Financial Protection Archives - Financial Planning in Surrey

Are you under the finfluence?

Daniel Liddicott
Sept 2024 • 2 min read

Are you under the finfluence?

Social media has become awash with financial influencers (also known as ‘finfluencers’) over the last few years. Whether they are talking about tax on TikTok or informing people about ISAs on Instagram, there is a real danger that those viewing their content may be at risk of making harmful financial decisions as a result.

Giving financial advice as we do is extensively, and rightly, regulated to ensure that any recommendations that are made to you are coming from specialists who are authorised to do so. Whilst more generic financial information is not necessarily harmful i.e., explaining the ISA annual allowance; some information given with good intentions to the wrong group of people could lead down a dangerous path.

I have seen one such example from a YouTuber (naming no names). She explained junior ISAs (JISAs) and how she and her husband have started paying into one each month for their toddler. Not an overtly bad thing to do by any means. She continued to show projections of what she believed the value of the JISA would be at their child’s various milestone birthdays – a powerfully persuasive method of showing the benefits of doing this.

However, there are problems with this. She used returns figures for her projections that are unrealistic (even if using a stocks & shares JISA over the long term). She did not once mention that the value of investments can go down as well as up and that the funds could realistically run out. It is not beyond the realms of possibility that some people viewing this content might then have opened a stocks & shares JISA for their child without fully understanding the risks involved.

This is just one relatively small example of how providing generic, selective information could lead to potential financial harm. Finfluencers have also been known to promote high risk, unregulated products such as cryptocurrencies without truly understanding or conveying the risks involved.

When under the finfluence, caution is required.

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Are you under the finfluence?Jemima Thomas2024-09-16T14:58:22+01:00

Have you been scammed?

Dominic Thomas
Sept 2024 • 2 min read

Have you been scammed?

According to a recent report for LV, roughly one in seven adults have been the subject of an attempted pension scam in the last 12 months! That’s an enormous number, translating into about 7.3 million people.

A staggering 14% were encouraged to transfer money from their pensions by text message. It may interest you to note that about 4 million British adults lost money to such scams over the same period. That is an awful lot and begs the question – are the regulators really focussing on the right things?

Pensions are both simple and complex. Simple in the sense that they are a savings plan that you access to provide income in your retirement. Ideally this needs to last for the remainder of your lifetime, which then presents the inevitable question “how much is enough?” which of course is subjective and dependant on your expectations and lifestyle.

Pension rules are ludicrously complicated, made by successive Governments, each of which has been utterly lacking any long-term thinking. Complexity is perhaps a double-edged sword. Most people know enough to realise that they probably need advice, but the cost of this is prohibitive. A lot of the cost is due to regulation, but in fairness most of the regulation is well intended.

A problem we all face is that scammers are getting better. Deepfake technology makes a decent scam difficult to spot. It is relatively easy to set up an email, phone number and website that all look perfectly legitimate. Something like 36% of scams were reported as fake HMRC emails and text messages.

Regulators, pension companies and advisers would all likely say the same thing – please seek advice. The scam rate amongst regulated advisers is very low (contrary to press-driven opinion). The majority of scams take place through the everyday technology you use at home. If you come across friends or family who you suspect may be about to make a catastrophic blunder, please (please!) get them to call us. Certainly not everyone is going to be a suitable client for us, but if we can save someone from self-destruction, we are happy to take calls or emails.

Don’t wait for a friend to get scammed, get them in touch with us, so that we can ensure that they don’t get caught out.

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Have you been scammed?Jemima Thomas2024-09-10T15:48:43+01:00

What decisions would you alter from your past?

Dominic Thomas
August 2024 • 3 min read

What decisions would you alter from your past?

The appearance of Michael J Fox on the Pyramid stage at Glastonbury with Coldplay was a reminder of the need to savour the moments that we have.

For those who don’t know, Michael J Fox has had a successful career in film and television, most notably for his performance as Marty McFly in the Back to the Future movies. He has since revealed his battle with Parkinson’s disease which has had an increasingly debilitating effect.

