PROPERTY FUNDS

TODAY’S BLOG

PROPERTY FUNDS

We all know the saying “as safe as houses” but I wonder how many consider how sensible this phrase is. Anyway, you may have read in the press that property funds, I think pretty much all of them are currently closed or suspended.

You do not need to panic. We do not invest our clients into property funds. One of the many lessons that I have learned over the years is not to hold anything that is not liquid. Whilst a property fund does not hold houses, it holds large scale commercial property. This is anything from a shopping centre to office blocks or even industrial sites. The main advantage is the rent that tenants pay to the owners, which is often rather predictable and long-lasting.

NOT EASY TO SELL A SHOPPING CENTRE

I’ve never been keen on property funds for the reason that there are other alternatives and frankly, history, literature and even religious texts are full of examples of tenancy gone wrong. When people want their money out, it isn’t easy to simply sell a shopping centre, so its paid from cash reserves until deals can come through, which often means that funds hold a fair bit of cash to cover normal exits. I have now experienced multiple occasions when property funds were suspended and never want to put clients at risk in this way.

Admittedly there are REITs (Real Estate Investment Trusts) which is really an investment into a single company which then invests in property. The main advantage being that you own shares in the company, which can be much more easily traded (in theory). However, as a company and “Investment Trust” it can borrow money to invest in more property – known as gearing. This can be great when things are going well, but disastrous when they are not, magnifying the returns of each.

As there are plenty of ways to skin a cat, I just don’t see why you need to take this additional risk, which is dressed up as diversification. So we don’t… and that’s another thing you don’t have to worry about.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

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The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

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PROPERTY FUNDS2020-03-27T10:15:32+00:00

THE GLOBAL MARKETS

TODAY’S BLOG

THE GLOBAL MARKETS

There is little chance that you have escaped the news or the reality that the global stock markets have been very turbulent. The charts are either setting new records or getting pretty close to them. So, by way of an update I thought that I should remind you of some of the basic investment principles that we believe and are applied to your portfolio.

Firstly, we cannot control the markets. Let us simply acknowledge the reality that the prices of assets around the world are not things that any of us control. Neither can we control Government policy. In truth there is very little that we can control, but when it comes to investing, it may as well be a secret, or so it seems.

YOUR BEHAVIOUR

I am not going to suggest that your feelings are things you can control, they are real and need to be acknowledged. However, they are not the basis for a good investment experience. When it comes to your portfolio, none of us are naturally programmed for optimal performance. So, whilst we note our feelings, we do not base our plans around them. We base our plans on the goals you have set and the basic, easy to say, hard to do, investment principles.

ASSUMPTIONS

As every “crash” happens, investors invariably tell themselves the same thing… “this time its different”. The truth is that unless you genuinely believe that capitalism, globally is dead, then nothing is different. Yes, there are things wrong with capitalism, but if its basic premise is to raise money so that companies and organisations can create and meet the needs of real people in different markets, that creates jobs, wealth and share profits and therefore prosperity. If you don’t believe that, then you really should not be investing in anything at all.

I am not pretending that there is not, or will not be some significant difficulties and hardship around the world as a result of the pandemic and crisis of confidence in markets, but it will return, it is a question of when, not if.

BULL and BEAR

This in mind, Vanguard produced a rather helpful chart this morning which I wanted to share with you. This shows the Bull and Bear runs of the FTSE AllShare Index. Note the falls and the durations of the respective “runs”. I have put the pdf of this below. This shows total returns, so includes the income (dividends) from shares. This takes a long-term view, since 1900. So before all of us were alive, through two world wars and unspeakable things that man does to man. Will we ever learn? Here is another opportunity for you as an investor to do so. Do not panic, this will pass.

In the office we have a sculpture by Linda Hoyle of a bull and bear that I commissioned (sounds fancy, but it wasn’t). This is in our reception and is a reminder that both are ever present, battling for the upper hand. There is opportunity in both. You can find Linda’s work here.

Download the pdf: Solomon’s Bull and Bear Markets

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

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The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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THE GLOBAL MARKETS2020-03-26T15:47:34+00:00

SHOULD I INVEST NOW?

