TOMORROW’S WORLD

TODAY’S BLOG

PLANNING A FUTURE

The more I read or hear about the impact of the pandemic on real people I am reminded of how important it is to have a sense of the future. There is little doubt that many of us have been struggling with the practicalities of living detached from friends and family, or frankly anyone that we may not know, but form a part of our ordinary lives.

Monty Don made the point that having something to look forward to is ever so important, which is part of the reason why so many people love and enjoy gardening. Those of us with gardens have benefitted this year from fairly good weather and the ability to take more time to enjoy our open spaces. Many have remarked that during the Spring when were in the full lockdown phase, they observed the natural world in way that seemed to be a glimpse into a bygone time, of no cars or aeroplanes – to see and hear nature, as may have been observed centuries ago.

TOMORROW’S WORLD

You will probably remember the BBC1 programme “Tomorrow’s World”. It was something of a TV fixture for many people, irrespective of age. When I grew up there were only three TV channels and “Children’s television” officially ended just before the news, but programmes really didn’t stop appealing to children. Perhaps you will remember James Burke, Michael Rodd, William Woollard, Judith Hann and Maggie Philbin all explaining various inventions which would perhaps become commonplace lifestyle improving solutions. Many of the “predictions” turned out to be some way off the reality, others were quite clearly an early prototype.

Anyhow, it got me wondering about the importance of having a vision for the future. We have seen some welcome reassessment of the past, we cannot change it, but we can at least learn to understand it differently, specifically its impact on the present.

SOLOMONS IFA - TOMORROW'S WORLD

A PLACE IN TIME

Without a grasp of history and a hope for the future, I would argue that it is easier to become overwhelmed by the present. Today I could probably find shows like Tomorrow’s World, but I’d really have to hunt them down from not simply hundreds of channels but different media sources and they certainly would not be what the majority watched, all experiencing the occasion at the same time, which I also believe to be pertinent to our sense of time.

THE IMPORTANCE OF HOPE

The book of Proverbs has an interesting phrase “without vision the people perish”. That’s a pretty bold statement and of course, has been interpreted in all sorts of ways and probably used to justify all sorts of ideas. If I may, can I simply offer it as an acknowledgement of the value of having a sense of tomorrow. Having hope.

Many of us, (perhaps all of us) have had moments of despair at the current circumstances. Whether that is concern about health, family, friends, loneliness, financial pressure, worrying if your business (or your friend’s) will survive, if you will ever get to enjoy the things you did before… Then there is a very deep despair that overwhelms and leads to some believing that they have no future and so end the pain.

DON’T UNDERVALUE YOUR FUTURE

The future is something I discuss all the time with clients, but I have to admit that simply having a sense of a future itself (whatever that looks like) is rather more important than having no vision at all. Please get in touch if you need to talk or simply want me to listen. Perhaps your plans have altered, maybe some priorities have changed. Alternatively, maybe you know someone that I may be able to help to get their plan for their future into shape.

And for your amusement… here’s the team at Tomorrow’s World looking back at the 1970s as the new decade was about to begin from roughly 4 decades ago – which is typically how long people “work” for a living and increasingly how long retirement may last…

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

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

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

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

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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TOMORROW’S WORLD2020-10-15T12:35:40+01:00

On Chesil Beach

On Chesil Beach

The new film On Chesil Beach of the book by Ian McEwan is now in cinemas. It will perhaps bring back some memories for anyone that married in the 1960s, with the period captured wonderfully. Set primarily in 1962, it is the story of a newly-wed couple Edward (Billy Howle) and Florence (Saoirse Ronan) who discover that they are unprepared for the intimacy of marriage.

At the time of the story, the “sexual revolution” of the 1960s had barely begun, indeed Penguin Books had only recently (November 1960) won their case to publish Lady Chatterley’s Lover. Despite the reality of millions of daily lives, Britain was generally rather poor at sex education. Edward and Florence lack any real understanding of each other intimately. The church would of course argue that a lifetime of marriage would gradually facilitate intimacy, whilst such an answer for many is workable, where trauma and intimacy collide, there is little comfort in glib answers. Florence offers a different option, one that Edward simply cannot face.