In the original movie, teenager Marty McFly travels in time from 1985 to 1955 and meets his parents when they were at High School. The difference in fashion, attitudes and culture in just three decades made for good entertainment. Today it is now longer since the film was released than the time travel that Marty experienced, nearly a decade longer! As with most time travelling fantasies, the lesson learned is that a change in the timeline will likely lead to different outcomes.

Aporia is yet another film on the topic, but rather than travel back, time is bent to change the past. Malcolm’s sudden death as a result of a drunk driver leaves Sophie widowed and struggling to make ends meet, their daughter Riley is becoming increasingly disinterested in school or friends. Malcolm’s friend seems to have done the impossible in his spare room and invented a working Time Machine. Sophie (despite having seen Back to the Future!) decides to interrupt the time continuum with the hope of preventing the fatal accident.

I am sorry to say that my pedantic self took over as events unfold, I immediately thought, why don’t you now take out a decent level of life assurance! This is your warning, you have seen how difficult life can be when tragedy strikes and a lack of funds merely compounds the difficulty. Whist money does not compensate for the loss of a loved one, it certainly helps survivors to cope and continue.

No, it’s not terribly romantic of me is it! But then my view is that romance is for the living. Early in my career there was a well-known training film about the impact of death on a family. Its aim was to highlight the importance of life assurance and the relieving of stress on a widow… which of course had the agenda of getting me (and every other adviser) to sell more life assurance.

Over the years I have worked with many people who have lost a loved one. Some were far better prepared than others and some were not prepared at all. We get constant reminders that life is short and death is inevitable; yet most of us avoid thinking through the consequences of our death on the families and businesses we may leave behind.

It’s time to change that. You can take action today, there are not as many tomorrows as you think.

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What decisions would you alter from your past?Jemima Thomas2024-08-09T15:23:59+01:00

Are you falling in love with a scammer?

Jemima Thomas
June 2024 • 3 min read

Romance scams – preying on the kind hearted

I apologise if I’m becoming the bi-monthly agony Aunt in reminding you about the importance of financial trust in romantic relationships; but being able to trust your partner in any relationship is imperative. It’s also important to remind those of you who are single, divorced or widowed that it is vital that you’re not taken advantage of when establishing a new relationship.

We know that you, our clients, trust our advice and expertise, which is why we’d like to think that if any significant financial decisions needed to be made – you’d get in touch with us.

Unfortunately, preying on the kind-hearted isn’t at all unusual in the landscape of financial scams and fraud. We hope that all our clients would call us if you were getting a ‘gut feeling’ when something doesn’t seem or ‘feel’ quite right. We are here to reassure you on things and to flag up anything out of the ordinary to prevent you coming to any ‘financial harm’.

Lloyds Bank research shows that the number of people falling for so-called ‘romance scams’ rose by over 22% in 2023 (on the previous year). The statistics revealed that men and women aged 55-64 were the most likely group to be tricked by “fraudsters masquerading as love interests”. However, it is 65-74 year olds who lose the most money in these scams, giving away an average of over £13,000.

The fraud prevention director at Lloyds Bank, Liz Ziegler, weighs in:

“Targeting those looking for love is a cruel, but sadly common, way for fraudsters to cash in. Scammers can be incredibly convincing and leave their victims both emotionally and financially drained’’.

I appreciate that this is a delicate topic; some people are loathe to talk about such personal circumstances with their financial adviser, but your relationships intertwine with your finances and we are very honoured that our clients are willing to share these details with us. Rest assured – like a close friend or a doctor – your stories and questions will always be confidential and received without judgement.

On the same note, I would like to remind all of you about the importance of both parties (if in a couple) attending initial or annual review meetings with either Dominic or Daniel. It is crucial that nothing is ‘lost in translation’, and this way we can ensure that we keep everyone as included as possible. For us, it is all about transparency and clarity for each and every one of you.

