag any areas of ethical concern. MORE HUMAN IS GOOD Our clients have traditionally been on the darker side of spectrum, meaning we know how important it is to get the investment decisions correct; one size does not fit all. Whilst all advisers will know of KYC (know your client), we like KYEC (know your ethical client). Over time, our client base has evolved to include those who are looking for a light screen, but this doesn’t take away the importance of getting it right. Having a bespoke ethical proposition will ensure investment opportunities are available in areas such as social housing, microfinance, off grid renewables, African farm leasing, renewable energy, and public transport to name but a few. We therefore aim to meet the vast majority of investors’ concerns by selecting a broad range of funds and/or direct

September 2019

KI NG AN D SHAXSON

equities that are specific in their goal, whether this is Ethical, Sustainable, ESG or Impact focused. Past experience shows that these specialist types of investment can have different underlying requirements to fit with the specific values that each client has. Our adviser support materials ensure that advisers can articulate and engage with clients to ensure these requirements are made possible.

Whilst all advisers will know of KYC (know your client), we like KYEC (know your ethical client)

We have constructed values-based questionnaires for advisers and wealth managers to use to help with that engagement and conversation with clients. We also offer a screening service for any existing client portfolios that might require a review based on the completed questionnaire. This can be invaluable when it comes to further cementing the adviser/client relationship and can also lead to increased assets under management for advisers.

About King & Shaxson Founded in 1866, King & Shaxson has evolved into dealing and custody, asset management and treasury consultancy. King & Shaxson is a leader in ethical investments, having run an ethical discretionary management business since 2002. Catering for individual, corporate and charity investors this service blends classical investment discipline with a focus on meeting the ethical requirements of the investor, from small negative screens to full impact investing.

Interested in ESG? Come and join us at the IFA Magazine ESG roundtable event on 18 October 2019 On October 18 2019, we’re delighted to be bringing together a series of experts on ESG to consider different approaches to and the importance of having effective strategies for managing ESG issues. The IFA Magazine round table will take place at the offices of M&G Investments, 10 Fenchurch Street, London EC3M 5AG where we will be joined by renowned expert Julia Dreblow of SRI Services as well as ESG experts from Triple Point and King and Shaxson. If you’re an adviser with a particular interest in this dynamic sector, then we’d love to welcome you to join the discussion and help influence the future. To find out more please email Kim Wonnacott - kim.wonnacott@ifamagazine.com.

I FAmagazine.com

Pictet-Robotics is a compartment of the Luxembourg SICAV Pictet. The latest version of the fundâ&#x20AC;&#x2122;s prospectus, KIID (Key Investor Information Document), regulations, annual and semi-annual reports are available free of charge on assetmanagement.pictet or at the fundâ&#x20AC;&#x2122;s management company, Pictet Asset Management (Europe) S.A., 15, avenue J. F. Kennedy, L-1855 Luxembourg. Before making any investment decision, these documents must be read and potential investors are recommended to ascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional. Any investment incurs risks, including the risk of capital loss. All risk factors are detailed in the prospectus.

Want to know about megatrend investing? Talk to the pioneers. Pictet-Robotics.

For over twenty years, our thematic equity experts have accurately identified the most rewarding themes, by carefully separating enduring megatrends from fads. Learn more at assetmanagement.pictet

September 2019

M&G I NVESTM E NTS

LISTED INFRASTRUCTURE:

ESSENTIAL ASSETS FOR THE MODERN AGE Alex Araujo, Fund Manager at M&G Investments, makes the case for investing in global listed infrastructure

WHY INVEST IN GLOBAL LISTED INFRASTRUCTURE? Infrastructure holds an important place in the fabric of modern society, serving as the backbone of the world economy. In its broadest sense, infrastructure refers to assets associated with the provision of essential services for the functioning of global society such as utilities and transportation networks. These types of businesses typically provide stable and growing cash flows, often backed by inflation-linked revenues and the predictability derived from long-term contracts. The favourable characteristics of infrastructure can be accessed in different ways, but the attractions of investing in listed infrastructure companies include liquidity, access for retail investors to invest in the asset class, and higher yield and lower volatility relative to global equities. WHAT ARE THE BENEFITS FOR AN INVESTOR’S PORTFOLIO? The predictable cashflows generated by infrastructure assets provide clear diversification benefits for investors’ portfolios. History shows that investing in listed

infrastructure enhances the returns generated by an investor’s equity exposure, while reducing the overall level of risk. The importance of taking a long-term approach cannot be emphasised enough because the longer the holding period, the more pronounced the potential benefit. Past performance is not a guide to future performance. WHY M&G GLOBAL LISTED INFRASTRUCTURE FUND? The M&G Global Listed Infrastructure Fund is a high conviction fund holding 40-50 companies that exhibit strong and growing cashflow dynamics. As a result of these characteristics, we expect dividends from these companies to increase sustainably over the long term. Through the consistent application of this approach, the fund aims to meet two objectives: • Deliver a higher total return (the combination of income and growth of capital) than the MSCI AC World Index over any five-year period • Increase the distribution paid to investors every year in sterling terms

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M&G I NVESTM E NTS

The fund is managed with a long-term investment horizon, consistent with the long-life nature of infrastructure assets, and follows a disciplined investment process which incorporates ESG, to deliver on its performance objectives.

Histor y shows that investing in listed infrastructure enhances the returns generated by an investor ’s equity exposure, while reducing the overall level of risk

By investing beyond the traditional realm of economic infrastructure (utilities, energy and transport) and diversifying into social (health, education and security) and evolving infrastructure (communication, transactional and royalty), we aim to provide a balanced portfolio which showcases the best attributes that listed infrastructure has to offer and better reflects an increasingly digital society. IMPORTANT INFORMATION The fund holds a small number of investments, and therefore a fall in the value of a single investment may have a greater impact than if it held a larger number of investments. The value from the fund’s assets will go down

I FAmagazine.com

September 2019

as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. The fund invests mainly in company shares and is therefore likely to experience larger price fluctuations than funds that invest in bonds and/or cash. TO FIND OUT MORE PLEASE VISIT: WWW.MANDG.CO.UK/INFRASTRUCTURE

About Alex Araujo Alex Araujo has been the manager of the M&G Global Listed Infrastructure Fund since it launched in October 2017, and was appointed manager of the M&G Global Themes Fund in January 2019. Alex initially joined M&G’s income team in July 2015 and became codeputy manager of the M&G Global Dividend Fund in April 2016. Alex has 25 years of experience in financial markets. He graduated from the University of Toronto with an MA in economics and is a CFA charterholder.

