IFA Magazine - Issue 54 - Decemeber 16 / January 17 by Clifton Media Lab

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

God help EU, Merry Gentlemen

Dec 2016/Jan 2017

N EWS

REVI EWS

ISSU E 54

COM M E NT

ANALYSIS

CONTE NTS Dec 2016/Jan 2017

CONTRI BUTORS

4 Editor’s Welcome

Brian Tora

an Associate with investment managers J M Finn & Co.

News

Richard Harvey a distinguished independent PR and media consultant.

10 Turn and face the strange: the crash that never was

CAREER OPPORTUNITIES Neil Martin

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

Michelle McGagh brings a wealth of experience on industry developments.

It's all about execution

16 Adviser spotlight: Barry Horner, Paradigm Norton Financial Planning

Brett Davidson FP Advance

If you go down to the woods today

22 Michael Wilson

How to be perceived as more of an expert

Editor-in-Chief editor ifamagazine.com

Sue Whitbread Editor sue.whitbread

ifamagazine.com

26 The essence of financial planning how much money is enough?

30 Mal content

Alex Sullivan

Publishing Director alex.sullivan ifamagazine.com

Business planning for 2017: Nailing your strategic plan Kath Morgans Head of Events kath.morgans ifamagazine.com

38 Ho ho holy Santa

40 Filling the knowledge gap IFA Magazine is published by IFA Magazine Publications Ltd, The Tobacco Factory, Loft 3, Bristol BS3 1TF Tel: +44 (0) 1179 089686 © 2016. All rights reserved ‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication. IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com

42 The view from Europe

46 The ideal specialist adviser opportunities

WE LCOM E Dec 2016/Jan 2017

Dear Santa I’d like a nice gentle Christmas please, with no socks and no shocks, and especially none of those nasty post-Christmas panics. I’ve had a bit of a year really, so would you mind asking Donner and Blitzen not to clatter about on the roof, because my headache is killing me. I’ve left you the usual mince pies by the fireplace, but I’m afraid the sherry is British this year because I can’t afford the real thing any more. Tinsel’s been rationed too. Normally I’d have been out shopping in New York, but events keep getting in the way. You know how it is. Rotation, Schmotation About two years ago, I found myself writing an editorial for IFA Magazine about something that the experts were calling The Great Rotation. My, how time flies. The gist of the Great Rotation argument, as you’ll probably remember, was that the unbearable weight of the market’s appetite for fixed interest investments was about to overturn the logic of the 28 year bull run in bonds and send us all skittering back into equities. Or maybe into cash if our luck improved and interest rates took an upward turn. It was absolutely, definitely bound to happen. So we waited, and waited, and waited…. And now it’s a (yawn) 30 year bull run in fixed interest, and US sovereign yields are still below 2%, and in Germany they’re so low that they often disappear into negative real territory - which has shaken up our ideas of what bonds are supposed to do, because a lot of us aren’t exactly used to paying money to central banks for the privilege of parking our money with them. Not even the enormous weight of quantitative easing, which was supposed to have pushed up rates by flooding the debt markets, has really helped the ECB to boost inflation toward the 2% inflation figure that everyone seems to agree is ‘normal’. And as for boosting economic growth, it just doesn’t seem to be happening, does it Santa? Equities on the trampoline What’s really odd about it, though, is that yes, the equity markets have been soaring exactly as everyone thought they would under the Great Rotation. Which perhaps isn’t so very surprising when you consider the pathetic bond yields that are currently on offer. And they’re currently bouncing about like the boxer in the John Lewis ad.

can outstrip the logic and the mathematics of the issue? And what will happen if the dam finally breaks, as everyone says it will? President Trump can hardly fulfil his electoral platform mandate unless he floods the US market with a few trillion dollars of new paper. And where are all the buyers for those going to come from? Will they really be persuaded by the call of the old reserve currency? Could be, but we now have a US which is stepping back from the world – and that’s a whole different scenario from the 1970s when the US bond explosion started. We now have China, and the euro, and a lot of disgruntled Asian countries that just might decide not to put their faith in Washington’s economic solidity. And, on the current face of things, I might not blame them. Crackers I was reminded of that recently by a social media discussion in which one participant got roundly thumped for trotting out the old mantra about how the percentage of equities in your portfolio should be 100 minus your age, with most of the balance in bonds or cash. Bonds, his tormentors demanded? Cash? Are you kidding? Dear Santa, I’ll understand if you can’t manage much in the way of a present this year. I know, times are hard up in Lappland. But if you’ll just take a look in your snow crystal ball and scribble down a few numbers for me, I’d be awfully grateful. Michael Wilson, Editor-inChief, IFA Magazine

But how on earth are we to explain the continued strength of the bond market? Is it really that the pensions industry needs them so much that demand

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Auto-enrolment membership soars

Automatic enrolment, which requires employers to enrol employees by default into a workplace pension scheme, resulted in a £2.5 billion increase in pension saving during the year to April 2015. A report published by the Institute for Fiscal Studies on 17th November shows that automatic enrolment increased pension participation among eligible employees by 37 percentage points, and that by April 2015, 88% of these private sector employees were members of a workplace pension scheme. The research, based on data from almost half a million jobs between April 2011 and April 2015, showed that membership of a workplace pension scheme rose from 5.4 million private sector employees in 2012 to 10.0 million in 2015. Of that 4.6 million increase, the IFS estimates that 4.4 million was the result of automatic enrolment. The report also found that: • Automatic enrolment boosted pension coverage by the most among those aged 22 to 29, those earning between £10,000 and £17,000 per

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year, and those who had been with their current employer for less than a year. In 2015, coverage among these groups had exceeded 80%. • Most of those brought into workplace pensions as a result of automatic enrolment have only been making low levels of contributions. The minimum contributions to pensions under automatic enrolment are 2% of earnings between £5,824 and £42,385 (in 2015–16), with at least 1% coming from the employer.

Season's greetings from the IFA magazine team With Christmas rapidly approaching, the whole team at IFA Magazine here in Bristol would like to send our festive greetings to all our readers. We also wish you all a very happy and prosperous new year. Whatever 2017 has in store for us, we are guessing that there will be yet more hugely significant events with the capability to challenge thinking and keep us all on our toes. Will it struggle to live up to the dramatic events of 2016? Well, we’ll have to wait and see but the good news is that IFA Magazine will be increasing in size, with each edition enjoying extra pages. We look forward to the additional scope it will give us to bring you the kind of detailed analysis you keep telling us you like right through 2017, starting with January/February 2017 edition, which will be with you at the end of January 2017.

• But all is not lost. The proportion placing 5% or more of their total earnings into a workplace pension has increased by 7 percentage points since 2012, the IFS says. • Total contributions are highly likely to increase significantly over the next few years as more employers are brought into the scope of automatic enrolment and as the minimum contributions increases from 2% to 8% of qualifying earnings. The full report is available via https://www.ifs.org.uk/ publications/8735

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Shock, horror - Britain is great for business Canada in 17th place. The global table was headed by Qatar and the UAE in joint position, with Hong Kong, Bahrain, Ireland, Kuwait, Denmark, Singapore and Macedonia all ahead of the UK.

Donald Trump might be planning to lure business away to the United States with his tempting promise of a 15% top rate for corporate taxation, but Britain is still among the top scorers when it comes to assessing the overall tax burden on businesses. A new report jointly published by PwC and the World Bank places Britain in tenth position for tax worldwide, making it the highest ranking of any G20 country in the latest survey; followed by

Even more encouragingly, the report (“Doing Business 2017: Equal Opportunity for All” (http://www.doingbusiness.org/ reports/global-reports/doingbusiness-2017), puts Britain in seventh global position for the general ease of doing business – behind New Zealand, Singapore, Denmark, Hong Kong, South Korea and Norway. (Surprised? So were we at IFA Magazine.) The report was compiled in June 2016 and measures regulations affecting 11 areas of the life of a business. Such as the ease of doing business, starting a business, dealing with construction permits, getting electricity, registering

property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. One of Britain’s key advantages, according to the report, is the ease of complying with tax obligations in. The company’s total tax rate — the total of all taxes borne as a percentage of commercial profit — was only 30.9% in corporation tax and national insurance contributions. According to the Financial Times, the report calculates that it would take about 110 hours to prepare and pay a typical company’s corporation, labour and value added taxes, which is significantly less than even some emerging economies. It was easier to arrange a VAT refund or to correct an error in a corporation tax return.

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Changing the narrative campaign progresses This year, IFA Magazine has been reporting updates on the ground breaking initiative led by Paul Wilson, Chairman of IFA Magazine publications, which aims to change the unwarranted negative narrative around EIS, VCT and BPR schemes. With the schemes often erroneously associated with socially unacceptable aggressive tax schemes, the campaign aims to set the record straight and highlight the significant range of benefits they deliver – including huge social dividends.

investments that act as engines of economic growth. The year book itself has been very well received in all quarters and is helping to highlight the serious attention fund managers pay to selecting, backing and nurturing winning business propositions which are ripe for investment. As 2017 unfolds the campaign will be focusing on delivering case studies of investments which highlight not just the

successful exits achieved for EIS and SEIS investments, but the growth and social impact of these investments. Another key development will be the establishment of an intermediary working Group that can help feedback to the fund managers, EISA and the Treasury what advisers and their clients would like to see from this sector. If you would like to be considered for this please contact our editor on Editor@ IFAmagazine.com.

The latest move has been to send of a copy of the EIS yearbook with a personalised letter to each of the UK’s 650 MPs. This landed with the MPS in early November. Each has been offered access to the industry’s thought leaders to help them understand the role EIS, VCT and BPR have in delivering sustainable

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Bitcoin bounces If the Brexit vote and the Trump victory have been jolting confidence in currencies around the world, one notable beneficiary during the last quarter has been the bitcoin crypto-currency, which has surged by nearly 50% since the start of September to reach $745 on 17th November. Meanwhile, other virtual currencies, such as Monero, have been seeing even stronger gains. That might seem counterintuitive, given that Trump’s move to the White House is seen as likely to enhance the value of the dollar during 2017, but industry experts reckon that it’s the uncertainty alone which is behind the rocketing price trend. Insiders say that new developments in blockchain technology are calming investors’ fears about any losses of confidentiality. Well, that’s what

they tell us, anyway. We’re afraid that sort of thing goes right over our heads. One mildly alarming statistic, from the bitcoin specialist Coindesk, is that virtual currency trading increasingly depends on trends from Asia, and especially from China, where it plays a key role in speculation around the value of the yuan. Thus, a steep decline in the yuan during October was accompanied by “robust” bitcoin activity. And just three Chinese exchanges – OKCoin, Huobi and BTCC – are reckoned to have accounted for more than 98% of the roughly 112 million bitcoins traded during October. What will happen next? That, it would appear, is in the hands of the new President and his threat of a 45% import tariff. Watch this space.

The digital age - IFA Magazine online Don’t forget that IFA Magazine publishes plenty of regular material digitally, as well as in print in this magazine. There’s a whole lot more to us than just the material you read on these pages, which, of course, we hope you find useful! Website Our website www.ifamagazine.com is updated daily with blogs, news stories and opinion pieces all relevant to the needs of advisers, paraplanners and wealth managers. Social Media You can also follow us on Twitter, and check out all the latest stories from @IFAMagazine. If you’re

not a member of our Linkedin group, then you can join the discussions by searching for Independent Financial Adviser (IFA) under groups. E-bulletins We certainly don’t want to bombard you with all the same updates you get landing in your inbox day after day from so many different sources. We provide three e-bulletins each week, bringing fresh ideas, information and opinions straight to you. On a Monday, our “what the papers say” roundup is been proving extremely popular, with many readers contacting us to say they find it useful. It’s a short, sharp and factual take on what

topics have been covered in the personal finances pages of the weekend national press. We know you won’t want to spend your weekend trawling through all the pages yourself, yet often clients will comment on what they’ve read in the press which might influence their thinking. Our Wednesday lunchtime bulletin is designed to make you think, giving opinion, perspective and thought leadership on a range of relevant topics and themes. Our Friday bulletin remains a roundup of other interesting snippets, interviews and expert opinion. Readers can sign up via our website http://www.ifamagazine.com/ page/about-us/subscribe/

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CHANGING THE NARRATIVE Dec 2016/Jan 2017

2016 — Changing the narrative around EIS 2016 has certainly been a year we will all remember, given the significant events which have taken place. The investment world of EIS, VCT and BPR is also going through a transformational period with a campaign led by Paul Wilson, chairman of the IFA Magazine group of companies. Through it, he aims to focus attention on the significant advantages that these asset classes bring to client portfolios as well as to the UK economy. The campaign is working to change the narrative around these schemes, which are losing their niche status and becoming established parts of client portfolios in their own right. With the year drawing to a close, Sue Whitbread has interviewed Paul to find out what’s been driving his passion for this ground-breaking initiative this year, and what he’s been doing about it to make things happen.