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Are you falling in love with a scammer?Jemima Thomas2024-06-07T16:44:52+01:00

The Beekeeper

Dominic Thomas
March 2024 • 2 min read

The Beekeeper

There was a click of the call suddenly ending. She stared at the monitor, the sudden reality of what had just happened began to flood her body. Her account balance stared back at her; it was all gone.

If you have ever been scammed, you will understand the mixture of feelings – shame, embarrassment, anger and a deep despair. “It’s not personal” is a response that has a hollowness of the desensitised. Fraud is a very real form of abuse, abuse of the uniqueness of the human character.

The Beekeeper is an action film that plays to our very ordinary desire for revenge. It may not be your cup of tea, but I found it amusing and cathartic. My inability to understand why some people choose to rip off others without any motive other than greed is just part of my own hardwiring. It makes me very angry.

Jason Statham, a man ticking the box for the perfect assassin, whilst seemingly very able to not take himself or his roles too seriously, plays Adam Clay, a ‘Beekeeper’ which is some black ops Government-sanctioned sword of Damocles, who takes matters into his own hands in the pursuit to end the call centres that scam the vulnerable with their promise of fixing a computer.

Of course it’s daft, but satisfying if, like me, you achieve a sense of a ‘balance in the Force’ through fiction because our reality of justice is often deeply disappointing. It’s not for all, it knows its audience, but even if that isn’t you, the scene early in the story of how a malevolent call centre loots an intelligent elder of their life savings is worth the educational value and disturbance to your sensibilities. I would counsel you to learn about and be alert to this and similar scams. Money is never just money if you understand what it represents.

Here is the official trailer:

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The BeekeeperJemima Thomas2024-03-26T13:54:01+00:00

The small print

Daniel Liddicott
Sept 2023 • 3 min read

The small print

Have you ever signed a contract without reading the small print? If so, you may have missed some important details that could affect your rights and obligations. The small print, also known as the terms and conditions, is the part of a contract that contains the specific and often complex details of an agreement. It may include clauses on fees, penalties, warranties, exclusions, limitations, dispute resolution, and more. Reading the small print can help you avoid unpleasant surprises, protect your interests, and make informed decisions.

Prior to a house move last year, we were encouraged by the estate agents to consider using One Utility Bill, a company who (as their name suggests) amalgamates all of your utility bills into a singular monthly direct debit. Drawn in by the idea of easy setup and management, as well as a call with a convincing salesperson over the phone, we signed up to this service on a 12-month contract. We proceeded to provide meter readings through their online portal.

Our bills were fixed at a relatively high rate though, with the cost-of-living crisis being at the forefront of everyone’s minds, we were happy to know exactly what we were paying for the term, with expected rebates should we overpay against our usage.

Fast forward to the end of the contract, at which point we had decided to go directly to providers instead and had given our required 30 days’ notice. When informing them that we were leaving, we were informed that no refunds for overpayment would be given – something that was not made clear or even mentioned during the sign-up process.

Sure enough, further inspection of the Terms & Conditions showed that this was the case, though they had not been forthcoming with this information during the sales process and the T&C document was sent to us post-sign up. Had we read the small print, even after having just signed up, we would have been able to cancel the contract within the cooling off period.

We had been paying at least £100 more than we should have been each month. An expensive mistake to make.

Reading the small print may seem tedious and time-consuming, but it can save you a lot of trouble and money in the long run. Remember, a contract is a legally binding document that can affect your rights and responsibilities. Therefore, it is important to read it carefully and understand what you are agreeing to. Make sure that you know what you are getting into before you sign on the dotted line!

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The small printJemima Thomas2023-12-01T12:12:29+00:00

Is it time to give up driving Miss Daisy?

Dominic Thomas
July 2023 • 8 min read

Is it time to give up driving Miss Daisy?

Amongst the showers that interrupted the tennis, I spotted a piece on the BBC news site. The clickbait that caught my eye “People should plan retirement from driving”. The article is about families challenging the older generation with a question about their ability to drive. Pause on that for a moment. I once heard a joke that basically said that the two things you cannot criticize anyone for are their sexual prowess and their driving. In fact, the offence to challenge either appears almost equally and deeply hurtful.

