IFA Magazine - June 2016 - Issue 49

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R EVI EW

COM M ENT

ANALYS I S

CONTENTS June 2016

CONTR I B UTOR S

3 Editor’s welcome

4 News

Brian Tora An experienced associate from one of the top investment management firms.

10 Why are stockmarkets not lower?

BREXIT

Richard Harvey

CHINA TRUMP

a distinguished independent PR and media consultant.

12 It’s all about the questions

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

14 Adviser spotlight

Michelle McGagh brings a wealth of experience on industry developments.

18 Suitability: the challenge for advisers and platforms

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Michael Wilson Editor in Chief editor ifamagazine.com

Sound and fury

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Sue Whitbread Commissioning Editor sue.whitbread ifamagazine.com

EU Referendum: no winter, or summer of discontent

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Alex Sullivan Publishing Director alex.sullivan ifamagazine.com

EIS - a tax adviser’s perspective II

31 Relationship building as a client retention strategy

36 What would life be like outside the EU?

38 Shifting sands

IFA Magazine is published by IFA Magazine Publications Ltd, Loft 3, The Tobacco Factory, Raleigh Road, Bristol BS3 1TF C

2016. All rights reserved

‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication.

IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com

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ED’S WELCOM E June 2016

Once more unto the breach History, it seems, is likely to call David Cameron a fine captain but a terrible general The EU referendum that’s coming up on 23rd June was once the Prime Minister’s brightest, greatest idea. His problem now, however, is that it’s turned not just into a political nightmare, but also into a battle that only he had chosen to call in the first place. Win or lose, what happens now will be very much on his own record.

You could understand his logic at the time. How better to fend off the cat-calling from the Eurosceptic Tory right, and to stop them all from defecting to UKIP? Just show them a bit of backbone and put the issue right out to the vote, in the hope that you could use the threat of Brexit as a lever for extracting more concessions from your European contemporaries?

That’d show them.

Solid counter-attack As you’ll have noticed, it hasn’t quite worked out that way. The Leave campaign has mounted a much more solid attack than the Prime Minister had ever expected – basing its arguments on popular issues such as sovereignty, immigration and employment law, rather than on the complex economic issues where Mr Cameron had some arguable cases to make. After all, how much of the electorate understands the flows of European commerce well enough in the first place?

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In the meantime, unfortunately, Syrian refugees and the banking meltdown have been preoccupying the European politicians much more than Britain’s own footstamping - with the result that the Prime Minister has got a lot of summit sympathy but hardly any concessions to show the electorate. It’s all gone quite badly wrong.

Scepticism abounds Of course, the Remain campaign has had almost 100% support from the top level of the international community – the European heads of state, the American president, the IMF and the OECD, for starters. But as far as many UK voters are concerned, all those outsiders are trading on a devalued currency of authority. Why would anybody attach much importance to them when Britain’s own jobs are felt to be at risk?

we can tell) are strongly in favour of EU membership, have a tendency not to show on up on polling day – either because they’re not on the polling register, or because they simply happen to have something more exciting to do on that day. Whereas the over-50s, who the pollsters say are far more Eurosceptic, can be relied upon to turn out en masse. The Remain campaign has the daunting task of cajoling all those youngsters to do their electoral duty.

It’s not going to be anything like the pushover that Mr Cameron was expecting.

Napoleon used to ask whether or not his generals were lucky before he appointed them for duty. If we should hear the sound of hollow laughter drifting across the Channel this summer, it might not be a great surprise.

The inertia factor Another problem is that you’ll always find it easier to persuade people to come out and vote actively against something, rather than voting to maintain something that’s simply been part of the political furniture for the last 43 years. And then there’s the fact that referendums also tend to bring out the demographic imbalances in our society.

The young, who (as far as

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N EWS June 2016

Financial Planning Week 2016 - Improving the nation’s financial fitness The Chartered Institute for Securities & Investment (CISI) is gearing up for Financial Planning Week 2016. The week, commencing on the 6th of June, represents a national initiative organised by the CISI to bring the importance and practise of financial planning to the consumer forefront.

Financial Planning Week has been taking place in the UK each year since 2008, to date having been organised by the Institute of Financial Planning. Previously the IFP held Financial Planning Week in November. CISI merged with the IFP in November 2015 and has moved the campaign to a new summertime slot.

The campaign is intended to unify Financial Planners, Paraplanners, schools and

industry media in a bid to improve the financial fitness of the British public.

As has happened in previous years, Financial Planning firms will be offering free consultation surgeries, “Ask a Planner” online sessions, and speaking to schools across

the country about the merits of financial planning. The week also gets the support of the industry media which will be relaying polls, quizzes and surveys highlighting the themes and money management issues of the consumer public.

New member firm and client servicing hub for Succession Succession Holdings has acquired its 22nd member firm, its fifth in 2016, and says it plans to acquire another nine this year.

Its latest acquisition is Great Missenden-based Michael Moore Life & Pensions, which is being acquired for £5.3 million. The firm has £150 million of funds under management and will be part of national wealth management advisory arm, Succession Group.

Michael Moore first became a member of Succession

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five years ago as it set about preparing for RDR. A senior partner of Michael Moore Life & Pensions said: “Under Succession’s guidance, we transitioned MMLP to a fee-based, recurring income model, instead of always chasing new business, and we introduced a long-term wealth management proposition that focusses on meeting clients’ financial goals, rather than investment performance.

“We are delighted with the recognition and reward for our work. This acquisition

allows us to enjoy a capital event now, and to continue making an active contribution to Succession Group.”

Succession Group has also opened its fifth client servicing hub in Salisbury.

Fifteen new jobs have been created at the Salisbury office which houses the client servicing teams, including wealth planners, advisers, and directors. They will provide tailored wealth planning solutions for private clients and businesses across the South of England.

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N EWS June 2016

Sanlam goes ape over new sponsorship deal The gorillas at Bristol Zoo have new benefactors.

Sanlam UK has signed a new sponsorship and partnership arrangement with Bristol Zoological Gardens. Sanlam will take naming rights of the Zoo’s world renowned Gorilla Island, which will become known as Sanlam Gorilla Island.

As part of the arrangement, Sanlam will assist in the promotion of the plight of the critically endangered western lowland gorilla.

It will also help generate support for Bristol Zoo’s associated conservation projects across West Africa, especially in Cameroon.

Sanlam will also raise awareness for Bristol Zoo’s “Access to Nature” Bursary Scheme. This helps community groups with limited resources visit the Zoo.

Head of Bristol Office at Sanlam Wealth Planning Colin Sutton (pictured) said: “This is a really exciting partnership for our business and, speaking on behalf of my colleagues, we are delighted to be associated with an institution that has played such an important role in the lives of generations of people and created so many memories. As Sanlam we

believe we have a duty of care; for our clients, our colleagues, for the environment, for everyone, for the greater good of us all. Our partnership with the Zoo will, I hope, make a major difference – it will raise awareness, encourage action and participation and create opportunities that otherwise may not have existed.”

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N EWS June 2016

Tilney Bestinvest acquires Towry for £600m Tilney Bestinvest has acquired Towry from majority shareholder Palamon Capital Partners for £600m.

The deal is subject to regulatory approval and once complete, the combined business will have responsibility for over £20 billion of assets for affluent and high net worth clients.

It creates one of the leading UK wealth management firms offering clients investment management together with

financial planning on a national scale. CEO of Tilney Bestinvest Peter Hall will become boss of the combined group.

Whilst a review of future branding is carried out by the management, the Towry, Tilney and Bestinvest brands will continued to be used.

The new group will have over 240 financial planners and 120 investment managers operating from more than 30 offices across the UK.

Going for gold Maybe it’s the time of year, and maybe it’s the time of man, as Crosby, Stills, Nash and Young had it. Whatever the reason, the same worried private investors who’ve been withdrawing hundreds of billions from global equity markets this year have been buying bullion, driving up prices both for physical metal and for derivative products. Mid-May’s gold price of $1,290 in London compared with just $1,045 in December.

What’s driving the market? Partly fear about China, the US election and the future of Britain within the EU, say the experts.

But Adrian Ash at Bullionvault notes that the boom is happening in the face of “deathly quiet” demand from India and China, which are normally the market mainstays. That would seem to suggest that this heavily western-driven market is anything but normal. Be careful.

Women take lead over men when it comes to investment decisions

New research commissioned

by The Share Centre suggests that UK women are in control when it comes to their domestic finances.

The figures reveal that well over half of female investors say that they take the lead in their household when it comes to making investment decisions.

But, the figures also show that one in three women feel unable to talk about stocks and shares.

It showed that 60% of women investors take the lead on ISA investing, compared to 28% who rely on their husband, or partner. Just 12% make investment decisions jointly.

Also, a quarter of female investors have previously dealt on behalf of a male relative or partner.

Stay on track

Across all terrain

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N EWS June 2016

Pension experts gather for milestone debate

Pension experts gathered last month to discuss the implications of the recent legislative changes and also how the UK public still seem disengaged from planning for their financial future.

The ‘Realising the Pension Revolution’ debate was organised by The Pensions Advisory Service and specialist communications agency Teamspirit, and took place at Portcullis House, Westminster last month. The panel was

chaired by Richard Graham MP and Chair of the APPG on Pensions. Other members were Baroness Ros Altmann; Michelle Cracknell (pictured), CEO of The Pensions Advisory Service; David McCann, Head of Planning at Teamspirit Group; Sarah Pennells, personal finance journalist and consumer expert; and Caroline Rookes CBE, CEO of Money Advice Service. IFA Magazine was invited to the event and heard the panel, and savvy

audience, discuss how the public could be better engaged with planning their retirement.