Sweet Sorrow?

Spoiler alert – the marriage does not last the day and is annulled. Unlike the book, we do not follow the characters much beyond the moment of decision on Chesil Beach. Decisions are made, tempers are lost, and parting was not a sweet sorrow.

In our contemporary society, relationships now take various forms, it was not until 1973 that the Matrimonial Causes Act made the case for divorce clear (beyond annulment). This despite all our somewhat hypocritical history about personal conduct in aspects of sexual intimacy and marriage. Henry VIII managed to get what he wanted and created the Church of England as a consequence. The law is flexible for those with power, as perhaps you noticed in the recent BBC dramatization about Jeremy Thorpe (A Very English Scandal).

Life can be Messy

The problem with most financial planning is that real life tends to get in the way and muck things up. Life is not nice, neat straight lines, well not for most. We might wish that everything was very each to model, but the truth is that it is of course complex, nuanced and on occasion vexing. One of the most significant aspects that will impact your financial planning will be your marital status. Any change in this will create an obvious need to review your plans, yet many don’t see past the Form E (financial statement required for a divorce) and to be blunt, I’m always surprised that lawyers do not wish all sides to undergo some basic (or complex) financial assessment with proper cashflow modelling for their new scenarios. Perhaps few have experienced the benefit of this.

In any event, life is messy. Sometimes we all need to make changes that we did not expect. This might be marriage, divorce, redundancy, addictions, debt… and so on, a plethora of possibilities that were not expected. So, I tend to get a little, well, dismissive of advisers who think that a cashflow plan is the done deal – the future is mapped out, life is now a beach…. I would be quick to point out the massive advantage of cashflow planning, we use it for all our clients, but it does have its short-comings and like anything else, garbage in, garbage out, but reading a forecasted future as anything other than an option would be unwise at best. We may all crave certainty, but there is none when it comes to living life. I advise all clients that the plan is not set in stone, it will be wrong, but it is today a very good guess about he future, based upon sensible assumptions that need regular reviewing.

The Unvarnished Truth

It is not a crime to admit things need to be changed. That your plans must alter, that is normal. What is a crime (in a sense) is pretending that everything is ok when it isn’t. You may never have a Chesil Beach moment, but may I propose that a relationship with a financial planner, requires honesty and the ability to listen, discuss and think together.

On Chesil Beach is now in cinemas, here is the trailer. I enjoyed the film, beautifully shot and poignant storytelling 7/10.

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

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On Chesil Beach2018-06-04T14:45:19+01:00

Loving and not so loving

Loving

Yet another example of how times have changed – thankfully. The new film “Loving” is the true story of Richard (Joel Edgerton) and Mildred Loving (Ruth Negga). White man falls in love with black woman and marry in 1958, but not recognised within their own state of Virginia. Hard to believe that it was not even 60 years ago, yet thankfully seems a lifetime and world away from where we are today.

Or not so loving…

This is an ordinary couple, with an ordinary story, except for their determination to fight for what they believe to be right. Their surname is, of course, perfect for their story and perfect backdrop for its opponent, the State of Virginia.

A lifetime ago

60 Years ago, not that long ago really is it. Of course it’s a lifetime ago. Certainly, in lifetime financial planning terms these days that would be the rough timeframe we use for clients in their 40’s. Lots of people will be celebrating their sixtieth birthdays this year, people like Jo Brand, Robin Cousins, Steve Davis, Fern Britton, Paul Merton, Jayne Torvill, Dawn French, Billy Bragg and Stephen Fry to name just a few. It may interest you to recall the BBC TV news programme called Nationwide, which aired its infamous April Fool joke about Spaghetti growing on trees… was aired in 1957. Fake news is clearly not new.

Tempus Fugit

In short, time passes quickly. You cannot really put your financial planning on pause. Life moves on, rules change, economically, socially and environmentally. Change is our constant and whilst often feared, is generally our friend – except when it comes to deteriorating health.