Flagship Adviser Events

Responsible Investing: The choice of the new generation London / Cheshire / Hampshire | October 2019

You are invited to our 2019 Adviser Academies on responsible and ESG investment, arguably the largest growth opportunity for advisers and millennial investors.

Highlights include: Expert insight into one of the fastest growing investment sectors for future generations Discussion of key investment concepts and how the sector is evolving Industry experts and celebrity guest speakers CPD accredited

To find out more information and to register please visit

bmadviseracademy.com

ESG Important information Past performance is not a reliable indicator of future results. The price of investments and income from them can go down as well as up and neither is guaranteed. Investors may not get back the capital they invested. Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Group plc is registered in England No 4402058. Registered office: 72 Welbeck Street London W1G 0AY.

BETTEI NSIGHT R BUSI N ESS

September 2019

COMING UP IN NEXT MONTH’S EDITION OF IFA MAGAZINE Exchange Traded Funds – the adviser perspective

xchange traded funds (ETFs) are certainly not newcomers to the range of asset classes which advisers and investment managers have to choose from when it comes to portfolio construction. But how popular are they with advisers today? And how is that set to change in years to come? These were some of the topics which underpinned the IFA Magazine ETF Roundtable discussion which was held in London in June and which forms the basis of our special focus in the October edition of IFA Magazine. Also featuring : • Trade Wars and the likely reaction of the US Federal Reserve – Brian Tora • Setting effective business goals for success – Brett Davidson, FP Advance

I FAmagazine.com

• A modern mutual – we talk to Julie Hansen of Unity Mutual about their wide range of familyfriendly products and why they are ideally placed to work with advisers • Robotics as an investment theme – John Gladwyn, Pictet • Lifting the lid on global listed infrastructure – we talk to Alex Araujo of M&G Investments about why he believes the sector is ideally placed for today’s uncertain market conditions • The key principles of multi-asset investing – Patrick Norwood, Defaqto As usual, there’s a whole lot more including analysis and opinion from Mike Wilson in his monthly Ed’s Rant, plus the latest financial service jobs from Heat Recruitment.

FRE N KE L TOPPI NG

September 2019

THE POWER TO

PROTECT With landmark change proposed by the Government to extend the legal definition of domestic violence to include financial abuse, Frenkel Topping is calling for the financial services industry to unite in support of this proposal. Here, Mark Holt, managing director at Frenkel Topping explains why this strikes a particular chord

nder the new UK directive, the impact of financial abuse will be legally recognised as domestic violence and can be reported as a crime.

The intention of the Domestic Abuse Bill, described as ‘landmark’ when it was published in January this year, is to help everyone, including victims, understand what constitutes abuse, to encourage more victims to come forward and to provide the appropriate legal guidance to ensure cases of financial abuse can be successfully prosecuted.

For the team at Frenkel Topping, these changes can’t come soon enough. We’ve seen the difficulties that arise in managing settlement funds – in the most extreme cases, often stretching to several millions of pounds – and while we strive to support our clients and their lawyers in obtaining the best possible financial outcome, this can create a new set of problems in terms of financial vulnerability. Handing a substantial lump sum to people who have been left with borderline capacity to manage their own financial affairs can leave the door wide open to abuse. Sadly, in our work with clients who have received substantial personal injury and clinical negligence awards, we’ve seen many examples of money being mishandled – sometimes with the best intentions, sometimes with dishonourable motives.

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FRE N KE L TOPPI NG

Some families guard the funds with the aim of saving it for their injured relative’s future – but what’s often needed is a sum that’s accessible immediately for essential expenses, such as round-the-clock care and home alterations for disability access. Others are, unfortunately, less honest. They see it as their bounty – a way to buy a new house or change their entire lifestyle, for example. OUR ROLE AS EXPERTS This is why our role as professional advisers is key and these changes to domestic violence legislation serve to highlight this further. The new definition of domestic abuse specifically recognises that it goes beyond crimes of violence and includes victims who are psychologically coerced and manipulated, as well as those who have no control of their finances. It’s a positive move to further protect some of the most vulnerable people in our society. Most importantly, it offers them more protection. For us, as professionals who may identify financial abuse taking place, we now have legislation to help us address it. I believe it’s up to us as an industry to help change the outcomes for anyone who may be subject to financial

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September 2019

abuse, recognising the critical signs and ensuring appropriate care is in place.

The new definition of domestic abuse specifically recognises that it goes beyond crimes of violence and includes victims who are psychologically coerced and manipulated, as well as those who have no control of their finances

Under the new directive, legal guidance for prosecutors will be changed to ensure cases of financial abuse can be successfully prosecuted where appropriate. For example, if a claimant who has suffered life changing injury should get divorced, there is currently no right to ring-fence any financial award to protect it from inclusion in the marital settlement – despite the fact that the damages clearly belong to the injured individual.

September 2019

FRE N KE L TOPPI NG

WORKING COLLABORATIVELY There are many strands to each case but always one common theme: all involved parties should take decisions collaboratively and always based on the best interests of the claimant. Our long experience shows that collaboration and open communication are key to delivering the best possible outcome. Only independent financial advisers who have a proven pedigree within this specialist industry are properly equipped to handle all aspects of the case and support the legal team, protecting the lawyer through giving the right advice based on years of learning, and upholding the claimant’s interests for the best possible outcome. There can be no hard and fast rules in the world of personal injury claims, especially in the extreme injuries we work with. Every single case is different and each individual has their own specific set of circumstances that need careful consideration. The fairest solution is one that balances out the settlement over its duration. This will achieve a fair claim for the injured individual and their family and better transparency for insurers. Professional IFAs will not only offer the best solution based on a whole of market approach, but will continue the relationship in the long-term, supporting the claimant and their deputy where appropriate throughout the

fund management lifetime to advise on and secure the individual’s long-term financial investment. As Frenkel Topping turns 40 this year, we welcome the new legislation around domestic violence. Undoubtedly, greater protection is needed against financial abuse as it is a crime against those who most need help. ABOUT FRENKEL TOPPING - A LONG HISTORY OF EXPERTISE IN FINANCIAL PLANNING For 30 years, Frenkel Topping has been providing financial planning and asset management advice to the legal profession. We were founded in 1979 and ten years later, in 1989, we were the first ever company to complete a structured settlement in the UK, in the landmark case of Kelly-v-Dawes. Since this major achievement, several significant milestones have shaped the business. In 2000, Frenkel Topping became the first IFA to be appointed by the Court of Protection to advise on clients’ investments. In 2004, the company floated on AIM and became a public company. The Expert Witness team launched in 2012, and in 2015 the Frenkel Topping Charitable Foundation was established to help and support the community we work with.

