For today’s discerning financial and investment professional
Feb 2017
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REVI EWS
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COM M E NT
ANALYSIS
Private Banking
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Banking | Lending | Investing Minimum eligibility criteria applies. Please visit our website for further details. Investec Private Banking is a part of Investec Bank plc (registered no. 489604). Registered address: 2 Gresham Street, London EC2V 7QP. Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the London Stock Exchange.
CONTE NTS February 2017
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CONTRI BUTORS
Editor’s Welcome
6 News
Brian Tora an Associate with investment managers J M Finn & Co.
10 2017 - A New World Order
Richard Harvey a distinguished independent PR and media consultant.
ER OPPORTUNITIES
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Better Business - The art of delegation
Neil Martin
has been covering the global financial markets for over 20 years.
18 Adviser Spotlight — Marlene Outrim
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Michelle McGagh brings a wealth of experience on industry developments.
Brett Davidson FP Advance
Breaking down barriers: the rise of technology
25 The ETF Doctor
26 Controlling the craziness Michael Wilson Editor-in-Chief editor ifamagazine.com
28 A Year of Reform
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Sue Whitbread Commissioning Editor sue.whitbread ifamagazine.com
Alex Sullivan Publishing Director alex.sullivan ifamagazine.com
Talking Forex with FJ
36 2017 — the year of living dangerously
40 The time for action
42 IFA Magazine is published by IFA Magazine Publications Ltd, The Tobacco Factory, Loft 3, Bristol BS3 1TF Tel: +44 (0) 1179 089686
SOAPBOX: Active v Passive Investing – neither’s better, and here’s why
© 2017. 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
46 Blonde Ambition
50 The ideal specialist adviser opportunities
WE LCOM E February 2017
Trust Busters Truth is the first casualty of war, they say. And although the last nine months haven’t produced any actual armed conflict, at least here in the industrialised west, you can’t fail to have picked up on some of the utterly warlike rhetoric both in Britain and in the United States.
Okay, Theresa May hasn’t needed to wear a bulletproof vest yet, but Donald Trump most certainly has. It’s a fair measure of how overheated the political atmosphere has become. And what a sorry situation that leaves us in. As we explain in this month’s issue, it’s still far too early to say whether The Donald’s policies are going to work, because even his closest associates can’t figure out yet what they are. What we can say, though, is that Trump’s campaigning style has thrown truth quite deliberately out of the window, in favour of a blustering, self-contradictory showbiz barrage in which everyone from Hillary Clinton to the Pope has been vilified, threatened with revenge, and then quietly dropped from the agenda. Whole news agencies have sprung up to distribute fake news designed for distribution via Twitter. Did you know that Hillary Clinton is in rehab? That the Democrats operated a paedophile ring from a Washington pizzeria? Well, she isn’t and they didn’t. Which didn’t stop somebody from shooting up that pizzeria with an assault rifle. Truth is fragile That’s what happens when people lose the certainty that what they’re being told is at least based on truth. We all know that politicians lie, but to industrialise the scale of the deception like this is corrosive, not least because it undermines every assumption that our society makes about democracy. Destroy that, and it becomes impossible for voters to trust politicians; for politicians to trust each other’s sincerity (even if it’s “misguided); and for everyone to take the serious media seriously. Sooner or later, the lack of trust will extend to financial institutions too. The Brexit referendum didn’t just stop at deliberate distortions – it featured people like Michael Gove actually exhorting us to stop believing the independent financial experts. An injunction which the voters, disenchanted as they were, were only too happy to accept. We had Jeremy Corbyn damning his own party’s pro-Brexit line with deliberately faint praise and a lot of carping as
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well. All of it helped to undermine our confidence in the sincerity of what we were being told. Infernal confusion We won’t know for some months yet what Theresa May will do with her poisoned chalice. In recent months she’s seemed frozen, indecisive, and believing, against all evidence to the contrary, that her 27 partners would quietly stand aside and let her keep our access to the Single Market. Until 8th January, that is, when she abruptly told Sky News that there was no prospect of our wanting anything but a hard Brexit. And no future in hoping to keep “any bits” of our membership. “We’re leaving,” she thundered. “We’re coming out.” That put her immediately at odds with her own Chancellor, Philip Hammond, who is still trying to save at least the banking passport. And with the CBI, which is desperate for clues as to whether it’s safe for British businesses to build new factories after Brexit. (Answer, at present – probably not.) So far, the City has been doing its best to take this huge farrago in its stride. But fund managers, pension trustees and – yes - financial planning advisers all depend on better than this. Don’t we? Michael Wilson, Editor-in-Chief IFA Magazine
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N EWS February 2017
The tax net tightens had to intervene to resolve in the past. And the new approach comes in the wake of a significant expansion of the taxman’s powers.
The 31st January deadline for the online completion of SelfAssessment forms has come with an additional twist this year, as HMRC has stepped up its vigilance over potentially undeclared earnings or savings interest. Some 10,000 taxpayers who had previously failed to provide satisfactory accounts of savings interest or dividends have been issued with letters warning them to double-check that all entries are correct before pressing the Confirm button. The letters are also being sent to some people who have over-declared revenues, or whose tax returns have raised queries that HMRC staff have
HMRC’s Connect system has been able for some time to assemble financial records from banks, credit card operators, corporations, investment accounts, peer to peer lenders such as Zopa, and even the Land Registry. And to collate the resulting information in a way that flags up potential discrepancies between earnings and expenditure or lifestyle. Even Ebay or AirBnB can be accessed. Since September 2016, however, HMRC has also been able to access information from financial institutions in British overseas territories such as the Channel Islands – and from around 60 more countries than a year ago. By the way, clients using older web browsers will need to upgrade in order to send this year’s returns. Forewarned is forearmed.
2017 investment guide to be produced by IFA Magazine In a new initiative from IFA Magazine publications, the 2017 Investment Guide will be available in early March, aimed at providing a useful resource to help advisers keep up to date with expert thinking, and to give news and views. This is the first time that the guide has been produced. It is intended to bring views on the merits of different investment sectors, to give an overview of global markets and key events taking place in 2017, as well as to raise discussion on some of the key issues of interest and relevant to investment advisers at the current time. Readers of IFA Magazine will automatically receive a copy of the guide.
Making whoopee, for now... Surprised? UK households have the highest level of household spending in Europe, according to the latest Global Economy Watch from PwC, which says that we spend an average of £50,000 per annum – compared with £41,000 in Ireland and just £35,000 in France. Yet our household savings are relatively low, at just 2% of an average household's disposable income – significantly weaker than France or Germany. But then, as PwC makes plain, we’re not always comparing like with like. In the UK, around 50% of household spending is on
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‘essential’ items such as housing, energy bills and food, but in France, it says, that proportion rises to 60%. The main difference, apparently, is that food makes up 13% of total household spending in France, but only 8% in the UK. What really matters for households and businesses, PwC says, is how much of a household’s income is left over for ‘non-essentials’ such as alcohol, eating out, holidays or entertainment. But even after deducting ‘essential’ spending, the UK continues to top the discretionary household
income rankings at around £27,000 per annum. PwC says that last year was the first time since the 2008 crisis that discretionary disposable incomes increased, which is why it says Christmas spending was relatively strong. But, it warns, those low savings ratios imply that the UK is skating on thin ice – if a future economic downturn were to develop, we’d need to divert household income into savings and our consumption would look potentially vulnerable.
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N EWS February 2017
Brand new magazine launched this month
House price rises decelerating, says Halifax Expectations that a cooling economic climate might impact on UK house prices appear to have been dashed by the Halifax’s announcement that average UK prices rose by 1.7% during December – bringing the annualised increase to 6.5%, compared with 6% in November. That in turn brought the average UK property price to an alltime high of £222,484, says the Halifax, and the ratio of house prices to average earnings reached 5.81 – only slightly short of the all-time peak of 5.83 that was recorded in July 2007 before the global financial crisis struck.
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Overall, however, the Halifax reckons that price growth will slow back to 1%-4% by the end of 2017 – broadly in line with Rightmove’s previously published forecast of 2%. As Martin Ellis, the Halifax group’s housing economist, says: “Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017.” However, he adds, “UK house prices should continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates.”
Along with this month’s copy of IFA Magazine, you will also have received a copy of the very first edition of GB Investments - a brand new campaigning magazine for the financial adviser community. It has the objective of changing the narrative about EIS, Seed EIS, VCT and BPR investments. EIS Magazine, with which IFA Magazine readers will undoubtedly be familiar, was the forerunner to this new magazine, which remains a sister publication of IFA Magazine The remit of the new magazine has been expanded to cover broader areas. Editorially, it seeks to highlight the value of the investment opportunities which these products present, as well as the contribution they make to society in terms of job creation rather than simply emphasising the tax breaks associated with them. Each edition will feature articles on each of the core investment types as well as ongoing insight into successful exits and new launches in the market place. This is all supported by a digital media platform and a variety of resources to help advisers to develop a deeper understanding of this sector and how it can be used to help clients meet their investment goals. For details visit www.gbinvestments.co.uk
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N EWS February 2017
What is the safe withdrawal rate from pensions? White paper from Investec Structured Products asks whether 4% is still the magic number? chosen. Pension freedoms have changed the landscape dramatically, especially given the favourable IHT treatment of pension assets which lead many towards a strategy of capital preservation. A new approach to portfolio construction should be considered in the light of this, particularly given the pressure on fixed interest yields with inflation on the rise.
It is more than 20 years since William Bengen produced his ground breaking research into “safe withdrawal rates” for pension pots. The US financial planner was the first to make his calculations using actual historical market returns rather than averages. Famously, he came up with a safe level of income that could be withdrawn over 30 years to ensure investors continued to receive an income in line with inflation, without running out of capital. The figure was 4%. Since then the figure has been challenged and criticised but 4% has stuck as a universal rule of thumb. How useful is it today? Is 4% still a relevant basis for calculations? What other strategies could UK advisers use to protect the income and capital of retirees for today and tomorrow?
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In a white paper entitled “4% still the magic number?” which looks at sustainable spending for UK retirement, Investec Structured Products have revisited the “safe” rate and have looked at some of the detail behind it in order to help advisers rethink the drawdown strategies used with clients. They conclude that the SWR depends on a multitude of variables, and while the 4% rule remains a useful baseline, it offers no more than a starting point for a detailed retirement planning exercise. The state of the market at the time of first withdrawal, the impact of fees and taxes, the optimum portfolio mix will all affect retirement planning. Above all, the client’s individual circumstances and attitude to risk will weigh on the solutions
Leigh Fisher (pictured), of Investec Structured Products comments: “Structured products are ideally suited to supporting sustainable spending in retirement. In my view they should be considered more widely by advisers who are looking to help clients to achieve income from their pension plans. The reason I say this is that they offer not only a high probability of delivering a known outcome but they also provide a base from which the IFA can build a broader portfolio. We need to change the mindset of the IFA to consider these products as a core part of their clients’ drawdown portfolios rather than using them as a satellite option, to top up the existing base. This is particularly relevant where advisers are using cash flow modelling to help identify future client needs. When structuring a portfolio based on such forecasts, why not start with a structured product which will lower the volatility of the overall portfolio?” For a copy of the white paper visit www. investecstucturedproducts.com or call 020 7526 9216
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Legg Mason IF RARE Global Infrastructure Income Fund
PLANES, TRAINS AND AUTOMOBILES: POWERING INFRASTRUCTURE INCOME In a low income world, smart investors are discovering the benefits of investing in global listed infrastructure: Stable and predictable income Inflation linked returns Lower correlation to traditional asset classes.
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0330 123 3790 or visit www.leggmason.co.uk This is a sub-fund (“fund”)of Legg Mason Funds ICVC (“the Company”), an umbrella investment company with variable capital, authorised in the UK by the Financial Conduct Authority as an undertaking for collective investment in transferable securities (“UCITS”). It should be noted that the value of investments and the income from them may go down as well as up. Investing in a sub-fund involves investment risks, including the possible loss of the amount invested. Past performance is not a reliable indicator of future results. This information and data in this material has been prepared from sources believed reliable but is not guaranteed in any way by Legg Mason Investments (Europe) Limited nor any Legg Mason, Inc. company or affiliate (together “Legg Mason”). No representation is made that the information is correct as of any time subsequent to its date. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situations or needs of investors. Before investing investors should read in their entirety the Company’s application form and a sub-fund’s share class KIID (and accompanying Supplementary Information Document) and the Prospectus (which describe the investment objective and risk factors in full). These and other relevant documents may be obtained free of charge in English from Legg Mason Investment Funds Limited, 201 Bishopsgate, London EC2M 3AB or from www.leggmason.co.uk. This material is not intended for any person or use that would be contrary to local law or regulation. Legg Mason is not responsible and takes no liability for the onward transmission of this material. This material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. Issued and approved by Legg Mason Investments (Europe) Limited, registered office 201 Bishopsgate, London, EC2M 3AB. Registered in England and Wales, Company No. 1732037. Authorised and regulated by the UK Financial Conduct Authority.
BRIAN TORA February 2017
2017 - A New World Order Brian Tora considers some of the most significant events around the globe that are likely to impact this year, and warns of an exciting but challenging year ahead for those tasked with portfolio construction.