Q A

Paul, can you tell us why you launched the campaign in the first place?

Yes, that’s easy. It was frustration mainly. I have been a serial entrepreneur myself and, have seen the positive impact that entrepreneurs have on society and their economic contribution through taxes and employment opportunities. It has therefore been difficult to reconcile this with the line that has so often been taken in the media that associates this vital investment sector with aggressive tax avoidance schemes which are not in any way connected to it. The narrative which has developed around tax breaks for the wealthy is destructive as well as being inaccurate. It needed concerted efforts to rebalance it and get the true picture out there. These are government backed investments, bridging the gap between wholly government and grant supported projects in Universities for example, and businesses that are sufficiently developed and robust that they can raise long term lending from the banks or unsupported equity investment. EIS is the bridge that allows commercial interests to take an idea from theory to reality.

Q A

What are your aims and objectives for this campaign?

Q A

What are the outcomes or changes that you want to see happening as a result of your campaign?

The campaign seeks to change the perception of EIS away from being a gamble and a tax avoidance measure for the wealthy, to an appreciation that these are professionally managed businesses guided by experienced managers, overseen by fund managers who are entirely focused on the healthy development and success of each investment. The investments stand on their own two feet as propositions. The tax element is not a tax break, but a risk sharing by the government to ensure that these businesses flourish and generate future tax revenue as well as jobs. Our aim is to get this message out to MPs, journalists and intermediaries to change the narrative and gain acceptance of EIS as a mainstream financial planning option.

We have had a very positive response with almost universal support from the industry and EISA in particular, who have been particularly supportive. The

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most encouraging aspect of the campaign has been the warm reception by the MPs and Civil Servants involved, of the case we have put forward and the feedback that this is a sector which needs to be supported, particularly in the post-Brexit world. We are hoping that more advisers and planners will feel comfortable recommending EIS to their clients as part of their portfolio. This is particularly the case as many clients are already self-investing via crowdfunding without the guidance of their advisers and may wonder where to turn for advice.

Q A

What has been happening with the campaign throughout 2016?

Q A

What are the plans for 2017 and beyond?

Q A

Finally, why do you think that advisers should be interested in what is going on here?

At the start of this year we put together a working party with 12 representatives from EIS funds and the wider industry. The group has been charged with formulating a united strategy to co-ordinate clear communication about the values and philosophy underpinning the industry, support for entrepreneurs based on hard-headed business investment principles, and support to make sure those businesses survive, thrive and achieve the required exit opportunities. The success of this has led to a second working party group of a further 12 representatives who are charged with working on the task of communicating this message.

Our contribution here at IFA Magazine is to relaunch the sister-publication EIS Magazine which is to be rebranded as GB Investments in 2017. It will provide an excellent resource for IFAs looking for information, news and guidance across the entire range of government-backed investments, VCT, BPR etc. and not just EIS and SEIS. We will also be looking at ways to co-operate with the education and qualification providers in the sector to see what can be done to help encourage advisers towards a greater understanding of this sector.

EIS is now appearing as a mainstream product and is likely to be an area of greater positive focus for the government as the focus of economic development narrows on developing UK industry and jobs. This will increase awareness amongst the investing public. A second strand to this is the rise of crowdfunding. Many advisers are finding that clients are investing directly in crowdfunded investments. These don’t always benefit from the rigorous oversight an EIS fund manager brings and the risk element is effectively multiplied. As time goes on, clients will turn to their IFA for advice. The industry itself now boasts a number of platforms like Growthinvest and, Kuber which act as information portals and trading platforms. These make it easier for the IFA to provide considered, researched and robust advice to their clients. By not engaging with EIS, I believe that advisers may risk losing some clients to other advisers who are taking a broader approach. EIS has changed. It is no longer a tax exercise but an investment exercise with risk mitigation. Clients will be interested.

BRIAN TORA Dec 2016/Jan 2017

Turn and face the strange: the crash that never was It seems that 2016 will go down in the history books as the year of surprises, suggests Brian Tora, as he considers the reaction to the US election result – and how the response from global stockmarkets was not quite what had been predicted

After the unexpected Brexit referendum result in the summer, we have what is arguably an even bigger upset with the election of Donald Trump as the next President of the United States of America. When the Brexit decision was first announced, shares dived, only to recover and even establish new highs. Similarly, the Trump victory in November saw a swift fall in indices, but this move was reversed in the first day of trading after the election. Why no meltdown? These moves are significant in the sense that popular wisdom failed to apply in both cases. Market commentators widely expected to see falls in the value of shares in the wake of a Leave decision and also a Trump win. Neither actually happened in the way that had been forecast. In the case of our Brexit referendum, it was the fall in the value of the pound – also expected – that made the main difference, given the international nature

Market commentators widely expected to see falls in the value of shares in the wake of a Leave decision and also a Trump win. Neither actually happened in the way that had been forecast

of our headline Footsie index. The swift recovery in market fortunes after the US election is a little harder to explain. The Republican Party is considered the party of business, in much the same way as the Conservatives are here. Trump is a businessman, albeit with a record that has a few blemishes, so you might reasonably ask why markets were expected to prosper more under a Clinton victory? The answer lies partly in the unpredictability of the Republican candidate and in his more extreme pronouncements on the campaign trail.

pronouncements on global trade appeared to presage a more isolationist America, with trade agreements being torn up and a global recession in prospect as the tide of globalisation is pushed back. But the earlier comments from the new President-elect suggested a more conciliatory tone, with pre-election promises being watered down and a more statesman-like approach being adopted.

Markets do not like uncertainty, which is why many thought the unexpected outcome of the US election could knock the stuffing out of shares. Moreover, Trump’s

Rhetoric or reality? Time will tell, of course, but markets – which remain unsettled and volatile – look to

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BRIAN TORA Dec 2016/Jan 2017

be hoping that Trump will not prove to be the radical leader that many feared. Indeed, some are forecasting that business could boom under a Trump administration. Given that the Republicans now control both houses, as well as the executive, and could well take control of the Supreme Court before too long, it seems that any measures that the new President wishes to introduce are likely to be enacted. Movers and shakers Some of the stock market’s reaction was to be expected. Pharmaceutical stocks benefitted initially – unsurprising, given Trump’s comments on Obama Care, though he appears to be rowing back on this too. European defence stocks also received a boost as analysts considered that more of the cost of maintaining NATO and defending Europe from a more aggressive Russia would need

to be borne locally. And the rise in the yields of US Treasuries – back over 2% at the time of writing - should also be expected, considering Trump’s criticism of the performance of the Federal Reserve Bank with its low interest rate policy. As to the future, this has now become even more opaque than usual. The new President will doubtless be only too well aware that certain of his campaign promises cannot be ignored. It is likely therefore that building a stronger US economy and creating more jobs will likely feature strongly in his early policies. But restoring manufacturing jobs could prove a tougher fix. It is all very well claiming that China and Mexico are robbing US workers of their position, so requiring new trade barriers, but I dare say Apple might have a few issues with any aggressive trade war with China. It could well

be that infrastructure moves more centre stage in America, as it has done here. The waiting game For investors and those advising them, a masterful policy of wait and see seems called for. American shares are not cheap, but the economy there is ticking along nicely, if in a subdued fashion. One of the comments made in the run-up to the election was that growth under a Democratic Party regime had proved unexciting. Perhaps Mr Trump plans some initiatives that will push growth higher, in which case we might see inflation rise, particularly if wages go up. The only thing we can take out of recent results with any degree of certainty is that the world of opinion polls will never be the same again.

For investors and those advising them, a masterful policy of wait and see seems called for. American shares are not cheap, but the economy there is ticking along nicely, if in a subdued fashion

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BETTE R BUSI N ESS Dec 2016/Jan 2017

It's all about execution As an adviser you are certainly on home ground when advising clients. However, running your business effectively and efficiently involves a different skill set - and one that many advisers often find challenging. Whether or not your 2017 strategic business planning is all done, Brett Davidson of FP Advance gives some practical tips you can use to see your business, and satisfaction at work, take a giant leap forward. You know what you’d like your business to look and feel like, but there’s a gap between your vision and the current reality. The only way to close that gap is to execute effectively on your ideas and it’s a crucial skill for anyone building a business. It’s often said that business is 10% strategy and 90% execution and I certainly believe this to be true. As part of your business education it’s important to read widely, listen to business experts (inside and outside of the profession), and to keep absorbing new information.

Business is a small series of experiments, many of which end in failure; that's just how it is

a mistake and know it’s wrong, than to forever procrastinate and theorise without taking action. It’s amazing how, when you take your first steps forward with something new, it becomes clear very quickly if you are on the right track. If you’re paying attention you can always change course or scrap the idea if needs be. Often, in that quick and immediate failure, you learn more useful information than in weeks or months of deliberation. Yes, you should take some time to consider a decision or do some research, but don’t take too long. Venture capital firms back ideas knowing that the original business plan might be changed, often two or three times in the first year or two, as the new venture finds its way. Business is a small series of experiments, many of which end in failure; that’s just how it is.

However, all that reading, listening and absorbing needs to be synthesised into actual ideas that you can execute. So how do you improve your execution skills? Here are five steps you can take: 1. Make decisions Good business owners make decisions. They may not always be right, but they continue to make them anyway. In my experience it’s better to make

2. Hold weekly meetings that resolve issues Some firms hold weekly meetings, others don’t. However, if you want to execute new ideas successfully, your leadership team needs to be meeting weekly and actually resolving issues that arise in the business. When I suggest this in my consulting work, most small firms initially have a fit. “What do you mean hold weekly meetings? Surely that’s overkill for a firm our size”, they say.

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BETTE R BUSI N ESS Dec 2016/Jan 2017

I assure you it’s not. The reason some firms don’t hold weekly meetings is that their meetings don’t ever seem to achieve anything. It’s the discipline and structure of the weekly meeting that allows you to resolve issues. The best process I’ve seen for meetings is contained in Gino Wickman’s book Traction: Get a Grip on Your Business. Grab a copy and read it, if you haven’t already.

The reason some firms don't hold weekly meetings is that their meetings don't ever seem to achieve anything When an issue is raised at your weekly meeting, ask yourself “Is this the real issue?” The real issue you need to resolve is rarely the issue you first notice. Often it’s just a symptom. By asking yourself, “Is this the real issue?”you’ll find the quality of your ensuing discussion and solutions improve out of sight. 3. Have strict quarterly objectives As part of your execution skill set you need to be setting quarterly goals that move your business forward. Ideally you want between three and seven of these goals. It also helps to remember that less is more, so three or four per quarter is usually spot on. These quarterly objectives need to be focused on matters other than financial results. They need to be small projects that create “jam tomorrow”. In my experience firms that focus only on hitting their financial targets (“jam today” in other words), often get stuck at a level of growth, because they are not working on tasks that make them bigger, better and stronger for the future. That’s what your quarterly objectives are for.