Not always happy, shiny people…

The problem I have with some financial planners and supposed gurus within our field is that whilst they mean well, the future is uncertain. However adept they are at cashflow planning and deep-diving on your personal values and goals, life isn’t always a neat straight-line. Sometimes, horrible stuff happens, like an uninvited thug turning up in your bedroom in the dead of night. Health can fade, as can memory and the real problem is if everything is as it is today. Now. It is in the darker moments that a great financial plan will be tested. Your concern is unlikely to be about your next holiday or where to moor your yacht.

A New Rising Star

At 35, Ruth Negga, was nominated at the BAFTAs for the 2017 Rising Star Award and is nominated for an OSCAR as leading actress for this film “Loving”. She is great in the movie, though will have tough competition with Isabelle Huppert, Emma Stone, Meryl Streep and Natalie Portman. Anyhow, if Ruth Negga were a client (do get in touch if you are keen), then we would likely consider a 65-year time horizon for her financial plan. That is a long time. So much can change. She’s a talented actress and I hope that she has plenty of opportunity to get some good roles (there are woefully few for women). Yet her future is no more or less certain than anyone else’s. This is precisely why it is vital to review your financial planning regularly – and clients know we do this annually. Checking our assumptions and progress towards the future you are creating. Little remains unchanged, which based on history, is a rather good thing.

Anyway, here is the trailer for Loving. I gave it 7/10, shot and acted beautifully, some great lines, but it felt a little slow.

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

Loving and not so loving2017-02-20T17:27:28+00:00

Money Box – Interest Only Mortgages

Money Box- Interest only mortgages

If you follow me on twitter you may be aware that I was raising some concerns about the reporting of an item on BBC Radio 4 Money Box and BBC1 Breakfast about interest-only mortgages. Let me be clear I do not provide mortgage advice – we refer this to someone that does – should anyone require it, we encourage clients to clear off debt and mortgages as quickly as possible.

Paul Lewis relates the story of Christine, a woman now 70 years old, bought her flat in Liverpool in August 2004 at the age (I assume) of 58 with a ten-year mortgage of £151,774. It was an interest only mortgage, meaning that she was only paying interest, not the loan which would need repaying at the end of 10 years. Having had 2 years extra time to repay the money, her lender (Santander) has now given her until 24th November 2016 to do so or face legal proceedings.

There is not enough information (as ever) in the story presented to be able to provide any solid advice. We are told that there is no equity in the property (the value of the flat less the mortgage). This could be because the flat has not increased in value at all since 2004 (which whilst possible seems a little unlikely) or it could be that she has amassed other debt which has wiped out any equity that built up over the last 12 years. The reality is we don’t know and in any event, this is the situation she is now in.

We are told that Christine now (in 2016) has an income from pensions of £1,100 a month and her mortgage costs her £600 a month. It is unclear if she has any other savings. The story is clearly upsetting to Christine, but I am suspicious of what is being reported.

What is missing?

If the angle for Money Box is the possible miss-selling of the mortgage then some better factual information is really required. As I have said I don’t arrange mortgages, but it would be unusual for someone to borrow £151,744 without an income to justify this (typically 3.25x income, which would mean requiring an income of about £46,700. Being 58 at the time she was only 2 years away from receiving her State pension. So what income did she declare? And was the lender really offering a 58-year old a 100% mortgage within 2 years of retirement? Now that would have some grounds for complaint about bad advice. She cannot “recall” being offered a repayment mortgage or anyone asking her how it would be repaid.

But there was a foreign property…

Christine is certainly very unclear about what an interest-only mortgage is, thinking (for a some reason that it would continue) when she knows it wouldn’t (not outstanding until she dies) and of course would be clearly stated on the annual statements and original mortgage offer. Christine provides what appears to be conflicting information, recalling when asked how she expected the mortgage to be repaid, she mentions an intention to sell a foreign property to help do so. Sadly this “crashed” but again merely demonstrates that rather more (and better) questions need to be asked. More information is needed, but is woefully lacking.

Clarity or Charity?

When Christine was asked a direct question “Did you not understand what interest only meant?” she replies “Yes, you were just paying off interest that they were charging on the house itself and not off the property. That is how it was sold to me”. The reporter does not challenge her statement which makes no sense at all unless by “house” and “property” she really means mortgage/loan or capital (read it back to yourself).