The debate focussed on analysis from Teamspirit which showed that the introduction of pension freedoms had promoted a 71% increase in enquires about pensions. It also revealed that the most important prompt to find out more about pensions is actually reaching retirement.

What’s more, that two in five people don’t feel confident in making decisions around saving for their retirement.

One panel member pointed out that even though more people have woken up to thinking about their financial future after retirement, most still preferred to watch Netflix than reading up on pensions.

The main conclusion from the debate is that there needs to be less confusion for the public, some of it created by the pension companies themselves, which leads to people being “anxious” and “terrified.” The debate agreed that greater consumer engagement and simplified information, including dashboards, should be a priority of everyone in the industry.

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N EWS June 2016

The CISI appoint Edgar Equity and Lockie to new release financial planning roles surging

At the end of April, the Chartered Institute for Securities & Investment (CISI) announced two brand new financial planning appointments as part of their commitment to the development of financial planning in the UK. Campbell Edgar (pictured) has been appointed to the new role of Head of Financial Planning, with Jacqueline Lockie (pictured) appointed as Deputy Head of Financial Planning.

Their key priorities will be to promote and grow the financial planning profession, including raising greater awareness of the CFPTM certification,

the global standard for financial planning.

Edgar was President of the Institute of Financial Planning from 2002 – 2004.

He has worked as Director and Partner at John Lamb LLP, was senior consultant at Anderson Charnley Limited (now Cannacord) and Director at Bloomsbury Financial Planning (now a branch of Raymond James Investment Services Limited).

Jacqueline Lockie was formerly Head of Adviser Training at the AIC and was previously Director of Training and Education at the IFP. She has worked as a Financial Planner and Paraplanner with Caulfield Cavells Financial Services.

The pension freedoms aren’t having it all their own way when it comes to funding retired people’s lifestyles, according to new information from the Equity Release Council. The Council reported that the value of new equity release lending grew by 21% year-on-year during the first quarter of 2016, taking borrowing to a new first quarter record of £393.3 million.

Drawdown lifetime mortgage products have been increasing their already dominant share of the equity release scene, the Council reports, and now account for almost 60% of all loans by value. Lump sum mortgages accounted for 40% of total lending during the first quarter, and old-style home reversion plans now represent less than 1% of the market.

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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.

W E A R E A S P E C I A L I ST F I N A N C I A L S A L E S , C O N S U LTA N C Y A N D B R O K E R AG E B U S I N E S 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

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B R IAN TORA June 2016

Why are stockmarkets not lower?

That’s the question being asked by Brian Tora as he reminds advisers that there is more to worry about than just the potential of Brexit and a Trump Presidency.

Markets seem to be largely oblivious of the two major events that could make a big difference in the future.

Most markets, that is. The uncertainty created by the run up to June’s In or Out referendum has hit sterling.

But equity markets seem largely oblivious of the prospect of either a Brexit or a Trump Presidency across the pond. It may be that they believe neither is a real possibility, but until we know for certain,

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perhaps it is better to concentrate on other issues.

China and oil have been inseparable in the past. Less seems to be said these days about a hard landing for the Chinese economy, but it is certainly slowing. As for oil, lower demand from China has played its part in bringing the price per barrel down, but the real issue is that we are simply producing too much of the stuff. Saudi Arabia can be blamed in part for this. They maintained production in an effort to squeeze out

other higher cost producers – and to embarrass its old enemy Iran, of course.

This is where the latest twist in the oil price saga has taken place. The news that Russia and the Saudis had reached agreement to limit production gave the oil price a shot in the arm. Not for long, though.

Iran said they were simply not prepared to play ball. Who can blame them? International sanctions have only just come to an end and they desperately need the oil revenues to help rebuild an economy that has suffered greatly in recent years.

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B R IAN TORA June 2016

Such is the sensitivity of the oil price that, when it seemed as though some sort of deal could be cobbled together between OPEC members, the price recovered again. Quite what the optimum price is likely to be in the medium term is hard to gauge. If it rises too far, then there are plenty of alternative sources to tap into, like shale oil, which was threatening to make the US energy self-sufficient. The reality is that over supply of black gold could be around for a while yet.

But to return to China, the economy there is now of such a size that it does make a real difference to global economic prospects. They may rank second to the United States, but with Chinese GDP accounting for over 15% of the world total – and rising – a smooth transition to more of a consumer and service based economic model would benefit us all. The trouble is that

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the debt mountain there is huge and growth has become too dependent on credit fuelled property development.

Spotting what might happen is particularly difficult, given that this is, in effect, a command economy with an authoritarian regime in control. We have already seen intervention in a number of areas with, it has to be said, very limited success. We are in a global village, though, even if most developed countries are not as exposed to China as you might think – the notable exceptions being Australia, Japan and Germany.

If oil and China are high on the list of potential worries for investors, don’t forget geo-political concerns.

Indeed, such is the turmoil in traditionally unstable regions, such as the Middle East, it is surprising that oil is not higher in price and markets lower. That can be blamed in some measure on the easy monetary policy followed by so many

central banks. Unwinding quantitative easing may yet have severe implications for financial assets.

So it seems as though there is plenty else to worry about without simply concentrating on the referendum and America’s presidential election. Why are markets not lower then? Perhaps easy and cheap credit has something to do with it.

Unsustainable levels of debt certainly continue to worry many, not least central banks themselves, who have been largely responsible for it. The reality is that equities offer better value than bonds and not all these concerns will turn out to provide wealth damaging outcomes, if indeed any do. Still, sitting on ones hands until after the June referendum could turn out to be a prudent approach.

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B ETTER B U S I N ES S June 2016

It’s all about the questions In this first article of his brand new “Better Business” series for I FA Magazine, Brett Davidson, Founder of FP Advance, takes a practical look at the skills involved in asking great questions.

What’s the essence of great financial planning?

As evidenced by where advisers spend most of their time, you’d think that coming up with amazing solutions to client problems is the magic.

Some of the best advisers I know really pride themselves on their technical knowledge and experience. I’ve seen their work close up; they’re right to be proud of that hard-earned set of skills.

But that’s not the magic.

I’ve worked with a Life Coach, Kerri Richardson (@KerriCoach) for over four years now. In fairness to Kerri, at times she has come up with some fantastic solutions to situations I’ve been facing. However, 90% of the time she simply asks me questions and we discuss whatever comes back from me.

Even after four years I find this process incredibly valuable. Why? The value Kerri provides is in helping me identify the real problem or challenge that I’m facing, and she gets to it by asking me great questions.

Daniel Pink talks about this issue in his book, To Sell Is Human: “If I know what my problem is, I can most likely solve it.

If I don’t know my problem, I might need some help in finding it.”

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We’ve been led to believe that problem solving is our highest value task.

However, Pink argues that it’s problem identification.

Just think about your own interactions with clients.

When you do all the talking, some clients actually do listen and act on what you say.

With other clients, this same approach sees you getting into tricky and difficult terrain when they just don’t get it.

When you do all the talking (in the mistaken belief that people want solutions), you’re trying to encourage a client to do something that is technically brilliant and clearly in their best interests.

The more you speak however, the more it sounds like you’re trying to sell them something and the more they resist.

If they eventually leave your office, not having taken your advice, it’s almost humiliating.

They walk away thinking a little bit less of you, when all you were trying to do was act in their best interests.

Because we never know who we’re dealing with at a first meeting, it makes more sense to spend time asking great questions, because this approach works with both types of clients outlined above and it helps the client see and understand their problem first.

I was taught that telling is not selling. If you say it the

client can disbelieve you (even when you’re 100% right). If they say it, it’s true. So ask better questions.

If you’ve been around awhile you’ll have picked up some brilliant analogies or one-liners that help explain difficult concepts to clients. These are useful, if they’re used judiciously, but beware of over-using these skills, because you might find yourself doing all the talking again, leaving you open to the problems I’ve already outlined.

One of the big challenges all advisers face, is the client who is very focused on a specific issue; for example an investment problem, or pension problem. In the client’s mind this is what they need help solving.

However, experienced advisers know that whatever the client presents with is almost never the real issue.

No one buys a pension, do they? They’re actually buying future financial security, or peace of mind, or some deeper outcome.

Yet most clients don’t immediately see that. A skilled adviser will help the client identify the correct problem to be resolving, before jumping to the solution.

Mostly, once the correct problem is identified, the range of solutions is pretty obvious. They may still need

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B ETTER B U S I N ES S June 2016

some technical advice and assistance to implement a solution, but it’s the first part of this process (problem identification) where all the value has been added.

So how do you do it?

At FP Advance we use what we call Our List Of Interesting Questions, to help advisers structure first meetings with new clients in a way that allows the real issues to come out, but in a nonconfrontational way.

Let’s look at an example.

After initial discussions the client explains they want advice on their pension arrangements. They’re not sure if they have the right plan, if the annual fees are too hefty, and if they’re invested properly.

Look at these two approaches: Approach 1 Adviser: “That’s not your real problem. What you want to work out is have you got enough money so that you can live comfortably when you don’t work anymore. For that we’ll need to look at all your assets, not just your pension. Let’s work that out using my fantastic cashflow modelling software.”

Client: “But I just want some help with my pension.

I don’t want to talk about all my assets.”

This adviser is solutions focused. He/she knows their

onions and is dying to help the client solve their real issue.