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Once these goals are set, re-read them and ask yourself the right questions: “If we hit these goals will we be a better business in 90 days’ time?”; “Will we have fixed something that is currently holding us back?” If the answer is ‘yes’ then it’s essential that they become your absolute top priority for the next 90 days. At your weekly meetings, the status of these goals should be one of your key discussion points. Are they on-track or off-track? If they are off-track then do something immediately (that very week) to bring them back on-track for completion by the end of the quarter. It’s easy to get sidetracked each week with new issues that appear to be vitally important. However bouncing from issue to issue is a major blockage to effective execution; don’t do it. My definition of ‘business hell’ is having seven projects 98% completed. Getting one project 100% completed adds value. Partially completed projects don’t, and can really raise the stress levels for you and your team.

It's easy to get sidetracked each week with new issues that appear to be vitally important. However bouncing from issue to issue is a major blockage to effective execution; don't do it

Stay focused on your quarterly objectives and simply record any new issues that arise during the current quarter on a separate list for you to consider in the next 90 day cycle. That way the issue is captured and not forgotten, but doesn’t dominate proceedings or distract you from what you agreed was your core focus for the next quarter. This is a discipline that can make all the difference to your execution skills.

BETTE R BUSI N ESS Dec 2016/Jan 2017

Constant, short-term decision making leads to short-term results, but creates no foundations for future improvement

4. Make long-term decisions Another key to better execution is trying to make long-term decisions. It’s all too easy to become target focused; aiming to hit the weekly, monthly and quarterly financial targets you’ve set for yourself and the business. Constant short-term decision making leads to short-term results, but creates no foundations for future improvement. An example: bad data You try to extract some information from your back office system, but the report is useless because the data you’ve entered is no good. Clearly, you can just find a workaround for this problem. It’s easy to believe this is the right call with pressure to get a range of other time-sensitive work done. However, if you were taking long-term decisions, you’d identify the real issue and create a plan to address it. In 12 months’ time that long-term decision sees your business in much better shape. It may not seem like a big decision at the time, but I believe it is.

The same can apply to staffing issues. If a team member isn’t performing and you’ve tried to address the situation, then it might just be time to replace them. If you make that decision, then get on with it. It’s also a sound long-term decision that many business owners try to avoid or defer because of the short-term pain that might go with it. In my experience thinking long term is the fastest way to short term success. 5. Get some outside accountability For some reason we’re all pretty adept at identifying everyone else’s issues, but not our own. So the final step in improving your execution is to get some outside accountability. Often this will be an external person who can sit on your board or attend regular strategy meetings to hold you, the owner, accountable for what you said you would do. No one likes to turn up and say they haven’t done what they promised, so this simple step can really make a difference to your execution skills. Hire a non-executive if you can afford it, or just ask a friend, business acquaintance, or your spouse to attend key meetings and help keep some accountability. I play the non-exec role for some firms and both they, and I, believe that it really helps keep the focus. Try actioning these five steps and watch not only your results, but also your satisfaction at work take a giant leap forward.

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

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ACQUISITION AND SALES

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

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ADVISE R SPOTLIGHT Dec 2016/Jan 2017

Adviser spotlight: Barry Horner, Paradigm Norton In this popular monthly feature, I FA Magazine talks to leading advisers about what’s working well in their financial planning businesses. This month, Sue Whitbread talks to Barry Horner, CEO of Bristol-based Paradigm Norton Financial Planning, about the development of his business as it continues to go from strength to strength. Paradigm Norton is now 15 years old. Could you tell us what have been the most significant changes that you have introduced to build the firm into one of the UK’s leading financial planning businesses? Over the last decade we have created a replicable model that will allow us to continue to expand and prosper with multiple owners and as a result we have a hugely exciting future. We now have an outstanding team of almost 50 staff, each of whom is positioned to enable them to work to the best of their unique ability. You have always been very vocal about building the profession of financial planning. For you, what is it that makes financial planning different to financial advice? What's your motivation here and why do you believe it is so important? There are three parts to the Paradigm Norton vision statement. One of them is ‘To be foundational in the building of the global profession of financial planning’. Our vision is to have played a major and significant part in the history of establishing financial planning as a profession in the UK. This we will only do when members of the general public actually recognise the need for financial planning and can also access a good and trustworthy planner in the same way as they now can an accountant or solicitor. A financial adviser, to my mind, is focused on the sale of ‘others’ products, albeit that this may be a helpful inter-connected series of products. A financial planner, by contrast, has nothing but his or her own skills to sell. The planner delivers a distinctly goals-based service, whereby,

for example, a client is able to retire eight years before they thought they could! What price would/ should someone pay for eight years more with their family doing the stuff in their lives that is really meaningful to them? Back in 2015, Paradigm Norton announced the launch of its graduate programme. How is it going and what is the plan for the future? Our graduate programme is one of the foundations upon which we intend to build the firm in the future. We took on two graduates last year and plan to take on a further one or two in 2017. We have found that our graduates are very eager to learn, they absorb facts quickly, are energetic, most often say ‘yes’, and have a real aptitude for technology and incremental improvement (one of our values). The quality of the graduates we have employed has been exceptional. They are given an initial a five-year career plan, which provides them with an excellent opportunity to establish themselves at the heart of our business. If you haven’t already done so, I encourage you to think about how you could accommodate a new graduate within your staffing plan. You won’t look back. Many congratulations on your recent election as the Chair-elect to the international Financial Planning Standards Board [FPSB], based in Denver, Colorado. What made you take this step and what do you hope to achieve whilst you are on the board? I was delighted to be invited to chair the FPSB Board in 2018. FPSB has a vision to be in over

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ADVISE R SPOTLIGHT Dec 2016/Jan 2017

40 territories globally by 2025 and see more than 250,000 CFP Professionals serving clients. For us to be recognised as a profession we need critical mass and the growing global momentum can only help this. My goal is to help lead the FPSB ‘LASER’ strategy that focuses on Leadership, Awareness, Standards, Engagement and Recognition.

It’s really key that as a business you have real clarity on your target client, the service proposition that you are going to make available to them and how much you need to be paid to deliver the service whilst making a profit

We are seeing lots of consolidation in the sector at the moment and Paradigm Norton has acquired a number of businesses over the last decade. Do you have plans to acquire more firms? Yes, merging in other smaller, profitable firms which have a similar culture, modus operandi and who share our vision and passion for financial planning will be a central strategy for us for the next five years.

change, such as two-factor authentication when they communicate with us. You have clearly defined your target client and I love the concept of ‘Paradigm Pete’! In general, how do you identify which clients are most likely to benefit from the services at PN? That’s an interesting one. In 2005 we created our fictitious client ‘Paradigm Pete’. We did this as a result of being asked ‘What does your perfect client look like?’ This was a question that at the time I couldn’t confidently answer. Over time, as the business has grown, we find we have multiple ‘Paradigm Petes’, each of the senior fee earners having created their own avatar or ‘perfect client profile’. This, I guess, has been part of our growth process. Each client would still be characterised as a ‘delegator’ but one might be a successful CEO whilst another might be an elderly retired widow. It’s really key that as a business you have real clarity on your target client, the service proposition that you are

We have yet to see the emergence of a significant ‘professional services model’ financial planning business in the UK. At the moment, we are in informal early stage discussions with four firms. You operate a 'Client Board' at Paradigm Norton - how does this work and how do you benefit from this type of forum? I meet with ten of our clients twice a year. This forum helps me to better understand the challenges that our clients are facing (for example, what are the key financial issues for them) and how well we are delivering on our promises. The whole issue of cyber crime was addressed at the last Client Board meeting, which has now led to our COO launching the IS027001 accreditation process. As a part of this project, we have created a paper for our clients alerting them to the issues of cyber crime and the need for

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ADVISE R SPOTLIGHT Dec 2016/Jan 2017

Digitisation will lead to commoditisation and my best guess is that what some financial advisers manage to be handsomely rewarded for at the moment, could within a decade be a thing of the past

going to make available to them and how muchyou need to be paid to deliver the service whilst making a profit. You have recruited an experienced nonexec director to join your board. Has this been strategy been successful and what does his involvement bring to the building of a successful financial planning firm? Yes, back in 2014, we invited a long-standing client and experienced corporate business leader, Kevin Gregory, to join our board. Kevin had previously worked at a senior level within HSBC and Legal & General and prior to this he was the CEO of a wealth management firm. In a nutshell, Kevin provides us with a perspective that we don’t have. He helps us see issues through a different lens. I, for one, really appreciate and value his wise counsel, his focus on encouraging us to do fewer projects really well and some of the discipline and rigour that he has brought to our corporate governance processes. We meet quarterly for an off-site board meeting, which is always a good opportunity for strategic discussion as well as wrestling with the operational challenges of managing a growing financial planning practice. There is a lot of discussion about roboadvice within the financial planning community and the impact that this may

have on financial planners and financial planning businesses. What are your thoughts on this area and how might it impact Paradigm Norton and financial planning generally? I see robo-advice as ‘digital investment management’. Will this be a threat or opportunity for financial planners? I think the answer depends on how you seek to promote your business. If you “run money” and promote yourself as an adviser who can out-smart the market, make tactical calls on market movements and timing, then I think you should be at least ‘concerned’. Digitisation will lead to commoditisation and my best guess is that what some financial advisers manage to be handsomely rewarded for at the moment, could within a decade be a thing of the past. If, however, you market your firm as a financial planning business, focused in its entirety around helping clients achieve their broader life goals, passions and desires, then I think you should be less concerned. We all need to embrace technology in every form but can I see a ‘delegator’ client who has multiple financial challenges and wants to discuss financial options, doing this in front of a screen in the evening? – I very much doubt it. There will of course always be some techy individuals where this is absolutely what they will do. In my view, they will be in the minority.

Barry Horner – Biography Barry is the CEO for Paradigm Norton Financial Planning Ltd and was the co-founder of the business back in 2001. He has subsequently led the team of 50 staff to its current position, whereby the firm is widely regarded as one of the most respected financial planning firms in the UK – an achievement recognised through Paradigm Norton having won numerous professional awards. Follow Barry on Twitter - @paradigm_ norton

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SPONSORE D FEATU RE Dec 2016/Jan 2017

If you go down to the woods today... With Christmas not far away, our thoughts naturally turn to trees amongst other things. Neil Martin speaks to Anthony Crosbie Dawson, an investment manager at FI M Services who likes to think he can see the wood from the trees. So is now a good time to invest in timber? According to Anthony Crosbie Dawson, those sophisticated investors on the look-out for a different kind of asset class with a really solid backing should take a long hard look at wood, or timber as those in-the-know like to call it. I admitted to Crosbie Dawson that my only experience of investing in woods and forests came from distant memories of celebrities being involved in less than fruitful schemes. He put that down to grandiose claims from schemes years ago which promised guarantees on forests that were often half-way around the world. The funds he manages are much more down to earth, are all based in the UK, target a respectable 7% return, aim to provide a 3% tax free distribution and are backed by sustainable, real assets. These include both the timber and the land on which they grow. This provides the industry term behind the investment, timberland (no, not the people who sell boots). Favourable environment And the case is now compelling, he says: “The positive prospects can be judged against increasingly expensive equities, continuing low interest rates and bond yields and uncertainty over the trajectory of inflation going forwards. Trees keep growing and the

supply of land is fixed. Throw in the tax advantages, which includes 100% relief from IHT, and there is a compelling case for investors – and their advisers - to consider.” Currency benefits What’s more, the fall in sterling has thrown in an extra advantage. Sterling’s recent weakness is, says Crosbie Dawson, expected to provide a long term benefit to UK timberland owners. The argument is based on the fact that the UK currently imports around 80% of its annual timber consumption, meaning that weakness in the currency will see the cost of imported timber rise, once deliveries for Q1 2017 start to arrive in UK ports. Once this happens, UK forest owners will increase the price of homegrown timber, thereby improving the returns generated by the asset class. The argument continues with the view that the price differential between similar grade homegrown UK timber and its imported competition, currently around 20-25%, will rise. This in turn is expected to lead to increased demand from UK processors for standing timber as they seek to exploit the price differential by increasing market share. This provides strong upside potential for UK timberland owners, potential which has yet to be reflected in UK timberland prices. And it’s here, says Crosbie Dawson, where the clear buying opportunity arises for investors.