The Coming Mortgage Apocalypse….

The only clear thing is that she appears confused, not fully understanding how mortgages work and is certainly distressed. Money Box seem concerned that lots of people are in a similar position, reporting that over 160,000 interest-only mortgages are due for repayment within the next 2 years. Money Box report that about 2million people have interest-only mortgages and that 1 in 8 (12.5%) of them appear to be like Christine, not realising that the money needs to be repaid (though presumably having been asked the question they do now know). Importantly 40% claim that they will struggle to repay the mortgage in full.

This of course is probably the real scare story or anxiety that Money Box wishes to convey and the implication being that this is the fault of unsafe products and a bad industry of bad lenders and bad mortgage advisers…. which will lead to are creating more homelessness. Well as with all things, there are likely to be some, (bad ones) but such generalisations and calling for yet more regulation is a far stretch, when in practice this has more to do with some people not understanding the commitment that they are making or claiming not to understand.

There are more options than you think

Christine is very worried, understandably, she has my sympathy, yet it seems that the only options she has discussed (remember there is a financial adviser “on hand”) is going into an old peoples home or a hostel. It sounds to me as though her adviser is pretty useless if this is the case. A quick search of properties to rent in Liverpool for £600 or less reveals over 2,000 listed as available.

The Power of Denial

It’s a terrible thing that’s happened, that I never thought it would come to this”. Well it is certainly hard, but Christine has £1100 a month of income and can chose how to use it. Renting is a viable option. So I am left feeling that this is more a report on the power of denial – denial of reality. Something has clearly gone very wrong, with poor budgeting and planning. This does not make Christine innumerate, frankly successive Governments fail far more spectacularly and one wouldn’t really accuse them of innumeracy or financial illiteracy, as tempting as it may be.

I’m left with the impression that this is a story of not wanting to understand, rather than not being able to understand, which is perhaps true of Money Box as well. Accusing lenders or advisers of mis-selling is a very lazy approach, when actually Santander has been providing information and already extended the deadline by 2 years.

Paul Lewis ends the piece with a nod to the debt-counselling charity Step Change, which implies an awareness that there is rather more here than simply clearing the mortgage by selling the flat and what is actually missing is a fundamental grasp of a budget and the reality of consequences. Getting out of depth financially is not a sin, it can easily happen to anyone, (and I do mean anyone… even billionaires!) the key is facing the truth and exploring options carefully.

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

Money Box – Interest Only Mortgages2017-01-06T14:39:13+00:00

Business Owners Beware

Business Owners and Employees Beware

Business Owners and Employees need to be aware of fraud that could cost a business its existence. Technology is fantastic, it enables us all to do things much more quickly and also opens up so many new opportunities. However, we all know it is a double-edged sword which can work against us. I imagine that everyone with an email address has had some form of email scam or fraud – everything from the rather obvious “I need you to help part $X million in your account and will pay you a share” to much more sophisticated scams.

The real problem is that in a world where you make purchases all the time from people and businesses that you have never “met” invariably this reduces your ability to spot a scam. There is an interesting story on the BBC website about how the Accountant to a business was pressured into sending €500,000 from one of their clients’ accounts. On the surface it seemed legitimate, but thankfully was caught.

Time Pressure

Often fraudsters will use the pressure of time for a deal or lost opportunity (increasingly common in many marketing campaigns as it is). However, some firms produce lots of information – for example online diaries, showing when people are available (capitalising on times when they are unavailable). So a sense check is often the first thing you should do. Where money is concerned, a good financial planner is someone that you will have a trusted relationship with. So he or she should have a pretty good idea about your plans – assuming that you provide information honestly and that suitable questions have been asked.

In the case the BBC highlight, the Accountant was informed that the money was to be used to buy a business in Cyprus. One would hope that the business would have discussed such a plan with the Accountant in advance (if true) so it would not be something out of the blue. Similarly, a financial planner, really should have a good idea of when you might need money – for school fees, a wedding, a property purchase and so on. In practice few expenses should be a “surprise”. This relationship is likely to mean that fraud can be spotted more easily, but in no way guarantees it.