That’s to be commended.

However, because they’ve jumped straight to a solution, there’s a disagreement and it can be very hard to get things back on track. Contrast that with Approach 2.

Adviser: “Can I ask why you purchased these pensions in the first place? What were you hoping they would do for you?

Client: “I wanted a good return.”

Adviser: “And if they delivered a good return, what would that help you to do?”

Client: “Well, then I’d be in a position to afford to retire at 60 with a good quality lifestyle. I just don’t enjoy my work enough to want to work beyond 60.”

Adviser: “What concerns do you have about your current pension arrangements in helping you reach that objective?”

Client: “The truth is, I don’t really know if I’m on track or not.”

Adviser: “Have you ever worked out ‘how much is enough’? Remember, that number could be achieved using a range of your assets, not just your pension funds.”

Client: “I haven’t done that, you’re probably right; although I’m worried about my pension.”

Adviser: “I hear you regarding your pension. We should definitely take a good look at it and give you some feedback on the issues you’ve raised.

We can do that as part of this process. However, I also think we should be helping you work out ‘how much is enough?. If we did both of those things, you’d be in a much better position to know what the next steps are.”

Client: “Yes, I would.”

Adviser: “Do you have any objection to us starting with those two issues then?

Client: “Not at all. That sounds great.”

The second adviser understands that they need to get the client to see and understand the real issue; which is problem identification.

Done well this is a hugely valuable skill. It’s helpful, it’s ethical and client focused.

The aim is not to manipulate clients for a predetermined set of answers. The aim is to help people unravel their own problems with some expert help, just like my Life Coach, Kerri, does on our regular calls.

The goal is to listen to the client’s answers and then help them shape a sensible, practical and hopefully simple solution to their situation. Now that’s a valuable service.

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: Website: www.fpadvance.com Twitter: @brettdavidson Facebook: www.facebook.com/FPAdvanceLtd LinkedIn: http://www.linkedin.com/in/davidsonbrett

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CH R I S DAEM S June 2016

Adviser Spotlight In this brand new regular feature, I FA magazine talks to leading advisers about what’s working well in their financial planning businesses This month we’ve interviewed Chris Daems – Director of Cervello Financial Planning and founder of AE in a Box (pictured). Here, Chris talks about his love for financial planning and also his latest business venture, the development of a project management tool to assist businesses in complying with auto enrolment regulations.

Can you tell us about Cervello and AE in a Box? Is it tricky managing your time as you’re involved with two businesses?

Cervello is a directly authorised independent financial planning business I set up 6 and half years ago. We have both individual and corporate clients but tend to specialise in the corporate space, in particular helping businesses of all sizes put benefits in place for their teams as well as helping them comply with automatic enrolment regulation.

AE in a Box was built to ensure that the tens of thousands of employers who have already complied, and the hundreds of thousands of small and micro businesses who are yet to comply with the auto enrolment rules can have access to low cost support both now and on an ongoing basis. It’s really a project management tool specifically designed to help SME employers through the initial and ongoing ‘tasks’ they need to complete to comply. It’s also got a range of additional features which help answer employers’ questions, select an appropriate pension scheme and ensure they have appropriate payroll software.

This is delivered using our technology platform and is currently supporting hundreds of partners, introducers (including financial advisers) and employers who are all using our platform. Since we’ve done it, I realise that I’ve developed a passion in building systems and developing practical solutions for real life problems like this. It’s different to Financial Planning but very rewarding none the less.

Managing my time effectively is something I’m always trying to improve on. However the most important thing I do is delegate to the members of my team who often are much better at certain ‘jobs’ than I’ll ever be.

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Can you share with us the main principles on which you set up your financial planning business? What is your vision for the future of the business?

Our values within Cervello are clear. We put our clients first. I love the power of financial planning and what it can do for people. We’re completely focused on being dependable and reliable and on having a true partnership with our clients and professional network. We also believe that having a constant focus on how we continue to improve our business helps to benefit both our business and our clients alike.

I’ve got some ambitious but realistic goals for the business as we move forward. Over the next couple of years the plan is to continue to grow both our client numbers and our team. However we need to ensure we manage the growth properly to make sure we continue to build a business we can remain proud of.

What are the biggest drivers of success within your financial planning business?

How important is marketing? Do you have a formal marketing and /or social media strategy?

I believe there are a number of drivers of success in a financial planning business like ours.

Fundamentally the most important aspect is that we deliver a service for our clients which meets their needs. We also need to make sure we’ve got the right structure in place so things like using paraplanners is also key. Our clients are often our greatest advocates so having a business where the focus is on delivering a good service for them not only leads to loyal, long term client relationships but also clients who are happy to provide feedback, positive testimonials and referrals.

However we also believe that marketing is fundamental part of the mix to ensure we continue to grow both now and in the future.

Online is a major part of our marketing mix, particularly the delivery of regular, good quality written content.

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CH R I S DAEM S June 2016

However this year we are looking at other approaches to how we market our business, including running seminars.

Much of our business, both at Cervello and AE in a Box, comes from fellow professionals.

It is therefore very important we write good quality marketing content not only aimed at potential new clients but also for the members of professional communities we might be able to help with our services.

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When it comes to using technology in business, what systems work well for you?

Are there any that you struggle with?

Technology empowers a number of different aspects of our businesses from how we manage our clients (through our CRM system) to how we manage our clients’ monies (via platforms) all the way through to the research and cashflow tools we use.

We also use technology to automate as much of our tasks as possible in a number of areas

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ADVI S ER S POTLIGHT June 2016

including how we market our business and how we manage our data.

At times we’ve struggled with technology and this usually points to one of two things. Either the technology isn’t right for our business or we’ve not spent enough time working out how it fits with our systems, processes and people.

What professional achievement are you most proud of and why?

I don’t focus on my past achievements too I’m often too focussed on what’s next!

However helping to build and grow a technology platform like AE in a Box (with the help of some great people) has been an exciting challenge.

Also last year I published my first book, “Three Circles – a practical guide to automatic enrolment” and this was a particularly proud moment for both myself…and my dad who attended the book launch.

How do you grow your expertise and how do you keep your technical knowledge and skills up to date?

I’m a big reader so the majority of what I study I read. I’m also quite a broad reader so I tend to read, in addition to technical material, about business and marketing as well as fiction (I’ve found you can learn a lot about ‘telling stories’ about your business from great fiction writers).

What’s your main business challenge and biggest frustration at present?

There are always challenges but I’d say that the one we’re grappling with at the moment is making sure we’re continuing to grow in a sustainable way.

What do you like to do in your spare time?

For me spare time is family time. However I’m also training for a 100 kilometre walk in June to raise money for guide dogs (one of my oldest friends is blind and has just received his guide dog) so currently when I’ve got free time I’m hitting the streets training for this walk.

If you could go back in time, what advice would you give to your younger self?

I don’t know if I’d give any advice. I’ve made mistakes throughout my life but hopefully I’ve learned along the way.

If I had to give myself advice it would be to read more and never forget that learning is a lifelong pursuit….something I probably didn’t focus on in my 20s and early 30s enough. I’d also tell my mid 20s/early 30s version of myself to exercise more, eat healthier and drink less…although I’m not sure he would have listened!

Chris Daems Biography Director AE in a Box / Cervello Financial Planning Chris has over 15 years’ experience as a financial planner, helping clients to achieve their financial goals. He is also an integral part of ‘AE in a Box’ an automatic enrolment solution designed to help small and micro businesses comply with their obligations.

Chris specialises in working in conjunction with professionals including accountants and solicitors to help their clients’ achieve both their business and individual goals. He also specialises in advising the directors of owner-managed businesses, and in helping firms of all sizes (ranging from 1500 through to 30 employees) with the challenges they face whilst meeting their employer duties relating to automatic enrolment regulation.

Chris has won numerous awards including the Unbiased “Pension Adviser of the Year”, the FT Adviser “Group Pensions Adviser of the Year” as well as being shortlisted for “Real Life Entrepreneur” and being commended for “Most Innovative Business” in the Federation of Small Businesses’ London awards.

You can follow Chris on Twitter - @ChrisDaems

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PLATFOR M S & S U STAI NAB I LITY June 2016

Suitability: the challenge for advisers and platforms Justin Blower, Head of Sales at Ascentric takes a look at what advisers need to consider when carrying out due diligence and where platforms can lend a helping hand, with the aim of ensuring the best possible outcomes for the end client Platforms have been placed firmly at the top of advisers’ suitability list following the FCA’s most recent due diligence review.

But, although the responsibility ultimately lies with the adviser to ensure they have carried out the appropriate level of suitability when selecting a platform, the provider can certainly help to make this job a little easier.

The challenges of today’s platform market The number of platforms in the current market can make the process of due diligence a time-consuming and often complex task.

Similarly, keeping up to speed with the pace of technological developments for platforms and, importantly, how these impact the end investor, can prove challenging when coupled with the near constant regulatory change that advisers must already adapt to. However, perhaps the most enduring issue for advisers is how to strike a balance between the very real tension at the centre of platform suitability; meeting the individual needs of each client while creating scalable, repeatable efficiencies for their business.

Breaking down platform suitability into bite-sized chunks Platform due diligence is no small task and there are a number of routes that advisers can take, depending on how much resource they have to hand. Advisers can utilise an external company to help specifically with platform suitability through varying solutions from online tools and standard reports, to full consultancy services. For adviser businesses looking to carry out platform due diligence internally, there are a number of steps that can make assessing suitability a bit more manageable.

