January 2012 - Page 2 of 3 - Financial Planning in Wimbledon

Tax Deadline Looming – Check P800 Forms

1954: An Inspector Calls – Hamilton

It is important that you check tax documentation. A key date in the tax diary is nearly upon us (31st January) and it is hard to avoid the HMRC advertising in London. However, just because you have a document from HMRC that says this is what you owe, it is worthwhile checking as often the tax inspector estimates tax. This is particularly so for a P800 form. The form is the HMRC view about whether you have underpaid or overpaid your taxes. Remember that under self-assessment rules you are personally responsible for the accurate reporting of your tax to HMRC.

Time is running out, but in order to prepare for each tax year you should obtain your P60 and ideally all payslips for the relevant tax year. Certificates or statements from your bank showing any interest paid and probably taxed on interest. You will also need dividend information, these form part of your income. You should also have details of any pension contributions that you made and any charitable donations. There are many other elements too – but this will depend on the nature of your investments.

I do not submit tax returns, but clearly all financial advisers have a pretty good understanding of the tax system (and have usually have qualifications for this). We ask for this sort of information so that we can get our records as accurate as possible for clients and remember that your tax position may significantly effect how your financial planning is put together and the order in which tasks are performed. Getting accurate from you information is vital.

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 Deadline Looming – Check P800 FormsDominic2023-12-01T12:48:06+00:00

One End is Another Beginning – Kodak, Film and Digital

1971: The Last Picture Show – Bogdanovich

The sad news that Kodak has filed for bankruptcy in the US (Chapter 11 there) makes the collapse of Kodak one of the the biggest in US history. The precise figures will take some time to come out, but consider these – Kodak has assets of $5.13bn and liabilities of $6.75bn a deficit of $1.62bn. The share price of Kodak reached $94 a share 15 years ago, but are now only a few cents. The market value of Kodak shrank over this period from $31bn to under $200m. That is an enormous collapse.

This is what happens when businesses cannot adapt quickly enough to changing markets. I want to use the analogy of the dinosaurs, but this would be very harsh on Kodak who did attempt to adapt – providing digital camera’s and ink for printers. Perhaps one of their biggest failings is that in the early 1990’s they developed a digital camera, but it is alleged that the Board of Directors were so terrified of the implications of the death of film that they sold the camera to… Apple. Ever since Kodak have been playing catch up and losing, almost as though they became frozen in time, like the images that they helped us all to create. Cashflows into the company have been deteriorating each year according the the 2010/11 Annual Report and Proxy Statement.

There is concern for Kodak’s UK arm, which has been downsizing dramatically over the last 10 years. In particular the deficit on its Final Salary staff pension scheme is estimated to be £576m which is now unlikely to materialise. According to the Financial Times, the company had paid £37.2m in 2010 and was scheduled to pay a further £37.7m in 2011. There were agreements to pay roughly £37m a year to the fund to help plug the deficit each year which would be increased to £62m in 2022. However, pension members should be covered by the Pension Protection Fund and there ought to be no alteration to those already in receipt of a pension from Kodak. All members of Final Salary schemes are meant to recieve an annual statement about the scheme, this should show if your scheme has a problem. Employees are probably well placed to determine if the company is doing the right things to make profits in the future and so ensure the future of the pension scheme. If you have concerns over your pension do contact me, planning a good retirement can be complex.

Reflecting on the history and demise of Kodak reminded me of a new play currently showing at The National Theatre called “The Travelling Light” a new play by Nicholas Wright and starring Antony Sher, which is a very moving story of the the first motion pictures made by a Jewish community in Russia. It powerfully captures the joy of a revelation and “new idea” perhaps also capturing the essence of “popular capitalism” it is thoroughly worth seeing. It will be on tour in in March and April, but can also been seen in some cinemas on 9th February 2012.

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

One End is Another Beginning – Kodak, Film and DigitalDominic2023-12-01T12:48:07+00:00

Doctors to the Ballot?