Anyway, be mindful that anyone that has access to any of your accounts – business or personal might unknowingly sign off something believing it to be true. You are responsible for your accounts and need to ensure that you have a process to sense check financial transactions. Here is the BBC item. Click here to see.

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

Business Owners Beware2017-01-27T10:56:10+00:00

America, you are better than this!

America, you are better than this

There are times, when I watch or read the news and am flummoxed by what I learn, particularly when it involves America. I don’t know why particularly, but I’m often left thinking – America, you are better than this!

Perhaps its due to personal contact with Americans, which to date has always been a good experience. Trips there over the years have been wonderful experiences and of course I’m a consumer so have enjoyed many aspects of this… let alone the many wonderful artists, film makers, sport stars and musicians.

We all know that we have a special relationship with North Americans, largely because we speak the same language and tend to fight the same fights. We share common values. Of course American foreign policy and politics is something rather different (and I won’t get into it now).

Liberty and Freedom

Whilst we are all aware that nations are scratching around for money and tax evaders are public enemy number one. It does seem somewhat at odds with any sense of American values. I’m talking about FATCA (Foreign Account Tax Compliance Act). This is based upon old tax rules about ensuring income is properly reported to the IRS (American form of HMRC).

Sledgehammer and Walmart… or rather Walnut

Due to the more sanguine approach to tax evasion (surely a good thing) there has been a series of “unintended consequences”. In essence, as the IRS demand income is accounted for, they require all foreign entities to report holdings of US citizens. As the significance of this has gradually dawned on the world, most financial institutions are avoiding the problem by ceasing to provide financial products and services to Americans. This is because, the US seems to wish to take the stance of applying onerous fines, in advance to the financial institutions.

As the rules about how income within investments or indeed from any assets is taxed operates differently from one country to another, but the US does not apply the local rules, deciding to apply their own. This makes a mockery of most of our normal arrangements such as pensions, property, ISAs, Trusts and so on which are essentially just treated as “savings”. There are complexities as you may imagine, but I won’t bore you with them here.

In essence, every US citizen, wherever they live has to submit a tax return. This has come to be understood that almost without exception, no financial institution wants to deal with American citizens for fear of being fined first and having to spend huge amounts of time justifying the whys and wherefores of common sense.

As a result Americans living outside of the US are finding it increasingly difficult to get basic things like a bank account, let alone anything as sophisticated as a UK pension!

Handing in US Passports

This has resulted in the bizarre situation of many Americans being essentially forced to renounce their US citizenship. Something that is frankly “nuts” in a costly process that seems akin to a public shaming with a Headmaster. There are about 9 million Americans living outside of the US. If you were born in the US, you have American citizenship – like the current Mayor of London, Boris Johnson, who was born in New York, you will be faced with the requirement to comply or say goodbye. He ended up having to pay the IRS various taxes on his UK assets, then declared he would be giving up his US citizenship.

There is a good piece on the BBC site about how American’s are finding this “hard going” with a bit more context. However, it is creating serious problems for UK financial institutions and advisers who are finding solutions very difficult to achieve for anyone with less than £500,000 of investments… and as you may imagine, the price for something of this importance (and risk to the organisation) isn’t as competitive as it might otherwise be.

America, you are better than this!…. at least that’s what I hope.

As for a film connection, if you are an American citizen living in Britain, you may feel as though you are being unfairly targetted…  as though you are an enemy of the State. So here’s the trailer to this Will Smith and Gene Hackman movie.

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

America, you are better than this!2017-01-06T14:39:19+00:00

War and Peace

War and Peace

I suspect that you will have seen the promotion for the BBC1 Sunday night drama – Tolstoy’s “War and Peace”. The story, one of the longest written, but still “short” at 1,440 pages and 561,093 words when compared against the 10 volumes of “Artamène ou le Grand Cyrus” and a massive 1,954,300 words for which the certainty of the author is questionable.

One of the many criticisms of the financial services industry has of itself is the amount of information that “needs” to be provided to investors. The prospect of reading a report containing jargon and frankly often dull, uninspiring information is… well….uninspiring.

