February 2011 - Page 2 of 3 - Financial Planning in Wimbledon

Supermarkets, Platforms – Simples!

Skandia is the leading platform provider and many of our clients use their platform. This is a good little video that explains what platforms do. The information pretty much applies to all platforms and do not take it as advice that theirs is the best (there is no such thing as “best”, just most worthwhile “fit”). Anyway, it explains the benefits of platforms clearly in just a couple of minutes.

Clients with holdings on the Skandia platform will shortly receive a mailing from them advising that the annual investor charge has risen to £68.50 per person. This will be payable in two parts the first on 14 June 2011. Skandia have agreed to hold this charge at this level until at least June 2013. Whilst the increase is significant (in terms of the % increase) it is a very small charge for the options and flexibility provided and is a very tiny proportion of the value of most portfolios. Skandia are preparing for the new FSA driven legislation the “Retail Distibution Review” or RDR. I am also expecting Skandia to shortly announce a significant enhancement to the already long list of 1000+ funds available in the very near future. For most people this is a world class investment option at a very keen price.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Supermarkets, Platforms – Simples!Dominic2023-12-01T12:52:06+00:00

Spot the difference: Ford and Ferrari

There’s something about a story on the BBC that makes me believe that some people could be using their time more productively. Ford have got themselves in a sweat because Ferrari decided to call their latest F1 model F150 – the same name as Ford’s F150 truck.

Now call me a fool, but I would have thought that most car maufacturers would probably benefit from being associated with Ferrari, but do Ford really believe that their customers are so simple as to confuse the two? I know this is really all about branding rights, but its more of the nonsense that US lawyers seem to spend their time dreaming up. According to the BBC, Ferrari decided to rename their car “Ferrari F150th Italia” which is fairly gracious of them. Just typing in F150 into google…goodness knows what they would make a fuss about next. For anyone that may be confused, the Ferrari Formula One car is the image below the Ford truck. Both are red, have 4 wheels and fall into the category of “automobile”.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Spot the difference: Ford and FerrariDominic2023-12-01T12:52:07+00:00

Public Sector Pensions – Warning Bell – One Giant Ponzi Scheme?

The Centre for Policy Studies has published a report today for the Government called “Self Sufficiency is the Key” by Michael Johnson, who has an investment banking background and has worked with Towers Watson. A free downloaded abridged version is found here.

Johnson argues that as a whole the public sector pension schemes are akin to the Bernard Madoff ponzi scheme – the promises simply are not going to be met. His solution is that all public sector pension schemes are switched to defined contribution arrangements rather than defined benefits. Sorry for the jargon – but its actually as it appears – defined contribution is where the amount being paid in (contributed) is defined – say 10% of saalry for example. This is then invested and what it becomes is downs to how well the investments perform. At the moment the vast majority of public sector workers, which includes doctors, GPs, teachers and those working within local Government.

At the moment most Public sector pensions are defined benefit schemes – in essence, how much is paid in (contributed) is irrelevant, the amount you get out is based upon your service within the scheme and your final salary.

The attack on public sector pensions began some time ago, depending on your point of view, the privatisation of some institiutions like British Gas, British Telecom and British Airways was also effectively passing the liability and repsonsibility for the maintenance of the associated staff pensions to the new owners.

More recently employees have been asked to contribute more – including another 1% increase announced in the previous Chancellors last budget – which has been deferred by the Coalition Government. Some scheme have also begun offering less generous terms and some have only offered new staff an investment based arrangement.

It would take a very brave Government to introduce such measures – the costs of running the public sector schemes are enoromous – just think about the basic principle, that a pension is generally payable from age 60 and would continue until death, but then continue at a rate of 50% until the death of a spouse. This is potentially a very long time. The savings to central Government would be signficant.

However, these are such valuable benefits that one can imagine a fairly bitter battle surrounding their withdrawl, involving probable mass strikes of those working within the public sector. However, barring a miraculous change in the financial wellbeing of UK plc or a change in the manner in which UK plc spends money, this is ultimately inevitable. This is not the first time that suggestions have been made that “the end is nigh” but one gets a sense that a significant milestone may have been reached.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Public Sector Pensions – Warning Bell – One Giant Ponzi Scheme?Dominic2023-12-01T12:52:08+00:00

Bank Base Rate Held at 0.5%

Today’s announcement that the Bank of England decided to maintain the rate of interest at 0.5% is no surprise. However it has been nearly two years since the Bank last altered interest rates (March 2009) which certainly is a long time in Banking terms and marks the reality that the economy has needed this level of support.

Interest rates are highly likely to rise and this is where statistics and a media hungry for sensationalism. A 0.5% increase in rates might be reported by some as “INTEREST RATES RISE BY 100%” which would be technically correct, but deliberately seeks to distort.

The credit crunch has left most of us wondering if the financial services industry has bitten off more than it can chew – we are all left with the scar of having to resolve the crisis by hefty debt repayments, which to you and I translates as higher taxes and fewer services. More for less.

In practice interest rates fell sharply during the credit crunch from 5% in April 2008 reducing to 2% by the end of 2008 and then cut by 0.5% a month in 2009 until we reached the current 0.5%.

