March 2011 - Page 3 of 4 - Financial Planning in Wimbledon

When it is not what it says on the tin…

There is a really good free tool called “Managed Fund Analyser” that can be used by advisers and clients to review the level of volatility and risk associated with certain funds. This is a free tool provided by Skandia, market leaders in investment platforms.

You can select from Unit Trusts, Life Funds, Pension Funds and even Offshore Funds and then select from certain ABI sectors – typically Cautious Managed and Balanced (a couple of others too). I think pretty much all of the funds are shown (within the related categories) and this allows you (or me) to compare certain funds based upon historic data. The results are troubling.

On the whole this information adds weight to the argument in favour of passive investing (something that we focus on with our clients) as there is very obvious evidence that the extra charges for a manager are invariably not worth the cost. In addition, the level of risk being taken is out of sync with the original mandate that both the adviser and client thought was the case. This demonstrates the vital importance of regularly reviewing your investments…and pensions…and investment based life products.

All in all, this is a fabulous tool that Skandia have provided free of charge, but the conclusions are very concerning for investors. For example, pension funds that are alledgedly “Balanced Managed” are considerably towards the high to very high risk end of the spectrum over 3 years. This is in part due to the credit crunch admittedly, but it would do little to help an investors confidence and suggests that the Fund Manager may not be as balanced in their management as advertised.

In short – review, review, review.

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

When it is not what it says on the tin…Dominic2023-12-01T12:51:51+00:00

Market Round Up

You can find the market data for the year up to the end of February 2011 in our monthly market report. This reveals that so far in 2011 the biggest increase has been in Oil. This will come as little surprise to anyone that has understood that the middle east is having something of a power stuggle. Oil has risen 18.7% in the year to date. Few of us will be quite so pleased when we fill up our cars in the forecourts. There has been a direct knock-on effect with the Baltic Dry Index (an index made up shipping prices for “dry” cargo worldwide). This index has fallen nearly 30% in the first two months of this year. Not to worry though, our clients do not have money in this index. FTSE100 up 1.6% for the year to date, most western markets are performing better to date than the UK, with the Asia Pacific region being the notable exception.

Diversity and a long-term view is everything!

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

Market Round UpDominic2023-12-01T12:51:52+00:00

Friends Life

Further to my post about Friends Provident and AXA, here is the new Friends Life logo and details from the horse’s mouth. This is a link to the leaflet that is being mailed to policyholders. The AXA rebranding to Friends Life begins next Monday on 14th March 2011.

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

Friends LifeDominic2023-12-01T12:51:53+00:00

Tax Year End 2010/11 – Time for Action

David Pointer is a tax specialist working in central London. Here are a few of the key issues as we run up to the end of the 2010/11 tax year. David runs the Open Tax Consultancy and helps high net worth clients with sophisticated tax arrangements, if you think that this is relevant to you please get in touch.

With the end of the tax year only four weeks away people are busy taking out ISAs and topping up pensions, these simple but effective steps show that tax planning is no longer the kingdom of the rich and famous. A warning bell then, have you looked at your tax profile recently, taken stock of your personal tax situation and that of your family? Have you considered the various tax reliefs and tax efficient investment opportunities available to you? Are you sure you understand what you can claim and as importantly what will ruffle the feathers of the tax man?

For the more straightforward a good start is to think about what reliefs can be claimed, the annual capital gains tax exemption is a good example – £10,100 of tax free gains each year or £20,200 if you are married. If inheritance tax planning is an issue have you used the annual exemptions for this year and last year? Do you understand exempt gifts out of income? For the more adventurous amongst us there is perhaps Venture Capital Trusts that gives income tax relief for investing or the Enterprise Investment Scheme that boasts income tax relief, the opportunity to defer the capital gains tax payable on other assets sales and inheritance tax exemption, all freely on offer and, subject to ticking all the boxes needed, perfectly agreeable to HMRC.

