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Money Matters: Money Matters:Money Matters:

Entrepreneurial Spirit10 Years of Belper IFS: Our First10 Years of Belper IFS: Our FirstDecadeDecade

We are living in times where inflation has become a bigger than expected issue and the rising cost of living has seen us look at ways to hopefully grow our monies in excess of the inflation rate to compensate. 10 years ago, Belper Independent Financial Solutions was formed after its founder (me, Kevin Glover) was made redundant from The Derbyshire Building Society. Since then, Belper has seen the loss of The Derbyshire, Woolworths, Somerfield, Thomas Cook and Britannia 10 years ago, Belper Independent Financial Solutions was formed after its founder (me, Kevin Glover) was made redundant from The Derbyshire Building Society. Since then, Belper has seen the loss of The Derbyshire, Woolworths, Somerfield, Thomas Cook and Britannia Unfortunately, this is not likely to happen given present interest rates available via cash deposits. So, if we want to make our savings grow in real terms, then we must accept some investment risk. There is no real alternative to accepting some risk or the certain consequences of your cash losing ‘purchasing power’. Taking more risk does mean accepting there is potential for some loss of capital at any time, too. Building Society to name but a few long-standing institutions that are now confined to history. Generations of people have been served or been customers of these organisations. You are probably one. State Pension Age has changed several times and will most likely do so again. At least interest rates have not changed much! Rubbish then and not much better today. Building Society to name but a few long-standing institutions that are now confined to history. Generations of people have been served or been customers of these organisations. You are probably one. State Pension Age has changed several times and will most likely do so again. At least interest rates have not changed much! Rubbish then and not much better today. History shows that over long periods of time cash is consistently one of the worst asset classes in terms of total Consider this – joining the EU was considered the right decision once upon a time. Consider this – joining the EU was considered the right decision once upon a time. returns. Other asset classes include shares, property and fixed interest such as GILTS and corporate bonds. Some would also favour crypto, rare metals and alternatives such as art and even spread betting including currency. For most investors though, they will look to invest into conventional investments such as Cash ISAs, Stocks & Shares ISAs or maybe into a Personal Pension. Each of these offers some attractive tax-breaks and shields the investor from tax on the returns (should they make any – as investment From my dining room in 2009, to an office in Heanor, back to Belper and now to the present location, much has changed including the greyness of my hair and the size of my waistline! Now as a team of 8 we have seen the client base expand over the years. ‘Generous ’ successive Chancellors introduce new legislation impacting the public and signposting the need for financial advice. From my dining room in 2009, to an office in Heanor, back to Belper and now to the present location, much has changed including the greyness of my hair and the size of my waistline! Now as a team of 8 we have seen the client base expand over the years. ‘Generous ’ successive Chancellors introduce new legislation impacting the public and signposting the need for financial advice. returns are not guaranteed). ISAs and Personal Pensions are effectively just tax-wrappers though, but it is what is held in these tax-wrappers that needs careful consideration. Some are far riskier than others. There is a spectrum of investment What about you – what has changed in your lives over the last 10 years? How many jobs have you had? Has your family extended or tragedy struck? How many times have you moved house? How many pension What about you – what has changed in your lives over the last 10 years? How many jobs have you had? Has your family extended or tragedy struck? How many risk and what is suitable for one investor will not be suited to schemes have you been a member of and simply left, times have you moved house? How many pension everyone. through one reason or another? How many cars, schemes have you been a member of and simply left, partners and other life events have occurred?through one reason or another? How many cars, An alternative for the ‘entrepreneurial minded’ are Venture partners and other life events have occurred? Capital Trusts and Enterprise Investment Schemes. These How many investments have you made and when types of investments are not mainstream but offer some were they last reviewed and looked at? My point is How many investments have you made and when were they last reviewed and looked at? My point is

amazing tax-breaks as well as access to some potential stellar returns albeit without doubt very high risk in nature. It is this that the need for financial advice and a solution should that the need for financial advice and a solution should high risk that the UK government supports and encourages by not be seen as a one-off. Financial products and solutions not be seen as a one-off. Financial products and solutions offering generous and highly attractive tax-breaks. Not suited were probably right at the time, but just how much has were probably right at the time, but just how much has to the inexperienced or cautious investor, for sure!changed since their inception?changed since their inception? Both VCTs and EIS offer Income Tax relief of up to 30% provided you have the income to support your investment. For example, an investment of £10,000 can provide a £3,000 tax-rebate which effectively is used to off-set taxes on other sources such as rental income or conventional earnings such as pension income, dividends or salary. EIS and VCTs were designed to attract private investment into fledgling UK companies seeking to raise finance when looking to expand. Sounds a bit like Dragon’s Den? Investment funds (whether held in pension wrappers or alternative structures such as Stocks and Shares ISAs), are mostly run by fund managers who are also human beings. As humans they may retire, defect to other companies, or run out of luck! Solutions that may have been right at the start may no longer be suitable or effective. Leading fund managers in 2009 may no longer be leading fund managers as we approach 2020. Investment funds (whether held in pension wrappers or alternative structures such as Stocks and Shares ISAs), are mostly run by fund managers who are also human beings. As humans they may retire, defect to other companies, or run out of luck! Solutions that may have been right at the start may no longer be suitable or effective. Leading fund managers in 2009 may no longer be leading fund managers as we approach 2020. VCTs provide tax-free dividends and EIS look to invest monies into the ‘next big thing’. Typically, the fledgling firms will not all survive. The EIS and VCT Industry say to expect typically 30% total failure but the other 70% can go on and compensate with significant returns albeit not guaranteed. Both EIS and VCTs Managers try to mitigate risk by doing lots of research into the companies they support and effectively buy In April 2015, pension regulations changed. They will almost certainly change again. Pensions from prior to this time may no longer be suitable – but just how would you know? So, as you sit munching your turkey over the festive period, consider how many of these questions apply to you and see what may benefit from having a review. In April 2015, pension regulations changed. They will almost certainly change again. Pensions from prior to this time may no longer be suitable – but just how would you know? So, as you sit munching your turkey over the festive period, consider how many of these questions apply to you and see what may benefit from having a review. into but also spread the risk by typically investing in a collection of 20-50 companies. So, there are many different investment opportunities and Is 2020 the time to take a look at your financial arrangements once again and get them fit for purpose? Is 2020 the time to take a look at your financial arrangements once again and get them fit for purpose? it’s about researching the best option for you. Knowing your options is why seeking independent financial advice can match your investment to meet your needs. Wishing you a happy 2020 and a prosperous next 10 years. Wishing you a happy 2020 and a prosperous next 10 years.

By Kevin Glover, Belper IFS By Kevin Glover, Belper IFS By Kevin Glover, Belper IFS

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