Improvements for 2016

We have worked hard over the years to reduce our versions of “War and Peace” generally by providing a summary letter together with an Appendices. The information is helpful, to some extent important, but often hard to produce in any succinct manner. There are other agendas to consider too – the regulator wants to be assured that investors are given sufficient facts and risk warnings, whilst the professional indemnity insurers want to ensure that every possible loophole is addressed to avoid any grounds for complaint.

Of course getting documents right is important, as highlighted in the BBC’s opening episode, which concerns the Will and beneficiaries of Count Bezukhov, as often is the case… where there’s a Will, there’s a crowd..

So for those of you that have received reports over the last couple of years or so, I wonder if you have any comments or thoughts about how we might continue to make some improvements – after all we are attempting to explain how we propose you handle your money. I welcome your feedback.

The BBC have condensed the novel into 6 episodes on Sunday evenings at 9pm. Click here for further information and the BBC i-player.

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

War and Peace2017-01-06T14:39:21+00:00

Honesty Report

Honesty Report

I was listening to the radio on Wednesday morning and a story that caught my attention was about a report published by Noddle, the credit rating agency. In essence their report is perhaps best described as an honesty report.

The research reveals something that anecdotally, most of us probably know already. The data, when extrapolated suggests that something approaching 1.9million couples keep financial information secret from one another. The suggestion being that this isn’t simply a case of not fully admitting how much was actually spent at the shops, or how much those birthday gifts really cost, but a rather more concerning inability or unwillingness to reveal the degree of personal debt.

The report found that 44% of married couples do not know how much their spouse earned. Relate therapist Arabella Russell and MD of Noddle Jacqueline Dewey briefly discussed some of the issues about couples struggling with honesty about money on the Radio 4 Today programme with Justin Webb. The BBC remove programming after a while, but the link is here.

Over the years I have observed many different approaches that couples take to the subject of money, all have their presumptions and “baggage” and I try to gently discover attitudes towards money, it is, as Arabella Russell outlines, so much more than simply an accounting system, how we think and talk about money connects deeply with how we think of and value ourselves (and others).

Common language

It isn’t quite the case that talking more honestly about money would save marriages, how couples communicate is more complex and frankly the territory of therapists not financial planners. However, it is clear (and obvious) that money is a one of the most significant “stress points” in any relationship. Relate’s own report “The Way We Are Now” found that 61% of adults with children, found that money worries was the greatest strain on their relationship, for those without children the figure reduced to 47%. That said, the report does provide some good news – 87% of people in couples are happy with their relationship.

Speaking Safely

When I meet with couples, it is important that both people are able to express themselves in relation to money and their hopes and fears about the future. I am often told at the end of our meeting that the experience wasn’t what had been expected… despite the website and this blog, most new prospects seem to assume that this is all “marketing” and that in fact I will “revert to type” and just talk about numbers, products and bore them to tears. For many, simply sitting down together with an impartial third (me) who asks pertinent questions about their past, present and future is a rarity. It’s different for each, but it is certainly clear that it is a welcome experience and the opportunity to get some clarity of how things really are.

Of course such a discussion needs to be conducted thoughtfully and sensitively. It isn’t therapy and it isn’t confession, to my mind its a safe space, to clarify… the issues that are raised may or may not be then requiring either therapy or confession, that is naturally dependent completely upon the couple and the information revealed. Of course this is not limited to couples, I would argue that anyone should benefit from “speaking out” what they think, feel and have experienced about money. To my mind self-awareness is vital for any financial planner operating in this way, ensuring that the discussion is about the couple or individual concerned, not their own projections.

Why is it important?

Saving relationships is simply not the domain of a financial planner, however anything that helps improve the lives of our clients – understanding their own truths and being able to reflect back the reality of things is invaluable. We all know that life can be messy, some relationships end, some very painfully, some can be improved… but we can all probably improve how we listen to one another. I have no doubt that having clarity about money (financial planning) will reduce financial stress for everyone, the real question is can you make the time to listen and be heard?

If you or someone you know are seeking therapy or couples counselling, I suggest visiting the websites of the BACP and Relate for couples.