The latest attempt by the regulator to ensure the right things are being done, (without being too obviously a new lick of paint such as FSA to FCA) is called “Consumer Duty”. A large element of this is about vulnerability. In short, are you more likely to misunderstand advice or be “taken advantage of” because you are either temporarily or permanently “vulnerable”. The term is of course open to interpretation, the intention though is very well meaning.

However, such discussions are rarely easy. Imagine being told that you are no longer fit to drive. So many of us cherish our independence, which is what our ability to drive represents. Indeed if you live in a rural area, your car may be your practical connection to wider society. Yet getting this wrong (which likely means a serious accident happened) will have devastating impact. There is a huge risk of causing offence, appearing patronising or controlling, yet this is “for your own good”.

So how will you know when it is time?

I have been struck by the wisdom of several of our older clients. Two incidents stand out. The first had the foresight to not simply visit local care homes, but she booked herself in for a week or so to see what the level of care was like. She wasn’t impressed and made other arrangements. The second possesses a grasp of self-awareness and a wisdom that I hope I achieve. He knew that at some point he wouldn’t know what he didn’t know. If that sounds a little Donald Rumsfeld, its intended. In short, he wanted me to take over the reigns so that his affairs remain in top notch condition.

Most of us are reluctant to become reliant on others. We generally place very high value on our own ability to make our own choices, we also have a tendency for overconfidence in our own abilities. Ask a room of people to raise their hand if they consider themselves a “better than average driver” the majority will raise their hand, which of course statistically doesn’t hold with logic. The majority cannot be above average.

So in our planning for you, we will increasingly be faced with ever more difficult conversations as we all age about how we protect ourselves from ourselves. Our role is to speak truth and consider your future in the context of all we understand. The BBC article is a sobering reminder that we cannot ignore things simply because it may offend.

Currently your driving license expires when you reach age 70. You retain the right to renew. I remember a short film by David Ackerman starring John Cleese called “Taking the Wheel” (2002) which is an amusing take on why his 90-year-old-mother refused to give up driving.

BBC ARTICLE

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Is it time to give up driving Miss Daisy?Jemima Thomas2023-12-01T12:12:30+00:00

Is your money an extension of your values?

Dominic Thomas
July 2023 • 12 min read

Is your money an extension of your values?

The financial services sector, like others, has been attempting to evolve over the years, moving with the times. I’m not talking about technology; but the people and culture. The regulator has had things to say about culture for some years, but usually too little too late and with no real weight behind it.

Sentry at your door

One of the things you may not be aware of is who we do not use. As your adviser and confidant, I take my role seriously. One aspect of the role is being a bit like a gatekeeper or ‘bouncer’. Some might say I possess the right thuggish look for this! What clients end up with is hopefully a well-screened experience, but you almost certainly don’t know how that is done and how much dross has been screened out, why should you? It’s my job to do this and time is too limited to bore you with all the detail.

So, cutting to the chase – price, functionality, financial resilience, performance and philosophy are all perhaps obvious elements. Culture is much more subjective. Whilst this can include ‘greenwashing’, I also consider elements of what, who, why and how things are done. Rare is the day that you will ever hold a ‘Prima Donna’ investment. Stars are for astronomy not your investments.

Leadership

We are all familiar with the reality that the wrong people are generally leading the world rather badly. Good leadership is vital, sadly the culture within financial services is often intoxicated by its own sense of importance and ‘leadership’, which often gives way to belief of possessing better skills and a Midas-touch. Performance-fuelled and rewarded and then re-awarding itself like an ever-consuming sycophant.

Nobody is without failings, but some people seem to believe that they can behave with impunity. An error of judgement or mistake is one thing, but constant repetition is another. One of the many problems with success is that people tend to ignore details, yet it is the detail that is likely to be the undoing.