TODAY’S BLOG

SHOULD I INVEST NOW?

The global stock markets have fallen further and look likely to remain volatile for some time. Whilst there are lots of good reasons to be concerned, we also believe that markets will recover. Every time there is a “crash” we hear people say that this time it is different… but it never is different, it’s the same problems reframed in a different way, for a new crisis. The problem is essentially the same. Fear.

If you believe that over the long-term businesses listed on stock markets deliver jobs, security and wealth then there is no reason to believe anything will change when you have a long-term mindset. Remember that commercial innovation always happens, some companies go bust as they are unable to adapt, new ones step in, technology evolves, everyone moves forwards. If you are investing for days or weeks, then frankly that isn’t investing its speculation and I wouldn’t advise anyone to do that. Investing is designed for long term wealth creation.

TIMING THE BOUNCE BACK

Trying to time an investment for the exact bottom of the market is impossible (well it would be luck). The truth is that the markets may fall further, we don’t know. However, we expect them to recover – much like the overwhelming vast majority of people will recover from coronavirus. It may take weeks, months or even years, but it will recover. That it not to say that life may be more difficult in the short term and require patience and assistance.

So to my mind, this is a good time to invest due to low market valuations. However, as always I would remind you that I advise everyone (including businesses) to hold somewhere between 3-12 months of typical spending in reserve for an emergency. This is that time. If you have this and have reviewed your numbers, including perhaps making some minor reductions to spending, then if this still fits your plan for your life, then there are good reasons to invest.

The one concern I have is the practicalities of getting investments done in time for the tax year end, primarily due to a reduced workforce and lots of demand. So I would encourage anyone wanting to make tax year specific investments to do so as quickly as possible.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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SHOULD I INVEST NOW?2020-03-16T10:49:17+00:00

A TRANSFORMED INVESTOR

TODAY’S BLOG

A TRANSFORMED INVESTOR

I came across this article which may be of some help to you. Dave Goetsch one of the executive producers of the hugely successful “Big Bang Theory”, who wrote a piece for Dimensional, one of our investment partners. This is his experience…

Seeing all the recent headlines about the sudden downturn in the stock market has transported me back to February of 2009, when I was close to despair. It’s striking how different I feel now.

In February 2009, the stock market was down around 50% from its high, and everyone seemed to feel like the sky was falling. I was familiar with this state of panic because my relationship to the financial markets was that I didn’t trust them.

They were always going up and down in ways no one could predict, and I couldn’t trust those folks who said that they could anticipate what was going to happen. So when the market went down, I went down with it—sinking into a depression, knowing there was nothing I could do. What a difference nine years make. I haven’t changed because the stock market rebounded. I changed because I learned that there was a different way to think about investing. I was right not to trust those people who thought they could predict what was going to happen in the markets, but I was wrong in thinking that there was nothing to do. I’ve learned that I can have a great investment experience if I just accept a few simple truths.

DAVE GOETSCH

I have to understand the uncertainty of the market. The stock market, as measured by the S&P 500 Index, has returned about 10% per year over the last 90 years, but there are very few individual years in which it has ever actually returned that amount. In fact, how many of those 90 years do you think the S&P 500 was up more than 20% or down more than 20% for that year? The answer is 40. Astounding, right? I wish somebody had explained that to me decades ago. Then I would have known to look at stock market returns in terms of decades—not years, months, days, or hours. I would understand that so many of those articles and cable news pieces are just noise, designed to keep an audience obsessed and unsettled.

I haven’t changed because the stock market rebounded. I changed because I learned that there was a different way to think about investing.

In order to be a long-term investor, you have to have a long time horizon. This can be hard to remember when you’re being assaulted by noise, but if you can stay strong, the results are stunning. By results, I don’t mean the investment returns, which hopefully are good. The return I’m talking about is how I feel every day. I worry less—not just about the future, but also about the present. Of course, I know that there are no guarantees when it comes to investing, but I feel like I’m going to be okay. I have a plan.