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Nobody can accuse 2016 of being a dull year for investors – or advisers for that matter. The important thing now, though, is what does 2017 have in store? At the very least it promises to be interesting with so many changes likely to take place. Aside from the difference that new US President Donald Trump in the White House might make over time, there will be general elections in France, Germany and the Netherlands. All this, plus geopolitical concerns and continued worries over global economic growth could add up to an exciting year.
rates by 25 bps. While this was largely expected, the hawkish rhetoric that accompanied the announcement did catch many by surprise. The suggestion that this year could see three further
A volatile environment For investors and advisers alike, this is likely to mean a volatile environment and a need to be nimble in both strategic and tactical planning. While we can never be certain how things will pan out, there are a few straws in the wind that could give a steer. One came last month, when the Fed raised interest
rate rises (most commentators were expecting two at the most) indicates a robust economic scene stateside.
The political environment is looking as uncertain as at any time in my recent experience
those jobs which have been lost overseas to lower labour cost countries is likely to prove beyond his gift, so the wise money is on more infrastructure spending – much needed in the US – funded through more borrowing. Interestingly, this approach looks likely to be adopted in the UK as we strive to replace our reliance on the European Union ahead of Brexit. Donald Trump’s apparent appreciation of Nigel Farage is beginning to look more understandable. A return to fiscal stimulus Well, what all this suggests is that fiscal stimulus is likely to replace the monetary option as 2017 travels on. Moreover, the trend towards higher inflation, which
And, of course, we have the start of the Trump Presidency which is promising to restore blue collar jobs in the US. Retrieving
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BRIAN TORA February 2017
most Western governments probably welcome, is likely to accelerate this move. And if monetary tightening continues, then arguably we can return to a more normal investment scene where bonds and cash actually deliver real returns to investors. None of this is necessarily negative, but it does ignore some of the obvious pitfalls that might derail investment sentiment. First amongst these must be the political environment which is looking as uncertain as at any time in my recent experience. The UK referendum and the election of Donald Trump were clear indicators that a substantial body of opinion exists that no longer trust the political establishment. The growing divide between the seriously well off and the average working man or woman may account for this in part, but the apparent detachment from political leaders to the electorate is as important. What about Europe? The Italian referendum at the end of 2016 continued this theme of
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disenchantment – and Italy is no small problem. As many as eight banks look vulnerable and, while Unicredit’s rescue plans were treated positively by investors, bank failures would seriously damage the single currency zone and an exit from the euro by Italy could prove terminal for this massive financial experiment.
Investors seem to be taking the view that a positive outcome from recent unexpected events is more likely than an upset
So the results of the three important elections in Europe need to be watched closely. First will be the German Presidential election, due next month. While at the time of writing “Mutti” Merkel is expected to win, the size of the protest vote could affect government policy in the future. In France, where the Presidential elections take place in May, the worry is the return of the right wing Marine Le Pen
– still an outsider in the polls, but then so was Donald Trump. Both countries have other important elections taking place, while the Netherlands fits in its decision on who governs neatly between the two. The future’s bright? With the US and UK markets hitting all-time highs over the past month or so, investors seem to be taking the view that a positive outcome from recent unexpected events is more likely than an upset. Given the pressures facing both Trump and May, I have sympathy with this view. Do not forget, though, that there are terrorists lurking in the undergrowth that could undermine the best intentions of national leaders seeking to ensure steady economic growth. For the US a spat with China could upset calculations, while at home problems in Europe might divert attention from how we structure any deal once we’ve departed. Let’s face it, the chances of any significant progress being made on post EU membership trade and other rights this year look pie in the sky. So we need to look elsewhere for real guidance. 2017 is likely to be a challenging year for those tasked with portfolio construction.
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This ad is for Professional Clients only and is not for consumer use. We cannot guarantee that the fund will achieve its income or capital preservation goals; your clients could get back more or less than the target income and they may not get back the amount they invest. 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. As one of the key objectives of the fund is to provide income, the ongoing charge is taken from capital rather than income. This can erode capital and reduce the potential for capital growth. The 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
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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 Reports1 and the Prospectus, which are available using the contact details shown. 1As the Invesco Perpetual Global Targeted Income Fund launched on 30 November 2016, the first reports will be issued on or before the following dates: Interim: 30 June 2017, Annual: 31 December 2017. Invesco Perpetual is a business name of Invesco Fund Managers Limited. Authorised and regulated by the Financial Conduct Authority. IFA GTI UB 1a
BETTE R BUSI N ESS February 2017
Better business - The art of delegation Everyone talks about delegating more, but it’s a difficult skill to master. Get it right, says Brett Davidson of FP Advance, and not only will your business benefit but you’ll have more fun too.
Intellectually, everyone gets the reasoning behind delegation. However, in practice very few people find that it comes easily to them, and this is especially the case with financial advisers and planners. If that’s you, don’t despair. So why don’t we let go of more tasks? There are a few potential blockages which we will examine here: 1. You have the wrong support in place This first blockage is a real one. If you don’t have the right support team in place you’ll never delegate successfully, because the work will keep bouncing back onto your desk.
That’s your first bit of delegation. External HR people are not expensive and they can add loads of value. If you’re a smaller firm (even a one-or two-person show) then you’ll hardly ever use your HR person, but when you do they’ll be a huge help. If you’re a larger firm then you really need someone on board to assist with good HR practice and people management.
is assuming, of course, that you have the right team on board in the first place. As someone said to me many years ago: if the person to whom you’re handing over work can do it 80% as well as you can, then let it go. If you want to stay stuck in the land of “only I can do this job to the standard” then you will
2. You believe you can do it best yourself This second blockage is not real; it’s all in your head. That
Here’s the test that I use when I think about the team. When I hand off a task I’m looking for the person that can not only do the task itself, but thinks of an extra thing or two that I didn’t even know needed to be done. They know these extras because they’re experts in the role they’re performing. If you don’t have the right support in place then your first job is to get that sorted out. “Oh, but I hate recruiting and training staff!” I hear some people saying. In this case, the first person I’d add to your team is an external HR resource that can help you with this stuff. There you go.
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forever remain small. If you’ve got good people in place then let them take on some responsibility. Describe the outcome you’re looking for and then let them sort it out their own way. 3. You don’t have time to delegate That feeling of not having time to delegate seems like a genuine excuse, but it’s not. We know it’s not because we find ourselves doing the task again and again, all the while thinking, “If I’d just taken the time to delegate this task the last five times I’ve done it, I wouldn’t be doing it now.” Where do you start? In my consulting work, one of the first things I try to get owners and advisers to delegate is their emails. However, whenever I make the suggestion you should be a fly on the wall and hear the screaming; it’s incredible.
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Let’s be totally honest. You don’t need to handle your own emails. Get someone else to screen them and then speak with you once a day (via telephone, Skype, or face to face if they work in your office) about the emails that are important.
“If I’d just taken the time to delegate this task the last five times I’ve done it, I wouldn’t be doing it now.”
Here’s what will happen: • You’ll stop spending way too much time on this low-value task. The verbal update from your email screener will take ten minutes. Sorting them yourself can take over an hour per day. Not only that, but checking your emails will
often distract you throughout the day from other genuinely important tasks that you should be working on. • Anything that you need to respond to personally will be identified and you can then respond. • Emails that don’t require a response will be related to you verbally and you will know the information, without having to spend time reading everything. For example, a client writes back to thank you for something you’ve responded to recently. It’s good to know that and you can make a mental note, but it doesn’t need you reading and replying one more time. • Your “email screener” will very quickly work out what’s important and what’s not. If they are unsure they’ll ask. • Some advisers worry this could be seen as impersonal (because you’re the magic, right?). No, it won’t be seen as impersonal. It will seem appropriate and professional. You’re a successful busy expert and your clients know this. My
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BETTE R BUSI N ESS February 2017
doctor doesn’t write and send her own emails to me and I don’t think any less of her. Quite the opposite. Calling in other experts Don’t just flick the email screening task onto some poor soul who works for you. Identify who has the skills to really own this job. In one firm I worked with, they decided that no one on the paraplanning or admin team should do this job (because they are great paraplanners and administrators and are already very busy). So they rent a Virtual Assistant (VA) by the hour who performs the task remotely. Brilliant. If you do have a PA internally who can do it, then great. Otherwise go and rent someone. The outsourced option works very well for some of the jobs that you want to delegate, because you can hire a specialist and only pay for the time they use. This doesn’t add much to your cost base (not like adding a full-time person does) and often frees up other members of your team to focus on what they’re best at (adminstration, paraplanning, advising etc). That lets you get even more productivity from your existing team too.
THE DELEGATION EXERCISE Here are two simple exercises you can do today to identify some tasks to get rid of:
1. THE JOBS THAT ONLY YOU CAN DO Set a timer for 3 minutes; that’s all. Now list the jobs that literally, ONLY you can perform within your business. What you will find is that it’s a very short list. There might only be three jobs on there.
2. WHO ELSE COULD DO THIS JOB? Re-set the timer for 5 minutes. List down the left-hand side of an A4 page all the jobs that you touch or get involved in during the course of running your business. This is a much longer list. Across the top of the page write the other job titles that exist within your business (e.g. paraplanner, administrator, office manager, receptionist, etc). If you’re a small firm there might only be one other person who is an administrator; if so, that’s cool. • From the list of jobs you touch, which of these could be passed off to some other person/role that already exists within your business? Move that job to that column under the other role/person. • If you added some other job titles like Virtual Assistant (VA), Bookkeeper, HR consultant, outsourced paraplanner, IT support, etc, what else could you get rid of from your list using specialist outsourced suppliers? Move some more jobs to the columns under the other roles/people. • What jobs are still left undelegated from your list? Are there other outsourced specialists that you could identify and use to do some of these tasks? Start Googling. • How do other successful firms you know deal with these issues? Ask around. Or drop me an email (brett@fpadvance.com) and I’ll let you know who we use for certain tasks.
Compare the list of jobs that ONLY you can do, to whatever is left on your longer list after you’ve moved a few to others on your team or some outsourced suppliers. How can you get rid of these jobs that you shouldn’t really be involved in and still run an excellent business?
This very short analysis should open up a range of delegation possibilities for you.
If you want to grow and have more fun in the process you have to delegate.
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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TENSE MARKETS? SHARPEN YOUR THINKING.
How do you release the strain on traditional investment strategies? How can low or negative interest rates be positive? Do the returns we have become accustomed to simply belong to the past? In these uncertain times, the intrinsic performers stand out. Discover more at www.gam.com/newabnormal
The information is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. In the United Kingdom, this material has been issued and approved by GAM London Limited, 20 King Street, London SW1Y 6QY, authorised and regulated by the Financial Conduct Authority.
ADVISE R SPOTLIGHT February 2017
Adviser Spotlight — Marlene Outrim 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 Marlene Outrim, Managing Director of U N IQ Family Wealth, a financial planning business which is focused on helping clients to plan for and achieve a life well lived.
How did you originally get into financial planning? Actually, my first career was as a probation officer which I did for 13 years. I thoroughly enjoyed it as it tested me in all sorts of ways. I was quite young when I started, but the training was exceptional. As well as dealing with people who had committed criminal offences, I also specialised as a divorce court welfare officer and as a mediator in the conciliation service for separating and divorced couples. I confess that quite a few people were initially surprised at my change of career to become a financial adviser back in the day. However, the personal and counselling skills I learned from being a probation officer have stood me in good stead with my clients, and one of the reasons I believe I have been successful. Prior to becoming a probation officer, I obtained some accountancy qualifications so these, coupled with other transferrable skills, meant I was really destined for financial planning, when I got into financial services. That particular way of working really suits me. UNIQ is still a relatively young business. What are the main principles on which you set up the business initially and how do you run it now? Also, could you share your vision for the future of the business with us and for the service you deliver to clients? Yes, it is still relatively young: just 3 years and a bit, but I always say it is in old hands. The purpose behind UNIQ is having a life well lived. It is not just about the money, although it helps, but unless you have good health and really try to get the most out of your life, what’s the point of having all that wealth? We want to help our clients and their families from the cradle to the grave, so apart from financial
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planning and wealth management, we can assist with broader support in areas such as wills, trusts and powers of attorney. We have already won a number of awards and obtained BS8577, the standard for financial planning firms through Standards International and are a CISI Accredited Financial Planning Firm. We have been shortlisted in the 2016 Unbiased awards (2 categories) and in the Professional Adviser Awards. We run very much on a team based approach. As I focus more on the business, I need younger, clever and enthusiastic people working with me and working to their strengths. This frees me up to work on bigger projects and I have learnt to delegate as much as possible to the team. However, it has not been easy appointing and retaining the right people. Our vision for the company is to become one of the most recommended practices in South Wales and the West in the “planning for financial independence” space. Our plans include expanding from where we are now, so we have greater longevity for the business, our employees and our clients. My daughter, Laura Janes, has just joined the Board and although she is also working on her own marketing consultancy, she is going to learn the ropes, so that at some stage she can take over at the helm. At UNIQ we believe in family values, being supportive to one another and our clients and helping them in a way that they can then pass on help and guidance to their family members too. But we also want to have enjoyable times along the way, so we organise events for ourselves and our development as well as for our clients. We have just started our own online investment service called UNIQinvest, but this has been set up primarily for children of clients who would not, at this stage of their lives, want our full blown financial
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ADVISE R SPOTLIGHT February 2017
planning service. We do however, provide education in terms of our Generation Next, workshops for clients’ children and encourage them to get started on their own financial plans. Each year we spend time during the “my money week” campaign, educating youngsters on the need to save and the dilemmas that money - or lack of it - can bring. It is hugely enjoyable, but hard work especially as Gemma Williams, our financial planning director had to do it single handed, last year.
requesting information, valuations etc. Planners should do all the client work and sign off everything else. Recently, I had to see a client who had previously been looked after by someone who had left the business. The team ensured that the cashflow was up to date and that I had all the information and documentation necessary to conduct the initial meeting where I was able to focus on the client and his needs and not worry about the paperwork at all.