I FAmagazine.com

TRACEY U N DE RWOOD

September 2019

CHOOSING A PARAPLANNING SOLUTION As more and more financial planning firms are recognising the importance of having an effective paraplanning process in place, Tracey Underwood of PACE Solutions summarises some of the key differences between using an outsourced paraplanning firm or recruiting an in-house paraplanner

question I am regularly asked is whether it is best to recruit a paraplanner to work inhouse or to use an outsourced paraplanning company. Having personally used both methods in the past, the decision really does depend on your business model and where you are at in the development of your business. Here are some of the factors you might want to consider if you are considering how best to integrate a paraplanning function into your financial planning business. THE OUTSOURCED OPTION Over the last few years, the number of outsourced paraplanning companies operating in the UK has grown significantly. This can range from the freelance paraplanner offering reporting writing services only, right through to the larger firms offering due platform diligence service and production of the firms’ Centralised Investment and Retirement Proposition.

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Of course, when it comes to the outputs, the quality of the report writing from such outsourced businesses will depend on whether it operates a templated ‘one fits all’ report writing system or a report specially created for your firm, incorporating values-based advice. In either case, once the firm is in receipt of the report, it is the advisers’ decision to approve and sign off the advice it contains. Typically, you’ll find that qualifications for those individuals operating within outsourced companies will vary from the Diploma in Financial Planning through to Chartered Financial Planners and Certified Financial Planner professionals. The cost of services can vary too, from a fixed price per report or a retainer to include several reports, data gathering and lifetime cashflow modelling. However, the benefits of the outsourced route include not having to consider elements such as the continuing professional development costs for an internal member

September 2019

TRACEY U N DE RWOOD

of staff, problems caused by annual leave or illness, the value of time out doing research and the time (and financial costs) of studying for and achieving professional qualifications. These are areas which can deliver economies of scale and should not to be overlooked. Even if you are using an outsourced solution, it is still important to build strong relationships and channels of communication with the individuals in that business. This ensures that there is a mutual understanding of what needs to be done, by whom and how so that you can work well together and for you to achieve the results you seek.

Before you decide to recruit a paraplanner to work within your business, you’ll need to spend some time on working out exactly what it is that you want them to do

THE RECRUITMENT OPTION Before you decide to recruit a paraplanner to work within your business, you’ll need to spend some time on working out exactly what it is that you want them to do. It sounds pretty obvious but you’d be surprised at how many firms fail at the paraplanner recruitment process (and consequently hamper paraplanner retention in many cases) by focusing on the report writing aspect only. Paraplanners are so much more than simply report writers. Used effectively, a paraplanner should be able to take total ownership of the advice process, doing research an analysis a well as liaising with providers, administrators and professional partners of the client. They may sit in

on the client meetings, run the lifetime cashflow analysing the respective returns required v objectives, pull together the tax calculations and formulate the advice for the client. They provide a sounding board for the advice team to bounce ideas off and also ongoing yet invaluable support to clients when the adviser isn’t available. One suggestion might be to make it a strategic goal of your advice firm to create a ‘team’ around the client with the paraplanner taking ownership of those client queries that do not require the advisers’ input. Used effectively, the paraplanner should free up the adviser to use their time to focus on the areas where they are most effective - client retention and acquisition. By leading the client relationship and attracting new clients the advisers are playing to their strengths and maximizing efficiency and profitability. A WORD OF WARNING In today’s competitive market place, recruiting a competent, qualified and experienced paraplanner is not easy. Demand far exceeds supply when it comes to paraplanners. Unfortunately, where the industry has come from in terms of product advice, there are many well-qualified paraplanners who struggle to apply their knowledge into values- based advice. Therefore in your search, I would suggest that you do not purely focus on the qualifications of applicants. You’ll need to delve deeper to ensure that the person who joins your team really does have the all-round knowledge, skills and competence to deliver exactly what you require. At the recruitment stage, it is important that you test whether candidates can apply their technical knowledge appropriately and effectively – ie you need to check that they’ve got the right skill set to deliver. For example you’ll need to see for yourself whether they have experience in lifetime cashflow and whether they can interpret the results to the level you will require.

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TRACEY U N DE RWOOD

When it comes to qualifications, good paraplanners should be at least diploma qualified however working towards Chartered or Certified Financial Planner status is something to look out for. You will also need to look at their experience in the role and drill down into how they operate, the standards they seek to achieve and deliver and the scope of the services they can bring to your firm.

Ultimately, the decision as to whether you outsource or recruit a paraplanner may well come down to your budget and where you are at in your business development

As you’d expect, there’s no such thing as a typical paraplanner salary. The salaries you will need to pay for competent paraplanners can vary according to their qualifications, experience and the geographical region in which you’re based. WEIGHING UP YOUR OPTIONS Ultimately, the decision as to whether you outsource or recruit a paraplanner may well come down to your budget and where you are at in your business development. Think about whether you want to continue to take full ownership for the advice, giving instructions to your team and pulling everything together. If so, then outsourcing will probably work for you.

Septmeber 2019

the advice together to present to you, then outsourcing may not be for you and you require someone ‘hands on’ within the business. Whichever route you decide to take, you will need to work at the relationship. Outsourcing certainly does not mean out of sight out of mind. It pays to think of them as an integral part of your team and invest the time and energy in building the appropriate working relationship and processes in order to maximize its return. You need to work incredibly hard to make the outsourced relationship work. This could take several months before the services are akin to that required within the firm but do persevere. There are many firms for whom this flexible yet arm’s length option is the perfect solution. It just takes time – and patience. The same applies to recruiting a paraplanner. Continual development is required from both parties to ensure they are delivering to the needs of the business and its clients. The good news is that in getting this right you will see significant benefits of increased efficiency and profitability across the business as well as happier clients.

About Tracey Underwood Tracey is the owner and founder of PACE Solutions. The business provides support for financial planning firms by focusing on operational practices including; recruitment, compliance, processes, client proposition and business strategy. This is achieved not only through a consultancy process but by hands on implementation to ensure that firms achieve effective results that would otherwise not be achieved through consultation only.