There’s no way I could’ve done this without a financial advisor. I needed someone who could not just talk me through what my asset allocation should be, but also help me work through how I felt about investing and what exactly I could do to change my perspective.

I was a mess nine years ago. Now, my outlook is totally different. The markets haven’t changed; they still go up and down. The difference is, I don’t anymore.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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WHAT WE’RE ALL ABOUT

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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A TRANSFORMED INVESTOR2020-03-13T12:58:58+00:00

IN SEARCH OF ANSWERS

TODAY’S BLOG

IN SEARCH OF ANSWERS

I had the unwelcome task of writing to clients to advise that the value portfolios have fallen by over 10% since the start of 2020. The emails that I sent seemed to be well received. Today has been another very tough day for investors (and their advisers). The charts are rather frightening, this comes at a time when we are all (most of us anyway) rather anxious about the state of the world and a deep sense of unease.

So, without wishing to fudge any issues, I thought it best that I re-use the bulk of the content that I have been sending.

It is now a regulatory requirement to tell you when a portfolio falls by 10%. This is a new experience for me, despite being an adviser for several decades. I genuinely believe that this new requirement comes from well-meaning regulation, but is entirely counter-productive, because it is essentially alarmist. I will endeavour to add a little more flesh to the bones.

Focus on what is important

SHOULD YOU WORRY?

Should you worry?  No; but anxiety and concern are normal responses to ‘seeing’ the value of your portfolio fall.  Anxiety or fear are normal responses to ‘danger’ or bad news.  We are built that way and it is why we have survived as a species for as long as we have. However, the instinct of ‘flight’ is of no use to investors.  The stock markets of the world fall in value each year.  I would refer you to the various articles I have written about this over the years and remind you that 1 in 4 calendar years have negative returns.  This is part of ‘the norm’ and indeed we don’t get the positive returns without the negative. However yesterday’s headlines of the FTSE’s second largest fall in a single day does not really help calm nerves.

UNCERTAINTY IS NORMAL

The problem with investing is that markets are not predictable, despite appearing so.  What is predictable is irrational investor behaviour. This is precisely why we ask you to complete an attitude to risk questionnaire.  So that a suitable portfolio is constructed for you – one that provides the chance of delivering the returns you need whilst enabling you to sleep at night.  You will have experienced similar falls in value before, but either didn’t notice, or were reassured.

WHAT IS A LOSS?

When the value of anything falls, it only impacts those selling.  A crash in property prices, impacts those selling their home, most of us do not notice, although it may provide conversation around the dining table with friends or colleagues.  Unlike property, the value of equities and bonds are transparently priced throughout the day in a highly regulated market.  When you sell your home, frankly the price is a bit of a guess by the estate agent, surveyor and then haggled over by seller and buyer … in practice, a very small and biased market.

The key is not to panic; not to sell.  You know this, but we also know it is hard to do.  You know that you should sell at the top and buy at the bottom, however as humans we tend to do the exact opposite.  I’m not going to pretend that this doesn’t make us all wince and wonder, but equally I will remind you to stick to your plan – yours; not those of a media which seems only intent on making you miserable.

Your portfolio is globally diversified, it is well balanced, it is low cost and it is properly reviewed.  We have biases towards smaller and value equities which over time will demonstrate to be better value.  There is a  huge amount of research that should you wish it, I can point you to.  However, I tend to think of that as my job … to help you make better decisions with money and help reduce or avoid all the daft ones.

THE UNCOMFORTABLE TRUTH

If you are investing on a monthly basis, the fall in prices is a bit of a bonanza – because you buy more for the same money.  We expect values to rise.  They will; it’s just a question of when.  For those who add lump sums, similarly now is essentially a discount sale that will not last.

Those who are withdrawing money have a much tougher time.  The fall in prices means you sell more holdings to get the same figure out. Thereby not benefitting as much when prices rebound.  They will, and you will, but not as much.  In an ideal world, you will have discussed and outlined your plans for income or lump sum withdrawals and we have already factored this in.  If you need to review this, then please get in touch.