All our clients also receive one of our penny pigs. We get great feedback on the number of ways the money has been used from saving in them, ranging from making gifts to grandchildren, payment of school trips and donations to charity.
When it comes to investment strategy and portfolio management, what’s your approach? We out-source our investment management service using J M Finn. This relationship has worked very well to date and frees up the planners to be able to concentrate on what they are good at, which is doing the actual planning with and for our clients. Personally, I have never had any ambitions to be a quasi-investment manager. As a planner, of course we have to understand how investments operate, but investment management is a completely different role which requires separate skills, qualifications and experience, as well as time.
Are you planning any major changes to the business for 2017? Yes, we are working on an acquisition at the moment, which I am really excited about. That is about as much as I can say on that for now. We are also putting together a grand marketing strategy with the direction of Laura, which will include a powerful video and city advertising. I am also in the process of writing a book about retirement, but this will be different from the financially led ones, so watch this space. How important is having a team approach in working towards your vision? Where does paraplanning fit in? I have always been a great believer in having very distinct roles for the team. Paraplanners for example, carry out research and analysis, must have excellent technical knowledge and ability, and put together cashflow forecasts and reports. Professional support carry out all the administrative duties, making appointments, meeting and greeting clients,
What are your main business challenges at present? That’s easy. It’s recruiting the right staff. We would like to take on another financial planner but they
We believe in family values, being supportive to one another and our clients and helping them in a way that they can then pass on help and guidance to their family
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ADVISE R SPOTLIGHT February 2017
seem to be few and far between, especially in the South Wales area. Marketing is an area which many advisory firms find challenging. What’s your approach? As I mentioned earlier, I have been very fortunate in that my daughter, Laura is a very experienced marketer and has been in financial services all her working life. Over the last year, she has provided us with some very useful guidance and tips. Those led to us winning the Professional Adviser award for best UK Client Engagement in 2016. Now that she has left her corporate role, I’m excited that she will be able to give us even more direction and support going forward. For you personally, what are the best bits about being a financial planner? Which are the bits you like least? To me, financial planning is all about personal engagement with a client and having a genuine interest in their goals, their ambitions and their family. The relationship is everything, but you must also be good at your job, knowing and understanding clearly the advice being given. Achieving that balance is important to me, so I not only want to get on well with my clients, but I really want to help them and gain their respect for what we can offer. Being creative and empowering others is very satisfying and that’s what I enjoy most. However, I do enjoy the entrepreneurship side of my personality and giving that some space. There is not much that I dislike, because I will only work with those who are committed to obtaining success with their plans and who want to work with me. Connecting with consumers is key but what do you think needs to happen for advisers and the industry to engage the public more effectively about the importance of getting professional financial planning advice? That old chestnut! I wish I knew the answer to this. We grappled with it in the IFP and back I the days when I was IFP President. The annual Financial
My three tips for business success are:
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Be crystal clear about the vision for your business and your “why”. Always keep asking why you are doing it, until you come up with an acceptable answer.
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Recruit the best people you can, encourage them to work within their unique ability and engage them with your plans.
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Walk the walk and talk the talk. So many advisers call themselves planners, yet they do not have a financial plan themselves, but somehow they think they can tell others how to plan. For a life well lived, for me it is important that I also show the balance between health, wealth and happiness, not just lecture others about it.
Planning Week campaign now organised by the CISI helps, but to really have some teeth, it needs the Regulator to give financial planning some recognition, but as it is not a product, there does not seem to be the interest, even though true financial planning invariably leads to best advice of products. The CISI which took over the IFP does need to do more too. So far it has been busy consolidating the IFP business, but now I think it needs to be more active in this area. Outside of work, what do you like to do in your spare time? I attend three dance classes a week as well as yoga. Then there is the art gallery I own with my husband, Off the Wall, which takes up time in curating the art, press, media and new shows. To support this, I go to art fairs and galleries when I can. My family are very important to me and my grandchildren are the biggest source of happiness and enjoyment. I never imagined I would feel so grand-maternal. I always enjoy socialising, so sitting down with friends and family for a good meal and plenty of wine is routinely on the agenda. There will always be music too, whether classical, opera, pop, rock or soul.
About Marlene Marlene Outrim is Managing Director of UNIQ Family Wealth, a financial planning business she set up in July 2013. Following her 13 year career as a probation officer, Marlene ran her first financial planning business Chambers Morgan James from 1991-2007. The business was ultimately sold to Bluefin in 2007, where she then worked as a financial planner. Marlene was formerly a board member of the IFP, and was its President between 2010 and 2012.
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GROWTH I NVEST February 2017
Breaking down barriers: the rise of technology David Lovell, Operations Director at GrowthInvest, looks at how advisers can use technology to meet client expectations As the technology-focused adverts on our screens try to move the collective focus and attention onto the very latest wireless tech offering, VR headset or the (ever-so slightly grating?) Alexa from Amazon, it is all too easy to shrug shoulders, switch media, and revert to the potentially slightly lower technology expectations of the current financial adviser workplace. However many times we hear talk of robo-advice, the rise of artificial intelligence within financial services, the all-consuming Internet of Things or similar, there is no escaping the fact that the tax efficient investment landscape for the adviser and their clients is usually quite some way from being on par with the technology now considered commonplace. Chasing HM Revenue & Customs or providers for hard-copy paper forms arriving in the post is now foreign for many standard fund and pensions investments found on traditional adviser platforms, let alone what clients are beginning to experience and take for granted in their everyday lives. This potential disparity needs to be overcome very quickly if tax efficient and alternative investments are going to play the important role they should be in appropriate advised clients’ portfolios over the next few years. The alternative finance sector is booming and growing at a phenomenal rate, with over £3.2 billion invested, loaned or donated by over one million individuals in 2014/15. This was primarily conducted through online platforms, of which there are now well over 100 of in the UK marketplace. This was a mixture of P2P lending, equity crowdfunding and donations or rewards-based crowdfunding, and there is, of course, a growing institutional influence in these figures, particularly within the lending marketplace. While growing at a staggering rate of nearly 300% per annum,
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equity-based crowdfunding already accounts for just over 15.6% of the total UK seed and venture-stage equity investment. This is a method of investing, lending or using otherwise latent cash assets that clearly has a wide and growing appeal to the UK marketplace, and is certainly extending beyond the younger generations into the traditional advised marketplace. Technology boom These transactions are being conducted online, by the individuals themselves, on secure online platforms which make the process as seamless and painless as possible for the customer: the technology itself is expected to be safe, secure, and very easy to use, to the extent that it becomes invisible. This is not something that is the reserve of the techsavvy “millennials”, but technology that is now welcomed and understood equally well by the pre- and post-retirement demographic segments that sit at the heart of nearly every financial adviser firm in the UK. “Any sufficiently advanced technology is indistinguishable from magic”, as goes an oft-quoted Arthur C. Clarke foresight quotes from 1973. As we now finally get to a stage where technology can deliver the type of advances such as driverless cars that were until very recently remained the preserve of Clarke’s science fiction, we are faced with an end customer who has very quickly changing and liquid expectations of service levels, in every aspect of their life. These customers may not expect “magic” but they certainly expect technology to be near invisible. The liquid wealth is set behind these increasingly liquid expectations, and transparent, flexible technology is taken entirely for granted, even by those that are not necessarily using it themselves. Thus, we are not only contending with the need to identify those with liquid wealth, but also match those liquid expectations – and
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those that can do this are coming out clear and demonstrable winners. This is not based on the particular technology used, but rather the use of the increasingly invisible technology as part of a wider customer offer. This is well demonstrated within the adviser platform marketplace, where the 15-plus platforms are now concentrated onto only a very few technology providers. Over the last decade or so the focus has been on how technology affects the “user experience”, and UX consultants have quickly become considered a staple in many product teams.
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This is starting to change and evolve as the user experience with the technology being satisfactory (at worst) is taken for granted, and the battle is about the overall experience of the customer both on- and off- line – the ‘customer experience’, or CX. Is this a return to the good old fashioned values of looking after the customer? Something the financial adviser world has generally prided itself upon, at least for the most valuable clients. Certainly these values, that of treating the customer as an individual, are at the very heart of any CX
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GROWTH I NVEST February 2017
experience, but now we have the underlying technology and integrated data to ensure that the experience is equally tailored online, and allows the client to have a seamless experience however they are interacting, just as they would expect to with their current account or airline. Such things are notoriously difficult to measure but Forrester’s latest research from June 2016 suggests that across a number of different industry verticals, including investment management, there is an incredibly strong correlation between positive customer experience scores and revenue growth, with the higher scoring CX companies outperforming their competitors – in some instances - by up to seven times (over three times stronger growth in the investment management and finance industries). There are clearly other possible factors at play, but this is a trend that is repeated year on year, and makes perfect sense, where there is a reasonable element of choice for the consumer. The market The million-plus individuals figure referenced in the Nesta report potentially helps to frame a much wider possible universe for tax efficient investing in a landscape of low interest rates and increasingly stringent pensions caps. Indeed, at first glance the £330 million of equity crowdfunding confirmed by the same report in 2014/15 seems to sit well alongside the record investment amounts of £1.82 billion (c.20% year-on-year increase from £1.5 billion the previous year) flowing into EIS (with Seis relatively static at £150 million), as confirmed by the latest HMRC figures for 2014/15. Certainly the 3,200-plus (over 10% year-on-year increase) SMEs who benefited from this investment last year welcomed the investment and few would argue against SMEs having an even more vital role to play in the Brexit-influenced economy.
in the UK marketplace, and while this number will not include all of the 600,000 or so households with more than £1 million in liquid wealth, or indeed the 250,000 that earn more than £250,000 income, it will certainly include a significant percentage of them, many of whom should be considering such investments as part of their overall portfolio. The data, and the million figure would seem to suggest that many of them are already, but just not necessarily viewing them as part of the financial adviser part of their portfolio. There would seem to be a much wider marketplace amongst UK investors for tax efficient investments via EIS and SEIS, and it would be surprising if these type of investments, alongside other ‘alternative’ assets, do not become a very much more common part of a typical UK investor’s portfolio. The investor will not expect to have to manage these types of investments individually, and nor should they be restricted from being involved and interacting with this more tangible part of their investment portfolio should they choose to do so as their high expectations ensure that they do not face such restrictions in other areas of their lives. Technological advances are breaking down barriers - both real and perceived - across the UK investment marketplace. So much so, that UK investors will quickly tire of the restrictions associated with the archaic, paper-based offline world that many feel should have been consigned to the twentieth century. It's those platforms and providers with the foresight to embrace technology and really bring the potentially dynamic world of tax efficient investments to life, that the history books will be talking about when it comes to the modern investor.