However, if you want to spend more time in front of clients and let someone else take care of the advice process, pulling

I FAmagazine.com

September 2019

PARAPLAN N I NG I N PRACTICE

PARAPLANNING IN PRACTICE Increasingly, paraplanning is being seen by large numbers of professionals across the UK as a career choice in its own right. Given its growing importance within the financial planning profession, we’re delighted to bring you a new series of articles where we talk to paraplanners from the PFS Paraplanner Panel about what paraplanning means to them and why they have chosen this dynamic and challenging career path

1. Tom O’Hara APFS, Senior Paraplanner, CF30 Chartered Financial Planner, Warwick Financial Solutions Limited

IFAM: Did you choose paraplanning as a career or did it choose you? TO’H: I was originally drawn to Paraplanning (or being a Technical Manager as it was called back in the day) by the appeal of only having to work from 9am to 5pm. Formerly, I was working as a direct salesforce adviser, which meant working evenings and missing my children growing up. I have now worked for the same firm for the last 18 years, which gives me the privilege of seeing so many of our clients’ financial plans coming to fruition. IFAM: What are the best bits about being a paraplanner? TO’H: Perhaps the best way to explain this is for me to share some examples. It’s all about the outcomes that we achieve for our clients. One that springs to mind was the

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PARAPLAN N I NG I N PRACTICE

time when one of our couples had their first gap year - at the age of 61. They travelled the world, a goal which was accomplished on the back of a decade of our planning. Another instance was when another couple bought a motorhome with £100,000 accessing the profits we created for them having following our investment advice. There are so many stories like this which gives one a huge sense of worth and job satisfaction from being able to help make these things happen. This especially resonates when clients are at their most vulnerable, perhaps when a family member has died. Of course, it is part of the planning process that we also plan for catastrophes. When the inevitable sadly happens, it is our financial plan that carries the surviving client to a better financial future. That’s rewarding too, but in a different way.

September 2019

continue to adapt our knowledge and skills to make sure we have the tools to support our business owners to constantly prove our value. In this past decade, paraplanners have found their voice. I am confident that paraplanners will be at the heart of resolving the new challenges we will face as a profession in the years to come and in continuing to deliver the standard of financial planning service which clients have come to expect and to value so highly. 2. Becca Tuck - Technical and Quality Manager at Magenta Financial Planning

IFAM: What does a typical working day look like for you? TO’H: On a day to day basis, I am generally supplied with a file of hard and soft facts after an adviser has completed a meeting with a client, which I did not attend. My responsibility is to use all this data and information to build the financial plan to meet the client’s goals and objectives. The analysis, the working out and the problem solving is my favourite part of the job. It is not dis-similar to a Sudoku problem, where you know the rules of the game, but you will not see the final solution until you have worked the problem through. Of course, I am totally dependent on the adviser asking great questions when they are with the client/s so I have all the information I need. I believe that the value in my work is to supply great answers and in a language and format which is easy for the client to understand. To achieve this, I play with a lot of technology. At Warwick Financial Solutions we have access to the full suite of Microsoft 365 Apps plus a dozen other software products purchased by the business to enable us to efficiently review the client’s circumstances. I would describe myself as the sort of person who has read more manuals than novels. To prepare for the next decade, I am now learning to code (very slowly). I think it is extremely important that we

I FAmagazine.com

IFAM: How and why did you decide to become a paraplanner? BT: Like many people, I began my career in paraplanning entirely by accident. I had my first taste of financial services at the age of just 16 during my work experience. I then returned to spend most summers throughout 6th Form and University working on reception at the financial planning firm or helping out with admin, but not really thinking that a career in finance was for me. After all, I was studying Marine Biology and Oceanography and had dreams of getting myself a seat in the deep sea submarine, Alvin, to discover everything there was to know about hydrothermal vent crabs!

September 2019

PARAPLAN N I NG I N PRACTICE

Sadly, jaunts to the deep sea are generally reserved for the most super of scientists (or the Director, James Cameron…) so, after University, I decided it was time to

join the “real world” and asked for a reference from my previous employer. Instead, it was suggested that I might like to try my hand at paraplanning. Six years later and I haven't looked back! IFAM: What does paraplanning mean to you? Which elements do you particularly enjoy? BT: Despite not setting out to become a paraplanner, I quickly realised that the role was perfect for me. I’m a natural analyst, a perfectionist, and I love problem solving. Growing up, I was the kid that took every IQ test going. Not (just) to prove that I was smarter than my parents, but because I really enjoyed challenging myself - using facts and logic to find patterns in the seemingly random. I feel that paraplanning is a little like that, with my enjoyment of the role increasing as my technical knowledge grew. Although there a large overlap in the knowledge and skills required by good para-planners and financial planners, the unique skills of the financial planner usually lie in the “bigger pic-ture” planning, whereas I thrive on the detail. To use the old “client journey” analogy, once the planner has established where the client is and where they want to get to in life, I can then act like a human Google Maps - suggesting some useful short cuts, some potential road works to be avoided, or that it might just be better for the client to leave the car behind altogether and get the train! There are so many facets to the role of paraplanning and I genuinely enjoy all of them. However, for me, there’s nothing quite like the feeling of using your know-how to do something a little bit clever and opening up a whole range of solutions that didn’t seem possible at a first glance.

Paraplanning and the PFS Insight from Lee Travis - Partnerships and Member Engagement Director at the Personal Finance Society As the Partnerships and Member Engagement Director at the Personal Finance Society, I helped support the new PFS Paraplanner Panel to reform in 2017 and develop its role and impact. We felt it was really important that we supported the growing paraplanning community and so we needed representation to help shape our proposition to ensure that what we offered was of val-ue. It was important that we had paraplanners helping us to shape that. We already have a Financial Planning Panel in place so it was the right thing to set this up alongside it. I’m a big believer that you should deliver what your members want, so if we are going to deliver an offer-ing to a particular group then we needed representation from it. Luckily for us, we set up a group of enthusiastic and passionate paraplanners who really want to ensure that they are heard and that they can make a difference to the development of the paraplanning profession. At our last AGM of the Personal Finance Society, I’m delighted to say that the wonderful Caroline Stuart was elected as Paraplanner Board member, which means that there is influence from this important community right at the top of the PFS. Long may it last!

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ACQUISITION AND SALES

O F I FA BUSINESSES Retirement? Time for a change? There are countless reasons to sell your IFA business, just as there are countless reasons to get hold of one.