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SPONSORE D FEATU RE Dec 2016/Jan 2017

A growing reputation FIM has been in the timber business for nearly 40 years and has just started raising money again for its FIM Timberland LP, which is open for subscriptions until 28 February, 2017. This trading vehicle, a limited partnership, has already raised £36m since its formation in the spring of 2015.

Trees keep growing and the supply of land is fixed. Throw in the tax advantages, which include 100% relief from IHT, and there is a compelling case for investors FIM manages two other Timber Funds which, says Crosbie Dawson, have delivered excellent returns for investors. They have combined assets of £210m. Both of these are fully invested and the first, operational since May 2010, has returned 11.7% per annum; the second, operational since December 2008, has returned 12.0% per annum. The third fund has the same target return of 7% as the other two funds and plans to pay annual distributions of 3% tax free. It also will have the benefit of 100% IHT relief after two years of ownership. Significantly, the minimum subscription is £41,360. Crosbie Dawson explains: “Within the known parameters of UK timberland investment, it is perceived to be only of benefit to ultra-high net worth investors. Indeed, to secure economies of scale this is the case, as bespoke portfolios generally commence at £5 million plus. But FIM promote commingled investment vehicles subject to a minimum investment of circa £40,000, allowing a wide range of investors to access the benefits of a secure, long term sustainable investment, with significant tax advantages.” Effective structure Crosbie Dawson points out that the structure of the trading vehicle, a tax-transparent limited partnership (LP) in which partners’ liabilities are restricted to the capital subscribed, is the most tax efficient mechanism for investment into UK timberland.

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This means that the vehicle is an unregulated collective investment scheme, which has the added advantage of protecting the diversification benefits of timberland by assuring that the fund is unlisted. This is because, unlike owning shares in a company, distributions are not subject to dividend tax, which would substantially reduce the net benefit of cash flow arising from the investment to a top rate taxpayer. Furthermore, any increase in the value of shares in a company would be subject to capital gains tax (CGT), whereas in the LP it is only the realised gain established on the sale of land which is subject to CGT. The increase in the value of timber, which has been by far the largest component of capital appreciation in timberland assets, is not subject to CGT in a limited partnership and provides 100% IHT relief (which would not apply to shares in a limited company quoted on the main market). The time is now FIM is on a mission to explain why investors should have some exposure to wood within their portfolio: “FIM is focussed on making the attractions of UK timberland available to a wide investment universe, and has been successful in doing so in a particularly tax efficient structure. The launch of this fund comes at an opportune time in relation to the outlook for timber prices. It will make UK timberland available to investors who may not wish to invest the capital required to acquire a forest directly.” The trees within the LP portfolio are spread over 3,000 hectares within nine properties (much of it in Scotland). This minimises the main risk to timberland owners, other than fire and windblow (both covered by insurance), which is damage from pests and disease, both of which are uninsurable events. And in case you’re wondering, the trees in question are spruces. These not only grow fast, but are preferred by the commercial market (main-use is the construction market) and take 35 years to grow. However, there is a ten to fifteen year harvesting opportunity, when the tree is aged from 35 to 50 years, which means the fund can choose to sell the wood at the optimum time in the market. Altogether now, TIMBER…!

MARK LE E - EXPE RTS Dec 2016/Jan 2017

How to be perceived as more of an expert 2016 has been a year when the credibility of experts in all walks of life has been called into serious question. So where does that leave professional advisers? Looking ahead to 2017, Mark Lee takes a look at what it takes to be an expert, and suggests that it is not just what you say but what you do and how you do it that can make the real difference During 2016, politicians in both the UK (Michael Gove) and in the US (Donald Trump) have repeatedly asserted that people have “had enough” of experts. Voting patterns seemed to confirm this as we saw expert political and economic views being largely ignored by the public in large numbers. And yet, we also know that it is patently not true. If you have a health problem, would you prefer to take the advice of an amateur or of an expert? What about if you were arrested? Whose advice would you want then? The real question The real question is why do so many people trust some experts but reject others? Why do many people on the one hand seek medical experts for medical issues, but distrust climate experts for climate issues, and economic experts for economic issues? I recently came across some research that may have the answer. But, before I explain this, let’s also consider the assumptions we make about other professionals. These assumptions often impact the extent to which we ourselves are likely to be perceived as experts. Making assumptions As a professional adviser, you’ll be used to making assumptions about things like inflation, rates of investment return etc. which form a key part of the advice process. However, in my experience, many of the assumptions that professionals often make about each other’s expertise are flawed. Sometimes they are outdated, based on misunderstandings, preconceptions or simply due to our prejudices. One good or bad experience isn’t really a justifiable reason for assuming that all future interactions with

similarly qualified people will be the same. But human nature being what it is…. As an expert in your field, maybe you are thinking that you would never do such a thing. Maybe you are right. And maybe I shouldn’t assume otherwise! Are you able to avoid making certain assumptions about the prospective client you meet? With experience, we come to learn that someone with a big house may not actually be that wealthy. This, as we know, will depend on the size of their mortgage, other assets, their debts and the extent to which their income exceeds their outgoings and commitments. Making fewer assumptions will probably mean that you will ask more open questions, which will, in themselves, help to reveal your expertise.

Making fewer assumptions will probably mean that you will ask more open questions, which will, in themselves, help to reveal your expertise

All accountants are not the same Another classic example concerns key assumptions that financial advisers make about accountants. Did you realise quite how different they are to solicitors? All solicitors are members of the Law Society. But anyone can call themselves an accountant. Anyone. Some have professional qualifications. Some do not. Some are Chartered. Some are not. The incorrect assumptions made about accountants is a topic I have been researching and advising on for many years. Financial advisory firms seek

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MARK LE E - EXPE RTS Dec 2016/Jan 2017

my guidance on engaging with accountants and yet on the other hand accountants complain to me about the quality of the financial advisers they encounter! In all such cases, my first challenge is to help everyone to overcome some common assumptions. Then we can focus on how each party’s relative expertise could be of value to the other and to their clients. Here are just a few of the misconceptions which I have heard over the years and that I have seen leading to misplaced assumptions: • Accountants will be interested in easy money for client introductions • Accountants give their clients advice on business and financial issues

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• Financial advisers are more interested in making money for themselves than in client service • Financial advisers can’t be trusted to look after my clients Each of these assumptions drives behaviour and yet none of them are accurate statements across the vast majority of practitioners in either profession. Expert colleagues You may have benefitted from advice you have had from experienced and expert peers and colleagues who have shared their views on all manner of topics with you. Much of their advice will be really valuable. However, some will simply be assumptions based on what may no longer be up to date experience.

MARK LE E - EXPE RTS Dec 2016/Jan 2017

Research Recent research shows that many of us tend only to accept the views of experts who fit a certain profile. Beyond their evident expertise we also see them as having: • Integrity and • Benevolence This German research suggests that being an expert is just not enough any more. This is key. Experts are more likely to be believed if they are evidently honest and likeable. This is one reason why we learn from colleagues and tend to be less interested in the views of those we dislike. Honesty One way to evidence your honesty, and thereby to build trust with those people you deal with, is to admit what you don’t know. In so doing, you add credibility to what you do know about. You evidence your expertise partly by accepting its limitations. This isn’t easy. As professionals, we want to evidence our expertise and to come across as confident when advising clients as to what action they should take. And so we should. But equally, we may generate more confidence in our expertise if we also admit we are not ‘all-knowing’. There are inevitably gaps in our knowledge but the important thing is that we know where to go, who to ask, or where to look to get the answers we need to fill those knowledge gaps. Conclusion Now, I’m assuming, due to the fact you are reading this magazine, that you consider yourself to be

One way to evidence your honesty, and thereby to build trust with those people you deal with, is to admit what you don’t know. In so doing, you add credibility to what you do know about

an expert; and that you feel your advice should be believed and acted upon. You will increase the chance of this happening if you demonstrate that you are a good, honest person who has their clients’ and prospective clients’ best interests at heart. We can all increase the likelihood that we will be perceived as experts if we: • communicate more clearly and hold back on the jargon; • admit what we don’t know; and • develop a genuine interest in helping other people. Let’s also stop making assumptions about other professionals. We will waste less time if we do this and instead we will build up our real knowledge and understanding. Then, when we seek to evidence our expertise to them, maybe they will be more open to our proposals. And correspondingly, that they will see us as more trustworthy experts to whom they should not only introduce relevant clients, but also with whom they can build mutually rewarding, long term business relationships.

Epilogue If you’ve reached the end of this article and feel you’ve not learned anything, my apologies for wasting your time. Please don’t assume however that the same will be the case for any future articles I might write for IFA Mag. To do so would suggest you did have something to learn from this one after all!

Mark Lee – Biography Mark Lee FCA is a speaker, author and debunker. He speaks about how to stand out from your peers and how to build better relationships with accountants. He can be reached through his website: www.bookmarklee.co.uk Follow Mark on Twitter @BookMarkLee

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COMPELLING EVENTS TO CHALLENGE YOUR THINKING

U P CO MI NG

EVENTS IFA Magazine Conference and Awards 2017 A brand new two day event purpose built to deliver exceptional content and networking for investment focused advisers. The programme will offer a variety of sessions, workshops and talks covering investment management as well as business and personal development topics. The whole event will be focused on helping you and your business to deliver excellence in client service both now and in future.

JUNE

28-29 2017

Investment Advice Forums 2017: A Brave New World – Midlands & South East Our one day forums will focus on analysing the main challenges facing the global economy as well as the threats and opportunities that exist for UK investment advice profession. With uncertainty on so many fronts such as Brexit and Trump as well in the EU, this is somewhat uncharted territory for advisers, trying to navigate the way forward for client portfolios and financial plans. This event will consider what the future holds for traditional investment products as well as looking at the alternatives. And what are the investment strategies of tomorrow? This event will make you aware of the issues and help you to understand the risks, enabling you to make informed decisions.

SEPTEMBER

14&21 2017

New beginnings! As we look back at 2016, there have been so many ground-breaking developments that are set to have an impact on the world as we know it. What this means is still to be seen and it’s going to be interesting watching it all unfold. We’re here to help you to try and make some sense of it all. The IFA Magazine Events team is stepping up to the plate with new events for these challenging times. Our exclusive adviser events are designed to inform and educate, ensuring you stay up to date. You’ll hear the latest news, views and information on relevant investment and financial planning topics. Great networking with peers is also high on the agenda. All our events are accredited for structured CPD by CISI. So what can you expect? These events are being designed with the input of the adviser community so the content and topics will be tailored to your needs. We would welcome your input so please get in touch with us with any suggestions or if you would like to get involved. We’ll also be giving you the opportunity to vote in the first adviser awards of their kind – peer to peer awards for advisers, voted for by advisers. We’ll be recognising industry thought leaders, client service, innovators and more.

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FI NANCIAL PLAN N I NG Dec 2016/Jan 2017

The essence of financial planning how much money is enough? The heart of sound financial planning process is being able to work out whether clients will have enough money to live the life they want to live both now and in future. The peace of mind that comes from using cash flow forecasting cannot be overlooked argues Mary Waring, Managing Director, Wealth for Women, especially when it comes to advising clients going through divorce.

The question I am always being asked by my clients is “Is it enough?” Of course, ‘enough’ means different things to different people. What may sound like more than sufficient for one person may barely scratch the surface for another. It all comes down to lifestyle: what level of spending a client needs to achieve their goals and the lifestyle they really want.

What may sound like more than sufficient for one person may barely scratch the surface for another Is financial planning different? That’s why the financial planning process, as opposed to financial advice, is vital in answering this

question. Financial advice will cover how to invest someone’s money. But it doesn't go that stage further to show whether it is enough to fund the lifestyle your client wants in the future. Imagine someone slogging away in the job they don't enjoy, purely because they feel they need to keep working for the high salary they're earning. What if they already had enough saved for their retirement? What if they don't need to be in such a high paying role and could afford to take a different position that they would love, but would pay less? What if you could tell your client that although they are happy with taking a certain level of risk with their investment portfolio, they could afford to achieve all their aims by taking less risk, and settling for a lesser return? Such is the power of financial planning that I really believe it

can change clients’ lives. I’ve had the enormous joy of being able to show clients that they can retire earlier than they had planned, once we’d done this exercise.