However, behind the headline figures, there lurks a possibly unpalatable truth that EIS and Seis tax reliefs investments are only being used by a very small number of UK investors, with only just over 145,000 EIS subscriptions, from possibly as few just under 30,000 individuals. This would seem to point towards a disconnect, both with the many more investors who are looking for higher returns on their investments in the equity crowdfunding market, but not taking advantage of the government sponsored tax reliefs, but also with advisers not directing appropriate clients down this road. There are over 2.5 million advised clients actively investing
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ETF DOCTOR February 2017
The ETF Doctor Dr Chris Mellor, Product Specialist, Source Commodities: a natural addition to portfolios “Don’t put all your eggs in one basket” is perhaps one of the oldest analogies in financial planning. As an illustration of the benefits of diversification it does a pretty good job. Just as spreading your eggs between different baskets can protect you from breakages so spreading your money across different types of investments can help protect you if markets drop. As with all analogies, eggs and baskets can only get you so far. Diversification works by giving you exposure to assets that perform differently to one another, the lower the correlation between assets the greater the benefits of diversification. Most investors will think of including equities, bonds and real estate in a portfolio to benefit from the effects of diversification but I would also add commodities to this group of assets. Commodity prices typically have a low level of correlation with other asset classes. Bonds are the greatest diversifier among these four broad asset classes but commodities offer only a slightly higher average correlation of 38% over the past quarter of a century versus 33% for a broad global aggregate bond index and 52% for listed real estate. Now, let’s say you’ve decided to put commodities in your client’s portfolio; what’s the best way to do it? A variety of ETFs give broad exposure to commodities, each with allocations to the three main groups: energy, precious and industrial metals and agriculture plus livestock. It’s impractical to invest in most commodities directly, so the largest investors gain exposure by buying futures on each of the commodities. And that’s what commodity indices do, and ETFs tracking these indices offer all investors an easy way to gain exposure. The indices with the longest track records are the Bloomberg Commodity Index (BCOM) and the S&P GSCI. Both give exposure to more than 20 commodities via front month (close to expiry) futures contracts. The main difference is in their weighting methodologies. S&P GSCI is a production-weighted index, which results in a high proportion in crude oil futures. BCOM avoids this energy bias by combining production with liquidity, and capping the amount in any one commodity or segment. The result of this approach is a more
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balanced exposure, with roughly a third in each of the three segments. Newer, “2nd generation” indices use different strategies to select which contract months they invest in. Typically, the price of commodity futures is higher the longer the time to expiry – a market condition known as “contango”. This is because the cost of the futures contract can be thought of as how much it would cost to buy the commodity today and store it until the expiry date of the contract. The increase in futures prices tend to be greatest for nearer futures contracts which means that the cost of rolling futures positions as they near expiry is greater in these front month contracts. It’s also possible that commodity futures trade in “backwardation”, when the front month contract is more expensive, giving a boost to returns when rolling the futures contract. These second generation indices attempt to minimise the negative impact of contango markets. A good time to add commodities? Aside from diversification, commodities may also be attractive for other reasons. For one, they typically outperform equities when inflation is rising. Also, certain commodities, such as industrial metals, are likely beneficiaries of Trump’s $1 trillion infrastructure plans. And, despite recent price gains, commodity prices are around 40% lower than in January 2012. Whatever your reason for investing in commodities, I believe it’s worth considering ETFs for transparent and lower cost exposure.
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CONTROL TH E CRAZI N ESS February 2017
Controlling the craziness Michelle Hoskin, founder and director of Standards International, takes a good hard look at what it takes to thrive in today’s busy world.
recharge of my batteries. Given the responses I’ve had to a recent social media post which I put out on this very topic, it seems that I am not alone in feeling this way.
I don’t know about you but I have come to the conclusion that life is bonkers (although I appreciate that this could just be mine!). It seems that, despite our best efforts, it doesn’t matter how much we plan or how much rest we get – living and trying to thrive in today’s busy world is a real challenge. So what can we do to ensure that not only can we reduce our stress levels, but also so we can get more done in less time and end up being much happier into the bargain? In this article I aim to share some of my own practical ideas on how you can achieve this. It’s all too much After a whopping two weeks off (mostly work free) over the Christmas period, for me it was great to get well and truly back in the saddle at work. However, we’re not very far into January yet I already feel like I need a bucket-load of sunshine and a
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So, what about that moment when the penny drops? No matter how much time you have, you simply don’t stand a chance in completing everything on your to do list. It’s when you finally realise that you will never get on top of all your emails or that you will never fully clear the decks of your amazing project or high value tasks, despite of course your own best efforts.
It’s important to remember that you are no good to anyone if you are not taking amazing care of yourself; your health, your diet and general wellbeing Well, after some careful consideration and a good stern talking to myself, I think the answer is quite simple. I want to share those thoughts and ideas with you now. My four tips are as follows: • Get over it and stop worrying about it. At almost the very second that you have cleared your current tasks, a tonne
more could be added in a blink of an eye. This is rather obvious if you are intending to achieve any sort of success in your business or personal life - or both. • Control only the controllables. So much stuff gets thrown at us, most of which we have no possible way of controlling. The only thing we can actually control is how we react to these things and what we then do next. • Ban other peoples ‘drama’ from your life. On this point I will stress the need for no excuses. Those people who love a drama clearly have way too much time on their hands. Keep your eyes out for such instances. Avoid other people’s drama like the plague. It will drain your energy and knock you off course from getting on with the more important tasks in your life. • Focus so hard … it hurts. People may well think you are a crazy, obsessed workaholic (which we know is not true of course). But who really cares what people think? Instead, set your sights on what you want and go for it with all of your might. Don’t let other people’s opinions, doubts or personal limitations stop you. Get going and you’ll be on a roll to achieving what you set out to achieve much
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CONTROL TH E CRAZI N ESS February 2017
more effectively, and you’ll be having more fun too. So, is that it? Is that all it will take to secure a successful 2017? Well, all I can tell you is that I certainly am going to give it a go myself. Look after yourself Whatever it is that you have set out to achieve for yourself over the year ahead, make sure you approach it with joyful effort. However, a few words of warning. It’s important to remember that you are no good to anyone if you are not taking amazing care of yourself; your health, your diet and general wellbeing. As they say when the plane is ready for take-off; make sure your oxygen mask is on securely before helping anyone else with theirs. These are wise words and ones that we should never forget. In our profession, where we spend pretty much every working moment taking care and designing the lives of our clients, we often leave the design of our own lives to chance; at no point was this ever a good idea.
So, with the majority of 2017 still ahead, why not take time to design the future vision you want for yourself, and to work on becoming that person who is properly equipped to get the most out of life in both business and in your personal life? To help you on this path
I recommend that you carry out this simple yet exciting and rewarding exercise, although I accept that for some it might prove rather daunting. Of course, this will only work if you are honest with yourself. So be brave, go and grab a pen and paper and let’s get going.
DESIGNING YOUR FUTURE – THE EXERCISE To start with, I want you to pick a date or an age in the future, a date or an age where you can honestly say to yourself: I am happy, and my life is perfect because I am living a life of total freedom with no restriction, no worry, I am totally free to be who and what I want. This will be a date or an age where each morning you get out of bed feeling that you have been shot out of a rocket as opposed to being shot by a rocket! Write down the date. Now let’s work this through. 1.
Looking ahead to the eve of your chosen date or age, write down how you want to be feeling in respect of the following areas of your life: — Physically — Mentally/emotionally — Professionally – your reputation
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Then, write down your goals and how you want to feel about the following areas: — Relationships — Finances — Skills/capabilities — Environment
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Identify and write down how you want to be spending your free time by then
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Finally, what do you want your contributions/feelings to be as regards: — Charity — Spiritually
How do you feel now you’ve identified these things, you’ve drawn up this new vision of yourself in future? Exhausted, excited? It doesn’t matter – the most important thing is that if you focus on the four commitments above and have intentionally designed the future version of yourself, you are well on your way to a killer 2017 and many more happy years too. So all I can say is make sure you have fun and enjoy the ride!
About Standards International Standards International supports the development of financial adviser business owners, their business partners, practice and business managers, and support teams in all areas of personal and business development. Our straight-talking, no-nonsense approach promises to push the boundaries of your potential, both personally and professionally. We’re changing the world, one financial adviser at a time! To find out more: T: 01462 790894 E: michelle@standardsinternational.co.uk For the latest news and updates please visit our website or connect with us on Twitter or LinkedIn: www.standardsinternational.co.uk Twitter: @StandardsInt/@littlemisswoww Linkedin: /standardsexpert
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PFS OUTLOOK February 2017
A Year of Reform What does 2017 have in store for the U K advice profession? We ask Keith Richards, Chief Executive of the Personal Finance Society, to share his plans for what he believes will be an exciting year ahead.
Let’s start by taking a look back at last year. 2016 will be remembered as a year of unprecedented political and economic change, underlined by the UK's decision to leave the EU and the rise of political populism in Europe, and of course across the pond. Against a backdrop of considerable global uncertainty, it was very positive that the UK’s financial advice sector continued to evolve in 2016, into a more professional, trusted and transparent marketplace for consumers seeking professional financial advice and planning services. Throughout the year, the profession’s attention was focused on the much-anticipated outcome of the Financial Advice Market Review (FAMR). The Personal Finance Society’s (PFS) focus for this year is to continue with our own evolution, and to ensure that as a profession we capitalise on the once-ina-generation opportunity for reform that FAMR has provided us with. We will continue to
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engage with policy makers and consumer groups to ensure the profession is represented in all relevant discussions as we go through 2017. Being at the heart of consultation activities with the FCA and Government, I have been heartened by their commitment to meaningful reform. This has already shown itself in some
I’m pleased to report that we currently have more than 37,000 individuals as members across the country
major announcements, including the Government’s decision to axe plans for a secondary annuity market just one week after we submitted our own input in which we expressed serious concerns regarding
poor consumer outcomes. This was indeed most welcome. The FCA has also taken on board our input on FSCS funding, and pleasingly, is now considering an overhaul of professional indemnity insurance (PII) as part of a broadened review. Professional Development In 2016, we continued to evolve our CPD programme to meet the ever-changing needs of a growing membership. I’m pleased to report that we currently have more than 37,000 individuals as members across the country. This evolution will continue in 2017 with several major new initiatives lined up. These initiatives will complement our ongoing commitment to delivering a relevant, informative and innovative programme of events and other CPD activities to support members develop their knowledge, skills and competence. The format of our successful regional conferences will
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PFS OUTLOOK February 2017
continue, with close to 15,000 delegates expected to attend 108 conferences across the country. Agendas will include technical sessions, complemented by soft skills guidance, as well as ongoing economic updates as Brexit negotiations progress. Also in the schedule are a growing number of specialist events catering to niche groups within our membership. These include paraplanners, Chartered professionals, financial planners and members of the Society of Mortgage Professionals.
offered a wide range of insightful events relevant to their ongoing development requirements. Festival of Financial Planning Our flagship event in 2017 will be The Festival of Financial Planning, which will be our biggest conference ever and one of the biggest in the UK financial services calendar. We’re expecting more than 3,000 delegates and 150 exhibitors to take part in this year’s
festival, to be held at Birmingham’s National Exhibition Centre (NEC) on 7th-8th November 2017. It will cater to the full cross-section of the advice profession, offering an insightful and tailorable programme of workshops, panel discussions and keynote speakers. Good practice guidance As well as events, good practice guidance remains an important way for us to offer members
By working closer with our local institutes, we will ensure that members across the country are
Our flagship event in 2017 will be The Festival of Financial Planning, which will be our biggest conference ever and one of the biggest in the UK
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PFS OUTLOOK February 2017
direction on topical issues in the marketplace. Most recently, we have published guidance on peer-to-peer lending and we will continue to roll out additional guidance as the year progresses. Call to arms While we continue to invest in our programme of events and CPD support, the PFS is about much more than just education and training – important as these things are. To support the vulnerable in our community, we will be pressing ahead with a series of consumer-related initiatives this year. So what exactly are we doing? Join the fight against scammers and fraudsters Firstly, we will be expanding our recently launched national anti-scamming campaign, urging members to sign up to a four-step commitment aimed at stamping out the activities of scammers and fraudsters. Central to this initiative, which we launched late last year in collaboration with the FCA, is a commitment for advisers to spend just 15
minutes each month scouring press, web and telephone promotions to help identify and report potential scams. We know that as professionals, advisers are more likely to be able to spot these scammers. By working together I believe that we really can help protect the public from scammers’ unscrupulous behaviour.
The political environment is looking as uncertain as at any time in my recent experience
Our pro bono and social inclusion initiatives will continue to play an important role. Throughout the year we will continue to work with consumer groups, including Citizens Advice, to extend our programme of existing and yet-to-be-announced initiatives which are aimed at supporting
vulnerable consumers in our communities. We are expanding our MoneyPlan initiative, which is now offered at more than 100 Citizens Advice services across England and Wales. This is where professionally qualified advisers volunteer their time and expertise by providing generic financial guidance for free. As I write this, we are looking forward to the official launch very shortly of our Advice for Heroes initiative, offering injured and recovering service personnel and veterans access to free generic financial advice. I have been overwhelmed by our members’ response to our pro bono initiatives, which shows they are always keen to give something back to the community. We are continuing to work on some other very exciting pro bono and social inclusion initiatives and plan to make announcements on these as the year progresses.
About Keith Richards Keith is Chief Executive of the Personal Finance Society. He has over 30 years’ experience within financial services, operating at executive level across both manufacturing and distribution. He has an established media profile and is a visible figurehead within the intermediary sector, regularly called upon for comment on UK financial services matters both home and abroad. Keith established a strong media profile whilst representing Tenet Group as Group Distribution and Development Director. Actively engaged in the promotion of financial services within the UK, he has contributed to the boards of both AIFA (now APFA) and AMI. He is Chairman of TISA Exco for Adviser Protocol and has represented the intermediary sector over many years on a number of panels and strategic leadership forums. Keith was appointed Chief Executive of the Personal Finance Society in May 2013. In addition to guiding the strategic evolution of the society he has evolved a greater level of government and regulatory engagement, brought about enhancements to membership benefits and its national CPD programme and introduced a number of key consumer facing initiatives - the Consumer Confidence and United Profession Campaigns being such initiatives that have been embraced by the majority across the advice profession.
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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.