WE AR E A S PEC I A LI ST F I N A N CI A L S ALES , C O N S ULTANC Y AN D B RO K ERAG E BUSINE SS. Gunner & Co.â&#x20AC;&#x2122;s mission is to work directly with you, whether you are looking to realise the capital in your business, or you are looking for growth through a merger or acquisition. We consider every business to be unique, and therefore finding the right solution for you starts with a thorough understanding of your business operations and your wish list. Only from here can we make valuable introductions which align to both partyâ&#x20AC;&#x2122;s needs. If you would like to discuss options to sell, exit or retire, or acquire IFA businesses, please get in touch for a confidential discussion.

louise.jeffreys@gunnerandco.com

gunnerandco.com

September 2019

TONY CATT

ARE YOU READY FOR THE

SENIOR MANAGERS & CERTIFICATION REGIME? The clock is ticking ahead of the December implementation date for this new FCA ruling. But how ready are you? Compliance consultant Tony Catt reminds financial planning firms that now is the time for action in order to ensure compliance with the new regime and gives some pointers on what needs to be considered and implemented

ith much commentary already been written on this topic, this article is to serve as a reminder and prompt for action by advice firms with the deadline rapidly approaching. On the one hand advisers will know that this regime is due to be implemented right across the advice sector from 9th December 2019, but on the other, there are probably many advisers who have actually done nothing about preparing for it. For many small firms, there may not appear to be much to do, but in this respect advisers underestimate the work involved at their own risk. As an overview, the Senior Managers & Certification Regime (SM&CR) is a catalyst for change - an opportunity to establish healthy cultures and effective governance in firms by encouraging greater individual accountability and setting a new standard of personal conduct. So, from December, the FCA is extending the SM&CR to solo-regulated firms. By doing this, the FCA aims to reduce harm to consumers and strengthen market integrity. This presents a unique opportunity for the regulator to set a new standard of personal conduct for everyone working in financial services. Decemberâ&#x20AC;&#x2122;s extension of SM&CR is set to affect almost every solo-regulated firm, from very small firms (including

sole traders and limited permission consumer credit firms) to some of the largest global firms. The SM&CR will apply to all FSMA authorised firms. It also applies to branches of non-UK firms with permission to carry out regulated activities in the UK. The FCA is extending the SM&CR in a way that is proportionate to the size of the firm. To comply with the new regime, firms may need to take a number of steps, such as adjusting their governance arrangements, clarifying areas of responsibilities, identifying and eliminating gaps, and recording and evidencing their review processes. In addition to the roles and responsibilities that apply to senior management, firms will also need to

TONY CATT

identify their certified persons; these are persons who could potentially cause harm to clients, employees or the firm itself. Certified persons will not be directly authorised by the FCA, but firms will need to identify any roles that include investment advisers, wealth advisers, pension transfer advisers, proprietary traders or any person who supervises or manages a certified function, just to name a few. To put it simply, firms will need to ensure that the right person is performing the right role within the business and that they are properly trained and qualified to perform that role. Senior managers and certified persons will need to understand how the new code of conduct rules that will apply to them specifically and will be required to undergo appropriate training before the commencement of SMCR. WHAT ADVICE FIRMS NEED TO DO: • Determine the firm classification – Limited scope, Core or enhanced - and understand how SM&CR applies to them • Identify senior managers, allocate the appropriate responsibilities and produce 'statements of responsibilities' • Identify certified staff, ensuring that mechanisms are in place to train, assess and certify them as competent, as fit and proper • Train senior managers and certification staff on the new conduct rules • Review 'statements of responsibilities' and terms of reference of governance and committees EVIDENCE As ever with regulatory procedures and processes, the most important thing for firms to do is to store the evidence, and be able to produce that evidence, demonstrating competence under fitness and propriety, of knowledge and skills through testing, file reviews, skills assessments and ongoing CPD, and so on. FCA DIRECTORY The Directory is a new public register that enables consumers, firms and other

September 2019

stakeholders to find information on key individuals working in financial services. The current FCA Register is to be adapted/replaced by the new directory. Originally, the FCA was considering disbanding the Register, but on consultation it received a lot of feedback about the importance to consumers who relied upon the register to check the status of advisers. When the FCA’s Directory opens for submissions, firms will be required to submit the details of their senior managers, certified individuals, as well as other important individuals who undertake business with clients and require a qualification to do so. Firms must also ensure that the details remain up to date. Banking firms and insurers can start submitting data as of September 2019, while all other firms can start submitting from 9th December 2019. CONCLUSION The FCA is looking to build a uniform structure to try to provide effective consumer protection throughout financial services. The application of SM&CR will be proportional, dependent on the size of firms. Senior managers will have specific spans of duty and responsibility. Senior Managers can be held to be liable for any breaches within their span of responsibility. This personal liability is likely to focus the activities of senior managers and therefore lead to better practices. Firms must not underestimate the amount of work that will be involved in getting to the stage where they are compliant for this new regime. I’ll repeat the date again, that implementation is due to take place on 9th December. There does not appear to be any plan to allow any period of grace before enforcement may take place for non-compliance with the new rules. It is strongly advised that firms to have everything in place as soon as possible rather than to experience the perennial rush to meet regulation deadlines that is bound to happen as the deadline approaches. Tick tock. About Tony Catt Formerly an adviser himself, Tony Catt is a freelance compliance consultant, undertaking a whole range of compliance duties for professional advisers. Contact Tony info@tonycatt.co.uk or call 07899 847338.

September 2019

BRIAN J U PITE TORA R

MULTI-ASSET INVESTING FOR THE NEXT TEN YEARS The prospects for investors have changed radically in recent years. Returns are going to be lower than they have been and yield is ever harder to find, but volatility will remain the same if not higher. At the same time investors need income and capital growth to meet their retirement objectives. Talib Sheikh joined Jupiter to take a fresh look at this investment problem: by taking an active and flexible approach to investing, backed up by a disciplined approach to risk, he believes he can deliver the outcomes multi-asset investors are looking for

dapting to change is never easy, and even more so when the change is profound and transformative. In recent years, the financial markets have undergone such radical change, established wisdom on how to navigate them has been consistently turned on its head. We now operate in an environment where very low interest rates are here to stay, the returns available across investment markets will be lower than they have been, and risk is likely to be higher. In short, achieving investment objectives will be harder: and as people are living longer, saving enough for a decent retirement has become even more difficult.