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

Honesty Report2017-01-06T14:39:23+00:00

Dementia – Suppose I Lose It

Solomons-financial-advisor-wimbledon-bloggerDementia – Suppose I lose It

Radio 4 will be running a programme this evening at 8pm, which will be a highly personal view of dementia. It features a well-known married couple – Timothy West and Prunella Scales who are interviewed by their long-time friend Joan Bakewell. The preview this morning sounded enganging, expressing the very practical, personal and real problems that anyone suffering dementia can face.fawlty towers

Becoming infirm is not a topic that many people wish to talk about, yet it is, in my opinion a vital part of proper financial planning. After all, the job of a financial planner is the attempt to make your money last as long as you, ensuring that it doesn’t run out. Yet we all know that should we ever require care at home or in a residence, this can be incredibly expensive and is often referred to as a “ticking time bomb” within press and political circles. One of the scenarios that I model for clients is precisely this problem and of course there are implications for ensuring that not only your Will is up to date, but also that you have Lasting Power of Attorney in place.

The broadcast promises to be interesting and is on this evening at 8pm, Radio 4, called “Suppose I Lose It”. It will be available on the BBC i-player afterwards presumably for the usual time-limited period.

Dominic Thomas

Dementia – Suppose I Lose It2017-01-06T14:39:32+00:00

Moneybox and Platforms

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Moneybox and Platforms

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This week BBC Radio 4 Moneybox featured the running spat that seems to be developing in the investment platform market. Platforms are online administrative services that both advisers and clients can use to buy, sell and value investments. To say that they vary considerably in price and functionality would be an understatement. There’s an entire market for helping advisers assess what platform is best for their clients (which I pay for and use for no small sum of money). In essence there is a price war or what I might call a race to the bottom. Cheap is not always good, but then neither is expensive. Moneybox kicked the tyres on the new Hargreaves Lansdown (HL) platform, which is really aimed at DIY investors. As far as I’m aware (which means from the latest research data) they have a decent platform with a reasonable range of funds. Their new charges aren’t that competitive and whilst they provide extensive fund information (most now do) as the HL spokesman said on air, there is the belief that they provide “the best funds at the best prices”. Whilst I can understand this statement, it rather betrays the belief that selecting “the best” fund is easy to do. It isn’t. This is a convenient belief, I might suggest delusion and one that DIY investors also suffer (hence a marketing match made in cyberspace).

Here’s the big one

Ok, here’s the big issue that the financial services industry generally doesn’t want to acknowledge, but when you read the next statement, and reflect on it, you know it is true. Here it is. It is not possible to consistently outperform the market without taking additional risk to the market. You might want to re-read that. Now there are some that that do outperform, but do so over the very short-term. Given that most fund managers do not manage their fund for very long, (a cynic might suggest that they quit whilst ahead) looking at the longer term performance of winners is equally unhelpful. Suffice to say a very small percentage outperform the market over 20 years… and the proportion that do is about the same as random chance. Its also depends on when you buy into a fund and don’t forget that hundreds of awful funds are closed and if had been included, would demonstrate that an even smaller proportion outperform over the long-term. Here is a chart a friend of mine shared recently.

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Experience isn’t priceless, but it is highly valuable

As for the platform, well on one hand it is an administrative system. They are not all equally as good as each other, they all have different charging structures and functionality. A key issue for me is “does it work?” and you’d be surprised at how many fail the test. Theory is one thing, reality is another. A good financial adviser will review the platform you use, sometimes it is better to move, sometimes it isn’t. Whilst it is important (always) to challenge the way things are to improve, the assertion that there is “one way” of doing things, that “cheapest is best” or that similar products are in fact  “all the same”, is simply not accurate. Experience isn’t priceless, but it is highly valuable.

Profit or profiteering?

However, let us not ignore some obvious facts, there are vested interests. Financial advisers (myself included) are not charities, we are businesses. Platforms are businesses, Fund Managers are businesses. All need to make a profit to continue to exist, the real question is what level is reasonable and fair – which is almost impossible to answer to everyone’s satisfaction. Moneybox challenged the 71.5% profit margin that HL make.

Dominic Thomas: Solomons IFA

Moneybox and Platforms2017-01-06T14:39:41+00:00
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