In writing this I should also say it’s very important to remember that there is a close interaction between investment choice, personal circumstance, portfolio balance and taxation…… just because an investment offers a tax break does not give it a Midas touch. Tax relief can certainly be used to enhance considerably investment returns but if you can’t get your money back when you most need it then all that glistened may well not have been tax gold. So clever advice is to talk to people who collectively know their tax and investment onions, which is where Solomon’s and Open Tax Consultancy can help

With the government spending squeeze and taxes on the rise people more than ever are looking to plan their tax pain away, charity it seems has never been closer to home. Tax by definition is taxing.

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

Tax Year End 2010/11 – Time for ActionDominic2023-12-01T12:51:53+00:00

Green Energy – A Boost for Your Businesses

There are £550m of Government loans available to businesses as a new initiative to get business to conserve energy and use it more efficiently. This is all due to a deal announced yesterday between Siemens and the Carbon Trust.

The loans will be provided by Siemens Financial Services in the UK, with the Carbon Trust assessing the cost, energy and carbon savings of the plans proposed by companies. The Carbon Trust anticipates it will generate lifetime energy cost savings of £1bn and 5.5m tonnes of carbon, which is fairly impressive!

The scheme will be available from 4th April 2011 and any energy equipment is eligible as long as it meets the scheme’s energy-saving criteria. This replaces the current scheme through which the Carbon Trust made interest-free loans of up to £250,000 each to small to medium-sized enterprises for energy efficiency ends later this month on 28 March.

The loans will be made at commercial rates for periods of one to seven years and sums from £1,000 to several hundred thousand pounds.

Chris Whitelock of Pure renewables says: “This is a very welcome initiative at a time when government-backed ‘green schemes’ are becoming more diluted with every passing day. Previous Carbon Trust industry loan arrangements have been difficult to implement with eligibility being limited to unrealistic payback timescales on renewable systems of just 4 years. Hopefully this new scheme will broaden the application of renewables in the industrial sector to a level which will actually make a tangible difference to both energy costs and carbon emissions. At last, it looks like we’re getting something with substance.”

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

Green Energy – A Boost for Your BusinessesDominic2023-12-01T12:51:54+00:00

Government Promise Red Tape Reduction

At last nights Mansion House dinner, Vince Cable discussed how the Government is keen to help small businesses by cutting the amount of red tape. He is reported in the Financial Times to have said:

“I confess to a certain exasperation with commentators and opposition politicians who, for reasons of ignorance, amnesia or mischief, assume away the past and expect that the Government can somehow guarantee an immediate, miraculous return to rapid economic growth through some all-encompassing plan. Developed economic markets cannot be made to grow like the Soviet Union.”

If you own your business, do let me know if you find any reduction in red tape.

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

Government Promise Red Tape ReductionDominic2023-12-01T12:51:54+00:00

Friday Morning Hope

Half full or half empty, becomes a fairly silly perspective when you come across something like this. At the end of a week, I’m trying to reflect on what has been achieved, what I am thankful for, not the seemingly endless list of things to do, have and want. Here’s an incredible short video, hopefully to pep up your Friday.

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

Friday Morning HopeDominic2023-12-01T12:51:55+00:00

Revolution – could it happen here?

In the last 3 weeks we have all witnessed the revolutions occuring in the middle east. Out with the old and in with the new. In regions that have little experience of democracy this is a significant moment in their history.

Here in Britain, we take our democracy fairly lightly most of the time and indeed over the last couple of years our politicians have been found wanting.

The Budget is now set for 23rd March – 3 weeks time. The Budget has a significant impact on most of us – not just in terms of how much we spend filling up at the petrol station, but the wider social and econmic map that unfolds. The Chancellor is open to suggestions and representations as he and his team put together the Budget. You are invited to have your say.

I quote: “A Budget representation is a formal written representation from an interest group, individual or representative body to HM Treasury with the aim of commenting on Government policy and/or suggesting new policy. HM Treasury welcomes representations as part of the policy making process.”

You can make your representation by clicking the link here to HM Treasury…. I wonder if you could start a revolution? let me know if you decide to have your say.

