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Make Time Count – There’s A Drag To Being Older

2010: Beginners – Mike Mills

Some people view financial planners as a bit of a killjoy, to be avoided, why? Because we have a habit of reminding people of their mortality, something that we all know, but live as though it’s an issue that can be thought about at some point in the future.

Good financial planning involves facing some home truths and more recently I have asked clients the very blunt question, “when do you plan to die?” of course none of us know when this might be. The purpose of the question is to start to help form a broad guide for when this might be. Actuaries seem to be suggesting that of babies born in 2012 in Britain, around a third of them will live beyond 100. Of course I’m not expecting to be around to find out if they were right.

So what do we use as a guide? Well your family background for starters, perhaps you might frame your financial plan with the assumption that you outlive your parents by a few years, not always possible, but one approach. Another is to take the latest ONS national statistics, which are historical, but to 2010. If you are male and now 65 the average life expectancy is another 18 years (83) or 20.62 (85.62) if you are female. So you may wish to assume +/- 5 years for this. An interesting element of this is called “mortality drag” so skip forward to age 75 and men have another 11 years to live (86) on average, or 12.82 (87.82) for women. You can see that they appear to live longer than the projection for those aged 65. There really is statistical evidence to assert that the older you are, the longer you will live. Strange, I know, but true. The point is that we need to start somewhere with our assumption for a plan so that we can ensure your money doesn’t run out first. Another important point is to remind yourself that time is running out, so make it count whilst you 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

Make Time Count – There’s A Drag To Being OlderDominic2023-12-01T12:22:02+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

Divorcing Doctors or Teachers

1996: The First Wives Club – Wilson

If you are going through the experience of a divorce as either a member of the NHS pension scheme or Teachers pension scheme, be prepared for the process to take a little longer. Both the NHS and Teachers pension schemes are updating their systems which produce the valuation of pension rights that need to be considered in a divorce. This is known as the Cash Equivalent Transfer Value, essentially putting a financial figure on the pension benefits that you accrue.

The reason behind this is the changes that the Government announced in March last year and finally published towards the end of October. The pension administrators naturally want to get this rather important detail right and it has taken some time for systems to be assessed and updated. At the moment expect delays. Indeed if you have already had a CETV statement and it was dated before 26th October 2011 and had a 3 month guarantee and you submitted the request to transfer benefits, then this will be honoured provided the 3-month time-frame has not expired. This means that in practical terms there are about 2 weeks left for anyone that was in this position. If you are one of those, I suggest contacting the relevant pensions agency.

In addition anyone that is moving benefits from one State Employer to another (eg Local Government to Teacher) the same problem will persist. These Public Sector Club transfers are all delayed until the software works to permit the transfers.

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

Divorcing Doctors or TeachersDominic2023-12-01T12:48:12+00:00

Happy Christmas

2010: The Nativity – Coky Giedroyc

Happy Christmas. Peace and goodwill to all.

Andrew Buchan and Tatiana Maslany play the leading roles of Mary and Joseph for the BBCs mini series. Tatiana writes about playing the role on the BBC blog, which can be found here.

Perhaps the most retold story in history and undoubtedly the oldest and most well known of all the Christmas newsletters. The traditional nativity story presented in primary schools is certainly contentious and scholars would generally agree lacking the accuracy of the chronology of events. However it is worth remembering that historians have evidence for the census, Quirinius and Herod the Great and his massacre of children. It is ironic that this date, upon which our entire calendar hangs is almost certainly not “year zero” but probably 4BC.

DT

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

Happy ChristmasDominic2023-12-01T12:48:16+00:00

Christmas Break – Holiday Hours

2006: The Holiday – Nancy Meyers

Christmas is a time that I ask all of our staff to have a well earned rest. As a consequence, the office will be closed from the end of Thursday 22nd December 2011 and will reopen on Tuesday 3rd January 2012. Emails will be collected and read in the order of receipt. If you have anything desperately urgent over the break, I am able to read emails and will attempt to respond appropriately. May I take this opportunity to wish all our clients, potential clients, suppliers and partners a very happy Christmas.

DT

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

Christmas Break – Holiday HoursDominic2023-12-01T12:48:19+00:00

ISA Rule Change – Never say Never Again

1983: Never Say Never Again – Kershner

The Treasury has announced a change in the ISA rules. It is my sincere hope that these are not rules that any of our clients will benefit by – as they are only enacted once an existing ISA provider company has gone bust. The change will enable investors that see an ISA provider go bust, maintain their previous ISA allowances rather than having to start again. Of course, one would hope and expect that should an ISA provider go bust then there is protection or at least compensation – but in some recent cases (Keydata) the value of the investment collapsed along with the product provider. This new change to the rules means that once the dust has settled, ISA allowances and previous contributions will be effectively protected.