DO NOT OBSESS OVER THIS

Looking at your portfolio each day will never help anyone.  It will rarely provide comfort.  Worry will not help you to live your life well.  You have to trust that the fundamentals of investing will remain true today, next week and next year as they have done over the decades.  Yes – there are ‘bad times’, but remember that market returns are positive 3 in 4 years on average, we simply don’t know the order or reason.

You are investing for decades and I have no doubt that this too will pass.

YOUR COMPLETE FINANCIAL LIFE

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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IN SEARCH OF ANSWERS2020-03-12T18:04:54+00:00

STAMPS TELL STORIES OF INFLATION

TODAY’S BLOG

THE PRICE OF A STAMP

Royal Mail announced yet another increase to the price of a first-class stamp. As of 23 March 2020, the price will rise from 70p to 76p. Second class rises 4p to 65p. This will possibly have you gasping at yet another increase and recollecting when stamps used to be much cheaper.

This neatly leads me to discuss the topic of inflation. Whatever anyone within the financial world tells you, this is arguably the most devastating element to your financial wellbeing. Imagine you have £100,000 and inflation runs at an average 3% a year. Over the course of 25 years £100,000 is effectively worth £50,000.

Most people should be investing for decades, not days, weeks or months – decades. Your finances need to outlast you. When you enter the adult workforce and ultimately leave it, you have to rely on your investments to provide an income.

First Class 1970,1980,1990,2000,2010

FIVE DECADES OF FIRST CLASS STAMPS

The price of a first-class stamp 10 years ago was 41p. In the millennium year 27p would have covered the cost of your standard first-class letter, which was not that much more than the 22p it cost in 1990. If you remember 1980, you will perhaps remember the 12p first class stamp and a decade before that – well, we hadn’t yet gone decimal, so 5d would have paid for your first-class letter which is around 2p. Over 50 years the price has risen from 2p to 76p for the same service.

The illustrations that you receive about investments (which are nothing like as beautiful as those of stamps) try to account for inflation, typically assuming 2.5%. CPI (yet another measure of inflation) is currently 1.8%.

IS YOUR MONEY GOING BACK IN TIME?

So, think on this. If your money in the bank is getting less than 1.8% interest, you are losing money. Your purchasing power is shrinking. Whilst this is great for those that owe money, it is terrible for those living off their savings. Yet I regularly come across people that lack into 3 or 5 years fixed rates of interest that are less than inflation. There are a variety of reasons, partly poor alternative cash deposit rates, but also a deep misunderstanding of how investments work and the dreaded “stock market” which news outlets seem to do their best to instils a sense of terror at the daily movements.

THERE IS NEVER A RIGHT TIME TO INVEST

Many of you worry about the right time to invest – the truth is, that it was 50 years ago, but otherwise it is today. Yes, we do not know what will happen to the UK economy, (we never do) we are facing all sorts of significant problems (again) but these will pass (again) being replaced by the next round of bad news and you will still have to live with the consequences of your decisions.

CHECK YOU ARE NOT DESIGNING TO FAIL

As the tax year is drawing to a close, check that you are not holding too much in cash. Certainly, having access to cash is vital – for planned expenses and the occasional mishap. You should have an emergency fund if your income is likely to stop. However, beyond that, you need to deploy your money to work for you over the coming decades so that it grows faster than inflation.

Do not make the mistakes you made a decade ago, holding onto cash and worrying about the financial crisis, or the decade before about Y2K or the one before that… inflation does not reward anxiety, it eats it for breakfast.

Pick up your phone or send me an email. It’s about time that this was mastered. Let’s get started…

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

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STAMPS TELL STORIES OF INFLATION2020-02-22T08:48:01+00:00

WARNING ABOUT LIFETIME ISAS

TODAY’S BLOG

WARNING ABOUT LIFETIME ISAs

Most of our clients have ISAs, because they are a fantastic way to grow investments in a tax free environment. Lifetime ISAs, or LISAs are not really aimed at the sort of people we work with. However pehaps you have a child, friend or colleague, typically under the age of 40 that might have a LISA – this may be worth sharing with them.