1932: Doctor X – Michael Curtiz

The report from the BMA that was released yesterday suggested that the changes to the NHS Pension Scheme will, as predicted, be a long battle. The BMA survey which was sent to members and associates in the first few days of the year had a very high level of respondents. There were 46,300 responses to the online and postal questionnaire. The results claim that 84% believe the Government’s proposals for further reform of the NHS Pension Scheme were unacceptable, with 63% willing to take industrial action over the issue. This has given the BMA and Unions the necessary mandate to examine options for a ballot about possible industrial action, should the Government continue to press ahead. This is scheduled to be held on Saturday 25th February.

Those caught by the proposals most impacted are 10 years or more away from retirement. The BMA suggest that over a third of doctors would consider early retirement if the changes proceed, this is also my own experience having met with a considerable number. In essence for most the scheme will become more expensive, have a later retirement date and be based upon career average earnings for all doctors (whichever scheme they are currently members).

The NHS Pension scheme has had significant reforms already and the previous Government with intentions to restrict tax relief to high earners, scored something of an own-goal with the reduction in the annual allowance and the way that this is calculated for members of pension schemes like the NHS. An own goal, because it was poorly thought through and could lead to double-taxation of many Doctors – particularly high earning Consultants with Awards. The NHS Pensions Agency have not been able to adapt their IT systems quickly enough to provide the necessary information in time for the tax year end, last suggestions were that such information would not be available until July.

As a consequence, advice for doctors in the NHS pension scheme has become an awful lot more complex. This is of course made worse by the proposals which have not been agreed. The NHS Pension Scheme is one of the largest in Britain and one of the best. Every pay rise makes it increasingly valuable. I have over 20 years of experience advising on the scheme, if you need to discuss your options about retirement please get in touch.

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

Doctors to the Ballot?Dominic2023-12-01T12:48:07+00:00

Plotting the course for your Journey

1959: The Journey – Anatole Litvak

As the media continue to cover the Costa Concordia cruise ship disaster, it seems that further revelations come to light. As yet, a proper report needs to be prepared, but certainly the reports to date seem to suggest that procedures were not followed at numerous levels. The cruise and shipping industry seem fairly convinced that most shipping disasters are the result of human error. So far things do not look good for the Captain. The video footage of people attempting to scramble into lifeboats is fairly terrifying and one can only imagine the terror that those aboard must have felt.

One message that seems to be coming from this is that the Costa Concordia seemed to be significantly “off course”. Given all the gadgetry onboard, it will presumably come to light as to why this was the case, if indeed it was. Clearly it must be to some extent, as no course would have been deliberately plotted for the rocks.

This reminded me that even with all the latest technology, disaster can still happen. Indeed one still needs a trained and wise head checking and double-checking. Think of the aeroplane pilot that performs a myriad of checks before and during the flight. In practice, often the aeroplane is on autopilot, but this is not sufficient and a wise head is still required. In a similar way, a good financial plan sets the course, but it needs tweaking and reviewing to ensure that it remains on course. Sometimes the journey is difficult and that is precisely when experience will have significant benefit. It is unwise to simply set a course and not pay attention. Things change, “stuff happens” some within our control and some not. A big part of designing the plan, is to build in the need for reviews to check progress. Now is the time to review yours if you have not done so lately.

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

Plotting the course for your JourneyDominic2023-12-01T12:48:08+00:00

How Reputations Are Ruined Over An Easy “A”

2010: Easy A – Will Gluck

There’s the good news and the bad news… which would you like first? let’s start with the Eurozone bailout fund, which had its Standard and Poor’s credit rating downgraded last night from AAA. This makes the bail out fund less attractive (solid) and therefore more money is needed to put things right. The IMF might not have enough money either… so could they have some more? Mr Osbourne is being asked to contribute another wad of cash to prop up the financial house of cards. He is keen to ensure that other nations (in particular China) also put more into the tin.