WE A RE A SPECIA L I ST F I NANC IAL S A L E S , CO N S U LTA N CY A N D BR O KE R AGE BUS I N ES S . Gunner & Co.’s mission is to work directly with you, whether you are looking to realise the capital in your business, or you are looking for growth through a merger or acquisition. We consider every business to be unique, and therefore finding the right solution for you starts with a thorough understanding of your business operations and your wish list. Only from here can we make valuable introductions which align to both party’s needs. If you would like to discuss options to sell, exit or retire, or acquire IFA businesses, please get in touch for a confidential discussion.
louise.jeffreys@gunnerandco.com
gunnerandco.com
I NVESTEC February 2017
Talking Forex with FJ Neil Martin talks Forex with FJ Eigelaar, Head of Private Client FX Dealing at Investec. They discuss the service Investec provides for I FAs and how currencies are impacted by everything that goes on in the world.
Speaking to Investec’s FJ is like plugging yourself into the heart of the Cityyou can almost feel the electricity. Whilst on the call I can hear busy dealers talking on the phone, keyboards being hammered with excited commands, and a general sense of controlled action. It’s how trading should be, pure and fast. Which is why, let’s be honest, if you have a client that needs a large amount of sterling changing to euros for example, you need to use someone who knows what they are doing. And FJ, and his team of relationship managers, would certainly claim that they are in the know. They are constantly talking to IFAs, ready to smooth their way through the buying process, although, as FJ makes clear, they only go so far: “We can't give advice, but what we want to do is make sure that when the client makes a decision about pulling the trigger and converting, they make the best informed decision, and they are happy with the decision they have made.” Client first For FJ and his team it’s all about hand-holding and putting the client on a pedestal. “We offer a proactive service, we offer a safe place in the bank, we offer that security, and we want to do what's right for the client. We've got ‘TCF’ on our side, treating customers fairly, and that is something that Investec hold very dear. As an organisation, we've been around for quite a long time, we are listed, our founders are still involved, and they drive us forward. We have got a big culture, something we hold very dear to us, and that attitude extends to our clients.” The private client team work closely with IFAs and have created a system which is designed to be quick and efficient. Within 24 hours a client can have a bank account, a personal dealer and can begin transferring their sterling into their chosen currency, and back again. Transparent and straight forward Investec believes that giving clients access to the dealers themselves, provides an edge. “You've got a direct line to the trading floor here, you get straight through to the dealing floor, we quote live off market and that way, speaking with someone in the know, you get a good service and you get a competitive rate.”
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I NVESTEC February 2017
We offer a proactive service, we offer a safe place in the bank, we offer that security, and we want to do what's right for the client
I FAmagazine.com
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I NVESTEC February 2017
And for clients that want to remain close to the action, there are a number of service features which includes a weekly market commentary on the forex market; a rate watch (a service which allows clients to place a call order for a particular price); a market order which automatically trade once a certain price is hit); and, hedging facilities. Clients need to transfer at least £50,000 worth of foreign currency a year to become an Investec client. FJ points out that there are no transfer fees, no hidden charges; everything is included in the rate given, so it’s a transparent and straight forward service.
It’s cause and effect says FJ“...if the markets move, our clients start to trade. It’s when people start looking at their pockets!”
The firm experienced brisk business throughout 2016, a lot of it created by the pension freedom changes. As FJ explains: “When people were given the opportunity to take money out of their pension and use it where they see fit, all of a sudden we had a lot of IFAs sending us business and it was people who've been saving all their lives to buy their dream home.” Most of the time the firm is actioning sterling to dollar and sterling to euro trades: “It’s people buying property, it’s people buying euro assets, but obviously on the other side, people also selling their assets and bringing them back.” Everything must change Forex is a market which is hyper-sensitive to world volatility, whether it’s economic, or geo-political. And it’s cause and effect says FJ“…if the markets move, our clients start to trade. It’s when people start looking at their pockets!”
This is also the signal for FJ’s team to start calling their clients, keeping them informed: “People start taking notice because it hits the back pocket, and that's a key reason why we've been so busy.” And as FJ points out, there was no shortage of headlines throughout 2016, which kept everyone on their toes. “The main driver for this is the antiestablishment sentiment that we've seen sweeping though the world. This year, we've got Italian elections happening in February, the French election in Spring, and then the German election in the Autumn, so you never know what’s going to happen.” In this post-Brexit and Trump-victory world, volatility is the new normal and everything impacts currencies. FJ’s personal view is that the Eurozone is about to undergo a sustained period of scrutiny. But, sterling, against the backdrop of Brexit uncertainty and not triggering Article 50, has also got stresses. Sterling is also struggling against emerging market currencies and against the dollar. And it’s clear that FJ is a man happy with his lot: “It’s fantastic market to be in, very interesting. Every morning we have a catch up meeting to make sure we know what’s happening. It is complex in the sense that everything impacts it, interest rates, political moves, a finance minister who might give a missquote; everything impacts the market. And now we’ve got oil prices going up.” FJ expands his view: “Everything plays a role in FX, you need to have keen sense of the economy and you need to have a clear understanding of what you talking about, because you need to make sure that the client gets the message. We try and keep it jargon free, simple and straight forward as possible, so when the client makes the decision, they are informed and they are happy with that what they've done.” We finish our call and I let FJ get back to undoubtedly what he loves doing best, trading forex.
People are driven by headlines: “Remember when the euro reached its recent low? All of a sudden, at some airports, you got one euro for one pound. That’s when you've got headlines, and then people start calling us and being interested.”
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I FAmagazine.com
Name
Sector
Country
BlackRock Continental European Income Class A
Managed Funds
Managed Funds
7.31
Legg Mason IF Brandywine Income Optimiser Class X
Managed Funds
Managed Funds
7.20
Jupiter Strategic Bond Class I
Managed Funds
Managed Funds
7.20
Invesco Perpetual Global Financial Capital Class Z
Managed Funds
Managed Funds
6.73
Weight (%)
Invesco Perpetual European Equity Income
Managed Funds
Managed Funds
5.90
M&G Global Dividend Class A
Managed Funds
Managed Funds
5.85
New Capital Wealthy Nations Bond USD
Managed Funds
Managed Funds
5.39
Aviva Investors Property Trust Class 2
Managed Funds
Managed Funds
5.19
UBAM UBAM Global High Yield Solution IHD
Managed Funds
Managed Funds
5.08
Man GLG Strategic Bond Professional D
Managed Funds
Managed Funds
FundsLibrary for Advisers 5.02
60.88
Total
ICB SECTORS
MARKET CAP
You’ll wonder how you managed without us £50bn+
40.34%
£20bn - £50bn
24.69%
£10bn - £20bn
16.52%
£5bn - £10bn
12.74%
£1bn - £5bn
4.60%
£250m - £1n
0.00%
£0 - £250m
0.00%
Bonds
0.00%
Other
0.01%
Cash
1.10%
ICB Level: Industry
Bonds
Financials
Non-Classified Industrials
Consumer Goods Health Care
Consumer Services
Cash and Equivalents Telecommunications Oil & Gas
Technology
Basic Materials Utilites
Managed Funds
Alternative Trading Strategies 0
10
20
30
Weight (%) The Industry Classification Benchmark is a product of FTSE International Limited and has been licensed for use.
Access FundsLibrary’s vast online database of fund data and documents. Our data is sourced directly from Fund Groups and validated by us for enhanced accuracy. Register today and enjoy this essential resource for advisers and financial professionals. GEOGRAPHY
View thousands of financial products, store your favourites and perform fund comparisons.
United Kingdom
26.28%
United States
16.37%
Managed Funds
10.01%
Direct Property and REITs
6.30%
Cash and Equivalents
4.64%
Download KIIDs, factsheets, ratings reports and more in seconds.
Japan
3.50%
Switzerland
3.44%
Netherlands
2.96%
Germany
2.55%
Other
20.20%
DEBT MATURITY
Summarised Factsheet
Professional Investor Factsheet
Private Investor Factsheet
10 to 15 years
2.82%
5 to 10 years
8.52%
Under 5 years
10.73%
Unclassified
14.11%
Other
53.81%
Cash and Equivalents
Portfolio Analysis
4.62%
Performance
Income & Charges
Name
Sector
Name BlackRock Continental European Income Class A
Sector Managed Fun
A
3.43%
BBB
Non-Classified Jupiter Strategic Bond Class I Invesco Perpetual Global Financial
4.95%
BB
7.02%
B
3.86%
CCC
0.80%
D
0.00%
No Rating
2.29%
Other
Risks
20
Global
Property
Private Investor Factsheet
Professional Investor Factsheet
New M&GCapital Global Wealthy DividendNations Class A Bond USD New Capital Wealthy Nations Aviva Investors Property TrustBond ClassUSD 2
The Industry Classification Benchmark is a product of FTSE International Limited and has been licensed for use.
Weight (%) 19.42
ASSET ALLOCATION Name
£0.50
5.19
Pound Sterling
5.08
21
4.33
6
AUSTRALIAN GOVERNMENT
5.39
Japan
3.85
Unclassified
3.79
Equity-Asia Pacific ex Japan
3.26
Novartis AG
Weight1.54 (%)
Equity-Global Emerging Markets
1.24 19.42
United Kingdom
UK Equity Income
8
UNITED STATES GOVERNMENT
5.85
31/08/2007
Launch Price
Total
% Growth
POUND STERLING RECEIV. 05APR16 JPM
11.19
Launch Date
Cash and Equivalents £ Strategic Bond
PERFORMANCE
Prusik Asian Equity Income Class 1B
IMA Mixed Investment 13.22 20-60
Equity-USANumber Of Holdings
Latest Report & Accounts
UBAM UBAM Global High Yield Solution IHD
100.00
16.65
United States
Johnson & Johnson
Health Care £1bn -- £10bn £5bn £5bn
United States
0.00% 0.67 12.74%
Total
£250m - £1n £1bn - £5bn
Bonds £0 - £250m
22.60% 0.00%
26.28% Other Bonds
1.10% 0.00%
16.37%
Cash Other
0.00% 0.01%
Cash
1.10%
10Y
From:
To:
3 Months
6 Months
1 Year
3 Years
-1.64%
1.29%
-2.28%
12.41%
-
Benchmark
-2.02%
-0.01%
-3.30%
9.13%
20.75%
Sector
-2.02%
-0.01%
-3.30%
9.13%
20.75%
-/-
-/-
-/-
-/-
-/-
-
-
-
-
-
DISCRETE PERFORMANCE Feb 2012 Feb 2013
Feb 2013 Feb 2014
Feb 2014 Feb 2015
5 Years
AAA
3.52%
AA
1.67%
A
3.43%
0.69
19.95 0.00% 4.60%
£0 - £250m £250m - £1n
MARKET CAP
2.82%
United States
21.59% 0.00%
20.20%
Fund
Feb 2011 Feb 2012
8.36% 0.67 16.52%
2.96%
CUMULATIVE PERFORMANCE
Quartile
United Kingdom
2.55%
10 to 15 years
Rank
£5bn - -£10bn £10bn £20bn Telecommunications
Germany
5.39%
0.74
Vodafone Group
3.21%
Over 15 years
0.83
£10bn £20bn £20bn --Technology £50bn
Jan 16
10/03/2016
11.56% 24.69%
Microsoft Corp.
3.44%
DEBT MATURITY
5Y
18.45% 40.34%
France
Oct 15
10/03/2015
3Y
Switzerland
3.50%
Other Jul 15
1Y
Non-Classified
Health Care
5.85
Apr 15
6M
Bonds
£20bn £50bn+- £50bn
Global
-6
3M
1.47
20.34% 1.35
4.64%
-4
3.26
Non-Classified
6.30%
-2
Managed Funds
£50bn+Health MARKET CAPCare
Cash and Equivalents
Netherlands
5.08
Technology
Non-Classified
10.01%
5.39
Managed Funds
MARKETTelecommunications CAP
11.19
0
1M
5.19 Fun Managed
Country
Bonds
Total
13.22
2
-8
Managed Fun Weight (%)
Direct Property and REITs
Switzerland
100.00
Managed Fun
Direct Property Total ManHealth GLG Care Strategic Bond Professional D and REITs
Managed Funds
Japan
4.12 Managed Fun
Managed Fun
Specialist
Global Bonds
6.00
Managed 5.67 Fun
UBAM UBAM GlobalBond HighProfessional Yield Solution Man GLG Strategic D IHD
Europe Excluding UK
4
6.30
UBAM UBAM Global HighTrust YieldClass Solution Aviva Investors Property 2 IHD Sector
Aviva Investors Property Trust Class 2
Mixed Investment 20-60% Shares 16.65
£ High YieldFund Currency
Income
Total
Name
Global Bonds
Summarised Factsheet
Managed Fun
Developed Government Bonds
30
Weight (%)
GEOGRAPHY
£43.81m
7.74 Fun Managed
M&G Global Dividend Class AEquity Invesco Perpetual European Investment Grade Bonds
4.62% Admin & Trading
Fund Size
Capital Class Z
Cash and Short-maturity Bonds
10
53.38
Invesco Perpetual European EquityCapital IncomeClass Z Global Financial
Real Estate
67.84%
CashRatings
Benchmark Europe Excluding UK
KIID
Managed Fun 16.32
High Yield and Emerging Markets Bonds
UK Equity Income
Specialist
Jupiter Strategic Bond ClassIncome I Legg Mason IF Brandywine Optimiser Class X
1.67%
IA Sector
DOCUMENTS
Managed Fun
Developed Market Equities
0
Weight (%)
Legg Mason IF Brandywine Income Optimiser X BlackRock Continental European Income ClassClass A
AA
£ Strategic Bond
Multi Manager Team
Yes
3.52%
NameDETAILS
Managed Fund Since: 31/08/2007
Yes
SIPP Allowable
ASSET ALLOCATION
TOP 10 HOLDINGS
MULTI MANAGER TEAM
United Kingdom
NISA Allowable
AAA
ASSET ALLOCATION
FUND MANAGERS
Unit Trust
Fund Domicile
Name
Register in less than a minute at www.fundslibrary.co.uk 5.39%
Fund Type
PORTFOLIO ANALYSIS
MARKET CAP
Over 15 years
OVERVIEW
KIID
Latest Report & Accounts
3.21%
France
Overview
DOCUMENTS
LIVI NG DANGE ROUSLY February 2017
2017 — the year of living dangerously Michael Wilson takes a look at ten of the biggest world events of 2017 which look set to bring change to world politics - and economics too.