Money, power and sex … or rather abuse

Money and power tend to keep those benefitting from it quiet. Sometimes a lowly observer has to point out the Emperor’s predicament. We can all be fooled, but I am often surprised how easily this is achieved.

You could read the article by Marriage, Cundy and Caruana Galizia in the Financial Times on 8^th June 2023 for detail about the behaviour of one of its members, (well several actually). However, the network will generally seek to protect and deflect blame, minimising any wrongdoing as ‘misunderstanding’.

Big fish, small pond

You can make the choice with your money to follow these people or not. However, I have no intention or interest in helping increase the personal fortunes of those whose behaviour privately, publicly and corporately appears self-serving. If you prefer to help these particular millionaires (or billionaires) become richer, that’s your choice, but it’s not mine. For me, money should be ‘used’ not ‘played with’ to impress parents who clearly gave up providing enough attention at the beginning.

Accomplished liars

Having been around the sector for over three decades, it won’t surprise you to learn that I do not believe regulation or legal action really makes a difference to characters who simply do not care about anyone else. They will of course utter feeble words about lessons being learned, seeking help, blah, blah … whilst standing beside a spouse who has yet to comprehend the depth of the offence … but this is all too predictable. They haven’t changed behaviour and its naïve to think they will.

They bullied or charmed their way into the spotlight. A lifetime of bluff and overconfidence has resulted in them becoming highly skilled liars. However, they are permitted to thrive by others pretending that everything is somehow OK, when it clearly is not. I don’t mean we should all pass judgement on each other’s choices, but ‘the network’ allows it to thrive. Of course, this is not simply within financial services, sadly most walks of life from the pulpit to the bull pit, the shop floor to the studio, the Boardroom to the changing room.

Another way

Your money is remarkably powerful – it endorses, promotes, approves and rewards. This is why I take great care in how it is invested and the philosophy behind it. As a client, you back our small firm that rewards its staff fairly and takes each person seriously, helping each to build their own lives on their own terms.

Click here for FT piece

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Is your money an extension of your values?Jemima Thomas2023-12-01T12:12:31+00:00

The big C

Dominic Thomas
June 2023 • 10 min read

The big C

If you have a television, it’s likely that at some point you will have watched an episode of ‘A Place in the Sun’ or the BBC’s ‘Escape to the Country’. You know the format – a 30-minute programme that would take 10 minutes to watch if it wasn’t for the constant of reminder of what you have just watched. I never really understand why despite each property being unknown, one is specifically described as a mystery house. These are popular shows (to put it mildly). We Brits are obsessed with house ownership and most of us hold onto a fantasy that ‘somewhere else’ is probably a better place to live.

I learned recently that one of the presenters of ‘A Place in the Sun’, Jonnie Irwin, who turns 50 this autumn, was diagnosed with terminal lung cancer in 2020. He has talked publicly about his illness and recently appeared on a podcast for insurance company AIG. Sadly, he does not have critical illness cover and is now on a mission to encourage people to get some. He believes it would help if advisers could ‘humanise’ the insurance, sharing stories about how it works and what their experience has been.

I think he has a point, and certainly in his professional life, he is adept at helping people imagine a better future for themselves. However, imagining a bleak future is obviously uncomfortable, something most of us try not to do preferring to leave this to dystopian books, films, TV shows and music. We simply prefer to ignore or deny uncomfortable truths, thinking “it will never happen to me”.

I’m 54. I don’t know if it’s unusual, but I have already lost many friends my own age to cancer. I’m guessing you know at least one person that has too. I have critical illness cover; I provide it for the team here as a standard benefit. It’s not cheap and frankly, I hope it’s a waste of money, because if it isn’t, then there has been a major, unwanted life event.

Over the last three decades, I have had to deal with various claims against cover that I arranged for clients. Not all of them died, some have recovered very well and whilst not forgetting the experience, it isn’t top of mind.