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Before turning all the attention to the platforms themselves, the adviser needs to first take a look in the mirror at their own business and client base. Put simply, an adviser must fully understand a client’s needs in order to ultimately decide if and how a platform meets these requirements. This may sound like an obvious step but it is an important exercise that should ensure an adviser keeps the client at the heart of any decisions around platform selection. A good place to begin is to look at the natural segmentation of clients, based on clients’ financial needs, although care should be taken to avoid forcing your clients into boxes.

Viewing your client base from this perspective should give a clearer view of the type of proposition, and therefore what platform, will best meet these requirements. Crucially, this exercise also sheds light on certain areas of the client base where platforms may not be at all suitable and will therefore need to be met off-platform.

At this point the focus shifts to platform providers to assess which will be able to power this proposition. Many platforms produce resources for advisers relating to due diligence, which can be a good place to start, although this alone is unlikely to give an adviser enough detail to fulfil platform due diligence.

One of the first questions that need to be answered in more detail is whether a platform can provide the functionality to service the proposition. Functionality is closely tied to the overall cost of using a platform from the adviser perspective, as a platform without the required reporting tools, for example, will require the adviser business to bring in its own tools and manually input data. This alone is an additional administrative burden and cost. Platform selection is also often decided on headline cost

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PLATFOR M S & S U STAI NAB I LITY June 2016

instead of the total cost of ownership, due to the fact that many advisers find pricing hard to understand. Again, this is an area where platform providers could certainly improve by articulating costs clearly to both existing and prospective clients.

The scale of the asset universe and tax wrappers available through a platform is another crucial consideration in today’s market. Investors’ needs are ever changing and with the recent pension freedoms, and the noticeable need for income, has giving rise to new product launches. This, arguably, makes it more important than ever for advisers to consider whether a platform provides a broad enough investment and tax wrapper range beyond the traditional options.

Further questions advisers may want to consider: The accessibility of the platform • How can you access the platform?

• Is it available online?

• Are clients able to access it?

• How strong is the platform’s track record when it comes to delivering its service 24/7?

Charges • How cost effective is the service for your client base?

• It is also important to know how charges are applied and assess whether they are clear and transparent.

It’s good to talk Bringing all of this together requires faceto-face time with representations from the platform provider before making any decisions regarding platform selection. Those representing the platform should be open to the adviser asking thorough questions as it is a positive indication of the platform’s overall transparency. The way a platform handles the questioning process can also provide insight into the culture of the provider, something which many advisers will feel should be aligned with their own internal culture.

Platform due diligence has never been a simple tick-box exercise, although it is essential to have a structure in place that can be rolled out across varying platform providers while still meeting the requirements of different client segments.

Neither is it a one-off procedure, instead it

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Looking beyond financial stability Looking further out, financial stability is perhaps the most obvious consideration when assessing the platform provider’s future plans.

However, having deep pockets is one thing but a platform’s commitment to the market is also important. It wasn’t so long ago when the platform industry’s sole focus was on financial strength. Since then a number of large parent companies have decided to no longer maintain their platforms. This said, providers should be able to present a clear roadmap for the overall direction of the platform, outlining profitability and any major future developments that may be in the pipeline for the proposition.

Training and support • What support does the platform offer advisers, to ensure their clients get the most from the service?

Additional tools • Does the platform provide tools such as risk profiling and financial planning?

• Are these tools totally independent?

Customer service • How well does the platform take care of day-to-day needs?

• What service standards are in place?

• How do existing users rate the service?

requires regular reviews to assess whether any developments to the platform, or broader regulatory changes, will affect the platform’s ability to deliver.

Most importantly though is the cooperation between both parties, for the provider to offer clear answers about what the platform can provide now, as well as in the future, and for the adviser to ask the right questions to ensure they fully understand whether or not the platform can truly meet the needs of their clients.

For professional adviser use only.

Ascentric is a trading name of Investment Funds Direct Limited (IFDL), which is part of the Royal London Group and authorised and regulated by the Financial Conduct Authority No. 114432. Registered in England and Wales number 1610781, VAT number 368524427.

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SOU N D AN D FU RY June 2016

Sound and Fury The EU referendum debate has brought us more heat than light, says Michael Wilson. But what are the implications for the financial services sector?

So finally we’re into the month that will decide Britain’s future as a member of the European Union.

And generally, as you might have noticed, the battle for the nation’s hearts has not so much failed to appeal to reason – rather, it’s relied on non-reason, and an awful lot of shouting. Hardly a great starting point for a campaign whose outcome will eventually determine not just how Britain’s economy develops but also how its strategic alliances with other global power groups will change and develop in the coming decades.

Overwrought emotions On the Remain side, as you’ll be aware, the great and the good of the international political scene have been weighing in on why we, poor benighted ex-colonials that we are, need to cleave to the United States of Europe because we don’t simply have the clout to act as independent operators any more. (We’re paraphrasing somewhat…) As we were putting this article to bed, the Organisation for Economic Co-operation and Development was adding its voice to the International Monetary Fund and – not least – to that of President Barack Obama, who was gently threatening that if Britain leave the EU it might take a decade or more before all the legal niceties could be tied up We’ll come onto that subject in a moment or two, but for the moment let’s stick with

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what the Leave campaigners are focusing their efforts on.

Namely, a complaint that Europe is gradually sucking all the political autonomy out of what we still think of as a sovereign nation, while also featplotting to drag us deeper into the ever closer political union – and never mind the exemptions that we’ve already got on the Schengen or Euro zone issues.

What’s all this got to do with financial services?

Or, indeed, on our exclusion from the erstwhile Eurozone plan to levy a Financial Transaction Tax (FTT), which would have dumped a Europewide commission charge on every sale or purchase made in Britain if it hadn’t been for our brave Chancellor’s decision to oppose it. (In practice, of course, the FTT ended up as a voluntary arrangement between a dozen or so EU embers – Britain stayed out, much to the relief of the banking community.)

And then again, there have been the pressures from Brussels to clamp down on bankers’ pay and bonuses – which was also enough to raise George Osborne’s ire and his ultimate rejection.

And rightly so, if you consider the particularly important role that banking plays in London’s financial dominance.

It didn’t get to be Europe’s premier trading centre for nothing, we are reminded – and its continued dominance over Frankfurt or Paris owes everything to its light-touch

regulation, not to mention its sturdy rejection of the dead hand of European bureaucracy wherever it may be found.

Up to a point, we have to agree with George Osborne, whose valiant defence of Britain’s financial service sector against the surrounding European armies has been worthy of anything you might have seen on Game of Thrones. But let’s pause for a moment and consider how Osborne’s once-vitriolic opposition has mellowed over the last few years. As has the attitude from Brussels itself.

You may not have noticed it, but we’re not losing all of our arguments for moderation from our European colleagues.

MiFID II As an adviser, and as a diligent observer of the FCA’s pronouncements, you won’t have missed the fact that European law is currently the basis on which a great deal of UK law is based – about a third of all new laws, by some counts. Even the briefest of glances at the FCA website will confirm that the last year’s succession of regulatory tinkerings represent the British Government’s efforts to bring us into line with the MiFID II regulations, which are of course required to be fully aligned by 3rd July 2016. (You hadn’t forgotten that, had you?)

It’s probably fair to say that the 2007 Markets in Financial Instruments Directive (iMiFID) s the point where the European juggernaut most

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Osborneâ&#x20AC;&#x2122;s once-vitriolic opposition has mellowed over the last few years.

As has the attitude from Brussels itself. You may not have noticed it, but weâ&#x20AC;&#x2122;re not losing all of our arguments for moderation from our European colleagues

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SOU N D AN D FU RY June 2016

directly steers the lives of UK financial operators – and that, in its revised guise (the stillpending MiFID II), it intends to go much further.

In principle, MiFID II is among the more obviously benevolent of Europe’s consumer protection measures that the EU is currently enacting. Brussels is committing itself to creating a level playing field for financial services that will stretch all the way from Cork to Valletta or Tallin.

No longer will an investor in Romania or Cyprus need to worry about being ripped off by an unscrupulous adviser who sells him an unsuitable product, or about being stripped naked by insider traders. But the problem for UK advisers is that, in its search for lowest common denominators, the MiFID II boys have sometimes flirted with banning things that are perfectly safe in a wellregulated market such as London’s. Execution-only trading, for example, or some forms of UCIS products which are comprehensively circumscribed in London but not, perhaps, in Malta or Milan.

Those days are largely over. London’s defence of execution-only and a narrow UCIS definition have basically prevailed over the Euroworriers. And so have some

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of the worries about what protection a medium-affluent investor needs. Meanwhile, of course, the whole MiFID process has hit the skids.

Implementation has just been put back by at least a year, due to the exact kind of parliamentary bungling from Strasbourg that the naysayers so detest. And in practice, the likelihood of the European Securities and Markets Authority (ESMA) getting its final set of guidelines into place by 31st December can be regarded as negligible.

Can MiFID still be stopped, in the event that the Leave campaign succeeds in forcing a UK withdrawal? And would a departure from the EU automatically mean that we could throw off the shackles of both MiFID and MiFID II? The Swiss experience On balance, it seems doubtful.

Forget, if you can, that embarrassing moment when Boris Johnson suggested that Britain could get along by aligning itself with countries like Bosnia and Albania in its relations with the ever-closer EU. And let’s focus instead on that other member of the awkward squad, Switzerland, which is very definitely not an EU member and didn’t sign up to the first version of MiFID – or to PRIPS or even the Basel III banking standard.