Mark Hoban is reported to have said that this “will enable investors whose ISAs are affected by the failure or default of a financial firm to continue to benefit from tax-advantaged savings.”

Frankly, I hope that none of our clients ever see a day where their ISA product provider goes bust, but should that day ever arrive, this is at least good news.

DT

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

ISA Rule Change – Never say Never AgainDominic2023-12-01T12:48:27+00:00

Safe as Houses?

1971: The Burglars – Henri Verneuil

I’m sometimes asked if I know anyone that can help with general insurance queries or renewals. I’m not an expert in general insurance and it is not something that I’m qualified to advise on, however I know enough to know that the comparison websites are, to put it bluntly, not the entire market. General insurance, like many other things in life is one of those costs that we would all like to keep to a minimum, but as is so often the case, price is merely one factor. When it comes to insurance claims and the inevitable stress that is almost certainly experienced, having a good insurer that handles and pays a claim quickly is worth additional cost when compared to the additional stress that more “competitive” companies may generate. I cannot tell one from the other until I experience a claim, but this is where a general insurance broker is ideally placed.

If you have a home that would cost over £500,000 to rebuild or have contents worth more than £75,000 then you would automatically be considered for “high net worth home insurance”.This type of policy provides much higher levels of cover than a standard household policy, including worldwide all-risks cover for all your contents (including pet damage, which is excluded by most other policies), high single item limits for jewellery, fine art and collectables, plus useful extras like identity theft cover, family legal expenses cover and emergency assistance.

Additionally, the security conditions are not onerous and the premiums are lower than you might expect. Underwriters can be very flexible in terms of what they can agree to cover and in most cases it is actually cheaper to arrange a high net worth policy than to cover the same sums insured on a standard household policy. You can also include cover for up to 6 properties – ideal if you have a second home or holiday homes you also need to insure.

So if this is something that would be relevant to you, I would suggest giving Phil Heard of 1Stop Insurance a quick call or email. Let me know if you would like his contact details.

Property crime has generally fallen fairly dramatically since 1993 according to the UK National Statistics from roughly 1.75m reported incidents to about 0.75m reported incidents. This is information for trends in domestic burglary to 2008/09. The more recent report for 2009/10 reveals that of the various types of reported crime, burglary accounts for about 12.5% of all incidents which is approximately a total of 542,375 reported burglaries. This is the fourth ranking form of criminal offences behind, (1) theft and handling stolen goods, (2) violence against the person, (3) criminal damage.

DT

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

Safe as Houses?Dominic2023-12-01T12:48:29+00:00

NEST: In a Flap about Pensions?

1951: Love Nest – Joseph Newman

There is speculation that the Government will announce that the auto enrolment (NEST) will be delayed for firms with 40 or fewer staff, perhaps by a year. This is political kudos, which would be seen as helping small businesses, by reducing the cost of implementation and ongoing additional pension costs. As this is little more than a “quoted source” there is no substance to this information until the Treasury says something rather more concrete. On Tuesday we may find something in Mr Osbourne’s Autumn statement, but until then, assume that nothing has changed.

If you would like to know when your firm has to comply with NEST (its currently intended staging date) then click this link. You will need the last two letters of the firms PAYE code if your firm has fewer than 50 staff.

There are now a growing number of organisations interested in running NEST qualifying schemes, even one from Denmark. The auto enrolment process is a fairly “involved” process. The largest employers – which includes the State institutions are due to begin NEST in October 2012. It isn’t until a year later that firms with fewer than 1,000 staff must set a scheme up (or have a compliant one). At the moment, the earliest a small firm (fewer than 50 staff) would need to have implemented a scheme is August 2014. In practice The Pensions Regulator will contact the employer a year before their outlined staging date. If you need help with your pension at work or what to know about the implications for your own existing pensions do get in touch.

DT

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

NEST: In a Flap about Pensions?Dominic2023-12-01T12:48:34+00:00

Who Cheques Which?

2011: The Adjustment Bureau

Today, Which? have announced that they plan to become one of the largest mortgage advisers in the UK. They propose offering a “free” service. Here’s my two bits worth.