The Italian PM Mario Monti is sounding more than a little anxious as he is suggesting that Germany needs to still do rather more to support the system, which in translation means provide more cash so that new borrowing arrangements are not so punitive as to make them unworkable for Italy. This is not looking much good is it? Add this to the fact that on Friday night France had its AAA status downgraded and we now have the scenario of politicians bleating that the credit rating agencies are wrong and making the situation worse, a situation that they themselves had effectively allowed to occur. The bleating is getting louder and it is my opinion that the blaming will begin rather shortly.

The financial crisis is now akin to the each credit card being maxed out and no one is left able to pay the monthly payments. That is of course unless new money is “created” which is the preferred choice of most Governments except Germany, who are all too aware of the calamity that inflation can bring. Perhaps news of China’s rate of inflation decreasing together with Britain’s rate reducing considerably to 4.2% and set to fall to around 3% by March if Bank of England Monetary Policy Committee Member, Spencer Dale is right, will provide some comfort that inflation is not out of control. That said the Bank of England has a target rate of 2% which it still fails to achieve. Perhaps the signs of falling inflation may move the Germans to relax their views about printing money, though as one of the only growing economies in the world, why they should change policy would surely be questionable. That is until you consider that in this global economy Germany needs to sell manufactured goods to make their own numbers work. Angela Merkel will no doubt be reflecting on how she can pull off helping Eurozone neighbours without ruining her own reputation.

So what does this mean for investors? well frankly more caution. It is important that clients keep in mind when cash (capital) is required from a portfolio – planning withdrawals and ensuring that there is enough in reserve. I also advise checking that you remain “comfortable” with the level of risk within your portfolio and that you discuss with me any changes in your capacity for loss.

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

How Reputations Are Ruined Over An Easy “A”Dominic2023-12-01T12:48:08+00:00

FUNDS: Skandia Deposit Fund

1954: Cash on Delivery – Muriel Box

Skandia are changing their Deposit Fund. This is a fund that is available to investors on their original product range, which includes Investment Bonds, Pensions and Maximum Investment Plans (MIPs). Skandia intend to effectively move this to Blackrock and used their Institutional Sterling Liquidity Fund. Skandia believe that this will provide greater expertise and a broader and even safer fund for investors seeking the equivalent of a deposit account. The fund currently places deposits with a range of Banks and Building Societies, but this has become increasingly difficult to manage in light of the various problems with various Banks.

Skandia expect to make the changes in March and there will be no additional costs for the changeover to investors. Letters are likely to be sent to those with holdings in the fund over the next two weeks. No action needs to be taken to approve the change.

The Blackrock Institutional Sterling Liquidity Fund was launched in 1998 and consistently outperforms its benchmark which is the 7-Day LIBID (London Interbank Bid Rate). This is the rate at which Banks lend to each other for deposits from “overnight” to 5 years. As an Institutional Fund, normally the minimum investment would be £1m. The portfolio is made up exclusively of first tier securities and must have at least half of its holdings with a short-term rating of A1+. The fund qualifies as a UCITSiii Fund. There is a Fund Fact Sheet which says it is for Professional Advisers only, but anyone can actually view it with a web search. At the end of November the fund was worth nearly £21bn.

Clients with Skandia Life products will have holdings in this fund as it has formed a part of the portfolio. The team at Blackrock are well known in the industry for providing excellent cash management and have a very good record. However I shall be keeping this under review. Skandia do not plan to rename the fund, so it will still appear as the Skandia Deposit Fund. The Skandia (Life) Deposit Fund was one of the first funds that Skandia launched way back in 1979. At the moment, the interest rate on the Skandia Deposit Fund is much like most deposit accounts – poor. My view at this point in time is that as is often the case Skandia are taking a pro-active approach and recognising that in the current environment others are probably better at providing this service – hence moving the money to Blackrock.