A decade of public howling has changed the Swiss

Government’s mind about the need to think about tighter alignment with all of these measures – if only because a failure to sing from the same hymn sheet as Brussels might prevent Swiss institutions from being eligible to handle investments from the 23 member countries. Switzerland has not been alone in feeling the international pressure on murky tax havens or on other (ahem) secretive haunts – and so, in its search for peace and unanimity, it has perforce been obliged to scrap its banking anonymity, and much else besides. But of course, you knew that?

London as an expatriate refuge?

What chance, then, of London deciding to refute the EU’s model after a No vote?

Suppose it could set itself up as a low-tax haunt for Russian oligarchs, elusive Chinese billionaires, oil sheikhs, African dictators and – no, hang on, it’s doing all those things already. A significant part of London’s recent property boom has been driven by such individuals who are not merely investing in the bricks and mortar required to establish their UK credentials, but are also contributing huge amounts to the swelling coffers of London banking

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institutions for financial advice and management.

How, exactly, would Brexit after 2018 make a difference to that?

It’s hard to think of anything very persuasive. But on the other hand, we do have positive evidence from estate agents that the prospect of a British exit from the EU has cast a chill over the UK property market. And only last month, the Bank of England’s Monetary Policy Committee confirmed that investment decisions from abroad were being delayed until the eventual results of the 23rd June vote were known. The resulting slowdown in company takeover activity - often a spur to productivity gains and faster growth – was more than apparent, it said.

Is there a rationale to that?

Only insofar as the prospect of Brexit had done a lot of damage to the strength of sterling in the first four months of 2016. (It had self-repaired, at least partially, by the start of May as the arguments in favour of Remain had begun to assert themselves.) But then, as a foreign investor whose currency base was in dollars, you’d expect to be sensitive to a 20% swing in the exchange rate, wouldn’t you?

Britain as a tax haven?

Ah, now we’re getting into more substantive territory.

Yes, in principle an EUfree Britain could declare a 12.5% corporation tax band

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like Ireland, and open up its tax breaks for wealthy foreign individuals, and generally go all out for the expat and international market. It could also chop its weighty VAT regime, which is another Brussels obligation that currently serves mainly to pay for EU subsidies and the European institutions themselves.

It all sounds great – and when the Leave campaign has laid out its plans in detail, it will doubtless make more sense.

The problem we have at present is that neither Boris nor anyone else has explored the fiscal impact of such an adventure. One suspects that the cost/benefit balance might not be as conclusive as has often been mooted.

And Scotland?

Lest we forget, Nicola Sturgeon’s Scotland would be mortified in the UK were to vote to leave the EU. Not merely because it would underline Edinburgh’s own trading links with the European mainland, but also because any decline in its very important international financial business wold prove crippling. Vote Leave on 23rd June, and we may see the whole independence debate coming up again.

So how long would an EU exit take?

If, as still seems possible, the vote does go against EU

membership on 23rd June, that won’t be the signal for an immediate and wholesale departure from the rule of Brussels. For one thing, under the terms of accession to the European Union, departure would entail a two-year process of detailed negotiation in which complete unanimity would be required. Which is another way of saying that even a small body of legislators could block Britain’s departure, or at least hold it up.

That’s another source of uncertainty. Given that a jilted EU would have a two-year window in which to marginalise us and make our lives pretty miserable with every kind of blocking tactic, it’s an open question at a time when the Leave campaign would prefer to have some instant results. And although that shouldn’t have to be a worry in the medium and long term, it could make life very uncomfortable in the four years that the Conservatives’ present government has got to run.

And we haven’t even got onto the impact on European labour laws, the European Court of Justice, the European Human Rights Act, or any of the other institutions whose reach into our own domain in more ways than we generally suppose.

One way or another, this is a more important vote than we popularly suppose.

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EU R EFER EN DU M June 2016

E U Referendum: no winter, or summer, of discontent That’s the view of Richard Buxton, Head of U K Equities at Old Mutual Global Investors, as he talks to Neil Martin about the forthcoming E U Referendum. Given his unequivocal personal views, it threatened to be a short chat.

Richard Buxton is not the sort of City figure to beat about the bush. So when I asked him whether we were heading for BREXIT or not, his answer came back like a heatseeking missile: “…this is absolutely not going to happen.”

Interview over then. Well not quite, because Buxton was happy to expand on his views, even though it was pointless talking about what might happen if BREXIT came about. He said: “We can talk about the implications if it were to happen, but I would caveat everything by saying in my view, it is just not going to happen.”

We were talking on a day when the latest poll put the “remain” vote at 55% of the population.

Buxton gave short shrift to this though: “Opinion polls are utterly irrelevant. They have been woeful to hopeless in recent elections.

People say anything to pollsters, when they bet, it’s their own money. And the odds on from the bookies are pretty consistent; two to one on that we stay.”

Personal view Buxton is also keen to point out that this is his own personal view and not the house

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view from Old Mutual Global Investors (OMGI). He explained: “We don’t have a house view, we deliberately don’t have a chief investment officer, we encourage diversity of view, and I’m very happy if people have good discussions and debates.”

And bravely added: “So this is my strong view, and I will happily be held accountable and ridiculed if I’m wrong!”

The reason for Buxton’s strong conviction is based on how the British people behave when it comes to voting. He argues that they are inherently conservative with a small ‘c’ and that they do not vote for radical change, unless they feel the country is in crisis, such as the Winter of Discontent in 1979. And there is no sense of crisis in the UK today meaning, he said, that the people will simply not vote for radical change, for the complete uncertainty of a total unknown.

He said: “There is no precedent for a country leaving Europe, so there is no playbook, you’ve got massive amounts of uncertainty, and people on either side of the debate cannot speak with any degree of certainty as what would happen if we did go.

“And because there is no precedent, you can have all sorts of different opinions, but they are just opinions. You cannot factually state that - oh it will be fine, we’ll still be members of GATT, WTO and be able to trade with our European partners with impunity. Equally it may not be the case that you would have to negotiate every single thing, start from scratch, no-one knows.”

So when push comes to shove argued Buxton, the average voter is not going to sign up and take an enormous leap into the unknown. He said that Europe has always been the hang-up

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of the right-wing of the Tory party. He said that they believe that Brussels is an “interfering nonsense” and that we’d be far better off as a little Englander. Buxton did not believe this view is generally representative of the bulk of the population.

Current situation As for the current situation, Buxton highlighted investment banks which have already created baskets of BREXIT stocks and sold them to international investors, and, have already, year to date, under-performed quite materially.

These stocks are mostly companies which derive the vast majority of their earnings from the UK economy, including housebuilders and retailers. They also include a number of UK centric financial stocks such as Lloyds Bank and Legal & General. Buxton said that when the referendum results in a vote to stay, then there’ll be a knee-jerk rallying in all of those stocks, alongside sterling.

Buxton commented: “Money clearly has left UK equities. Now whether it all comes straight back in, whether it’s all BREXIT related, or because we’re nervous about equity markets, or is China heading for a hard landing, or is the US rolling over in terms of growth, these uncertainties won’t go away post referendum.”

He pointed to the fact that there has been disinvestment and the holding back of potential investment, with people hanging onto cash, but with that uncertainty out of the way with a Remain vote following the referendum, investors will take the opportunity of days when the markets dips to dribble money back in.

General Election 2015 Buxton remembered: “We saw exactly that ahead of the General Election 2015. Clearly there was investment held back, and selling ahead of the May election, and thereafter, when markets were weak, particularly we saw it in late August, September and October, there were really quite strong flows into our UK equity funds from people who had been keeping their powder dry. They didn’t jump in immediately the election result was announced, but waited for the next set back in markets, and people were then ready to buy.”

Buxton doesn’t think any of the recent manoeuvrings will change the Bank of England’s outlook on interest rates: “The UK economy was already decelerating a little bit, back end of last year. Again you don’t need to be too cynical to note that the Chancellor had got the feel good, or the feel less bad factor, to its absolute peak in 2015, in time for the general election.

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“Clearly the pace of decline in unemployment had been so rapid that inevitably it’s had to slow, and indeed has done; taxes have been raised, quite significantly, so it’s no wonder that leaving aside the uncertainty of referendum, economic activity has slowed a little bit.”

Buxton also noted that although many investment and hiring decisions have been put on hold, the very latest survey data shows interestingly that it is looking pretty positive again for the manufacturing and service sectors.

And with uncertainty out of the way, predicted Buxton, you should see some modest pick-up of activity in the economy.

Buxton finished with: “I don’t want to emphasise the degree to which it has decelerated a bit last year. We were growing at two, two-and-a-half per cent, maybe now were growing one-and-a-half to two. At the margin, it’s a little bit softer and I imagine that there will pick up post-referendum.

“I don’t think things will change. The monetary policy committee will just continue to be extremely bullish and laid back. There’ll be no need to see any early moves in interest rates.”

Last word Buxton’s views echo many in the City of course and from the many conversations I’ve had with fund managers and analysts, I can’t remember one who has been in the Leave camp. This is hardly indicative of the general electorate though. It is an emotive subject and it’s being said that those over 55, and who will be determined to vote, want out of Europe, yet those aged under 35 want to remain, but they are less keen to make the trip to the voting booths.

Well, we are about to find out which way Britain is going to swing. Are we Little Englanders, or Europeans?