Rates since 1993 have broadly ranged between 4.5%-7.0% before the crunch rates were fairly static at around 5%. This is probably a more “normal” level for interest rates. It has been 20 years since interest rates were in double figures. Sitting here in 2011, it does seem unlikely that rates will suddenly rise to such levels, but gradually return to the 3-5% range. The main purpose of interest rates is to encourage people to save rather than spend – effectively to attempt to control the money supply and reduce or control inflation.

Inflation is currently rising, but my own view is that this is unlikley to continue and in general, inflation is “under control”. We are certainly all paying more for certain items – fuel and food, but these inflationary pressures have tended to come from additional taxes and natural cyclical problems that farmers experience from time to time. I don’t believe that this will continue for the long term. Indeed in the US they have problems that are rather worse – the prospect of deflation, which does little to help a consumer capitalist culture.

What does this mean? well in short – you’ve never had it so good if you are a borrower. Borrowing (if you can get it) is cheap. However any repayments that you are making mean that more of your money is going towards reducing the debt – which is pretty much ideal. On the other hand for cash savers, most deposit rates are so low that they are below the level of inflation, meaning that whilst your capital is “safe” you are losing money in terms of its actual spending power.

The problem that the Bank of England face is this: if inflation were to get out of control, what level would interest rates need to be to curb it? and secondly would this cripple those that are are struggling and create more problems – after all anyone that has borrowed from a good source for the first time in the last 20 years will not have known the real pain of double-digit interest rates. I would hazzard a guess that for most people with a mortgage if rates rose to 9% (for example) there would be a further property crash.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Bank Base Rate Held at 0.5%Dominic2023-12-01T12:52:08+00:00

Specialist Tax Planner

Specialist Tax PlannerDominic2023-12-01T12:52:09+00:00

Exciting New Client Service

I’m itching to tell clients about some fantastic new services that I am testing at the moment. In a nutshell this will enable clients to review and amend information that we hold easily, any time of day, anywhere on planet earth. Lots of useful goodies which will make life easier for us all (hopefully).

As ever, I’m working to promote our clients interests and have got to the front of the queue as I beta-test the systems. I’ve been pushing for this functionality for several years and whilst it has taken a long time, there have been very good reasons for the delay (honestly!) all of which make the new services even more robust and a better offering altogether.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Exciting New Client ServiceDominic2023-12-01T12:52:09+00:00

Financial Education

I was at a branch meeting of the Institute of Financial Planners last night and listened to some interesting stuff (well for me it was). One of the points that was made was that an IFAs/Financial Planners website is not really there to educate clients/interested parties – as plenty of other sites do this job perfectly well. I would certainly agree that other sites do offer some helpful guidance, but I wonder what your thoughts are? Who else is better placed to comment!

Here is a link to Money Made Clear which is produced by the FSA for everyone to use. Whilst I know that the FSA see an awful lot of duff advice, it does rather irritate me that the assumption is that most advisers don’t provide the facts, confuse and confound clients with selling techniques and jargon. Their own documentation (available to all) is about as jargon-full / double-dutch as it gets!

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Financial EducationDominic2023-12-01T12:52:10+00:00

Henderson Shuffle the deck

Following the acquisition of Gartmore, the task of re-arranging the chairs has begun. This is no easy task as both Henderson and Gartmore have some excellent Fund Managers, many of whom are well known within the industry as “Star Managers”.

In these more judious times, names are not drawn from a hat (not that you ever thought they were) – rather an attempt to find the best fit of style and culture and of course “va va voom”. 2011 brings with it many challenges and as a frequent dog walker in Richmond Park, the similarity between the current deer cull and the inevitability of a cull at a firm where there are now “too many chiefs” has resulted in the first set of redundancies. In this instance it is the Multi-Manager fund managers Mark Harris and Craig Heron who have left Henderson.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Henderson Shuffle the deckDominic2023-12-01T12:52:10+00:00

Funds: Premier Money Market Fund

One of the Cash or Money Market holdings that we have for clients is within the Premier UK Money Market Fund. If you have a holding in this fund you may have recently received a letter advising that Premier plan to alter the objectives and scope of the fund. In essence they want to be able to use other forms of investing, which by defualt make the fund more “risky”.

We have selected the fund as part of a portfolio due to its low risk nature. The proportion of holdings within this fund (or those like it) will be greater for those with lower risk portfolios. I am currently reviewing the fund and will be writing to investors with holdings outlining my advice. In short there are alternative funds that do not use derivatives or gearing within this sort of fund.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Funds: Premier Money Market FundDominic2023-12-01T12:52:11+00:00

Back to Basics – the future is…farming

Here is a 10 minute video

[click the link] that you may find of interest. It is presented by Sarasin and promotes their Agrisar Fund, which is one of the funds that is certainly on my radar and something that I am considering for portfolios where available. Its quite a good little film about what is happening in developping nations and how the increased wealth results in higher demand for food. Have a look and let me know what you think.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Back to Basics – the future is…farmingDominic2023-12-01T12:52:12+00:00