Such is the power of financial planning that I really believe it can change clients’ lives

Knowing your client My typical client is a woman going through divorce who has been a full-time mum, and therefore has not been earning an income in her own right. She has not dealt with the finances during the marriage. She’s taken full responsibility for looking after the children, the house etc., but her husband has looked after the finances.

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FI NANCIAL PLAN N I NG Dec 2016/Jan 2017

This is a wonderful split of duties whilst they're married. After all, if he feels more comfortable dealing with the finances it’s very sensible that he takes responsibility for this. However, this plan totally falls apart if things go wrong in the marriage and they get divorced. Throughout all of this emotional upheaval, she now must somehow get to grips with her finances. It can be a truly distressing time for her. It’s not unusual that during my first telephone conversation with a potential client she is in floods of tears. It’s the total terror of the unknown and what her life may look like after the divorce. Her goals will have shifted, and her confidence in being able to achieve those goals is often in question. A different approach So, while she doesn't need different advice from men, she will often need a different approach from her adviser. We need to understand that she will be feeling particularly vulnerable. She will need to be handled very delicately and given a lot of care and comfort to ensure she can face the future

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As advisers, we know that what our client really needs most is some certainty

positively, and with the peace of mind that having a well thought out plan in place can provide. She will probably feel totally overwhelmed. Of course, there will also be well meaning friends and family offering anecdotal, and often conflicting, advice as to what she should be doing. She just doesn’t know where to turn. As advisers, we know that what our client really needs most is some certainty. She needs to know what her future will look like and how much she can afford to spend each month knowing she won't run but of money in future.

small amount and often she has limited pension provision. This is an extremely difficult position for her to be in. By understanding this, and helping her to make sense of her situation, we can add the most value for her. Cash flow analysis is key Going through a detailed cash flow planning exercise can give our clients the certainty they need. By working closely with her we look at, in an ideal world, what she’d like to spend both now and in the future; what her current and future earning are; we also look at her goals for example whether she’d like to help her children with some funds for a property purchase, for instance. These all need to be identified, prioritised and costed. We also look at whether she’d like to leave any funds for her

As a non-earning spouse, it’s likely that whatever she gets from the divorce settlement will be the amount of money that must last her for the rest of her life. She may be earning herself but it’s often a relatively

FI NANCIAL PLAN N I NG Dec 2016/Jan 2017

family or for her children or favourite charity when she dies. It’s not unusual for clients to love to do this in an ideal world,

Going through a detailed cash flow planning exercise can give our clients the certainty they need

but they have been totally against that idea. Rather than trying to persuade her that’s what she needs to do, I go through the cash flow model with her instead. If she is happy with all the income and expenditure figures, then the cash flow must be showing her the correct answer. This is a very different approach and one which resonates with the client. If she is going to run out of

but recognise this just may not be possible. Knowing the future income and expenditure and her current net worth, we can then look at what her future cash flow looks like. Using a software package that is very visual (eg Truth or Voyant) will allow her to see what happens to her money without a need to understand the detailed workings. I use Truth and the graph shows her current money in blue; as soon as she runs out of money it turns red. It is immediately obvious when a problem arises. There have been several times when I can see that my client will need to downsize in the future,

money at some point, we can look at several options which can address this: reduce expenses, aim to work longer than planned and so on. But it is often only by downsizing that the gap in funds can be plugged.

The wonderful thing about doing this exercise is that she's not being told this, she can see it for herself. What she most wants is certainty. Cash flow planning absolutely provides that for her. Even if her future is not exactly as she has planned, it gives her that certainly as to what to aim for and that is hugely empowering. As one of my clients told us: “The work we’ve done has provided a framework for both the long and short term. Provided I keep to that, I know I'm OK financially. It makes having a future possible when there's a framework to follow. “ If you're not currently using cash flow modelling in your business, I strongly recommend that you investigate this service. It does take some time to learn how to use the software effectively, but it will totally transform your client meetings and the value which your service brings to your clients lives. It helps you to build trust and establish powerful, long term client relationships that last. It will allow you to answer the question: Is it enough?

Mary Waring – Biography Wealth for Women is a financial planning firm which specialises in providing advice to women who are going through divorce or bereavement. Its founder and Managing Director is Mary Waring, Chartered Accountant and Chartered Financial Planner. The firm’s typical client is a female, aged 45-60 who has not earned during the period of the marriage. Follow Mary on Twitter @MaryWaring

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Make It Your Business

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MAL CONTE NT Dec 2016/Jan 2017

Mal content As 2016 draws to a close, Mark Polson, of the lang cat, reflects that, in so many ways, it has been a legendary shocker of a year. But, he asks, what can we learn about the reaction of the mass media to such events, and why doesn’t it sit comfortably with sensible, long term investment portfolio management?

Sadly, the most recent addition to the death rollcall has been Leonard Cohen, who followed Bowie’s lead by dropping a fantastic album just before turning up his toes. And away from popular culture – although not really – the Year of Reactionary Self-Harm transferred its attention to America and we are now staring up the luxuriously groomed nostrils of a Trump presidency. Brace, brace Those of us who – and I am looking for sympathy here – keep an eye on product provider communications to advisers, winced doubly that morning when we found out that it was The Donald. Once for, y’know, world peace and all that, and once because we knew it was only a matter of time before mountains of cant was unleashed in the name of timely communications from various investment marketing departments. Such headlines as ‘What stocks to pick in a post-Trump world!’, ’10 ways in which a Trump presidency could be good for your clients!’ and ‘Please, please buy my multi-asset fund!’ did indeed come flying out into adviser inboxes. (I may have made the last one up). Any client unfortunate enough to have accounts with certain direct investment platforms got much more than that. Crisis? What crisis? But here’s the thing. I was hosting a sort of investment conference event the day after the election. I polled the 150 or so advisers who were there, to see how many of their clients had actually got in touch with them following the result, to voice concerns about their portfolios. The answer was…two. All the advisers had their devices with them, and I’m assuming clients generally have their adviser’s email address so they will have been aware if there had been a mass panic going on.

There was none of it. This lack of panic was borne out when I phoned a few direct platforms to see if their share-trading arms were getting pounded as they did post-Brexit. None were. One was running at about five times its normal trade volumes but it was well within expectations and there were no problems filling orders. Markets failed to plunge, much to the annoyance of headline writers, and in general everything seems to have ticked along not too badly, considering.

Markets failed to plunge, much to the annoyance of headline writers, and in general everything seems to have ticked along not too badly, considering The reason I bring this up is that the way the industry communicates with clients – and by that I mean both directly and also through advisers – is once again under scrutiny. Some of this is about boring stuff like contractual documentation, but there’s much more going on. Mixed messages As part of its recent “Our Future Mission” paper the FCA stated that “It is now clear that, in real life, consumers “focus on the here and now”, “use more personal decision making”, “based on a narrative of what they want and believe they deserve, rather than logically balancing opportunity against risk”. A couple of observations – first of all, cracking job, industry, on all the communication about investment risk. Take the rest of the day off. No, actually do.

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MAL CONTE NT Dec 2016/Jan 2017

There is a massive disconnect between the messages which the industry pumps out and the messages that you, as advisers, give your clients

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MAL CONTE NT Dec 2016/Jan 2017

Second of all, we can’t be surprised. There is a massive disconnect between the messages which the industry pumps out and the messages that you, as advisers, give your clients. And there’s no better example of this than the Trump result. You will tell your clients – rightly – not to do anything daft; that investment allocations are set for the long-term and if they need to be reviewed then that will be something that’s done as part of the regular review process, once the dust has settled.

There are only so many ways to say ‘buy a portfolio that matches your risk profile and hang onto it’ Meanwhile, the industry, including providers of buy-and-hold multi-asset funds, or platforms which try to encourage investors to exhibit long-term behaviours, will spam out a tonne of content which appears to be aimed at encouraging exactly the opposite behaviour. Why? Content marketing – a hungry beast The reason is pretty simple. Most providers, from investment houses to life companies to platforms to

DFMs, have a content marketing strategy in place. This is a hungry beast, and needs to be fed with fresh ideas all the time. There are only so many ways to say ‘buy a portfolio that matches your risk profile and hang onto it’. So, marketing teams charged with coming up with content, inevitably get a bit excited whenever anything newsworthy happens. This is what leads to content generators – including consumer finance talking heads – getting bogged down in relative irrelevances about what’s happening in Uzbekistani smaller companies or maple syrup futures in Canada. It’s simply that the big content machine needs to be fed with new stuff, and the only readily available source of new stuff is something that changes every day, like the investment markets. Some of this stuff is aimed at genuinely active investors – those who like share trading as a hobby. That’s fine. But for everyone else, the best thing they can do is ignore the carefully clickbaited content that is spewing out, day after day. The real question, then, is what can these guys do that will be of genuine value to you and your clients? Perhaps some more of the content budget could be spent on working with you to find that out, and a bit less on the other stuff. Here’s hoping.

About Mark Polson Mark Polson is founder and principal of the lang cat, a specialist platforms, pensions and investment consultancy. The lang cat works with platforms, life companies, fund managers and large advisory firms helping them develop new propositions, turn marketing strategy into action and articulate their services in such a way that people without a financial services degree have a hope of understanding them. Bit by bit it aims to make the industry just a little less corporate and a little more human. Mark is a prolific writer, contributor to the trade press and public speaker, even when people ask him not to be. He doesn’t play guitar as much as he’d like and spends more time than is reasonable going to gigs aimed at people considerably younger and more tattooed than him. Follow Mark on Twitter: @theactualpolson

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STRATEGIC PLAN Dec 2016/Jan 2017

Business planning for 2017: Nailing your strategic plan As 2016 draws to a close, Louise Jeffreys, Managing Director of Gunner and Co. suggests that now is the ideal time to reflect on what has worked well in your business over the past twelve months – and also what hasn’t. Here she gives practical tips and ideas that you can use to be proactive, to think ahead and plan what you need to do for business success in 2017 and long into the future.

As many of you who have followed my previous articles in IFA Magazine will know, I work with financial planners to help them to define not only their exit strategy but also to suggest appropriate third parties who they may wish to work with, to help them build an effective plan. All of this involves a lot of strategic planning, and that, plus my experience of both running multimillion pound divisions in my former corporate life, and running Gunner & Co. day to day now, has given me lots of experience in strategy & planning. Personally, I find that the pressures of running my business and team day to day often seems to take priority over assessing and defining the strategic direction of the business for the longer term. Therefore, around this time each year I set aside at least half a day to review the year that’s passed, and consider my direction for the year ahead. I call it my ‘Strategy One-Pager’, and I’m going to share it with you in the hope that you can find some practical ideas that you can take away and use as part of your own business planning activities. What’s your business purpose? Knowing your business purpose seems simple, but we all know how easy it is to get pulled in odd directions when it seems like there may be a commercial gain. Every year, as a starting point to my Strategy One-Pager, I review what I set out my business purpose to be, and if it has changed or should be changed for the year ahead. For example, have you strayed into employee benefits or auto-

enrolment, and should that now be considered as part of your strategic direction? Understanding your business purpose is as much about what you don’t or won’t do, as what you do. We all know the most successful business leaders are those who unyieldingly focus on delivering what they said they would. And we also know, and may be guilty of it ourselves, someone who has bags of business ideas but never quite manages to follow them through to a successful outcome. Articulating, reviewing and checking back against your core business purpose is a sure sign of a focussed business owner or manager.

Understanding your business purpose is as much about what you don’t or won’t do, as what you do SWOT Analysis This is a very useful activity for me; to carry out a quick SWOT analysis of my business. SWOT analysis, which stands for strengths, weaknesses, opportunities & threats by the way, allows you to look at your internal operation in terms of your strengths and weaknesses, and your external and internal environment, in terms of opportunities and threats. These are important so let’s break them down and examine them in a little detail:

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STRATEGIC PLAN Dec 2016/Jan 2017

• Strengths: A business author I follow called Marcus Buckingham wrote a book ‘Now Discover Your Strengths’. His research suggests that if we focus on improving our weaknesses we can become semi-good at something, whereas if we focus on developing strengths, we can become truly amazing. Identifying the strengths of your business and your staff allows you to plan in the year ahead how you will maximise them to best effect.

client management systems, or maybe there are specific growth opportunities you could build into a plan for 2017, such as acquisition? Identify them, and play to your strengths.