If you want another reasoned view on the implications for the financial services sector on a Brexit vote, take a look at pages 22-25 and read the thought provoking article penned by our Editor-in-Chief, Michael Wilson. It’s entitled Sound and Fury and is recommended reading before the 23rd June.

The result unravelled – Join Old Mutual Global Investors for live online analysis on 28 June There will be implications for UK investors whatever the outcome of the EU Referendum.

Join Richard Buxton and team for a live postreferendum video interview online on 28 June at 9.30am when they’ll be discussing what the result means for UK equity investing. Register now at www.omglobalinvestors.com

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EI S TAX ADVI S ER June 2016

E IS - a tax adviser’s perspective I I

By Mike Donovan, Senior Manager at Deloitte LLP

A powerful campaign is underway at IFA Magazine’s sister publication EIS magazine, on changing the narrative around EIS, to broaden awareness of the range of benefits to be gained from investing in this dynamic asset class.

The campaign aims to highlight the role of the fund manager in identifying the strongest businesses in which to invest, the role

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of the IFA in identifying the strongest funds and establishing appropriate asset allocation strategies for clients including EIS, and also the specialist role of the tax adviser in understanding the client’s specific tax needs to support the IFA in making appropriate recommendations.

In the May edition of IFA Magazine Mike Donovan, Chartered Tax Adviser and Senior Manager at Deloitte LLP took a detailed look at how EIS investment can interact with a client’s personal tax position.

Here, in the second of his two part series for IFA Magazine, he takes a look at some of the common pitfalls associated with EIS investment and identifies particular areas that advisers should be aware of.

As I mentioned last month, I should start by informing you all that I am not an IFA. In fact, I am not even an ‘accountant’ in the truest sense of the word, but rather am a ‘Chartered Tax Adviser’ (CTA) who specialises in advising high net worth individuals (business owners, senior executives, entrepreneurs, inherited wealth, etc) to ensure that their personal tax affairs are looked after from a risk, tax efficiency, and commercial perspective.

In a time when technical information/advice is readily available online how do we, as professional advisers, distinguish ourselves from the competition? I believe that the only option is to continue to put the client at the core of our proposition; always take a holistic and commercial view when considering their

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position; and always strive to ‘add value’ wherever possible.

I do not give financial advice, but I do regularly work alongside a number of other advisers (such as IFAs) to ensure that my clients’ wider aims, objectives, and ambitions are achieved in a manner which is both suitable and appropriate to their personal circumstances and tax situation.

In this article, and in my previous article which appeared in the May edition of IFA Magazine, I will touch upon on the alternative uses of structured Enterprise Investment Scheme (EIS) products. This is not intended to be a ‘technical’ run through of the (extremely complex) rules which are relevant to EIS, but will instead highlight some examples of how, as tax advisers, we see EIS investments our clients have made interacting with their personal tax position.

The aim of both articles is to provide you with an awareness of some wider issues/

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opportunities which could be both relevant and of use to your clients, so that you can raise these with your clients and ensure that they are aware of the need to obtain detailed tax advice in this most complex of areas.

Common pitfalls So what are the common pitfalls that we should be looking out for and what other areas should we consider?

• Delays in issuing EIS 3 certificates If you remember only one thing after reading this article then make sure it is this – the most common area of concern we hear from clients in relation to EIS investments relates to delays in the issuing of EIS3 certificates required before tax relief can be claimed.

Now, it is likely that any such delays are completely out of your hands however if the possibility of such delays has never been brought to their attention then it would be fair to say that your client may feel aggrieved.

I have also recently experienced a situation where the EIS3 certificates were received after 4 months however the refund of income tax & CGT by HMRC then took over 250 days to process and issue... Thankfully, I would say that this is a oneoff and in my experience HMRC, as a general rule, are very helpful.

My advice here?

Communicate the possibility of delays, both with the issue of EIS3 certificates and with any eventual refund, with your client in advance. In particular, if they are relying on the respective income tax refund in any way then it is of even greater importance to make your client aware that there could be delays through no fault of your own.

Forewarned is forearmed!

• 3-year holding period This may sound obvious however there is nothing worse than finding yourself caught out by something ‘obvious’. The point here is just to keep a track of

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EI S TAX ADVI S ER June 2016

anything which could occur within the ‘termination date’ (typically 3 years from the date of investment however on occasion this period can be longer – and in any event is shown on the front of the respective EIS3 form) otherwise income tax relief could be clawed back and deferred gains could fall back into charge.

The type of events to look out for within this 3 year window include (but are not limited to) the following: • •any disposal, or deemed disposal (i.e. gift to anyone other than spouse) of the EIS shares • losing UK residence (see below) • somebody ‘associated’ with your client acquiring shares in the same company which, collectively, means they then hold more than 30% the ordinary share capital or votes • your client ‘receiving value’ from the company

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• the company starting to carry out, to a substantial extent, ‘disqualifying activities’ • the company becoming under the control of another company • the company not spending all of the money it raised under EIS for a qualifying purpose within 2 years Also, don’t forget that any deferred gains will have to be declared on your client’s selfassessment tax return when they fall back into charge (unless they subscribe for further EIS).

• Moving abroad?

Finally, note that if your client becomes non-UK resident before the end of the ‘termination date’ then any deferred gains fall would immediately fall back into charge and become assessable to UK CGT. However, if there is any flexibility on the timing of a move abroad then it could actually be possible

to structure your client’s affairs such that any deferred gains fall out of the charge to UK tax.

Summary Space constraints stop me from adequately summarising each of the above points so I will simply end with the following – structured EIS products are often suggested (subject to your client’s risk profile) by IFAs on the basis that the tax reliefs available can make the investment aspect attractive.

As has hopefully been touched upon in both this and last month’s article, although EIS can offer great additional tax benefits to investors, they are inherently complicated and good holistic advice is required, and careful management, to ensure that the client’s position is best looked after.

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CLI ENT R ELATION S H I PS June 2016

Relationship building as a client retention strategy With more and more importance being attached to the ability of advisory firms to build long-term relationships with clients, Sue Whitbread considers whether client retention strategies are sometimes overlooked in favour of a focus on client acquisition?

A significant part of the RDR changes for many advisory firms was of course the move from product and solution focus to the provision and sale of a service. To survive in this new world, let alone thrive, advisers have needed to clearly demonstrate the value-added nature of the service they provide for clients if they are to build the strong, long term client relationships which form the basis of a sound business.

As you’d expect, a well organised and streamlined client proposition has clients’ needs at its core. With this in place, clients will recognise the value of the professional service that they are receiving; they trust the firm and the people that work with them, they have a meaningful plan to work towards, and they recognise that they can deal with any issues as they become

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due. This brings the peace of mind of knowing they are on track to getting what they want out of life.

They acknowledge, in effect, that the adviser is sitting on the same side of the table as them and clearly putting their interests and goals first. They appreciate, of course, that there is an ongoing cost for this professional service - but they also see that, in most cases, the value far outstrips the cost. On that basis they are happy to pay ongoing fees for such a service.

Rethinking the model But the changes that advisers are making to their businesses go beyond the services that they offer: the very structure of their businesses is evolving. Part of this change is expressed in the way that firms think about how they engage with clients outside the

world of financial planning, of advice and into building and nurturing relationships.

And often, this means opening up new channels of communication.

Many of the firms we see are very much on the front foot when it comes to generating and maintaining high quality client relationships which can build on the trust they’ve already established through the financial planning process.

Whether it’s through face to face events, sponsorship opportunities, engagement through blogs, newsletters, social media or a host of other means, firms are getting better at reaching out and cementing the client relationships upon which the business depends – and managing to build their brand into the bargain.

We’ve asked five advisers to highlight which activities have worked for them, and to share with us some of their own plans for building client relationships this year.

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CLI ENT R ELATION S H I PS June 2016

Martin Bamford, Managing Director of Surrey-based Informed Choice

“We host a number of events throughout the year, held with the dual purpose of strengthening engagement with our existing clients and also reaching new clients. These range from sponsorships hosted by other organisations to events that we host ourselves. We always try to keep these local, because

being local is an important part of our brand - and consistent with the geography of our clients.

“In sponsoring or hosting our own client events, we always aim to support other local businesses at the same time; this is achieved through venue hire and the use of suppliers for food and drinks.

“Our sponsored events this year include a 10km charity run for a local school, a season for classical recitals at the local Arts Centre, an outdoor performance of Shakespeare’s Much Ado About Nothing this summer, and a long-distance charity walking event for our local Rotary Club. We tend to sponsor events which

closely match the interests of our clients, so walking and music feature heavily in our selection.

“In terms of our own events, this year we will host a summer BBQ in our office car park for a third year running, to celebrate our 22nd birthday. We invite local clients and professional connections to this BBQ which is a fun, social event. A farm shop in our village caters for this and runs the BBQ, with a local microbrewery supplying the drinks. Later in the year, we will hold a Christmas drinks reception at the Arts Centre, inviting around 50 of our clients and professional contacts.”

Craig Palfrey, Director, Penguin Wealth, Cardiff

Penguin was formed in 2010 by a group of Financial Planners with a shared vision and a love for their jobs. Our purpose is to make a positive difference for our clients, by exceeding expectations, one relationship at a time.

The fundamental part of this is in building long term relationships with our clients, who value the service we provide for them and trust that we are always working with their best interests at heart.

Whilst we tend get to know our clients well through carrying out the financial planning process itself, we

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find that it helps if we also look at a range of other ways of developing those relationships, so that we really get to connect with them at a higher level and really cement those relationships.