Firstly, I think that for an organisation like Which? to become a product supplier is counter-productive if they wish to remain an independent assessor/evaluator of products and services. Secondly and frankly more importantly, to use terms like “free” is decidedly misleading. Which? currently employ staff (advisers) to provide mortgage advice and have presumably regulatory, PI and operational costs. The mortgage companies pay them a procuration fee for placing a mortgage (which is related to the size of the mortgage), but some (a small number) do not. Which? currently take this “on the chin” which in their speak is their own reserves (their own money). At the moment this is about 20% of the mortgage cases that they place. This model is not sustainable in an environment where the client has to be (finally!) told what the costs are. The procuration fee is effectively a cost built into the mortgage, which if removed (often it cannot be) would reduce the cost of the mortgage. I believe that any consumer champion should be advocating that mortgages, one of the biggest financial commitments, are transparent in the same way. This means lenders will have to pull apart their pricing structure, separate out the parts and then put them together again in a clear fashion. This is precisely that is happening to investment products from 2013 – with all of the “costs” separated out.

Which? normally berate companies that say things are fee, when in reality there is a cost. Here they seem to have become blinded by their own ambition. Certainly set up a decent mortgage broking company, but please do so in way that applies business practices and accounting principles that demonstrate a viable, sustainable approach. Frankly this smacks of yet another media outlet protesting its independence, whilst actually being paid to sell products. Most, if not all of the main newspapers have a cut of commission from selling insurance in various guises to its readers, yet failing to disclose this rather fundamental point.

I wonder, if given that a mortgage is going to be arranged, whether Which? will provide proper advice regarding relevant and suitable protection products – which the FSA would expect any other adviser to do, ensuring that should problems befall the borrower, they are not unprepared. If so, Which? would have to become a proper financial adviser – but under RDR rules, they would be restricted, not independent, unless they also offer the full range of investment advice. The term independent is one that I assume that Which? regard rather highly. Oh dear, it seems as though they have not really thought this through. Another mess waiting to happen.

As I don’t arrange mortgages and any protection policies arranged has all commission removed, I think I’m probably in a position to cast justifiable doubt on what Which? are proposing.

DT

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

Who Cheques Which?Dominic2023-12-01T12:48:35+00:00

The Real Cost of Bad Advice

2009: This Is It – Kenny Ortega

The trial of Michael Jackson’s doctor has come to the conclusion that Dr Conrad Murray was guilty of involuntary manslaughter. The New York Times suggests that Dr Murray acted improperly for a qualified doctor and the prosecution in the case have suggested that his motives were somewhat suspicious.

Michael Jackson is one of those celebrities that generates a huge amount of media coverage, it seems that everyone has an opinion about him. Whilst the media will on occasion report how isolated some celebrities become, few really do much thorough analysis. His website has over 40m Facebook “likes”.

To my mind, it would appear that Michael Jackson was bereft of good advice. Quite apart from a bizarre personal life which like many other “icons” will continue to generate questions and supposition, by people that were not “there” and of course he is unable to answer any accusations. You might recall that Vincent Van Gogh experts Steven Naifeh and Gregory White Smith recently stated that they believe that Van Gogh did not commit suicide, but was accidently shot by two young boys and he didn’t want them to get into trouble. Anyway, it seems that Michael Jackson did not receive very helpful advice and there were plenty of people willing to help part him from his money.

It is somewhat shocking that a man that sold millions of records was $400,000 in debt at the point of his death, according to the New York Times. He was working on a new Tour which would help revitalise his career and reduce his debts. Apparently exhausted, he employed Dr Murray at $150,000 a month that’s $1.8m a year (remember Jackson was in huge debt at the time) as his personal physician. Dr Murray then dismissed his other clients (patients) and solely took care of Jackson. A problem surely – even to an untrained eye.

As a result of his death, record sales and tribute concerts have helped to swell the funds in his estate, The New York Times, puts this figure at $310,000 – still leaving a deficit of $90m by my maths. Somehow the estate has managed to pay out $30m to the beneficiaries (40% his mother, 40% his children and 20% to charity). I’m not clear how it is possible to pay $30m from minus $90m. Perhaps it has been helped by the huge reduction in overspending (estimated at $30m a year of overspending) and rising revenue from record sales.

I wonder what Michael Jackson might have achieved had he benefited from good advice and some great financial planning? Surely any good adviser would have challenged the sustainability of his spending patterns. Perhaps like many other celebrities, he was constantly told things he wanted to hear, rather than what he needed to hear and perhaps he ended up feeling unable to know who he could really trust. This is a real problem for those with significant wealth – when others depend upon it, their “advice” is perhaps less than entirely honest. A good financial planner will be very clear about their charges and their advice, importantly they need to be able to bring good news and bad. To genuinely care is to help protect you from yourself. This is a key part of what I do for clients and also embedded within my investment philosophy.

As for Michael Jackson, well he had something to say about isolation, the media and money.

They don’t care

They’d do me for the money
They don’t care
They use me for the money

DT

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

The Real Cost of Bad AdviceDominic2023-12-01T12:48:48+00:00