• Weaknesses: Now that’s not to say that weaknesses can be ignored, especially when you are working in such a highly regulated environment. Knowing what needs to be addressed and committing that to paper are the first steps to defining a plan to overcome those weaknesses.

• Threats: Looking out for potential dangers is essential for business success. You may perhaps be looking at changes in the market for advice, what potential compliance/regulatory hurdles are coming up, as well as threats which you can identify as being very specific to your business which may arise. All these are key to having a risk mitigation plan in place. Considering and planning for potential threats ensure you can overcome these bumps in the road without significant disruption to your ‘business as usual’ operations.

• Opportunities: With your business purpose and focussed direction firmly in mind, are there opportunities you could follow which will allow you to be more efficient and effective in what you do? It may be that changing your back office and

A SWOT analysis needn’t be an arduous task. Bullet points for each heading are a good starting point, and give you something to come back to as you set objectives and continue to review them throughout the year ahead.

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STRATEGIC PLAN Dec 2016/Jan 2017

Setting goals & key performance indicators (KPIs) So let’s get to the meaty bit of the plan. What are you going to achieve in 2017? Typically, I would start with financial targets, and ideally do this in a detailed way – not simply a fixed % of year on year growth. The more specific you can be, the more you can measure against it as the year goes on and see if you are on track. An example would be to set a goal on the number of brand new clients you will take on in 2017, and what value of assets under advice/management you would hope that they bring to the firm (this number of clearly trickier). When you multiply that into fee revenue, you can then split it into achievable chunks, such as monthly or quarterly. To win new business, we typically must maintain a certain level of activity to generate referrals, enquiries etc., so setting a monthly target for those tasks all contributes to delivering your financial objectives overall. You should go back to your SWOT and identify a couple of goals from this analysis. For example, developing a team incentive plan (not necessarily financial – the American author Chester Elton

writes very convincingly on the benefits of nonfinancial recognition) may build on that strength in your business. Perhaps you identified a growth opportunity by recruiting more support such as a paraplanner, or by acquiring another business? Whatever it is, committing this to a goal for the year ahead is more likely to make it happen than leaving it in the back of your mind! Don’t forget the age-old structure for goals, that they should be SMART ie specific, measurable, achievable, realistic and time based. Test your goals against this rule. If you’re wondering about the difference between achievable and realistic, a trainer once described it as running a marathon – is it achievable for 90% of the population? Almost certainly… Is it realistic? Probably not..! Breaking your goals down into bitesize chunks, and setting them alongside other business key performance indicators (KPIs) is something I am passionate about. Not simply because I love a spreadsheet, but primarily because when you measure performance with KPIs you can honestly say if you/the team/the business has done well and, most importantly, you can then celebrate that success.

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STRATEGIC PLAN Dec 2016/Jan 2017

Making it happen For some of us (women especially – no sexism meant!), making the plan isn’t such a challenging thing. It’s in delivering the plan, when we’re juggling everything else which is where things can come unstuck. Now we all work differently, but I have a few ways to ensure I am accountable to delivering what I say I will as outlined below: Get weekly ‘Q2’ time: Dr. Stephen Covey talks about time management in his excellent ‘7 Habits’ books. Principally, he categorises our time use into four quadrants to help us to focus on and value the important tasks as opposed to the urgent ones: • Q1: Important & Urgent – all the ‘business as usual” (BAU) things you must do to run a business and keep it on track • Q2: Important & Not Urgent: All the strategic planning, relationship building, long-term tasks • Q3: Not Important but Urgent: these are things like emails and meetings we commit to which don’t have an importance to us running and developing our businesses • Q4: Not Important and Not Urgent: trivial timewasting, which falls on your desk because no one else wants to do it! Carving out ‘Q2’ time in my diary each week is how I make sure that I progress my strategic goals. Typically, I do this outside of the office, with my emails switched off. This gives me time to think about the future of my business and also to work on the actions surrounding my goals, which is so essential to making them happen. -A monthly business MOT. This is where I produce a report of my KPIs, typically measured against my target for the year and ‘TTLY’ – this time last year. By looking at these numbers every month I can spot if I am off track early, and set out a recovery plan. I share this with my business partners and key members of my team along with any new actions I

need to take. I’m not sure if they always read it, but knowing I’ve made the commitment to doing it and sending it ensures I complete it and also think about what the numbers are telling me -A quarterly review of strategic goals, as part of a board meeting. This is where I present progress, challenges and action plans for the goals I have set to my business partners, giving me accountability beyond myself and useful feedback from objective supporters. With 2016 drawing rapidly to a close, each of us has to find what works best for us as individuals. However, we all need to have a sound process to work through to help us to make the effective plans which really do act as the building blocks of our future business success. I hope that you have found some of the ideas and processes which I’ve talked about here and which work well for me, to be useful for you too. You will have noticed I follow a number of business authors and learn regularly from their teachings. If you’re looking for some ideas for reading material for your Christmas wish list, here are some business books I have found particularly useful and would thoroughly recommend. Happy reading - and a very happy and successful business new year to you and your team too! Recommended reading Mastering the Rockefeller Habits/Scaling Up, Verne Harnish The 7 Habits of Highly Effective Managers/People, Dr Stephen Covey A Carrot a Day/The Carrot Principle, Chester Elton Now Discover Your Strengths, Marcus Buckingham Built to Last, Jim Collins Key Performance Indicators: The 75 Measures Every Manager Needs To Know, Bernard Marr

Louise Jeffreys – Biography Louise is the managing director of Gunner & Co., the boutique M&A brokerage service for helping financial planners to define and undertake exit planning, and equally with financial services businesses looking to grow through acquisition.

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RICHARD HARVEY Dec 2016/Jan 2017

Ho Ho Ho...ly Santa, what's happened? God rest ye merry IFAs, compliments of the season, ho-ho-ho and other festive greetings, says Richard Harvey... After what has been one of the most tumultuous years in our collective lifetimes, the sentiments of peace on earth and goodwill to all men have never seemed so pertinent. So allow me to delve into Santa's sack, and pull out a compendium of Christmas wishes. Namely, that..... • President Trump delivers on his promise to put the UK at the head of the queue for trade deals (if he isn't too busy alienating the entire world or poising one of his pudgy little fingers over the nuclear button). • The unfortunate folk at Bernard Matthews will find their embattled pension fund is able to pay them sufficient to purchase at least one 'bootiful' turkey. • Our Brexit negotiators follow the advice of country singer Kenny Rogers and "know when to hold 'em, know when to fold 'em". • Those crooked IT monkeys in Russia and the Philippines, flooding the internet with phoney investment offers and ransomware, find themselves marooned in the deep midwinter snow, clad only in their undercrackers.

convictions are even slightly left-of-centre, so let's at least offer congratulations to the paper on the 50th anniversary of its weekly MoneyMail personal finance pages. And thanks to former MoneyMail editor Tony Hazell for offering readers 50 wizard wheezes on how to save money. At Harvey House, we already follow some of the more obvious tips, such as selling unwanted household items. Thanks to the unremitting efforts of Lady H, I get all the recommended daily exercise I need slogging down to the Post Office, laden with parcels full of stuff she's sold on eBay. I also noted Tony Hazell's recommendation to check your tax code. Which is fine if, unlike me, you get one a year. Having recently decided to draw down a modest monthly sum from my SIPP, I received a blizzard of tax code notifications from HMRC, which were about as simple to understand as quantum physics. Obviously these notifications are computer-generated. Now if those IT monkeys want to find a new system to target...

• Carney & Co don't reduce interest rates even further, exposing savers to Cratchitesque penury, and • Currency speculators stop betting against the £. Otherwise, it's muggy Glencoe rather than icy Courmayeur for the New Year ski brigade. ...and may have you have a peaceful Christmas and a busy, hopefully prosperous, 2017. The Daily Mail comes in for a regular and robust kicking from everyone whose political

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RICHARD HARVEY Dec 2016/Jan 2017

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SOAPBOX Dec 2016/Jan 2017

Filling the knowledge gap Financial education is something very close to Adam Piplica’s heart. That’s why he’s doing his bit to help people to make better financial decisions and gain control over their lives Much has been written about the ‘advice gap’, affecting those who cannot or will not pay for full, regulated financial advice. Whether or not the gap really exists, there is, unquestionably, a ‘knowledge gap’ about money and the advice process. Most people may have got their heads around cash ISAs, but go any more off the beaten track and knowledge about pensions and investments falls precipitately. My entry into the world of financial services was unusual. I began as a DIY investor and shared what I had learned in the process by writing a blog at MagicalPenny.com. After attending a “Money Blogger” event in America and meeting financial planners, I was inspired to pursue the Financial Planning Diploma. I am now working in a Chartered financial planning firm but I have kept writing online too, sharing what I’ve learned. Making a difference Financial education has continued to grow and develop here in the UK, particularly online. Notable contributors include Chartered Financial Planners

Pete Matthew of Meaningful Money, Martin Bamford of Informed Choice and Dan Woodruff of Woodruff Financial Planning. Another major contributor in this space is Damien Fahy, a former financial analyst who set up ‘Money to the Masses’ and is having enormous success and impact. Inspiration from the US British financial planners should also be looking at what our cousins across the pond are doing to close the ‘knowledge gap’. One American planner by the name of Jeff Rose has developed a website called ‘Good Financial Cents’. I met him at the conference that originally inspired me to pursue financial planning. He holds online seminars to share information on money topics and then allows those who feel the need for more specialist advice to approach him. His practice Alliance Wealth Management has grown considerably because of his “knowledge gap’ endeavours. If you’re an adviser and reading this, you might be thinking ‘why should we bother educating the public?’ Certainly, financial planners are already very busy doing work for clients who value their contributions and inputs. However, educating a broader public audience is vital for demonstrating the value that planners can bring to those potential future clients who have not yet engaged in the financial planning process. Closing the ‘knowledge gap’ therefore becomes ‘information marketing’ and is clearly working for a growing number of planners, particularly online as it is inexpensive and easily scalable. And yet, whilst online information might help fill a ‘knowledge gap’, taking action is another hurdle more easily overcome off-line. Face to face free financial planning ‘surgeries’ is one example but I feel there is potential for a more impactful live interaction that is less intimidating than a oneto one meeting. As a solution to this, I have been organising my own consumer event, Money Life LIVE, because one day really can change everything.

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SOAPBOX Dec 2016/Jan 2017

If you’re an adviser and reading this, you might be thinking ‘why should we bother educating the public?' Money Life LIVE is a full-day event happening in central York on Saturday 14th January 2017. My aim is for attendees to be introduced to financial planning concepts and gain clarity on their money and their life through talks and workshops with sought-after experts in life planning and financial advice. I’m indebted to speakers such as Chris Budd of Ovation Finance, Financial Life Planner Andrew Hart, and Adviser Victor Sacks who have backed this vision by offering to share their messages of inspiration and information. Full details and tickets are at MoneyLifeLIVE. com. Do spread the word. With

the dawn of robo-advice and the proliferation of online finance blogs and forums, it might never have been easier to start investing but, as financial planners know, financial choices, particularly at retirement have never been more complicated. Whether an online or off-line approach appeals most to you, will you join me in working to help fill the knowledge gap? By doing so we can make a real difference to people’s lives and also continue to build the profession of which we are all proud to be a part.

Most people may have got their heads around cash ISAs, but go any more off the beaten track and knowledge about pensions and investments falls precipitately

About Adam Piplica Adam is a Paraplanner at PenLife Associates, Chartered Financial Planners, in York. Originally a quantitative market research analyst, Adam moved into financial planning in 2014 after running his own web publishing business full time for two years. He is a self-taught investor and financial writer and is CII/PFS Diploma qualified in Regulated Financial Planning. When he's not working or studying for advanced exams, he is a semi-professional singer performing in choral concerts across the UK and abroad.