What that does not mean is that investors can hide under the mattress and hope for the best; on the contrary, seven trillion euros are sitting on deposit at negative interest rates, being eroded in real terms at the fastest pace in history. Anyone who parks money in a cash account today and hopes for rising interest rates will continue to lose money in real terms for a long time to come. NEW ORDER To succeed in this environment, it is vital to plot a different course, and that is exactly what manager Talib Sheikh is looking to do at Jupiter. In the past 10 years, it was enough

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BRIAN J U PITE TORA R

to hold a relatively fixed portfolio of equities and bonds that had to be readjusted now and again. Over that period, for instance, a simple portfolio mix of 50% equities and 50% bonds would, on average, have given investors an annual return of about 8% for a volatility of about 6% p.a. Looking forward, the same investment strategy we think will earn less than half the returns with at least as much risk. Traditional sources of return have been eroded by very low interest rates across the globe and particularly in Europe. This difficult, volatile investment environment will remain unchanged for a few years yet, partly because it will take a long time for the world’s central banks to complete the normalisation of monetary policy. Markets have entered a new era. In the past 10 years, central banks supported the economy by injecting lots of capital. But this support is less likely to be forthcoming now. In addition, all asset classes are much more expensive today after a decade-long bull market.

September 2019

WIDENING THE TOOLKIT Large, slow moving, passive approaches to multi-asset are likely to disappoint in the coming years. We need to widen the toolkit to deliver the returns investors need to meet their objectives. For Jupiter’s multi-asset strategies, that means a three-pronged approach of being active and flexible with a very disciplined attitude to risk management.

Anyone a cash hopes for continue terms for

who parks money in account today and rising interest rates will to lose money in real a long time to come.

GLORY DAYS? The US, for example, has seen the longest expansion in its post-war history. A key question for investors is: how long will this cycle last? Trade tensions and declining manufacturing confidence have ignited recession fears, with the most visible expression of this fear being played out in declining sovereign bond yields. However, while recession risk has increased quite materially, the team’s base case is that the cycle of expansion can continue if the US consumer and dovish central bank policy across the globe remain supportive. That said, it is important for investors to be aware that trade tensions have created a “persistent political risk premium” that will weigh on growth for the foreseeable future.

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A HIGH CONVICTION APPROACH One of the reasons Talib Sheikh chose Jupiter as the place to build his new business is the firm’s commitment to high conviction active management. For the multi-asset team this means a commitment to active asset allocation decisions to take opportunities and manage risk in fast-moving markets; and where appropriate, allocating capital to Jupiter active managers to deliver alpha. The team’s existing strategies have around 400-500 individual positions, compared to competitors with four to six times that number.

September 2019

J U PITE R

FLEXIBILITY AND FOCUS In a lower return, low rate world, returns from asset classes multi-asset funds have traditionally relied on are likely to disappoint, and you can’t afford to miss opportunities in other areas of the market. This is where the flexible approach Talib’s team has adopted can, in our view, deliver better results. Emerging market credit and listed infrastructure, for instance, feature in our portfolios, among a wide range of asset classes. These are asset classes that offer better risk-adjusted returns than investment credit, a traditional asset class for most multi-asset funds, but one which you will not find us invested in today. The team also has the flexibility to create its own baskets of stocks tailored to benefit from some of the economic, political and social themes that drive asset performance over the longer term.

The team asks three basic questions in choosing investments: “What will happen to the world economy in the long term? What does this mean for asset prices? And what does the optimal portfolio look like against this backdrop?” Their task is primarily to brainstorm and shape a solid framework. In the management of security-specific risks, they draw on the expertise of his fund management colleagues who manage individual sleeves for the fund. By combining this active and flexible approach with a sophisticated and disciplined approach to risk, Talib Sheikh and his team believe they can deliver meaningful performance for a moderate level of risk.

MANAGING RISK The final pillar of the Jupiter multi-asset approach is to take a careful and disciplined approach to risk. Talib Sheikh is very aware that clients don’t like to lose money, and many are using multi-asset approaches to find an equilibrium between risk and return as they approach retirement. The team therefore monitors risk through a wide range of sophisticated analytical techniques to target a smooth return through time. For Talib Sheikh, key to his approach is his ability to react in a timely manner to changed investment situations and to be able to selectively take advantage of opportunities in individual sectors. His mantra is that flexibility and focus are crucial.

About Talib Sheikh Talib joined Jupiter in June 2018 and is Head of Strategy, Multi-Asset. He manages the Jupiter Flexible Income fund (SICAV). Before joining Jupiter, Talib was managing director and portfolio manager at JP Morgan Asset Management where he has worked for nearly 20 years. He was instrumental in the formation and growth of the Multi-Asset Solutions team, since inception in 2004. Over this time, Talib has managed a number of products including multi-asset income, target return and flexible balanced funds plus diversified institutional accounts.

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M AGAZINE

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September 2019

CHARLES STAN LEY

INTERGENERATIONAL PLANNING - IT’S GOOD TO

TALK

Helping clients to make effective plans to maximise the amount of their estate which is passed to their chosen beneficiaries after death is a crucial part of the financial planning process. Sean Osborne, Head of National Accounts at Charles Stanley, outlines a few options that planners can consider in such situations

or those individuals looking to minimise the tax impact upon their death, proper inheritance tax planning is key. However, research conducted by Charles Stanley found that only 24% of parents with adult children have spoken openly with them about the issue of inheritance. This is a surprising statistic, considering it is estimated under-45s in the UK stand to inherit more than £1.2trillion. The role of a financial planner includes encouraging clients to discuss the issue of inheritance with their families, and letting them know all the options they have available to them. It goes without saying that the sooner families start planning their estates, the more choices they will have in order to limit the amount of inheritance tax paid by their loved ones. So, what are their options? We have outlined a few of these below.

GIFTING Gifting is commonly used in estate planning. Small gifts from normal income are known as ‘exempted gifts’ and there is no inheritance tax to pay on these, or on gifts between spouses or civil partners. In the UK you can give away up to £3,000 worth of gifts each tax year as part of your ‘annual exemption’ and any unused annual exemption can be carried forward onto the next year, although only for one year. Gifts out of this allowance are liable to inheritance tax, and the amount owed depends on when they were gifted. If gifted in the three years before a death, there will be 40% IHT to pay, but after seven years a gift becomes exempt. There is a sliding scale for inheritance tax owed between three to seven years. Gifting is a good option for those who are happy to part ways with money during their lifetime, providing they are aware they will still owe inheritance tax should anything happen within seven years.