We’ve tried a number of different activities over the past few years. We’ve taken clients to 20/20 cricket matches which has been fun, but it’s hard to demonstrate any tangible business results from it. It’s simply about relationship building. We’ve also taken tables at charity events and invited clients to join us. That way we not only get to spend time with them but support good causes too. Our annual golf day has been very successful. With 40 or 50 people there, it’s really boosted goodwill with our clients and helped bring potential for new clients too. However, for us one activity which has worked particularly well is our next generation workshop. While

we act for our clients, their offspring also tend to want to know more about financial planning. So, on Saturday mornings, we’ve invited them along. With an audience typically of 20-40 year olds coming from far and wide, they’ve enjoyed listening to a range of different sessions related to financial planning.

These have covered topics such as the basics of trusts, how to save, wills, lasting powers of attorney etc as well as getting great financial planning tips. It’s a great opportunity for them to meet the team here and to find out more about what we do and the importance of having a financial plan in place. Our pension briefings have been popular, particularly given the new pension freedoms. These types of get togethers are great for generating goodwill and also for attracting potential new clients too.

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CLI ENT R ELATION S H I PS June 2016

Gordon Wilson, Managing Director, Carbon Financial Partners, Scotland

“We’re actively involved in sponsorship, with the focus on sport as well as on activities for schools. As part of our being event sponsor for the Bill McLaren Foundation, we sponsor the annual dinner where approximately 500 solicitors, accountants and other professionals within our target market are in attendance. We also get to invite quite a few of our clients along, which is great, and an excellent profile builder for us. Not only do we help to give money back to grass roots sports but it helps to raise our business profile in the communities we want to work with.

“We also work with the Prince’s Trust, and with a number of individual schools and local rugby and football

clubs here in Scotland. And then, for the first time this year, we’ve ventured into elite sport by sponsoring professional golfer Richie Ramsay. Our annual golf day has been a great way to engage with clients and potential clients.

“This year we’re hosting a family event at a Scottish Museum for over 200 people.

Our Christmas carol concerts have also worked well in the past. Some activities we invest in and expect to see a return, but others are done in order to support the local communities here in Scotland.

“To celebrate our fifth anniversary, five of our team are cycling 500 miles in 5 days for Winning Scotland, with the aim of helping young people to develop life skills.

The thrust of our charitable work is to give young people a chance, to make a difference through sport. It’s also a lot of fun and a fantastic way of building our own team spirit within the firm too. A word of warning though. If you’re considering sponsorship, you need to be properly involved in it, be part of it in the

preparation, the execution and delivery. It’s a case where the more time you invest in planning then the better then results are likely to be.

“More routinely, we use the full suite of social media and communication opportunities including client newsletters, blogs, use of Twitter, Facebook etc. We find that the most successful engagement comes from our newsletters, which we produce electronically and also 3 or 4 times a year as hard copy - and blogs. We write all the content ourselves, we don’t outsource. That way we can share news of what we’re up to as a company, as a team, as well as more traditional financial planning news updates.

“This year Carbon will be five years old. However through our range of activities we’ve built a strong profile which really helps the engagement process with our clients, and boosts name awareness.

In fact the impact has been greater than I achieved in 10 years with a previous business.

It really helps us to show how Carbon is different.”

Keri Carter, Managing Director, Broadway Financial Planning, Cotswolds

“We’re a bespoke Financial Planning firm and for us it’s really important to nurture the relationships we have with clients. By planning

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opportunities for chatting with them on a social level, we get to know them so much better and they get to know all our team here too. It works really well for us – and doesn’t break the budget either.

“We’ve done lots of different things. For example, earlier this year we ran a flower arranging morning for clients which worked really well. Our clients loved it and it was a great way of prospecting too.

It was a simple formula, a flower arranging expert and

a local hotel – something we will do again.

“We also hold a summer party each year as a thank you to our clients, who can invite guests along too. This year we’re holding it on a steam train! We’ve also done wine tasting with a difference, tying in wines of the world with chats about financial planning related topics such as investment and economic prospects in those different parts of the world.“

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CLI ENT R ELATION S H I PS June 2016

Damien Rylett, Managing Director, Brunel Capital Partners, Bristol

“We’re still a relatively new business, where building strong client relationships

really matters. We understand that clients want to do business with people with similar values and a similar outlook on life. Creating opportunities to bring them together and with us is really powerful.

“We hold an annual client conference, where our clients can come and mix with the team and listen to quality speakers on topics like the state of the global economy.

This year we’re planning some client lunches to give us more scope to get to know individual clients and their partners in a different setting.

“So much investment of time and energy goes into bringing new clients on board, so it’s vital to make sure that we reinforce the relationship over and above the delivery of a financial planning service which provides the bedrock of that relationship.”

Corporate Hospitality on the move Chris Crouch of Club Wembley has had plenty of experience working with IFAs, attracted by the option of inviting clients along to the stadium for high profile events. “Sports hospitality is becoming increasingly popular with many companies looking for opportunities to entertain at a convenient, neutral venue, giving flexible use at a wide range of sporting and music events. At Club Wembley for example, advisers can choose exclusive pre and post-match hospitality, from fine dining to a wide choice of bars and food outlets, giving plenty of opportunity for face-time with valued clients. A number of IFA, both small independent advisers and larger national brands use Club Wembley to maintain a close relationship with their clients away from an office environment.

“Members have their seat guaranteed for an average of 11 events each season, including the FA Cup Semi Finals and Final, the Capital One Cup Final and all England Home Internationals.

There is a range of membership options to suit various budgets, depending on the view you’d like and what style of dining you’d prefer.

Membership starts form £1,733 (ex VAT) per seat per season with more extensive packages up to £7,000 (ex VAT) per season for our Bobby Moore Club membership including full hospitality.” For details contact chris.crouch@ wembleystadium.com.

Rob Wingrove, Head of Marketing at Prestige Hospitality Ltd (STH Group), highlights

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research carried out last year into the effectiveness of sport hospitality. “Aside from the obvious entertainment highlights that sport hospitality can deliver,” he says, “research

by SMG/YouGov sheds light on the powerful marketing and business development returns that this activity can generate.

“Hospitality at large global sporting events provides executives with an opportunity to spend quality face-to-face time with clients in a dedicated space where they can enjoy world-class sporting action while developing relationships.”

The SMG/YouGov study was designed to gauge the effectiveness of sport hospitality as a business development tool by speaking to 500 regular hospitality purchasers and attendees.

And the results, he says, were “hugely positive” for hospitality.

Following on from the successful Rugby World Cup 2015, the finals of this year’s UEFA Euro 2016 TM football tournament also present opportunities for hospitality. The tournament, which is taking place in France and starts on 10 June, will be contested by 24 teams including England, Wales, Northern Ireland and Republic of Ireland, who have never featured together in the same international tournament. The group, he says, offers a range of products which allow businesses and their clients to enjoy exceptional service for three hours prior to kick-off and for ninety minutes after the final whistle.

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R ICHAR D HARVEY June 2016

What would life be like outside the E U? Richard Harvey takes an alternative look at the EU debate and tells us why he’s in the Bremain camp Rarely can there have been such a nail-chewing time for investors than right now, not least because it’s “make your mind up time” on our future in the EU. The gloomsters would have us believe that a vote for Brexit will see the Stock Market, the pound and all manner of other investments go south faster than a flight of swallows en route to Capistrano.

It seems hard to argue against this, because everyone knows financial markets hate uncertainty, and the future of any country which has been persuaded by a lobby including the likes of George Galloway and David Icke

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probably deserves to cop every misfortune coming its way.

Me? I’m voting In, for the most self-serving of reasons.

As the owners of a holiday home in France, Lady H and I have occasionally enjoyed the services of the finest health system on the planet (source: World Health Organisation) for virtually zero expense.

Coming from a family with dodgy cardiac systems, I therefore want to avoid the post-Brexit prospect of a heart attack on being presented with a whopping bill from Monsieur Le Medecin if I receive his ministrations for so much as an ingrowing toenail.

And also to avoid the sniggering of the locals as they

see the pound sink to parity and beyond? - with the Euro.

A couple of Sundays ago, I had lunch with a dozen chums who were 7 to 5 in favour of leaving the EU. While appreciating this was hardly robust polling data, and that the people concerned were from Kent’s doughty middle classes who instinctively rankle at the prospect of rule

by Brussels, they are the sort of people who will - to a man and woman - trek off to the polling stations on June 23rd.

Just a few days earlier, I’d similarly asked a bunch of Brit expats living in France how they would vote. Quelle surprise, they were unanimously

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R ICHAR D HARVEY June 2016

in favour of retaining EU membership, again for the most unashamedly selfish of reasons - protection of the value of their pensions, and free access to Euro-goodies.

At the time of writing, the polls seem to indicate Britain will ultimately vote to stay in, driven by the most powerful of arguments - that we simply cannot know what life will be like outside the EU. But perhaps what is most striking about the debate is

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the almost universal belief that the EU needs drastic reform. Grotesque overexpenditure, the sort of pay-and-pension packages which would be envied by a Russian oligarch, and a lack of accountability are criticisms which seem to have been voiced by everyone, regardless of which way they plan to vote.

Examples such as the ÂŁ130 million spent every year by the EU in decamping lock, stock

and barrique from Brussels to Strasbourg each month for a four day sitting is just the sort of Alice in Wonderland logic that leads so many to wish a plague on all their houses.