Given my background and when I started in financial services, selling products was what I was trained to do. Rightly or wrongly, I have been somewhat reluctant to use sales ideas that make people feel uncomfortable within my own business. I often haven’t shared the details of fairly harrowing stories of things that might prompt you taking out more cover (or some). I hate being manipulated and I struggle with the tension of using a true story that is designed to encourage you to get more insurance (even if we do remove commission). For that, I apologise. I have a drawer full of stories and with permission, I will share a few, not with the intention of getting a sale (we don’t even arrange protection policies these days – we refer you to a specialist broker); but to ensure you give this proper consideration.

I hope that Jonnie and his family find the miracle they seek.

If you would like to talk about financial protection, please get in touch. If you already know what you want and need, then head over to our professional connections page and give Cura a call or email.

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The big CJemima Thomas2023-12-01T12:12:32+00:00

Ponzi – only in America right?

Dominic Thomas
June 2023 • 8 min read

Ponzi – only in America right?

If you have been around for a while, then you have probably heard the term ‘Ponzi scheme’. It was coined after Charles Ponzi over 100 years ago. In essence, it’s a con. One where the investment genius pretends that investment returns are high, to a very-willing-to-believe-it public. The scheme takes in new money from investors and uses part of it to pay the original investors, but too much, which suggests high returns and of course all those drawing money are ardent advocates. It’s a bit like the State Pension scheme (oops, didn’t mean to say that surely?).

Anyway, someone pretending to be your friend whilst actually thieving from you is a long-established human condition, yet a smart suit and decent offices will often convey the impression of something of substance (dare I mention cryptocurrency?).

The largest Ponzi crime to date is that of Bernie Madoff, who managed to fool well known investors around the world, including one who shares a name with a warm bedtime drink. The realisation of duplicity is sadly for many too much to bear and many take their own lives having lost a fortune. Netflix have a docudrama mini-series about Madoff which is reasonably informative. His fraud is the current record breaker, estimated to be in the region of $50bn-$65bn.

Ponzi schemes don’t simply happen in America; they are everywhere where money resides. Two men were recently charged in UK courts. First there was Jonathan Allard, from Wandsworth, who had a rather splendid address in Canary Wharf. He took £3.7m from 43 investors who were lured by returns that appeared to be between 9% and 12% a year between 2013 and 2017. He is now serving a 7-year prison sentence, sadly most of the stolen money was spent on ‘fast living’.

Then there is Anthony Constantinou who makes Allard look positively cheap. He was convicted of a £70m fraud and sounds like a generally terrible example of humanity. His crimes occurred between 2013 and 2015 by his company Capital World Markets (CWM). He is described by those that know him as a ‘Wolf of Wall Street’ type character; sleazy and grotesque in his misguided sense of machismo, the sort of traits that get some people to the top of politics. Like most similar characters, he was unable to face his wrongdoing and is currently on the run. His scheme promised ludicrously high returns of 5% a month. If you spot him, do inform Scotland Yard.

Whilst not Ponzi schemes, there have been examples of financial advisers taking money from client investments as ‘ad hoc fees’ or simply not investing it, fabricating investment statements so that investors are unaware of the fraud. Recently the Director of Nexus IFA in Portsmouth had her FCA permissions removed, and the company subsequently placed into administration for alleviating clients of around £2m into her personal bank account. This was discovered by Nucleus, an excellent platform that we have used for years, who noted ad hoc adviser fees of £1,895,040 from a single investor. Large ad hoc fees were also taken from four clients with holdings at 7IM (another good platform company). Ad hoc fees are not the regular ongoing fees, but one-off, agreed fees with clients for specific work. The case is ongoing.

Whilst I don’t believe that any system is totally fool-proof, one of the advantages and reasons that we provide access to our own secure portal and those of providers is so that details can be cross-checked, not simply by us, but by you too. Sadly, we live in a world where the pressures of living and/or a background of dysfunction can and will lead some people to steal.

If you are concerned about a friend who may have been subject to a scam or fraud, please get in touch. One of my roles is to stop any get-rich-quick and too-good-to-be-true rubbish from reaching you.

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Ponzi – only in America right?Jemima Thomas2023-12-01T12:12:32+00:00

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