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: Skandia Deposit FundDominic2023-12-01T12:48:09+00:00

Golden Gongs and Going Global

1964: A Global Affair – Jack Arnold

Last night the Hollywood Foreign Press Association had their annual gong ceremony in LA. This saw “The Artist” and “The Descendants” both winning best film – in different categories. The British media picked up on “British” interests, which meant Idris Elba for his role in Luther; Kate Winslett for Mildred Pierce and Downton Abbey as best mini-series made for TV. The new film “The Iron Lady” about Margaret Thatcher also saw Meryl Streep pick up the award for best leading actress… to add to her stockpile! This does bring into question what is “British” and frankly, is it important? like most products and services, the nature of a now small world means that many people from different nations are involved. The Iron Lady was in part produced by Film4, Pathe, the UK Film Council as well as Canal+ and CineCinema to name just a few. A global film requires global distribution and it is pretty difficult to describe any film with a global reach truly “British”.

This is to be in no way anti-British! It is always good to see people from Britain doing well in the film capital (in one category 4 of the 5 nominees were British). So congratulations to those that picked up awards – the long red carpet walk of award ceremonies for 2012 has now officially commenced.

Investing in “regular” investment products is also a multinational venture. A good investment portfolio will be globally diversified. Companies listed on the UK stock exchange invariably have a significant proportion of earnings generated from around the world, indeed as mentioned in recent blogs, some would be very difficult to describe as in any way “UK based”. This new world order, makes protectionist policies rather daft despite all the political ranting by all parties. Certainly we should be using home-grown talent to its full advantage and providing products and services that are locally sourced where appropriate. This sometimes needs encouragement – which invariably translates as financial support. Anyone with enough money can, for example invest into films and support “British” film. If you would like to know more about this get in touch. Of course in practice, most of us are aware that we live in a global economy that requires all to benefit. Consider some of the items you are currently sitting near, most have travelled considerable distance to reach you. So thinking globally is probably rather easier than some would suggest.

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

Golden Gongs and Going GlobalDominic2023-12-01T12:48:09+00:00

Dig That Uranium – Global Mining Fund Launch

1955: Dig That Uranium – Bernds

Today Barings have launched a new fund – the Baring Global Mining Fund. This is run by Clive Burstow who was with Blackrock and had responsibility for analysis and investment of the mining sector. He returned to Barings in June last year and has a wealth of experience as an analyst and this will provide him with some of the necessary skills required to run the fund. On the face of it, this seems like a great idea from Barings, mining stocks continue to dominate the key performers of a variety of markets. Of course mining is essentially getting something out of the ground, which is problematic at the best of times.

The fund aims to have somewhere between 70-100 holdings and will used the HSBC Global Mining Index as its benchmark. The benchmark has tumbled over the last year. It will hold non-ferrous metals like copper, aluminium, zinc and tin. Interestingly it will hold ferrous metals including ferrochrome and uranium. Precious metals like gold, silver, platinum and diamonds as well as a variety of commodities including magnesium, titanium, coal and iron ore amongst many others. The fund will have a truly global feel with the UK making up around 20% of the fund.

The million dollar question is of course, will Clive Burstow outperfom his peers due to his research, information and investment strategy? My understanding (which may be wrong) is that he hasn’t run a fund before but has clearly worked very closely with those that have. Lessons from the past would suggest that many themed funds launch on the back of successful historic performance that then becomes all too disappointing – rather like arriving after the event. If others are tempted to follow suit this might indicate a turning point in the short-term future performance of mining stock, which as you will be aware includes gold. We shall have to wait and see. Mining stocks have played a valuable part of a well diversified portfolio, but selecting the right stocks or the right fund is almost as precarious as mining. I suggest checking out Our Approach to Investing to see what I consider to be important factors.

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

Dig That Uranium – Global Mining Fund LaunchDominic2023-12-01T12:48:10+00:00

Another Bad Result for Footballers

2008: Pride and Glory – Gavin O’Connor

A news item that has just come to my attention is yet another Ponzi scheme. This time, it was one that appears to have been marketed to footballers based in the Midlands. The scheme is alledged to have offered monthly returns of 20% with capital guaranteed and able to be withdrawn at any time without notice. Sadly it appears that a number of people were duped by this.