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E D'S RANT Dec 2016/Jan 2017

The view from Europe With 2016 drawing to a close, Michael Wilson puts his disappointment over Brexit and the forthcoming Trump presidency to one side, as he voices serious concerns over what lies ahead for the E U in 2017

Okay, I admit it. I do love a good scrap, and there’s nothing I enjoy more than those interminable struggles that manage to combine the best and the worst of both politics and economics - ideally with the occasional inference for the securities and investment industry thrown in. But this year’s slugfests have been just a little too much for even my tastes. You don’t need me to tell you that all eyes are on the United States at the moment, as President-elect Donald J. Trump weighs up the tough decision as to where to hang the diamante moose antlers on the White House staircase, or whether he should order two festive gold statues of himself for the lobby, or maybe six. With a little luck, we British will be getting over the worst sense of outrage by the time Christmas comes, and we’ll be focusing instead on what’s good about his vague economic policies and what’s bad. But the perspective from continental Europe is a little different. If you think Theresa May is getting a rough ride from her European partners over her plans to activate Article 50 (“get on with it!” seems to be the battle cry), it’s only partly

that they really want to see us go. More to the point, they are anxious to head off a rising tide of nationalism and anti-EU sentiment in half a dozen other member countries, and – most importantly – to be seen as the kinds of people who aren’t easily to be crossed.

Political uncertainty, slow growth outside the EU and weak global trade weigh on growth prospects

And the economy? On the face of it, the European Union’s prospects don’t look too bad. According to the European Commission’s autumn forecast, which was published on 9th November, this year’s 1.8% economic growth for the EU (and 1.7% for the euro zone) will dip slightly in 2017 to 1.7% and 1.6% respectively before returning to their 2016 levels in 2018. But those unexciting projections mask some serious concerns. First, because they’re modest. But secondly, as Brussels

concedes, there are “a number of hindrances to growth and a weakening of supportive factors.” “Political uncertainty, slow growth outside the EU and weak global trade weigh on growth prospects. There is also still a risk that the economy's weak performance in recent years could hold back growth, and persistent slack points to the possibility of faster growth without undue inflationary pressures. Moreover, in the coming years, the European economy will no longer be able to rely on the exceptional support it has been receiving from external factors, such as falling oil prices and currency depreciation.” “The euro area aggregate budget deficit is set to continue to edge down,” it says, “while the fiscal stance is projected to remain non-restrictive.” And although it says that investment is set to continue increasing, the commission has probably not managed to take in the latest decisive indicator – the rising interest rates which Donald Trump’s presidency are also to bring with them. And that factor in turn is capable of upsetting the apple cart in other ways. As we shall see.

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E D'S RANT Dec 2016/Jan 2017

In, out, shake it all about You could say that we in Britain have already had some practice at coping with disappointment since the Brexit vote on 23rd June, which not all of us remember very kindly. But the thing is that, even if not all of us Remainers are feeling cheered by the economic downturn since then, we have at least come to accept that it was an exercise in democracy in action. Pity, then, our European cousins, who are now facing a double whammy of uncertainty, soon to be followed by a third, fourth, fifth and probably sixth. We are, of course, talking about the growing possibility that nationalists and separatists in several key European states may decide to take their cue from Mr Trump and Mr Farage and push for some form of secession from the European Union. Or at least from the Single Market, which a surprising number of the biggest fiscal beneficiaries are keen to ditch. • Italy is likely to be the first such battleground. On 4th December the government of Matteo Renzi was due to face a referendum on constitutional reform which seemed certain to strengthen the hands of the Eurosceptic M5S movement, led by former comedian Beppe Grillo. Grillo’s people already control the local authorities on Rome and Turin, and they have demanded a Brexit-style referendum on membership of the euro group – which, they claim, is being unreasonably dominated by the suits in Frankfurt. • France is probably the most nervous EU member, given that the Eurosceptic National Front party of Marine Le Pen is unquestionably the best organised far-right grouping in Western Europe. Having got 27% of the vote in last December’s local polls, few doubt that she will make the final cut in the next presidential election. Ms Le Pen greeted Donald Trump’s election as "a new world emerging”, which she said ”redefined” the global balance of power.

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E D'S RANT Dec 2016/Jan 2017

• Germany’s Chancellor Angela Merkel would have been in enough trouble even without the ghastly incidents involving Syrian migrants which have attracted so much unwelcome attention. For many years now, her Christian Democrat (CDU) government has seen its power eroded by the far-right Alternative für Deutschland (AfD), which beat her own party into third place in last September’s state elections in Mecklenburg-Western Pomerania. Needless to say, the nationalists largely favour getting rid of Germany’s EU ties; they are also becoming increasingly anti-Islamic. • The Netherlands faces a blistering assault next March from the populist Freedom Party (PVV) of Geert Wilders, who is violently anti-EU and who has repeatedly got into trouble over his comments about Muslims. Polls indicate that the PVV ought to get 27 seats in March – about equal with the liberal VVD of Prime Minister Mark Rutte. • Austria came within a whisker of getting a far-right, antiimmigration president last May, when Norbert Hofer, the

head of the Freedom Party, lost the ballot by only 1%. A new election was called for 4th December. Why all the dissent? The same reason that Britain went for, of course, and America too, in its way. The sense that the political classes had become detached from the working populations who supported them, and that the whole essential thrust of international co-operation had become politically diverted in a way that favoured the piggies with the biggest snouts. For Britain, as we know, it was all down to three factors: the substantial net contributions

Even the biggest net beneficiaries (France, Italy and Spain) were being heard to protest at the overpowering economic clout that Berlin was exerting on everything that we make to the EU budget; the fear that rule from Brussels would overpower our national sovereignty; and the worry that the free movement of labour that came with the Single Market would attract freeloaders, cutprice labour and possibly even terrorists from outside our sacred shores. It may surprise you to hear that, for EU members, many of the same reasons applied. Even the biggest net beneficiaries (France, Italy and Spain) were being heard

to protest at the overpowering economic clout that Berlin was exerting on everything. And, given the way that the economic weighting system works, it was no surprise that Greece, Italy and Spain all felt politically steamrollered by the affluent Germans - who, in turn, were getting just a little fed up in their own right about the whingeing from the spendthrift, boneidle Mediterranean states. And so on, and so on. That in itself would have been a major problem even if the German government of Angela Merkel hadn’t flung open the welcome doors to Syrian refugees and got some pretty medieval social mores back from some of the newcomers. All of which helps to explain the rise of the nationalist right, which may yet derail her hopes in next year’s parliamentary elections. Going global And then, finally, there’s the issue of globalisation. I’ll confess that it took me longer than it should have to make the connection between globalisation and the awkward fact that so much of the proceeds of economic growth were going to the one per cent and not to the ninety-nine. And to be honest I still don’t entirely buy the link. According to the Trumpers and some of the Brexiteers, globalisation has been a doubleedged sword. On the one hand, it has promoted economic growth in the developing world, reduced the price of goods and linked the nations of the world in positive ways.

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E D'S RANT Dec 2016/Jan 2017

On the negative side, it has opened up the domestic markets of the west to aggressively cheap imports which have created industrial black spots. And, more damagingly, it has allowed giant corporations to slide their profits around the globe, in a constant search for tax havens, with the result that the likes of Google, Starbucks and Apple have contributed far too little to national tax takes, so that the very rich get richer at the cost of the poor. That’s something that might be righted by President Trump’s programme to bring expat companies’ profits back onshore to the United States. Except that, for some European tax havens (Ireland?), it may entail a fiscal loss that we’ll need to anticipate. Turkey without the trimmings And as if that weren’t enough, the growing tensions with Turkey’s Recep Tayyip Erdogan seem set to cut off the far southeastern flank of pan-European co-operation. The deteriorating political climate since July’s attempted coup has seen the authoritarian Turkish leader not only stepping up his Islamist political direction but also shouting loudly at Brussels for having kept Turkey waiting 40 years for EU membership. That would be inconvenient enough, were it not for the fact that Turkey is currently accommodating some three million refugees, many of them Syrians who were sent back to Turkey with a promise of an aid deal by EU members that didn’t want them flooding their own

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boundaries. Part of the deal here was that Europe would open up its own borders to Turkish migrants who wanted access to the EU – but to date, that hasn’t happened. Can you guess why? Complicating the matter further is the fact that Turkey is a hefty bulwark of NATO and an essential landing-strip zone for US military aircraft on service

We don’t know much about Trump’s plans yet, but what we do know is that he’s going to be issuing a lot of new government paper between now and 2020

We don’t know much about Trump’s plans yet, but what we do know is that he’s going to be issuing a lot of new government paper between now and 2020. His super-soft tax proposals allow no other interpretation. That in turn will depress demand by diluting the market for new paper. Which will push up yields. We know that Trump favours a return to higher interest rates, and that inflation is likely to rise if his tariffs on Chinese and Mexican imports are put into place. That too will exert an upward pressure on treasury bonds.

throughout the region. Ankara threatened in August to leave NATO if it didn’t start to get a better deal from the EU – and, by inference, it was expected to cosy up more closely with Russia. Now, consider the growing expressions of affection between Presidents Trump and Putin, and you have a tricky situation in which Brussels can hardly fail to come under pressure to admit a country that is very likely to reinstate the death penalty.

But the third plan, which is still being explored, is to “renegotiate” existing bond obligations with bondholders. Which is something that we called a haircut when Greece and Cyprus did it. And which may yet expose weaknesses in banks, hedge funds and other institutions that seem quite solid at present. Remember, it didn’t take much counterparty risk to start the subprime mortgage crisis of 2007/2008, did it now?

My word, my bonds! And finally, to the ultimate reason why Trump’s accession may upset the fiscal applecart – and, in the process, the entire fixed interest system too. It’s simple when you think about it.

Will these things happen? We have no idea. But if Theresa May’s European counterparts seem a little too preoccupied at present to be able to give her the time she thinks she deserves, it might just be that they’ve got more important things on their minds than Article 50.

CAREER OPPORTUNITIES Position: Self Employed Independent Financial Adviser (28413) Location: Bristol Salary: £100,000 - £150,000 This is established IFA firm where you will benefit from a very successful lead generation process, for prospective clients in the Bath and Gloucester areas. On offer is a face to face, relationship building role where you will have the opportunity to interact with a diverse client bank and deliver holistic financial planning services. Ideally you will be Level 4 qualified or above. As well as lead generation, This is a self-employed Financial Planning position with the firm provides plenty of back office support provided to include lead generation, including Compliance, Administration & Paraplanning so enabling you to get on with what you do best; developing and cultivating client relationships. Working alongside Directors also provides to have the opportunity to influence the business and play a part in its succession planning. This will give you an opportunity to implement ideas and concepts at a strategic level and enhance both your commercial and soft skills.

IFA Employed (28807) Location: London Salary: £40,000 - £60,000 A unique chartered financial planning firm with a reputation within the industry for providing an exceptional standard of service to their clients, is looking to add to its prestigious ranks a qualified Financial Planner With an extensive client bank available to the successful candidate, this holistic financial planning office has all the technical support to boost your career with earnings potential far exceeding that of most opportunities in the area. You will be a tenacious, well refined character, with appropriate professional qualifications, who aspires to be a well-known figure in the industry. A strong natural ability to build and nurture client relationships is required, from someone who is happy to go the extra mile to deliver. You will be highly experienced in providing holistic financial advice to clients of high net worth comfortably, developing relationships and finding new avenues in which to advance their financial security.

Position: Financial Adviser (28480) Location: Bury St Edmunds Salary: £40,000- £60,000 A reputable financial services Financial Services Practice has created an opportunity for a qualified Financial Adviser to join their successfusuccessful team. You will be working with aand dedicated team which works with aith a common goal. This is a highly profitable organisation and is well respected in the market for its client-ustomer centric model. This organisation has been able to prosper through the engagement and dedication to provide a quality client service. The senior team is committed to creating a highly rewarding environment that encourages personal development. You would offer holistic financial advice to clients. One of the key benefits to working for this IFA firm is that aand benefit from an existing client bank. ook of business is available. You would be required to: • You would offer holistic advice thorough financial advice to clients. • Provide exceptional Client service building long term relationships whilst and adheringe to the principles of TCF and to working within towards the company’s compliance standards and professional development scheme.