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CHARLES STAN LEY

BUSINESS PROPERTY RELIEF Business Property Relief (BPR), an established part of inheritance tax legislation since 1976, is a straightforward investment incentive, and is chosen by many who want a chance to grow the inheritance they plan to leave behind. BPR-qualifying shares become exempt from inheritance tax once they have been owned for two years and can cover different kinds of businesses, including AIM listed companies and companies which are not listed. There are always risks associated with investing so it’s key to assess your client’s appetite for risk before considering this route. But if the investments are profitable, it can be a great way of leaving an inheritance without having to give away a large sum of money during your lifetime. It is also one of the quickest ways to turn an investment into a tax exempt one, with two years being a short amount of time compared to gifting a large sum of money.

September 2019

Many modern pensions offer a range of ‘death benefits’, which include being able to pass over pensions savings to a nominated loved one. It is important to discuss this with your client’s pension scheme provider, first to ensure the pension actually has this benefit, and second to let them know who your client will be leaving it to, as pension savings are not covered by a Will. These pensions savings are normally free of IHT and not part of a taxable estate. Of course, a pension is also an investment, so it’s recommended that clients are aware of this and that the value may go up as well as down in value. When it comes to estate planning, there are many options out there, but it’s not straightforward, with a confusing array of inheritance tax rules, particularly with potential changes suggested by the Office of Tax Simplification on the horizon. The first step is making sure clients know it’s good to talk!

FAMILY INVESTMENT COMPANIES Family Investment Companies (FIC) can be considered for families with large sums of money. A FIC is a UK registered private company in which current family members become shareholders. Transfers of shares outside a specified level of family connection are generally prohibited, making a FIC different to a standard company. When it comes to estate planning, a Family Investment Company is a great way for individuals to transfer large sums of money that will be passed onto their family, whilst still having some degree of control. Of course, setting up a FIC can be a complex process and there are lots of things that must be taken into consideration when thinking about starting one. PENSION OPTIONS

About Sean Osborne Sean is Head of National Accounts at Charles Stanley. He is experienced in building, developing and managing sales teams and defining and delivering sales strategies in order to significantly improve sales volumes. He is a SIPP market expert and has strong knowledge of the platform and investment management arenas.

Many view pensions as just a means to support themselves during retirement but in fact a pension can be a very tax-efficient way of passing on wealth to loved ones.

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September 2019

RICHARD HARVEY

MAD WORLD

Is it kind of funny or is it kind of sad that today’s pensioners are facing new threats to their level of income and benefits? Richard Harvey doesn’t find it funny but he certainly finds it hard to take

t's perfectly natural to feel revulsion over stories of pensioners who have been mugged, either literally by a drug-addled hoodie or figuratively by a doorstep shyster ("tarmac your front garden, lady?").

So it's not unreasonable to experience the same emotion at what seems a sustained attack on pensioners' incomes from those who might be expected to offer some empathy with the over-66s (or whatever age it is the government periodically deems sufficient to justify the state pension). First, a committee of the House of Lords - that retirement home for the plumply prosperous and self-important decrees free or discounted TV licences should be phased out, and bus passes and the winter fuel allowance reformed. Oh, and while they were at it, this committee on "intergenerational unfairness" also thought those working beyond state pension age should pay national insurance contributions. As if those workers - many of whom are

still slogging into work every day because the state pension doesn't equate to a decent standard of living - haven't already coughed up enough NIC payments in their previous 40+ years in the workplace. The irony somehow eludes m'Lords and Ladies, all of whom are either comfortably off or rich as Croesus, that they enjoy the sort of bunce denied the rest of us, such as the £305 a day attendance allowance, travel expenses and subsidised restaurant facilities. THE TV DEBATE Like the proverbial London buses, no sooner have they come up with their pensioner-bashing programme then surprise, surprise - the BBC comes along with proposals to means-test free TV licences for the over-75s, only handing them over to those who receive pension credit. This is among of parcel of money-saving ideas from the broadcaster, desperate to sustain its cashflow after George

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RICHARD HARVEY

Osborne clipped its corporate wings in 2015, and deaf to the unassailable fact that the TV licence is no longer sustainable in a world where there is massive competition from other news and entertainment sources, in particular the internet. It's piquant that those very same victims of "intergenerational unfairness" are the least likely to access the BBC. Although they should, perhaps, have watched the splendid comedy series W1A, which beautifully skewered the broadcaster's pomposity, extravagance and sense of entitlement. And actually produced by the BBC, in a remarkable demonstration of self-flaggelation. THE IMPACT OF â&#x20AC;&#x153;INTERGENERATIONAL UNFAIRNESSâ&#x20AC;?

September 2019

believe me, in my rural part of leafy Kent is essential - and the welcome injection of a few quid in the form of the winter fuel allowance. Maybe the Lords could look at "intergenerational unfairness" from a different perspective. Why, when we're living in one of the most prosperous nations on earth, do UK pensions regularly come at the bottom of comparative international league tables? As one respondent to an online debate about the Lords' proposals commented: "What kind of country are we living in when the ruling elites are looking for ways to make life harder for people who are less well off than they are?" Couldn't agree more. To the barricades!

So one can easily imagine, just a couple of years down the line, the difficulties imposed on pensioners no longer having a subsidised TV licence, free bus travel - which,

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CAREER OPPORTUNITIES Position: Paraplanner Job Ref: 53527 Location: WORCESTER Salary: £30,000-£50,000 per annum The client: This is an exciting opportunity to join a highly reputable firm that encourages growth and development throughout. They pride themselves on providing an excellent service to their clients whilst continually looking to grow and expand their highly reputable team, maintaining one of the best names within the industry. There is a large focus on promoting from within where possible, so there is a clear structure towards full advisory positions as well as management.

The opportunity: The firm is looking for an experienced senior paraplanner to support the successful financial planners of the business. The firm has the flexibility to mould the perfect opportunity around each person’s specific skillset, so there is scope for the role to be tailored somewhat to your requirements. The role is actually a 50/50 hybrid between technical paraplanning and providing telephone advice, so a great stepping stone into full advice later on (where clients will be provided). You will be working in a strong teamfocused environment where you can develop your career within a prestigious firm, and equally help the junior members of the team by passing on your existing knowledge accordingly.

What’s needed for me to be considered? • • • • •

Hold Level 4 Diploma in Financial Planning (AF3/AF7 Desirable) Previous experience supporting advisers within an IFA environment Comprehensive market knowledge with strong technical ability in private client financial advice Client-facing experience (advantageous) Progression towards Chartered status (advantageous)

Position: Research Analyst Job Ref: 53430 Location: ALTON Salary: £18,000-£23,000 per annum The opportunity: The opportunity for an ambitious candidate to join a well-established Financial Services Practice which provides a highly personalised financial planning and investment management service.