An ISA but with tax relief

Lifetime ISAS (sometimes called LISAs) are a way in which many people will opt to save money – be that to buy their first property or for later in life. This was a Government response to attempt to help young people build a deposit to get onto the property ladder (not a good one in my opinion). The total penalties savers have paid when withdrawing their money in a Lifetime ISA has been revealed by HM Revenue and Customs (HMRC). Savers who have a Lifetime ISA can get a 25% government bonus added to their savings in this type of account – up to a maximum bonus of £1,000 per year. The maximum amount which can be paid into the account is £4,000 each tax year – up until a person reaches the age of 50. But while the 25% bonus may attract some savers, there are some rules about withdrawing the savings. The money can be withdrawn from this type of ISA if a person is:

  • Buying their first home
  • Aged 60 or older
  • Terminally ill, with less than 12 months to live.

Break the agreement, expect a hefty charge

However, a 25% charge must be paid if the saver withdraws cash or assets for any other reason. The withdrawal charge aims to recover the government bonus received, and applies an extra charge to the original savings. this means that if a person treats their Lifetime ISA as a short-term savings product, it may be that they get less back than they paid in. Data obtained by the Royal London in a Freedom of Information (FOI) request shows that HM Revenue and Customs (HMRC) have so far charged more than £9million in penalties for withdrawing money out of a Lifetime ISA. In short people that picked the WRONG type of ISA pay a price.

YOUNG HOUSEBUYERS

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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WARNING ABOUT LIFETIME ISAS2020-01-24T10:27:53+00:00

GOOD NEWS FOR CHILD TRUST FUNDS

TODAY’S BLOG

GOOD NEWS FOR CHILD TRUST FUNDS

Young people with a Child Trust Fund (CTFs) could see their savings automatically rolled into a new tax-free savings accounts at maturity under new government proposals. The first Child Trust Funds are due to mature in September this year and, under current arrangements, will be automatically cashed in once the account holder turns 18.

CTFs could instead be automatically rolled over into another account that continues to shelter the young saver’s cash from the taxman. Child Trust Funds were launched in 2005 as a way to encourage parents to start saving for their children. Children born between September 1, 2002 and 2 January 2, 2011 received between £250 or £500 to be invested on their behalf.

Parents, family and friends could continue to contribute to the account, with all gains tax-free. More than 6 million CTF accounts were opened and no money could be withdrawn until the child reached age 18. That means the first tranche of accounts will mature in September 2020. But CTFs were discontinued in 2011 and replaced with the Junior ISA (JISA).

For years, children with CTFs were left in limbo as savings providers stopped offering new products as JISAs took precedence. In 2015, the Government ruled that money held in CTFs could be transferred out to a JISA. For those who kept their money in a CTF, the money would automatically cash out once the accountholder turned 18. But many have considered this to be unfair. Junior ISAs are automatically rolled into adult Isa accounts when a child reaches 18, meaning they continue to enjoy their tax-free status. The Government’s latest move looks to be levelling up the playing field.

Note that tha current JISA limit (which is a tax year limit on contributions) is £4,368 for 2019/20.

Child Trust Funds

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

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To get started download and use password – solomons

   

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GOOD NEWS FOR CHILD TRUST FUNDS2020-01-24T09:34:48+00:00

CHANGES FOR TRUSTEES

TODAY’S BLOG

CHANGES FOR TRUSTEES

A series of government moves over the past few decades have reduced their tax advantages and made trusts much less attractive to wealthy families. They are likely to become less popular still from March, when a new requirement will force thousands more trustees to list on a government register that is partially open to the public, or risk penalties.

Since 2017, certain types of trusts have had to report information to a government online register called the Trusts Registration Service (TRS). This came into being as result of an EU-wide directive to tackle money laundering. Far be it from me to imply or suggest that motivation for Brexit had anything to do with circumventing new EU Anti-money laundering rules!

To comply with the rules, all UK trusts that have to pay a tax liability such as capital gains tax (CGT), income tax, inheritance tax or stamp duty must report information to the register.