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

Revolution – could it happen here?Dominic2023-12-01T12:51:56+00:00

Tax Reliefs Review – Handed to Government

I have previously covered the fact that the OTS was reviewing a variety of tax reliefs. Today they have published their report. Remember that the purpose of the exercise is not to reduce or incease tax, but to review and simplify…. so here is the 191 page report!

The report recommended that 45 reliefs should be abolished; 17 reliefs should be simplified and 54 reliefs should be retained. They also found that there are 8 expired reliefs which should be removed from legislation. The recommendations have been submitted to the Chancellor ahead of Budget 2011.

Most of those rleiefs that are being reccomended for abolition are really not that significant. Life Assurance Premium Relief (LAPR) which was scrapped on life assurance policies from March 1984 – some 27 years ago, is still available to some policies (taken out over 27 years ago). This is a tax complication and is being proposed for abolition. An unusual relief is for “Black Beer” which is exempt from excise duty. This benefits one beer producing company and is generally not consumed outside of Yorkshire, the exemption dates back to the 1930’s and is also being proposed for abolition.

In terms of the recommendations for simplification – the main headlines will be Enterprise Investment Schemes, Venture Capital Trusts and Entrepreneurs’ Relief. I cannot find anything in the document relating to inheritance tax, pensions, ISAs or Investment Bonds. However, there is a call for the Government to review IHT, but the OTS felt that this should be a top-down approach rather than altering the various associated reliefs available, so this does not mean that IHT has escaped a review – probably deferred. To quote the review:

During the review, a number of key themes have emerged:

• Merging income tax and NIC – this is a long term project of structural reform that would deliver major simplification;

• Employee benefits and expenses – The longer term aim would be to align the treatment of employee benefits, with shorter term aims of simplifying many minor benefits with a de minimis limit of £100/£500, or amending the current £8,500 threshold;

• Inheritance tax and trusts – the reliefs for inheritance tax are integral to the policy and we consider that a more appropriate approach would be to review the tax as a whole;

• Capital gains tax, particularly as applicable to companies – the capital gains systems for individuals and companies have drifted apart, with gains by individuals taxed at a lower rate than income to reflect inflation, whereas companies are still required to calculate indexation. Our aim would be to realign the treatments and simplify the tax, but as there are changes in relation to corporate capital gains expected in Finance Bill 2011, this is clearly a longer term project; and

• Environmental taxes – Both landfill tax and aggregates levy should be reviewed, as both regimes contain basic charging provisions with numerous exemptions and it may be more appropriate to define what is caught rather than what is excluded.

In summary, this is what the OTS would suggest to the Government (Treasury):

Predictability: Objectives for major reform to be set out, including how they will be taken forward and the timetable;

Stability: Majority of changes to be announced at least three months prior to the start of the tax year in which they come into effect or publication of the Finance Bill in which they will be included;

Simplicity: Setting up of the OTS and ensuring that simplification is at the heart of the Government’s agenda

Scrutiny: More legislation to be published in draft, to allow for pre-legislative scrutiny; and Transparency: Tailored Tax Impact Assessment, replacing the current Regulatory Impact Assessment used across Government, plus more information to be published on costing of tax policies, improved supporting documentation accompanying tax changes, and consideration of greater use of sunset clauses for post implementation evaluation.

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

Tax Reliefs Review – Handed to GovernmentDominic2023-12-01T12:51:56+00:00

iPad 2 – So good they made it twice

I’m not a gadget guy (at least I don’t think I am) – but sometimes there is something that comes along and just seems to be fantastic. The iPad is due to see its first successor launched later this month, in theory coming to the UK on 25th March. So, just in case you are thinking of spending the money now, it may be worth holding on a few weeks.

The genius of Apple marketing and design speaks for itself. Its not everyone’s cup of tea, but this is certainly a revolution in the IT world.

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

iPad 2 – So good they made it twiceDominic2023-12-01T12:51:57+00:00