Position: Employed Independent Financial Adviser (28851) Location: Bristol, City Centre Salary: £40,000- £50,000 + uncapped bonus Are you an experienced financial adviser looking for change? This is an exciting role within a vibrant team providing financial planning and advice to both new and existing clients. The business provides a full financial planning service to personal and corporate clients and has a good reputation as a forward-thinking firm. The role is based in the firm’s central Bristol office. Clients will be provided as will full paraplanning and administrative support and a competitive package. This is established IFA firm where you will benefit from a very successful lead generation process, producing a high volume of quality leads for prospective clients in the Bath and Gloucester areas. Full back office support is available to allow you to concentrate on holistic Financial Planning with a varied client portfolio. This is a face to face relationship building role where you will have the opportunity to interact with diverse clientele. Are you tired of working within a ridged framework as a Financial Planner within a Bank or Building Society environment? This could be the opportunity for you to have autonomy within your role to control your client portfolio and have earnings potential of £100,000 - £150,000 Security of fee advance available if required to provide the initial support to get up to speed in the role. Ideally you will be Level 4 or above qualified If the sound of this opportunity interests you, and you meet the criteria, please apply now for further details.

Position: Senior Paraplanner (28765) Location: Chester Salary: £30,000 - £40,000 A well-established Wealth Management practice in Chester require a career-committed research professional who is dedicated to enhancing their knowledge, experience and skills in this area. Ideally, you will have previous experience as a Paraplanner within a fast paced environment and have extensive product knowledge in the areas of pensions, investments and protection. The successful candidate will benefit from full support and training within a welcoming office environment. About the Role: • You will be required to analyse a analysis of client’s’ circumstances, objectives and existing financial planning arrangements, preparation in order to prepare an appropriateof appropriate recommendations for discussion with the adviser, • Uundertaking whole of market research, as required, on all areas of the market, including pensions, investments and protection, both on a client-specific basis and as part of regular reviews of the market place • Liaising with various members of the Research Team involved in Risk and Compliance to ensure that advice is compliant • and proProvidinge high quality technical, administrative and research support to the advisers • Provide input to the Research Manager on the suitability of new systems or procedures • Assist in the development of less experienced members of staff.

Position: Chartered Financial Planner (28549) Location: Northampton Salary: £45,000 - £65,000 This role offers high basic pay as well as a bonus package, from a highly reputable firm which currently has more business and clients than they can comfortably handle. They require help from a planner committed to providing holistic advice. You will be working with HNW clients with portfolios in excess of £1m. You will also have full back office support. The firm is looking for someone with integrity, depth and who has a proven track record.

Position: Financial Consultant (28760) Location: Leicester Salary: £40,000 - £80,000 DOE An experienced financial consultant focused on delivering advice to meet clients’ needs, is required by a firm building on their reputation of delivering a first class financial planning service to its clients on a nationwide scale. Substantial leads are provided, where you will be required to present to both individuals and groups of up to 15 people, offering the chance for business leads and to gain referrals.

Position: Chartered Financial Planner (28549) Location: Northampton Salary: £45,000 - £65,000 Are you a Chartered Financial Planner with the desire of offer full holistic advice within a highly reputable firm? If so, on offer is a salaried role with high basic pay as well as a bonus package. This is a role where existing clients are not needed as the reason for the position is because the practice has more business and clients than they can comfortably handle. You will be working with HNW clients with portfolios in excess of £1m. You will also have a full complement of back office support. We are looking for integrity, depth and someone with ha proven track record. Apply now for more information.

Position: Paraplanner (28490) Location: Central London Salary: £40,000 – £50,000 My client is seeking an experienced Technical Paraplanner is required to join a friendly, busy and vibrant team which seeks . We are looking for a likeminded individual eager to contribute new ideas and who has a desire to make a difference. Ideally you will be Diploma qualified with AF30 or G60 and working towards Chartered status with a history of working within an IFA firm already and can demonstrate a high level of advanced pension knowledge Based in Central London, you will be working closely with the IFA’s and Directors of the firm closely and helping the team of paraplanners around you as the senior paraplanner within the office. Duties: • Preparing compliant, technical suitability reports and ‘Financial lLife pPlan’ reports detailing the consultant’s recommendations for the client. • Manage client annual reviews • Carry out technical research and analyse client data collected on behalf of clients • Evaluate investment portfolios and accurately invest client money as per consultant’s recommendations process investment transactions post client meetings • Liaise with clients post meetings answering technical queries • Be proactive in identifying investments/tax saving opportunities for clients • Manage and prioritise your consultants work • Evaluate investment portfolios with your consultant Skills & Qualifications: A minimum of the Diploma in Regulated Financial Planning (Dip PFS) Advanced Pension exam AF30 or G60 or demonstrate a high level of advanced pension knowledge Achieved or aspires to Chartered status

Position: Paraplanner (28424) Location: Cheshire Salary: £40,000 A well-established Wealth Management practice in Cheshire require a career-committed research professional who is dedicated to enhancing their knowledge, experience and skills in this area. Ideally, you will have previous experience as a Paraplanner within a fast paced environment and have extensive product knowledge in the areas of pensions, investments and protection. The successful candidate will benefit from full support and training within a welcoming office environment. You will be required to analyse a client’s circumstances, objectives and existing financial planning arrangements in order to prepare an appropriate recommendation for discussion with the adviser. Undertaking whole of market research, as required, on all areas of the market, including pensions, investments and protection, both on a client-specific basis and as part of regular reviews of the market place. Liaising with various members of the Research Team involved in Risk and Compliance to ensure that advice is compliant. Provide input to the Research Manager on the suitability of new systems or procedures. Assist in the development of less experienced members of staff.

Position: Paraplanner (28424) Location: Cheshire Salary: £40,000 A well-established wealth management practice in Cheshire require a career-committed research professional who is dedicated to enhancing their knowledge, experience and skills in this area. The successful candidate will benefit from full support and training within a welcoming office environment. Ideally, you will have previous experience as a paraplanner within a fast paced environment and have extensive product knowledge in the areas of pensions, investments and protection. You will be required to analyse clients’ circumstances, objectives and existing financial planning arrangements in order to prepare appropriate recommendations for discussion with the adviser. You will undertake whole of market research, as required, both on a client-specific basis and as part of regular reviews of the market place. You will also liaise with the research team involved in risk and compliance to ensure that advice is compliant, provide input to the research manager on the suitability of new systems or procedures, and assist in the development of less experienced members of staff.

Position: IFA Employed (28807) Location: London Salary: £40,000 - £60,000 A unique chartered financial planning firm that has a reputation within the industry for providing an exceptional standard of service to their clients is looking to add to its prestigious ranks a qualified Financial Planner With an extensive client bank on offer for the successful applicant to manage, this holistic financial planning office has all the technical support to boost you through your career with earnings potential far exceeding that of most opportunities in the area. My client seeks a bespoke and tenacious professional that aspires to be a well-known figure in the industry A well refined character with professional qualifications that would be welcomed within a chartered financial planner An advisor with a strong natural ability to build and nurture client relationships and is happy to go the extra mile to deliver A professional with ambition to earn a salary that allows them to live the lifestyle they wish to comfortably Highly experienced in providing holistic financial advice to clients with high net worth comfortably, developing relationships and finding new avenues in which to advance their financial security.

Position: Financial Consultant (28760) Location: Leicester Salary: £40,000 - £80,000 DOE Our client is looking for an experienced financial consultant to join them as they continue to build on their reputation of delivering a first class financial planning service to its clients on a nationwide scale. You will be offering your client's advice on a broad variety of products based on their best interests, finding the best methods to help them reach their goals purely on their lifestyle, financial goals and aspirations. Substantial leads are provided, where you will be required to present your products and services to both individuals and groups of up to 12 - 15 people, offering the chance to generate new business leads and to gain referrals. Offer advice to be best suited to meet the clients' needs. The financial services you will offer will include retirement planning, life insurance, income protection, critical illness, investments and inheritance tax planning.

Position: Employed Independent Financial Advisor (28851) Location: Bristol, City Centre Salary: £40,000- £50,000 + uncapped bonus Are you an experienced Financial advisor looking for change? Do you have experience of providing tailored financial advice in an IFA firm? My client has an exciting role for an experienced, motivated Independent Financial Adviser to join their vibrant team to provide financial planning and advice to both new and existing clients. They offer full financial planning advice to personal and corporate clients and have a good reputation as a forward-thinking firm. In return you will be based in an office in central Bristol, given clients, full paraplanning and administrative support and a competitive package.

Position: Senior Financial Planning Assistant (28411) Location: Peterborough Salary: Flexible and negotiable depending on the individual We are looking for someone The practice is looking for someone that haswith experience working in an IFA environment to provide a first class administration and support service to Financial Services Consultantstheir advisers, where you will be meeting and exceeding the expectations of the clients. Ideally you will have some financial servicesFS qualifications and possibly will be working towards the Level 4 Diploma. You will be supported heavily in your career development and progression within the firm. and allowed to grow from within the firm. You must have previous experience in a financial services administration environment; some supervisory experience would be an advantage but is not essential The ideal candidate will hold the Certificate in Financial Services, or equivalent or working towards it.

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Invesco Perpetual Global Targeted Returns Fund

A fund to help cushion the impact of market volatility. Because who likes unwelcome surprises? Our multi asset fund seeks a smoother growth trajectory by blending good, long-term investment ideas into a truly diversiﬁed and robustly risk-managed portfolio. It targets gross returns of 5% per annum above UK 3-month LIBOR, over rolling three-year periods. Since its launch in 2013, the fund has delivered gross returns of 22.65%* with less than half the volatility of global equities. That’s something we can all welcome. Visit invescoperpetual.co.uk/investinginideas Follow us @InvescoInsights

This ad is for Professional Clients only and is not for consumer use. *Source: Invesco Perpetual as at 9 September 2016. Fund inception 9 September 2013. Gross fund performance is shown in sterling on a mid-to-mid basis, inclusive of reinvested income and gross of the Ongoing Charge, portfolio transaction costs and the entry charge paid by individual investors. Net performance: The fund’s Z-accumulation share class performance over the same period was 19.23% in sterling on a mid-to-mid basis, inclusive of reinvested income, net of the Ongoing Charge and portfolio transaction costs and gross of the entry charge paid by individual investors. Global equities volatility is measured by standard deviation of the MSCI World Index. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. There is no guarantee that the fund will achieve a positive return or its targets. The Invesco Perpetual Global Targeted Returns Fund makes significant use of financial derivatives (complex instruments) which will result in the fund being leveraged and may result in large fluctuations in the value of the fund. Leverage on certain types of transactions including derivatives may impair the fund’s liquidity, cause it to liquidate positions at unfavourable times or otherwise cause the fund not to achieve its intended objective. Leverage occurs when the economic exposure created by the use of derivatives is greater than the amount invested resulting in the fund being exposed to a greater loss than the initial investment. The fund may be exposed to counterparty risk should an entity with which the fund does business become insolvent resulting in financial loss. This counterparty risk is reduced by the Manager, through the use of collateral management. The securities that the fund invests in may not always make interest and other payments nor is the solvency of the issuers guaranteed. Market conditions, such as a decrease in market liquidity for the securities in which the fund invests, may mean that the fund may not be able to sell those securities at their true value. These risks increase where the fund invests in high yield or lower credit quality bonds and where we use derivatives. For the most up to date information on the fund, please refer to the relevant fund and share class-specific Key Investor Information Documents, the Supplementary Information Document, the Annual or Interim Short Reports and the Prospectus, which are available using the contact details shown. Invesco Perpetual is a business name of Invesco Fund Managers Limited. Authorised and regulated by the Financial Conduct Authority. IFA GTR 3YB 1a