Will this be the year that we learn to love Donald Trump? The year that the European Union falls apart? The year that global oil overcomes its slippery reputation and the price settles down, or will it invert the relationship with economics as it did in the 1970s? Will Theresa May manage to avoid the back-stabbing daggers for long enough to secure a Brexit on at least her own terms? And have we finally seen the end of the bond revival? We wish we knew. But here, for your diary, are a few of the market-moving things that we think you’ll be wanting to follow this year.
February: Trump Trump Trumpety Trump Yes, it’s coming for you, ready or not. Is Donald Trump’s plan for the US recovery going to work in the long term, or the short term, or indeed ever? Will he slap a 45% import tariff on all Chinese goods, and 35% on any other countries such as Mexico which he feels aren’t playing to America’s rules? Will the Prez go straight into action with his plans to reform corporate tax rules? Timetabling the changes might be difficult, since the fiscal year starts on 1st January, not in April like Britain or Japan. But where there’s a will there’s a way. Industrial job creation? That’ll take a while, too. But the social
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welfare expenditures and public obligations that have kept Barack Obama’s scope for action so limited will still be around until those factory doors finally start to open. That’s going to be an uncomfortable gap, during which Trump’s popularity will be put to the test. Spring 2017: Rising US bond yields/interest One of the things we can state with absolute certainty, starting any time now. For more than a year, Trump has been rampaging at the Federal Reserve about how it has kept US bank rates low in order to ingratiate itself with the Obamas. And sure enough, in December the Fed announced that it would be raising the Fed Funds target by
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LIVI NG DANGE ROUSLY February 2017
25 points to 0.75%, with three rises anticipated during 2017 – of 25 points each. What will that do to demand and corporate investment? Assuming that the rest of the tax reforms seem on course, US businesses ought to be able to weather it. But the impact on an already embarrassingly strong dollar may prove negative. It certainly won’t do much for world trade. 15th March: Netherlands elections The Dutch election is the first of many major political tests for the European Union this year. The incumbent government of Mark Rutte, which consists of liberal and socialist elements, faces a stiff test from the far-right Party For Freedom, led by Geert Wilders, which is projected to win 33 out of 150 parliamentary seats - more than any other party. (Yes, it’s a fragmented system.) The snag is not just that Wilders has promised to get his country out of the EU if he wins power; he was also convicted last month of inciting racial hatred, and he reportedly wants to close all mosques – and to ban immigration from Muslim countries. So could he achieve any of these aims? Not without cross-party support. And could that happen? After the Brexit vote, who can say?
I FAmagazine.com
31st March: Article 50 Theresa May’s self-appointed deadline for setting the UK withdrawal process from the EU is under way, of course. We won’t waste your time with telling you what Article 50 means – but the other 27 EU partners seem resolute in their insistence that Britain’s access to the entire Single Market trade area will expire the day after the two-year consultation process ends.
Is Donald Trump’s plan for the US recovery going to work in the long term, or the short term, or indeed ever?
That will apply even if the 27 spend the next two years playing for time and simply sharpening their pencils. (Or if some other catastrophe hauls them all away from the negotiating table.) Small wonder, then, that Mrs May lost her experienced chief negotiator, Sir Ivan Rogers, in early January and had to replace him urgently with the tough-talking Sir Tim Barrow. Is it all a bluff by Brussels, as Boris Johnson insists? Will the 27 partners cave in for fear of losing the UK as a trading partner? And what of the plans to retain
Britain’s banking passport, by cash purchase if necessary? These are not small things to be uncertain about. 23rd April and 7th May: France’s presidential election The election season gets back into gear with a two-stage election which pits Marine Le Pen, the Eurosceptic leader of the Front National, against the conservative former prime minister François Fillon and a socialist candidate who had yet to be named at the time of writing. (What we do know is that the incumbent president François Hollande won’t be standing, due to his appallingly low electoral standing.) It is generally agreed that the charismatic Ms Le Pen will make it to the second round of the election. She has previously demanded that France leave the Eurozone, although not necessarily the EU, where she says the national sovereignty question needs to be renegotiated. But in January she floated the curious idea that France should have both the euro and the franc – a throwback to the European Currency Unit that existed before the euro. 19th May: Elections in Iran Donald Trump’s least favourite democratic state goes to the polls in a contest that pits the
37
LIVI NG DANGE ROUSLY February 2017
incumbent President Hassan Rouhani against a hardline opposition that has accused him of kowtowing to the west. It’s not clear which other candidates will be standing against him, but the hardliners are generally committed to scrapping the ground-breaking nuclear deal with the rest of the world which Barack Obama helped to achieve in 2015. Oh well, that’s at least one issue on which they agree with Trump. Less facetiously, this is a potential flashpoint which may well impact on oil prices. Because, let’s remember, the restoration of oil exports was the whole incentive for Iran to go along with the 2015 deal. What price an oil supply squeeze now? June and July: Oil prices What price indeed? At a time of year when seasonal demand for oil is normally on the rise – due, apparently to the onset of the “summer driving season” in the US – the prospect of a sudden tightening of supply from Iran would probably put a smile on Donald Trump’s face, since a price rise would push a number of US shale oil corporations back into profitability.
38
It would also cheer up his Russian counterparts. And the Saudis, who have historically acted as OPEC’s ‘swing producers’, expanding and contracting their production to stabilise prices, but who have increasingly been opening the export taps all year round so as to boost their own revenues.
You could probably get some excellent betting odds on an asteroid strike from 2013 TX68
Oil price forecasting is, however, a notoriously fallible business. Will anyone ever forget the International Energy Agency’s brave forecast in July 2008 that crude would top $200 by Christmas? Instead of which it ended the year close to $30, where it sulked for a year or more. 28th September: Anyone for asteroids? Near misses don’t get much more unwelcome than the nattily-named 2013 TX68, a 100
foot diameter asteroid which according to astronomers - is heading for our planet at 34,279 miles per hour but which ought to miss us by, ooh, at least 11,000 miles, or maybe nine million miles if the wind’s blowing the right way. The good news is that NASA puts the chances of an impact at 250 million to one against. The bad news is that the same agency miscalculated the same rock’s flypast in 2016 by a full three days, which equates to really quite a lot of space distance when you think about it. You could probably get some excellent betting odds on an asteroid strike from 2013 TX68, but you might have trouble collecting your winnings. 22nd October (latest date): German elections And so to the most widely watched election of the year, the one which will pitch Christian Democrat leader Angela Merkel and her Social Democrat coalition partners against a rising tide of alt-right nationalism led by the AfD (Alternative für Deutschland) – a ragbag of right-wing, anarchist, irredentist and anti-Muslim grouping which has been chasing her
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LIVI NG DANGE ROUSLY February 2017
party hard in the recent regional state elections. AfD supporters believe, in no particular order, that Germany should stop pandering to the demands of ‘soft’ southern European states for financial support; that Berlin should consider splitting off from the euro club to form a sort of northern currency league; that the government should take action to secure German sovereignty and stop Brussels from deciding everything (where have we heard that one before?); and, most controversially, that the immigration of more than a million Syrian and Middle Eastern refugees should be stopped and if possible reversed. The ‘open doors’ immigration policy looks, in retrospect, like Frau Merkel’s biggest mistake, and a recent spate of Islamic State-style atrocities against German cities has put her on the back foot, politically speaking. But there are few international pundits who expect Merkel to lose the autumn election, all the same. If only they hadn’t said the same about Trump and the Brexit vote.
I FAmagazine.com
October/November: 19th China Communist Party Congress We’ll round off this year’s events with possibly the most important political bunfight of the year – the five-yearly Communist Party Congress in Beijing, which will set out the economic direction of the billion-strong nation over (you guessed it) the next five years. Chinese governments
There are few international pundits who expect Merkel to lose the autumn election, all the same. If only they hadn’t said the same about Trump and the Brexit vote take very much second place to the ruling Communist Party shindigs, so that’s where the world’s media will be looking for guidance. And so will the foreign producers, the commodity suppliers and the politicians. Item one on the checklist will be the development and direction of the national economy. The 18th Congress in 2012 instructed Chinese producers to stop focusing so much on the export
industry and direct their output instead at the Chinese consumer; it also resolved to try and restrain the domestic borrowing boom and the soaring property inflation – and in large part, it has succeeded. No-one should doubt, however, that American trade policy will be playing a central role this time around. Should China continue with its weak yuan programme, which has so annoyed Donald Trump, and how should it respond to any unfriendly tariffs from Washington? Should China settle for less than 6.5% economic growth? And so to 2018... Without a doubt, though, the 19th Congress will bear the hefty stamp of President Xi Jinping, who is steadily crushing his way to dominance among the political elites. No longer is he simply called First Among Equals, in traditional CP style – nowadays he’s referred to as “the Core Leader” - and that’s a historic phrase that denotes an insistence on absolute obeisance. Expect a tough consolidation of Xi’s power, and a little more of the iron fist in a slightly less velvety glove. A measured response, perhaps, to the tough-guy Trump phenomenon that’s happening on the other side of the globe?
39
RICHARD HARVEY February 2017
The time for action Pension freedoms are all well and good for those who have the sense to use those freedoms appropriately. However, they present an open door to scammers and unwary consumers which advisers can help to close suggests Richard Harvey Although the government's proposed ban on pension cold calling means IFAs now have even greater influence in advising clients to steer clear of scams offering fanciful returns, sadly though the lure of easy money will continue to seduce the unwary. The reason? Well, Facebook for a start....... Log onto the world's favourite collection of kitten videos, selfies from the irredeemably vain, foam-flecked postings urging you to rise up and destroy the government/religious intolerance/Donald Trump/ Remoaners/ Brexiteers/sugary treats (delete as appropriate) you will find folksy little homilies designed to change your life. Live the dream – but mind the cost A favourite among them is an image of a sad pensioner peering out of a rain-spattered window with the caption: "Don't wait to do the things you've always wanted. Do it now - before it's too late". And, frankly, you can't argue with that. Before they shuffle off into that long, dark night, many pensioners want to "live the dream and begin a new journey", as they would say on X Factor. The old might be getting older (as indeed we all are) but they are healthier than they have ever been. While they may suffer a twinge or two in their replacement hips as they climb the gangplank of the luxury
40
cruise liner, you will find them in the disco that night, boogy-ing away like Travolta's grandparents. One Sunday recently, I bumped into an acquaintance and asked where her husband was. "On the tennis court", she said. "Every weekend he plays three sets". I expressed my admiration (actually, it was jealousy), knowing he had recently celebrated his 72nd birthday. "Oh, it's nothing special", she said. "His opponent is 85."
The Treasury's proposed ban on pensions cold calling is overdue, so I say well done to IFA Darren Cooke and all those who signed his petition
Time for truth For the IFA, the opportunity to greatly strengthen trust in the industry exists. By extending their use of cash flow forecasting and using the output to have more of those honest conversations with clients about what exactly is the safe level of withdrawal that they are able to take from pension plans without jeopardising their long term financial security, is where real value is added. Even if it means the client has to accept it will only pay for a fortnight on the Norfolk Broads rather than Barbados.
The Treasury's proposed ban on pensions cold calling is overdue, so I say well done to IFA Darren Cooke and all those who signed his petition, supported by Hargreaves Lansdown and Royal London, urging the government to act. All that glitters The number of pensioners and would be pensioners who have already been scammed is truly alarming. Citizens Advice estimates almost 11 million have been targeted by cold callers since April 2015, with savers reporting estimated losses of some £19 million between April 2015 and March 2016 twice as much as for the same period in 2014-15. And it could be even worse. The Money Advice Service estimates there could be as many as 250 million scam calls a year, while Xafinity Pensions Consulting reckon that as many as one in ten transfer requests could come from fraudsters. There is, however, no accounting for naivety. My local BBC TV news programme recently reported on a chap who had pulled £100,000 out of his pension pot, and transferred it to a character who had phoned him promising lavish rewards for investing in diamonds. It's surprising that Her Majesty's Opposition haven't stormed the green benches looking to lynch George Osborne, whose pension "freedoms" when he was Chancellor are largely responsible for this mess.