The role includes the following requirements: • • • •

To complete day to day client-related investment analysis forming part of the overall advice process To assist the investment research and portfolio management functions in completion of their responsibilities Producing annual review packs, writing fund reviews and performance comparisons to a competent standard and within agreed turnaround times Assisting Senior Research Analyst in production of information for the investment committee

What’s needed for me to be considered? • • • •

A genuine interest in a career in financial services/investment management High attention to detail Ability to learn new skills and work as part of a team Numeracy and literacy skills

Position: Financial Adviser Job Ref: 53593 Location: WATFORD Salary: £45,000-£65,000 per annum The opportunity: This independent advice firm seeks a financial adviser with a professional and level-headed approach to help take on a number of the company’s clients and to acquire new ones. This opportunity would be suitable for any Level 4 Diploma qualified professionals, whether you be an existing IFA with a strong book of business, or a newly qualified adviser looking to work in a highly professional environment. The role provides the chance to work with a number of the firm’s existing connections, with all your leads provided via referrals and professional introducers, with a highly rewarding salary and benefits package.

What’s needed for me to be considered? • • • •

Have previous experience within an IFA / financial planning practice Must be qualified to a minimum industry standard of Level 4 Diploma Previous experience dealing with high net worth clients desirable but not essential A strong understanding of pensions and Investment products advantageous

Position: Technical Administrator Job Ref: 53586 Location: IPSWICH Salary: £26,000-£28,000 per annum The client: This well-established financial planning firm with offices based nationally is looking for an experienced technical administrator..

The opportunity: This unique opportunity is an administrative role in which the chosen candidate will report directly to the regional administration manager operating out of their fantastic East Anglia based office. This role is unique in that the successful candidate will assist the consultant in preparing the report, assist in research and performance data collection and work closely with a financial analyst to ensure a smooth process.

Responsibilities: The responsibilities of this challenging role stretch beyond that of many financial administrative roles as follows: • Provide high quality administrative support to financial consultants and clients alike • Production and issuing of client advice, including liaison with product providers and undertaking research • Use of Exchange for research • Prepare and issue client review documents • Processing of new and existing business from outset through to conclusion

What’s needed for me to be considered: • • • •

You should have financial services experience with a drive and determination to progress and develop. You will ideally have attained the Diploma in Financial Planning, or currently be working towards Excellent IT and communication skills and the ability to deal with individuals at all levels within and outside the business Ideally you will have a degree of pension transfer experience, due to the company dealing largely with defined benefit transfer cases

Position: Financial Adviser Job Ref: 53494 Location: IPSWICH Salary: £30,000-£50,000 per annum

The opportunity: A financial adviser with a professional and level-headed approach is required to help take on a number of the company’s client's. You will have the chance to work with a number of the firms existing connections, with all your leads provided via referrals and professional introducers, with a highly rewarding salary and benefits package.

What’s needed for me to be considered? • • • •

Hold previous experience within an IFA/financial planning practice Must be qualified to a minimum industry standard of Level 4 Diploma Previous experience dealing with high net worth clients desirable but not essential A strong understanding of pensions and investment products advantageous

Position: Paraplanner Job Ref: 53417 Location: LONDON Salary: £40,000-£45,000 per annum The client: An exciting opportunity for an experienced paraplanner has opened at a highly regarded financial planning firm that specialise in all aspects of savings, investments and retirement planning for both corporate and personal clients. The firm prides itself on the highest level of personal advice and professionalism which is provided to each and every client. You will be joining a very well-established firm who are innovative, supportive and forward thinking.

The opportunity: This is a fantastic opportunity to build on your industry and technical knowledge by working with an established team of paraplanners to provide high quality support to a team of IFAs. You will have an experienced team of administrators assisting you with other queries and you will be provided with the latest technology to help you within the role.

Duties: • • • • •

Process and deliver suitability reports for a variety of IFAs Obtaining relevant research relating to proposed advice Provide recommendations to clients on investments, pensions and protection policies based on your own research and to be able to support these recommendations with a coherent explanation Ascertain that procedures followed by the company are compliant and follow the guidelines set out by the FCA Providing relevant documentation ahead of client meetings

What’s needed for me to be considered? • • • • •

Qualified or working towards level 4 diploma is an advantage Experience of lifetime cashflow modelling, preferably with Voyant would be advantageous Previous experience within IFA practices and paraplanning is essential Excellent communication skills, both oral and written FCA understanding of regulations and their practical application

Position: Senior Pensions Administrator Job Ref: 53393 Location: BRISTOL Salary: £24,000-£30,000 per annum The opportunity: The firm’s business activities include corporate pension consultancy, investment consultancy, scheme administration and the provision of actuarial services. They provide a boutique service to trustees and employers. Their focus is very much on the provision of a personal and professional service tailored specifically to meet each client’s particular needs.

The Role: They seek an experienced senior pensions administrator to join their friendly and supportive department with great opportunity for growth. . You will be responsible for your own work load but supported as part of the team.

What’s needed for me to be considered? • • •

Previous experience dealing with DB or/and DC desirable A professional communication manner, both written and verbally Any financial services qualifications are desired

Position: Paraplanner Job Ref: 53558 Location: NOTTINGHAM Salary: £25,000-£35,000 per annum The client: This is a very well respected IFA practice that seeks to build a long term, trusting relationship with their clients in the Nottingham and London areas. They provide tailored financial planning advice in all areas to private clients and pride themselves on their level of technical knowledge, expertise and the ability to find the best solutions for their clients.

The opportunity: You will part of a technical team and be actively involved in the back office process as a key member of a back office team. The firm can provide genuine career development opportunities as well as exam and study support.

What’s needed for me to be considered? • • • • •

Qualified or working towards level 4 diploma is an advantage Previous experience within IFA practices and paraplanning is essential Understanding of FCA regulations and their practical application Effective communication, both written and verbal Have a professional, proactive and positive attitude

What’s next? If you are interested in any of the above opportunities, please contact us directly. If suitable, one of our specialist consultants will be in contact with you to discuss the opportunity in detail prior to submitting your Curriculum Vitae to the client. During this discussion, we will aim to identify your specific skills and motivations and, where appropriate, can also recommend other relevant opportunities to you that match your requirements.

And finally… 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.

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

What Going On With Gold? | IFA 81 | September 2019

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