Many will say, if the item is correct, that clearly this was a case of things being too good to be true and rather obviously so. However, for those that get bombarded by emails (and I had at least 3 bogus emails over the weekend which were not really from HMRC, Santander and Barclays) and are not familar with financial limitations, it is rather harder to judge what really is too good to be true – particularly when you consider that a Building Society offering a 5% deposit rate is also, frankly too good to be true.

This is precisely why you need someone like me to assist make sense of the huge array of Banks, Building Societies, Investment Houses, Stockbrokers, Hedge Fund Managers and so on, all willing to offer the answer to financial woes with “fantastic” products and services. The truth is rather different and often more complex than I would like. I work hard to reduce the financial mistakes that my clients would otherwise make on their own. This includes everything from having a proper Will in place to an appropriate investment strategy for your financial plan. The stockmarket or financial market is no place for pride, if you don’t understand something do not do it. If you want proper financial planning advice, get in touch – whether you are a footballer, movie star, business owner, member of parliament or anyone else. If I cannot help I will put you in touch with someone that can.

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

Another Bad Result for FootballersDominic2023-12-01T12:48:10+00:00

Cash Deposits – Deceptive First Appearances

1960: Circle of Deception – Jack Lee

Here is an up to date list of some of the current “best buys” for Cash ISAs and deposit accounts. Note that Virgin Money appear for the first time in the list as a High Street Bank having taken over Northern Rock. One note on this takeover is that anyone that had money with both institutions prior to the agreed takeover is unusually covered by the FSCS for both institutions, normally a merger would mean the you are only covered for the new institution. It is worth having a look at the FSCS website about what protection is provided on your cash savings and always worth diversifying your cash deposits for large sums.

One Year Deposit

Online: Yorkshire Bank 3.60%

Bank: Santander 4.20%

Building Society: Barnsley 5.00%

Two Year Deposit

Online: Yorkshire Bank 4.01%

Bank: Clydesdale 4.01% (same group as Yorkshire Bank)

Building Society: National Counties 3.76%

Instant Access

Online: Nationwide 3.12%

Bank: Virgin Money 2.85%

Building Society: Nottingham 3.25%

Cash ISA Fixed Rate

Online: Governor Money 4.50% (hybrid innovative account)

Bank: Halifax 4.40% (5 years!)

Building Society: Barnsley 5.00%

Cash ISA Variable Rate

Online: AA Savings 3.05%

Bank: Santander 4.00%

Building Society: Newcastle 3.05%

As ever, this is a guide, have a look at Moneyfacts for more details and always check with the financial institution that the deposit account suits your requirements for flexibility. Be careful about locking too much cash away with interest rates at an all time low. If you would like advice about the right mix of cash for you do get in touch, this should form a key part of your financial planning.

Please note that good rate of 5.00% offered by Barnsley Building society is in my opinion misleading. This is not really a deposit account. Many Banks and Building Societies are playing this game. In essence it is a combination of a fixed rate deposit account and an investment. Frankly this makes my blood boil as whilst it becomes clear what the product is, most people will see the headline rate and a considerable number of people that are short of time or perhaps financial vocabulary or financial understanding can quickly become confused by what this sort of product really is. Invariably this can create problems for ISA allowances and above all else access to the money. Nearly all of the Banks and Building Societies play this sort of marketing game, so I’m not going to vent too much about Barnsley, although this is no longer really a small Building Society trying to compete as they merged with Yorkshire Building Society in 2008. Together they have over £33bn in assets and I do not understand why the Barnsley Brand name is still retained and marketed as though in competition with Yorkshire (and everyone else).

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

Cash Deposits – Deceptive First AppearancesDominic2023-12-01T12:48:11+00:00