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RICHARD HARVEY February 2017
The number of pensioners and would be pensioners who have already been scammed is truly alarming.
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ACTIVE V PASSIVE February 2017
I FA SOAPBOX
Active v passive investing Neither’s better, and here’s why, argues Craig Palfrey, a financial planner at Penguin Wealth, Cardiff The I FA Magazine soapbox feature invites individuals who have a strong opinion on a particular topic which is relevant to the world of financial advice, to air their views.
Before we get down to some detail, let’s just take a step back and clarify what it is that I’ll be talking about here.
is a bit like the magician tricking you by deceiving you into seeing what he wants you to see for the purposes of his trick.
Looking at Wikipedia, I find the following definition: “Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index. In passive management (or passive investing), investors expect a return that closely replicates the investment weighting and returns of a benchmark index and will often invest in an index fund.”
Does passive mean passive? Firstly, and just to position this, the whole passive argument is completely undermined straight away because the word ‘passive’ is a misnomer in this context.
The ongoing debate about whether active or passive investing is the best approach is one of the most misguided within the investment world. That’s because, in my view, the debate itself is based on a completely false premise and the fanatics on either side need to wise up. The fact that there is even a debate on this topic at all
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One thing we can say for sure is that tracker funds tend to be cheaper than actively managed funds
Any adviser proposing a passive investment approach, or any investor following such an approach, is not acting ‘passively’. The decisions being taken – at outset and all the way through
the period of investment – are, in so many ways ‘active’. As advisers, we have to make active decisions about matters such as which assets to use, which markets we may wish to track. If, for example, an adviser decides to put some of a client’s invested monies into the UK Equity market, decisions still needs to be taken around what proportion of the portfolio (as a percentage of the overall portfolio), what product to recommend, which extends to whether we use an All Share, FTSE 100 or FTSE 250 tracker, or an OEIC, an investment trust or ETF. Then, as time goes on and the portfolio builds, we need to review whether to keep the same percentage originally invested into those assets, and decide when to switch and rebalance, if at all. All in all, investing in passive funds still requires a lot of active decisions to be made.
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ACTIVE V PASSIVE February 2017
What passive investing really means is index tracking. Using market tracking funds instead of active funds. So the debate terminology needs to be “active or tracking?” The “average” return This leads to my second point; one which can sometimes take a little time to get one’s head around. The average return of all active funds in a market is exactly the same as the average return of all tracking funds in that market, all other things being equal (which they are not, but more of this in a moment).
On the average point, ignoring costs, tracker funds do not outperform active funds, but this is just as true the other way round. Neither one is better than the other. However that assumes all other things are equal but, of course, they are not. The impact of charges One thing we can say for sure is that tracker funds tend to be cheaper than actively managed funds. This cost differential does produce a swing in favour of trackers. Let’s assume the gross return (before costs are factored in) from the UK stock market
index will be 5% per year in a particular period. A typical tracker fund might charge, say, 0.5% per year, whereas a typical active fund is higher at say, 1.5% per year. Let us assume these are the average costs, across the sector. Now the comparison swings, because the average tracker returns 4.5% net per year, the average active fund 3.5% per year. In this simple example, that means tracking wins. But, does it? If you work on the basis
So the two alternative methods revert back to the same average return? Take the market in UK shares for example; the active funds, totalled up, make up a large proportion of the total market. Therefore the market index, say the All Share index, is a factor of this total. The performance is therefore averaged to produce the index performance. This average is the average of the active investments in that sector. Trackers follow this average. The above is ever so slightly oversimplified, but academic research shows this to be the broad case in virtually all markets, all of the time.
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ACTIVE V PASSIVE February 2017
that you will only ever get an average return from an active fund, then, yes, you should use trackers. Full stop. However, if by using a solid due diligence process, you can find active funds which have performed better than the average (and there are some which have track records over long periods which suggest this may be feasible), in theory you can swing the balance back in the other direction. The debate is really, ultimately, this: neither approach is a better way of investing; what needs to be determined is whether we, as advisers, can find active funds which are consistently better than ‘average’ – and will continue to be better by enough to wipe out and pay off the cost difference? At Penguin, we think the answer to this question is ‘yes’ this can be done. But care needs to be taken. This is why we prefer to look in some detail at investors’ own positions, discuss their views and then create a fund portfolio accordingly around those. Sometimes that means using trackers, sometimes using active funds, sometimes both. We take the difficult quest very seriously, when we advise on the inclusion of active funds in client portfolios, to try and identify
the long term winners. But the results of the fund strategy that we advocate and use prove that with diligence and effort this can be achieved. Asset allocation There is one more thing which ultimately trumps (sorry to use that word!) everything else above, something which I believe all of us as advisers need to remember. It is asset allocation, not fund selection, which is the most relevant factor in determining optimum portfolio returns.
It is asset allocation, not fund selection, which is the most relevant factor in determining optimum portfolio returns
The decisions we make on how to allocate a portfolio into different asset areas will be something like 70% relevant to the outcome. So, whichever funds are selected, whether active or trackers, will be much less significant than the asset allocation strategy that is pursued.
On that basis, the time that we spend arguing whether active funds are better or worse than index funds, is to a large extent wasted. This is because as advisers we should be focusing mainly on the asset allocation strategy we use within our clients’ portfolios, and that’s taking a long term view, which includes when and how to rebalance. Anything one can do to improve results by pursuing a better overall strategy is going to make a lot more difference to clients’ portfolios, than the marginal differences achieved by decisions around an active or tracking approach. I believe therefore that the debate about active or passive is superfluous or a distraction; don’t be deceived by where “the magician wants you to look” and be careful of getting sucked into one camp or the other. Neither is right, neither is wrong. An adviser’s job, and the effective impact we make on our clients’ position, will be determined by broader aspects than this.
The opinions expressed in this article are the views of the author
About Craig Palfrey Craig is a Certified Financial Planner, Chartered Wealth Manager and founder of Penguin Wealth, a financial planning business based in Cardiff. He began his financial services career back in 2000 and considers himself extremely fortunate that he’s found his vocation in financial planning. Craig really enjoys presenting at seminars as he is passionate about sharing his knowledge with people who need it. This is evidenced further by Craig authoring a book that will be featured on Amazon upon its release. On a personal note, Craig has always lived in Cardiff and considers himself lucky to be blessed with 2 children and 3 step children. He loves playing and reading with his little ones and sharing as much time as he can with his family.
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E D'S RANT February 2017
Blonde Ambition Donald Trump’s iconoclastic style brings a new direction to U S politics, says Michael Wilson. If only we knew what it was?
If a year is a long time in politics, a four-year term of presidential office is very long indeed. Long enough, you might say, to set a country either on the road to triumph or to lasting disaster. And although I’ll try to be as kind as I can to the incoming President, Donald Trump, who took over the keys to the White House on 20th January, I’ll also take the liberty of siding with the sceptics who don’t see very much to celebrate. Ahead of Mr Trump’s inauguration, the overwhelming professional view coming in through my email box has been that, although the new man’s fiscal stimulus seems likely to deliver a short-term sugar rush to the US economy, it’s likely to fizzle out by the end of this year – perhaps because of inherent shortcomings, or perhaps because the personal behaviour of the new president alienates the international community in ways that militate against new investment. The dollar bulls have had a good time of it during the last three months - partly because Trump favours a higher lending rate which will boost the greenback, and partly because Wall Street is confident that an uncertain and unstable world will come flocking toward the safe haven of US investments. The doubters say that that’s a high-risk
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gamble: what if it goes radically the other way? The sceptic’s tale We don’t have any more crystal balls than anybody else. All we can say, by way of hard factual information, is that Donald Trump has made no secret of his loathing of ‘the established way of doing things’. And his amateurish attempts to subvert the diplomatic process – firstly
If you’re looking for a better hole than America to tip your money into this year, you might be a long time looking
you’re looking for a better hole than America to tip your money into this year, you might be a long time looking. The thing that worries me is that US stock valuations are appallingly high at the moment, and that it’s going to take a radical upturn in corporate profits to justify them going any higher. The cyclically adjusted p/e ratio for the S&P 500 was heading for 28.5 in early January – the highest level since 2002 and easily 50% higher than its long-term average. There’s a chance that Trump’s policy plans can boost American businesses’ profitability to the sort of levels that support these numbers, but we haven’t seen any details yet.
by cosying up to Taiwan in the teeth of China, and then by trying to foist the former UKIP leader Nigel Farage onto Theresa May as British ambassador to Washington – have given us no reason to think that he will go soft on his iconoclastic promises.
The case for the defence By way of balance, I’ll add that there’s every chance that the sceptics are wrong, and that protectionism, huge borrowing and a regression toward antiquated smokestack industries might indeed propel the United State to the top of the world’s productivity league.
Then again, The Donald can point toward a ghastly year coming up for the rival Eurozone, and a none-too-clever prospect for stagnant Japan. The Chinese Communist Party congress in the autumn comes at a time when President Xi Jinping is stamping his political authority in some quite unsubtle ways. If
It would be churlish of us to forget that spending $1 trillion on your national infrastructure isn’t so very different from the path adopted in the 1930s to get America out of the Great Depression. The trickle-down jobs and wealth effect has been proven to work, while also loosening up social rigidities and
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E D'S RANT February 2017
giving people a shared sense of purpose and belonging. It would also be negligent to omit the fact that Ronald Reagan’s protectionist era in the early 1980s was also a winner – although, in fairness, his punitive tariffs and quotas against America’s imports of Japanese cars, motorbikes and technology were designed with a very short intended life span, and with the specific purpose of giving Detroit a time-limited window in which to make it produce efficient, reliable cars instead of the clumsy gas-guzzlers of the day. The rust belt’s industries, by comparison, are not so much
being updated as re-opened. Well, that’s the way Trump tells it anyway. We ought to know more once the plans acquire some proper detail.
intimated that he’ll be setting up schemes and incentives for private sector involvement which won’t tax the taxpayers beyond endurance.
Overall, the point seems fair – spending money on job creation is a fine and well-proven way to get an economy moving. We’ll also add, in fairness, that not all of Trump’s trillion dollars for the transport infrastructure will be coming from the federal government – he’s
Sticks and carrots Speaking of taxpayers, we haven’t heard very much detail from the new president about how tax reforms will impact on the ordinary Joe. We know that Trump plans to cut the corporate income tax rate to 15% - a reduction of more than half, according to some estimates – and that that rate should also become available to the half of all US businesses that are not in corporate form. (i.e. mainly smaller businesses and partnerships.) Trump also intends to simplify personal taxation with personal brackets of 12%, 25% and 33%which would
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E D'S RANT February 2017
represent a cut for those in the top band, but a potential rise for some middle-earners because the high rate would start at a relatively low level. And, as has been widely touted, he aims to repeal the estate tax in a way that would particularly benefit those with assets of perhaps $10 million upwards. Not a policy that will go down well with Congressional Republicans, one feels, but let’s await the details. And then there are the penalties. 35% and 45% import levies on all products bought from Mexico and China respectively. Huge tax fines for any company that offshores any new activity and then hopes to sell those products back into the USA. Well, that leaves a lot of questions open. What of a company that’s already manufacturing abroad – will it be caught up as well? “The US is going to substantially reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and thinks it will sell its product back into the US without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies wanting to sell their product…back across the border.” - Donald Trump, Twitter We don’t know. What we do know is that raising the prices of Chinese and Mexican goods through punitive tariffs is certain to hit the poorest who most depend on them. What we don’t
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know is whether The Donald can hold onto their loyalty once that becomes clear? Behavioural Differences We’ve mentioned the fact that Trump’s erratic, provocative, aggressive style is an entirely conscious choice, and one which is already raising uncertain eyebrows on the international circuit. Trump’s preference for making grand policy statements on Twitter, apparently on the hoof, is effectively bypassing much of the political and diplomatic protocol which he professes to despise.
Overall, the point seems fair – spending money on job creation is a fine and wellproven way to get an economy moving
So perhaps we shouldn’t be too surprised about that, then. Some of Trump’s iconoclasm hits the spot with an American electorate which does indeed regard the whole political establishment as a rigged system. And yet, his highprofile but often infuriatingly unsubstantiated claims and allegations are raising hackles among his own Republican Party colleagues. And his public bullying of giant companies Ford, General Motors, Boeing, Lockheed Martin – is unsettling other companies which haven’t been dumped on yet.
Democrat Senator Chuck Schumer, one of the more respected members on the liberal benches (and also a former anti-China campaigner, as it happens) was quick to remind the then incoming president last month that ”Making America Great Again requires more than 140 characters per issue”. Indeed, we might add, 140 characters aren’t really a place where detailed reasoning - or indeed, any reasoning - can easily be accomplished. It’s a little hard to know what to say of a president who is certain that global warming is a myth that’s been put about by the Chinese, and that 97% of the world’s environmental scientists are lying on Beijing’s behalf. Or who builds that belief into an affirmed policy of reopening North America’s mothballed coal mines. But that’s the situation we’re looking at, so we need to adapt our ideas accordingly. Industrial renewal – where’s the beef? So who are the beneficiaries of Trump’s jobs going to be? With an unemployment rate of less than 5% - far less than in Reagan’s day – it would seem that most of blue-collar America won’t be queuing up for the new jobs in the new factories. Again, that’s a contentious statement, partly because the unemployment is concentrated in particular run-down areas of the north-east, and partly because the unemployment statistics themselves are suspect.