Trusts that are outside the UK but trigger UK tax must also do so, as must all trusts that are required to fill out a self-assessment tax return anyway. Currently the register is not publicly available, with access limited to law enforcement authorities. But from March 2020, the next phase of the EU directive (the fifth Anti Money-Laundering Directive) is set to increase the number of trusts that must submit reports.

It will also partially open up the register to the public, including journalists, leading some to worry about an erosion of privacy. Despite the UK’s imminent departure from the EU, the government is committed to implementing the directive and passing it into domestic law. Tax experts warn that hundreds of thousands of trustees and beneficiaries could be affected and need to understand better the possible impact of the changes.

TRUSTS & MONEY LAUNDERING

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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CHANGES FOR TRUSTEES2020-01-28T14:32:38+00:00

SCAMS AND GOOD LIARS

TODAY’S BLOG

SCAMS AND GOOD LIARS

Sadly, there are lots of ways to part you from your money. Unfortunately, the criminals are getting ever more sophisticated and we are all accustomed to being so overwhelmed by choice, that we often skip the task of reading the detail or asking more questions.

The problem is that when it comes to your money, you can lose quite a lot of it very quickly. Crooks rely on several things.

  • JARGON
  • PRESENTATION
  • FRUSTRATION
  • “PROOF”

JARGON

The financial services sector is full of jargon. We also often have multiple names or terms for the same thing – for example stocks, equities and shares are all the same thing. As for Bonds – let’s not even go there

PRESENTATION

In a world of low interest rates, where your hard-earned cash is going backwards in value because of inflation. If prices rise 3% and you only get 1% interest, you are falling behind inflation and the £ in your bank account cannot buy as much as it did. So being offered something that looks and sounds like a decent return, (particularly if it’s on a nice-looking website or advert) well nobody would honestly say you are being greedy. You just want to make your money work harder. However, the adage if it sounds too good to be true…

THE GOOD LIAR MOVIE 2019

FRUSTRATION

You are fed up with jargon, bad interest rates and the news regularly reports that millions were wiped off the stock markets. Oddly they never report that millions were wiped on, at best the news may mention the FTSE100 is up by something every 15 minutes, which is utterly pointless. So something that offers “guarantees” or suggests that it has nothing to do with the stock market – perhaps investing in something that sounds green (and good) is likely to appeal to your sense of frustration.

“PROOF”

Having a celebrity promote the “investment” or business opportunity is designed to give it some credibility. After all, celebrities are nice people aren’t they? They have reputations to uphold. Well the truth is that actors are paid to speak words, sports professionals invariably are paid to have words written on them. However nice they may be, they are paid for their promotional work.

How about those reviews from previous customers? Those star ratings? Or industry awards? If you have been around long enough, you will know that whilst these can be true, they are often partially true and sometimes not true at all. As a business owner I am regularly offered awards or encouraged to do something to get them, such as join a trade body that gives the impression of some credibility, when all it really means is that it’s a marketing club

You are a target, nothing more

Scammers prey on those that have money but don’t have the time or perhaps knowledge to think through what it being proposed. They target anyone.

The Good Liar

The new film “The Good Liar” starring Helen Mirren and Ian McKellen, showcases a scammer, a pretty good one. I may have some issues with the speed and ease at which things purport to be done (establishing a Trust, combining the wealth of two people, and an oversized calculator keypad to confirm live payments for sums less than £100m) but the mechanics of a scam are all there.

You can attempt to keep up with scams on the FCA website here: Alternatively, please get in touch, if you have any doubt about what you are being told, it is worth getting us to have a look at it. How much are your life savings worth to you after all?

As for the film, I quite enjoyed it. I may think that popcorn and a drink borders on being a bit of a scam, but the movie is entertaining and just short of 2 hours. Longer than a sports match and more informative. Here is the trailer.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

=

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

info@solomonsifa.co.uk    Call – 020 8542 8084

SOLOMON’S FINANCIAL PLANNING APP

Our free powerful new Finance & Tax app.
To get started download and use password – solomons

   

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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SCAMS AND GOOD LIARS2019-11-14T17:35:06+00:00