Would a sizeable - possibly decisive - vote for Brexit bring about reform of that sort of nonsense? Itâ&#x20AC;&#x2122;s the wrong time of year, but the thought of turkeys and Christmas springs to mind.

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SOAPBOX June 2016

Shifting Sands Beware relying on what you only think you know, says Michael Wilson. History is changing fast out there in the oilfields Now here’s an odd coincidence. I was wondering recently about why all the international admonishments about Brexit and so forth (from the IMF, OECD, Barack Obama etc) seemed to be making so very few dents on the essentially emotional response that the Brexiteers are displaying. Why, in the face of all that supposedly expert knowledge, did people stubbornly insist on following their gut instincts and trusting that Britain would be better off outside the EU? Even though nobody had yet produced a single cogent economic argument in its favour, or even a picture of how the new world order might look?

So what do the experts really know?

And then, quite by chance, I found myself looking at a report published in July 2008 by the International Energy Agency – a lavishly funded organisation which has access to the world’s very finest energy market minds, and which was confidently predicting the arrival of $200 per barrel by Christmas 2008.

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(Spoiler: crude ended that year at below $42, and it took two years for the price to get decisively back to $75.)

So much for the value of informed opinion, then…..

crude had already doubled within a year to reach $144 per barrel by mid-2008, but there were completely sound reasons why it was going to keep on rising

Yes, the IEA had agreed, it was a bit worrying that crude had already doubled within a year to reach $144 per barrel by mid-2008, but there were completely sound reasons why it was going to keep on rising. On the one hand, the boffins said, oil demand was soaring in developing economies such as Asia, South America and the Middle East.

On the other, although money was certainly being poured into the oil sector, it was all going into refining and not

into producing more of the black stuff. And the emerging political instability in North Africa could endanger production to such an extent that the next five years would see sharply growing pressures in the supply/demand relationship. Hence the disastrous $200 prediction.

Correlation?

What correlation?

Well, I suppose one out of three ain’t bad. Yes, North Africa did indeed become a worry in 2008, but no, it had no impact whatsoever on a world which was about to suffer the full weight of the Lehman Brothers collapse and the worst financial crisis of the last 80 years. But what made the IEA’s predictions of a price rise really odd was that the financial markets had already been in retreat for a year or so at the time it made its $200 forecast.

The Footsie had lost 20% since mid-2007, and the S&P hadn’t done much better.

Clearly, the IEA boffins who hadn’t noticed had their heads firmly up their collective fundaments. (Incidentally, any time you fancy a snigger about

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SOAPBOX June 2016

the folly of economic wisdom, the report is to be found at www.iea.org/publications/ freepublications/publication/ mtomr2008.pdf. Enjoy.)

But let’s return to the point: The red faces at the world’s most eminent energy agency had struck an unintended blow for anyone who instinctively mistrusted the logic of pure reason, and who dismissed the experts’ outpourings as hogwash.

Within a year, the weakening uptrend of the Chinese stock market taught us that there is no reliable correlation between a powerfully growing economy and a burgeoning financial system.

The euro, which had trounced the dollar just years before, fell back sharply despite the fact that not only were Europeans getting better off, but Americans were getting worse off. The commodities market, which ought to have been soaring on the back of Chinese manufacturing growth, sputtered and then dropped dead at the moment when we least expected it. And suddenly it seemed that all the sage wisdoms our fathers

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handed down to us were suddenly open to question.

Place your bets At which point the Brent oil price decided to nearly halve itself, from $80 in November 2014 to just $45 two months later. It dribbled down to $35 by last Christmas and then skittered down to $25 in midJanuary 2016. That, remember, was barely a sixth of the price it had commanded in 2008, and a third of what it had fetched sixteen months earlier.

Now, I’m going to concede that oil has certainly rebounded since January 2016 – all the way back to the levels of early 2015, in fact.

A combination of political uncertainty and a bunch of surprisingly low estimates from the US strategic reserves in Cushing, Oklahoma, have seen to that. But can it last? As May 2016 drew to a close, it was hard to find many people who had anything better than hunches to go on.

In the meantime, I am more than happy to applaud all the market-timers who bought into petroleum at $25 this year. But personally I’m still holding back. Here’s why.

Whatever it is that’s driving the oil price, it isn’t global economics, and nor is it entirely politics – although recent panicky moves by Saudi Arabia, the world’s biggest oil producer, have had a big and undeniable influence.

The new rulers in Riyadh (of whom more anon) have been reshaping their country’s vision in ways that are likely to blindside anyone who still believes that Saudi Arabia has nothing more to offer than oil and conscious consumption.

Stagflation is dead, we hope Nor does the fluctuating oil price seem to have affected the world’s stock markets in any of the usual textbook ways. Back in the 1970s, when I was just a young impressionable investor, the prospect of a doubling of the oil price (which happened twice, remember) was enough to send the equity markets into a blue funk, as energy-dependent manufacturers were forced to push up their prices in order to take account of their spiralling costs. Whereupon their workforces invariably demanded higher inflation-

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SOAPBOX June 2016

related pay and the whole ghastly inflationary spiral began, eventually morphing into stagflation, which was the worst of all worlds.

This time round, however, we don’t seem to be able to decide whether cheap oil is a good thing (for manufacturers, especially of motor cars) or a bad thing?

Maybe that’s because the hefty dividends paid by oil and mining companies make up such a large proportion of the divi return from the Footsie, so that the thought of a diminished divi sends a chill through the markets.

But actually I don’t think we need to look much further than the diversification of the production scenario.

Shale poker Back in the 1980s, the OPEC oil producing cartel led by Saudi Arabia (the Organisation of the Petroleum Exporting Countries) accounted for easily two thirds of the world’s petroleum, with Russia making up a large chunk of the remainder; now OPEC’s share is comfortably

40

under half. North Sea oil might have come and gone during the intervening years, but the arrival of US shale oil has been a game-changer that we underestimate at our peril.

As recently as October 2014, Goldman Sachs was

Riyadh had announced that it was no longer prepared to cut back its surplus production so as to support the international petroleum price forecasting that U.S. shale oil would soon move into OPEC’s place as the first-mover “swing producer”. What it meant by that was that Saudi Arabia would no longer be able to steer the crude price up or down by voluntarily restricting or expanding its massive output potential, as the world’s producers needed.

On the face of it, Goldman Sachs seemed to have a point.

From just 0.4 million barrels per day in 2008, total US production had soared to 3.4 million b/d in early 2014, and the volume was rising by as much as a million b/d with every passing year. That meant, it said, that Saudi Arabia’s 1.5 million b/d of ‘reserve capacity’ could no longer be used a weapon against the industrialised world, because the United States could trump and nullify its every move with a move of its own.

Clearly, the Saudis were already drawing their own conclusions. Within a month, Riyadh had announced that it was no longer prepared to cut back its surplus production so as to support the international petroleum price. And that was a move which sent a huge jolt through the entire market – not necessarily to the advantage of the other players.

International fallout We might try to guess that Saudi Arabia was simply trying to starve the US shale

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SOAPBOX June 2016

oil producers out of the game, and thus to retain its dominance. A great many of these US companies are horrendously leveraged with debt, and the casualties among both the producers and their drilling technology suppliers has been appalling.

But that on its own wouldn’t seem very likely, because the damage from the low oil price has been felt much more sharply by the biggest traditional oil producers – all of whom rely disproportionately on just the one source of income.

A study published in the Wall Street Journal during late 2014 had reckoned that OPEC members Iran and Algeria required $130 per barrel for their economies to break even; that Nigeria needs $123, Venezuela needed $117, Iraq $101, the UAE $77, Qatar $60 - and non-OPEC Norway just $40 a barrel. Even Russia was doomed to suffer at less than $98, it said. And Saudi Arabia itself needed $106 per barrel to make ends meet.

Not because getting it out of

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the ground is expensive (it isn’t), but because the Saudi government was spending its oil revenues so freely that everything would quickly crash without that sort of a world market price.

A new broom in Riyadh You might have noticed in recent years that the general tone has changed – and nowhere more so than in Saudi Arabia, which used to call all the shots. Clearly feeling the pressure, the new King Salman, an octogenarian who took office early in 2015, has appointed his 31 year old son, Deputy Crown Prince Mohammed bin Salman, to take over what are effectively the reins of the country.

Prince Mohammed didn’t disappoint. In March he brought an OPEC summit on price support to a crashing and unexpected end by refusing to get involved unless the rival Iranians also committed to the deal. (They wouldn’t.) That was enough to send crude down by five dollars, or 14%, which jolted confidence somewhat.

In April the prince unveiled his so-called Vision 2030 plan, which provides for a substantial diversification of the economy away from oil and into other fields – such as building up the arms industry, selling off a stake in Aramco and upgrading the education system.

Weeks later, the man who’d run the oil ministry for the last 20 years was out on his ear. Ali al-Naimi, the force behind Saudi Aramco and the power behind the troubled ‘swing producer’ policy was ousted in favour of a former health minister called Khaled al-Falih. As of late May 2016, we still had no idea what al-Falih actually stands for. Apart from being a new broom, of course. And with Riyadh’s $550 billion state cash buffer against adversity running out quite fast, it’s probably not a moment too soon. But what does it mean for crude? Gentlemen, place your bets.

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CAREER OPPORTUNITIES Position: Senior Compliance Manager (Ref: 25280) Location: Midlands Salary: £50,000 - £55,000 DOE A compliance professional with relevant qualifications plus a proven track record of working within an IFA practice is required for a full and varied role where efforts and hard work will be rewarded.

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