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E D'S RANT February 2017
Let’s explain. One of the most puzzling factors of the last decade has been the number of unemployed people who’ve simply signed themselves off the job-seeking registers, so that they’ve ceased to figure on the unemployment statistics at all. Some of these people have exhausted their entitlements to unemployment benefits, which don’t last long compared with our own in the UK. Some have been dragged out of the workforce by drugs or imprisonment, while others have simply switched over to the black economy. Washington hasn’t generally asked where its vanishing workforces have gone, because it’s been much more convenient to trumpet the falling jobless stats instead. In a country where so many millions of migrant workers are gainfully but ‘invisibly’ employed, it saves a lot of bother if you can focus your propaganda effort on the nonfarm payroll statistics where they won’t be likely to appear because their jobs aren’t kosher. And the new administration? We have a president whose personal office is being run by Steve Bannon, the ex-head honcho at far-right-wing ‘alternative’ news site Breitbart, which has distributed more anti-Semitic commentary than almost anyone else in recent years. So when his new boss says he’s closer to Jerusalem than Barack Obama, we can only hope that Mr Bannon is speaking with his own heart.
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Relations with Russia are also likely to prove uncertain and hard to predict. On the one hand, the new POTUS says that Vladimir Putin is a friendly, “smart” man who “says nice things about me”, while on the other hand he’s announced a build-up of nuclear arms capacity which is aimed against that same
Trump’s preference for making grand policy statements on Twitter, apparently on the hoof, is effectively bypassing much of the political and diplomatic protocol which he professes to despise
leader’s Russian state. We have support for Russia’s bombing of Syria, which is in support of Syria’s Bashar al-Assad, who aligns with the state of Iran which Donald Trump would love to see crushed. Either the new president’s grasp of political complexity is limited, or else he’s the best Machiavellian operator of the last half-century. Normally this apparent ignorance wouldn’t matter, because the Sir Humphreys of the civil and diplomatic service would take the brash newcomer aside and put him straight on the finer points of diplomacy which he hadn’t considered up till now. But this is a president who has filled his cabinet with ‘dealmakers’ and financial friends
who have little or no political experience between them. Indeed, that’s his selling point in pushing his reform agenda through. Less obviously promising is the fact that he’s roped in his personal family members as key policy advisers. Hey, Caligula made his horse a consul, too. But it’ll be the senators of Washington, not Rome, who’ll be left to do any reining in of this wayward emperor. Although a US president is empowered to do a certain amount by decree (as his predecessor did with Obamacare), long term changes of a different sort will require the compliance of a Congressional majority that is far from universally convinced that the party has done the right thing. At present, the loud disapproval coming in from senior figures like senator John McCain is a problem that could yet cramp Mr Trump’s style. But will he care about the party line? How far, in fact, does he align at all with the Republican Party, which he left in 2009 and then rejoined in 2011? John Boehner, the former Speaker of the House of Representatives, told Breitbart itself in November that Donald Trump was “not an ideologue”, but also that “he’s barely a Republican.” And he went on: “He could be barely a Democrat as well. So nobody really knows where he’s going, but he made it clear during the campaign what his issues are.” So that’s all clear, then.
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CAREER OPPORTUNITIES
Position: Compliance Manager Location: Leicester Salary: £55,000 p.a. A highly- respected firm of chartered financial planners that specialises in investment and pension advice and pride themselves on innovative bespoke financial advice are looking to add a compliance manager to their growing business. The compliance manager will monitor and report the results of the compliance and ethics efforts of the business to the partners and provides guidance for the partners on all matters relating to compliance. In this position, you will be working with the partners, senior managers, advisers whilst overseeing the compliance officer and compliance assistant at the firm. Duties: •
Oversee all matters relating to compliance and ethics to ensure that the firm, its representatives and associated businesses comply in all respects with
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Ensure that these entities comply with legislation relating to the prevention of money laundering, financial crime and fraud, and to mitigate risk to the firm and TCF regime.
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Develop, initiate, maintain and revise policies and procedures for the general operation of the compliance programme and its related activities to prevent illegal, unethical or improper conduct.
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Manage the day to day operation of the compliance department.
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Develop and periodically review and update standards of conduct to ensure continuing currency and relevance in providing guidance to management and employees.
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Provide reports on a regular basis or as directed to keep the partners and senior management informed of the operation and progress of the compliance department.
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Identify and develop effective training programs on compliance matters including appropriate introductory training for new employees as well as ongoing training for all employees and managers.
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Monitor the performance of the compliance programme and related activities on a continuing basis, by taking appropriate steps to improve effectiveness.
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To hold QCA level 4 qualification or able to demonstrate relevant experience equivalent to level 4
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Experience of working within financial services is required
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Experience working within a senior compliance role, to include experience of dealing with the FCA
Position: Senior Private Client Consultant Location: London Salary: £70,000 p.a. An exciting opportunity has arisen for an experienced tax, trust and succession planning specialist to join the private client services team at this prestigious financial planning company, and to become part of the management team. You will be supported by a strong administrative function and will have support from a more junior adviser. This is an ideal role for someone whose technical expertise is matched by their commercialism. You will have autonomy to effectively manage your client bank and to proactively seek, identify and implement business development opportunities (both internal and external) plus being involved in setting and effecting the overall strategic direction of the department. Duties: •
The successful candidate will be responsible for providing specialist tax, trust and succession planning advice and services and, where complexity requires it, drafting documentation and client communications specifically relating to but not limited to:
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Wills
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Powers of Attorney
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Trust Deeds
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Inheritance tax, capital gains tax and income tax
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Tax returns (for individuals and trusts) and other HMRC forms
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Trust/probate accounting and estate administration (including acting on behalf of the in-house trust corporation)
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You will also be responsible for robust checking of the work produced by the private client consultants aligned to their clients and managing a case load of clients and files effectively and efficiently.
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Experience of advising on the constitution and ongoing running of charities is desirable.
Skills and Qualifications: This client takes pride in the technical expertise of their staff so any prospective candidate will be required to have either a degree in Law or Accountancy (or similar) or a relevant and recognised professional qualification in the appropriate jurisdiction (such as TEP, CTA, ATT etc) plus significant relevant experience.
Position: Employed IFA Location: LEEDS, Yorkshire Salary: £40,000 p.a. An established IFA practice with a strategic growth plan, has an excellent opportunity for an Independent Financial Adviser to join the business. The successful candidate will provide holistic financial planning advice to both prospective & existing clients. Key responsibilities: •
Managing and maintaining the service proposition to clients through regular contact
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Identifying the most suitable service proposition and making referrals
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Engaging clients and building relationships
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Delivering formal recommendations
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Following up new business initiatives
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Level 4 Diploma qualified
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Previous experience in an adviser role
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A high level of confidence, sales & presentational skills and interpersonal skills are also key
Position: Investment Manager Location: CHIPPING NORTON, Oxfordshire Salary: circa £90,000 p.a. An experienced investment manager is required to join a firm experiencing strong growth. It offers independent investment management and financial planning advice to individual clients in Oxfordshire and further afield. This well-established firm has a considerable client base and over £230m of assets invested between both centralised and bespoke portfolios. The successful candidate will take on full responsibility for the running of the client investment proposition and processes whilst working directly with the CEO, investment committee and management team. They key purpose for this role is to develop and enhance the investment management department and the vision of the business moving forward. Duties: •
Carry out in-depth fund analysis, including quantitative and qualitative screening and fund manager meetings
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Take ultimate responsibility for strategic and tactical allocation decision
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Present research and market views to both internal and external clients
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There may be a degree of client contact, going to meetings with the financial planners, presenting at client seminars etc
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Ensuring that research activities and the investment management department is conducted in a responsible and compliant manner.
Qualifications: •
Relevant industry experience and qualifications such as the IMC, CFA or similar.
Professional Qualities: •
A keen interest in macro-economics, behavioural finance as well as investment markets and how they work.
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A robust work ethic and a strong sense of responsibility and several years’ experience of analysing funds
Position: Paraplanner Location: Whitchurch, Cardiff Salary: £28,000 p.a. An exciting opportunity for a paraplanner has opened at a well-established financial planning firm in Cardiff which specialises in all aspects of savings, investments and retirement planning. Your role will be to implement processes to ensure the smooth running of the business, completing suitability reports, conducting technical research and analysis, reviewing client files upon completion of business and providing relevant documentation ahead of client meetings You will assist the team in their vision to continue to expand and provide a 'first class' service to their clients. The company offers employees the opportunity to develop their business skills by supporting them with industry exams. Duties and responsibilities: •
Duties will include writing suitability reports and financial plans, utilising a wide range of investment solutions and product types
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Conducting technical research and analysis as well as summarising recommendation options for the IFA
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Preparing documents for annual investment reviews
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Level 4 Diploma qualified (or working towards this)
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Previous experience within an IFA practice and Paraplanning is essential
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Knowledge of using Synaptics, Exchange, Selecta Pension and Analytics would be advantageous.
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Understanding of regulations and products, and their practical application
Position: Compliance Supervisor Location: Exeter, Devon Salary: £30,000 p.a. An excellent opportunity has arisen for an experienced compliance supervisor who is Diploma qualified, to join a well-established and well-recognised financial services practice. This position centres around assisting the compliance director in ensuring that the company meets its regulatory obligations and is well positioned within the financial services sector to tackle any regulatory issues that may arise. Responsibilities: •
File assessments
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Pre-approving high risk cases
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Ensure relevant manuals and procedures are up to date and in place
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T&C scheme
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Staff training
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Ensuring money laundering procedures are in place
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Monitoring the Compliance budget
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Providing technical and compliance assistance to the administrators, paraplanners and consultants
Position: Paraplanner Location: BLACKBURN, Lancashire Salary: £30,000 p.a. A successful and reputable firm of Chartered Accountants which has a friendly and very atmospheric environment, is looking for a hardworking and dedicated Paraplanner. You will be part of a high-quality wealth management team assisting in the run of the office. If you are an experienced IFA administrator looking to progress into a paraplanner position or an experienced paraplanner looking to work for a growing and successful company, then apply here. Duties and responsibilities: •
Support the advisers in helping clients, many of whom are business owner managers, professionals and retired people, in all aspects of wealth management – planning, tax mitigation, investment strategy and asset protection
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Specific functions include researching products, funds and solutions, preparing reports for client meetings, highlight areas requiring attention, process new business, prepare suitability reports and track cases through to completion
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Assist the compliance officer in maintaining appropriate systems and records
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Deal with the implementation and maintenance of group pension schemes
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Play an active part in business development initiatives
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Level 4 Diploma qualified or working towards this is an advantage
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Previous experience within an IFA practice
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Excellent communication skills, both oral and written
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FCA understanding of regulations and products, and their practical application
Position: Protection Proposition Manager Location: Solihull, BIRMINGHAM Salary: £55,000 p.a. An individual who is passionate about account management and relationship maintenance is required to develop effective relationships with providers to gain commercially favourable terms for advisers in order to support the ‘consumer centric’ vision of the company. Substantial and demonstrable business experience in a senior role within a financial services environment is required. Key accountabilities: •
In conjunction with the head of propositions, you will contribute to the development of the proposition strategy with a view to maximising good customer outcomes and profits.
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Implement the proposition strategy working with other key business areas to ensure product deals are communicated effectively and directly deliver key product developments via presentations/forums at business events.
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In conjunction with the Head of Propositions lead and develop the relationship management with provider partners.
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Contribute to the provider strategy ensuring favourable commercial terms for both consumer & company are negotiated and agreed at all times.
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Lead and implement the development of the technology platforms to ensure ongoing efficient product distribution for the members.
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Promote the protection proposition
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Develop support services to provide the customer, through the adviser, with a full range of protection services.
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Relationship building
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Networking and influencing
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Negotiation
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Strong communication at all levels both internally and externally
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Able to present to senior management/directors (including of external companies)
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Project management
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Mentoring and coaching
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Sales process of financial service products
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Regulatory requirements of financial services products
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Technical knowledge of protection products
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CeMap 3 or Level 4 DipFA plus R01
Position: Private Client Consultant Location: Glasgow Salary: £45,000 p.a. Multi-award winning, national financial planning advisory firm is currently seeking a private client consultant to work in conjunction with their partner business, building relationships and servicing existing clients. This position is well suited to someone with a proven track record within financial planning and has obtained Level 4 Diploma and notable achievements in managing and developing a client portfolio. Job requirements: •
To provide holistic financial planning for prospective and existing clients
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To provide exceptional client service
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To adhere to the principles of TCF
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To work towards the company compliance standards and professional development scheme
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To develop and action a business plan to achieve targets and facilitate this with by undertaking regular fact finds, presentations and service review meetings
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To maintain and ensure client files are kept up to date
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