AVOID MINI BOND SCAMS

TODAY’S BLOG

AVOID MINI BOND SCAMS

Following on from my piece about cash management services I mentioned the problem of a growing number of scams. Cash savers looking for better rates of interest are regularly duped into believing that rates of 4% or more are currently achieved for cash. THIS IS NOT POSSIBLE for deposit accounts UK Banks or Building Societies when the Bank of England rate is 0.1%. Of course a few years ago such rates were common, but not since the credit crunch. So be warned that something that says it is the equivalent of cash when it is nothing of the sort. Genuine interest rates will not be much better than the Bank of England rate – perhaps 2% more, but very little else.

Accounts offering “interest” of more than this are not genuine cash. They could be legitimate, but not cash. The rise of peer-to-peer lending is often a touted as an alternative to a regular bank. There might be some good ones (they may be) but on the whole this is a new business taking your deposit and lending it out to other businesses or individuals at a higher rate than they pay back to you. No different from a traditional Bank, except that a traditional Bank has been doing this for years and has learned the hard way that lending needs to be done carefully… and whilst I am no fan of Banks, just think about who might borrow from such a lender… someone that cannot, for whatever reason borrow from a high street bank. Hey presto, higher risk of default.

MINI BOND SCAM

Mini Bonds are yet another layer of this, except they dont have to relend the money to legitimate borrowers (people trying to fund their business or enterprise where a mainstream bank won’t play ball). They can lend the money to anyone, sadly often to the Directors of the company running the mini-Bond. Thousands of savers have got into problems with these mini-bonds. Tempted by higher rates of “interest” which was then passed on to some pretty despicable humans. These were banned in January, but this month made permanent after mini-bond firm London Capital & Finance collapsed with £237m of savers’ money.

WHITE CAT

WHAT IS A MINI BOND?

There is no legal definition of what a mini-bond is in the UK. Most companies that have offered them, including London Capital & Finance, borrow money from ordinary savers, promising them a fixed return well above the rate available on most standard saving products. The mini-bond firm is then largely free to do what it wants with the money. Many have lent investors’ cash to third party companies (which sometimes has the same directors), bought other risky investments such as race horses or wine, or funded property construction. A number of companies that raised money in this way have collapsed with millions of pounds of savers’ money unaccounted for. The FCA claims that mini-bonds are not within its remit, while criminal investigations for fraud are rare and prosecutions even rarer. As a result, investors generally have no protection if things go wrong, and fraudsters can operate with little fear that they will be punished.

ONLINE ACCOUNTABILITY

One of the many problems with google and facebook is that they carry advertising and seem unwilling or unable to vet adverts for authenticity, though I find this very hard to believe as whenever I have attempted to run even the tiniest marketing initiative on Facebook, my “advert” has to get “approved” before it can run. So… no I don’t believe that more cannot be done. Anyway, savers who are not as sophisticated as the scammers invariably google interest rates and are faced with adverts offering higher rates… what’s not to like? Well just the fact that risk isn’t really explained and its all framed to look, smell, sound and taste like any other Bank. You need to know the real risks that you are taking. A mini-bond is a great way to part with your cash on a permanent basis, something that the stock market does not do until Armageddon (as you will not get to a £zero value if you have invested in an index unless everything is worth nothing – and I can only imagine one scenario where that could occur… the sort of scenario where a Blofeld Bond-like villain (hence the cat picture…) is holding the world to ransom, or the actual obliteration of everything we know. If this ever happens, you won’t be worried about your ISA or pension.

In the meantime, please beware of scams, watch out for the villains, they are rarely as easy to spot as Mr Blofeld. This reminds me of an element of my work which is to act as a type of bouncer to your finances. Some have asked me about my photo, suggesting I look a little “mean” (perhaps they meant grumpy). It is deliberate – anyone that has engaged with me knows that I am having a little joke. As a bouncer, or gate-keeper part of my role is to ward off those trying to part you from your money. Its meant to be a little amusing, (ok not hilarious) whilst holding a very valid truth – that I am on your team as a defence against the rubbish that inevitably comes in your direction, its not if, but when…

As for the calibre of the villains, well the fictional ones are best left to the likes of 007, those that are actual criminals, well… I have to leave them to the authorities whilst doing what I can to prevent them coming anywhere near you.

As for Mr Bond, from the perspective of 2020 there are many aspects of 007 that hang heavily today. A friend of mine recently mentioned that he had rewatched the entire Bond collection with his children, he reappraised his favourite Bond and saw the films in a different light. When it comes to cash accounts, please appraise with care – make sure you know your Bonds from your Mini-Bonds. Here’s a trailer for 007 in “You Only Live Twice” (1967) who, let’s face it, has probably lived more than twice already.

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

AVOID MINI BOND SCAMS2023-12-01T12:13:16+00:00

Spectre in Bond?

Spectre in Bond?

As a financial planner, I’m told that I’m meant to know a thing or two about the “Bond market”….I am sure that you will have seen some of the marketing about the new James Bond film “Spectre”. As I write, the film has grossed over £48m in its opening weekend. James Bond has been one of those familiar features of British culture, with strong themes of Queen and country… notably drawn upon in the London 2012 Olympic opening ceremony.

Despite this Bond is a character that has required considerable updating, partly due to the technology employed and partly due to changing attitudes in a more enlightened society. Here is the trailer for Spectre.

The struggle is a familiar and shared one, yet such attitudes are deeply embedded in culture.  The recent film “Suffragette” whilst shocking to some extent by todays standards, the more shocking details appear in the final end credits which reveal the year in which different countries gave women the vote.

Ladies and Gentlemen… not boys and girls

Anyway, back to Bond, despite the suggestion that this Bond is rather different, sadly it is simply rather disappointing. Perhaps I have become more critical, but I found myself feeling completely disconnected from the initial opening action scene a fight and flight pursuit in Mexico. This feeling persisted throughout, akin to a formula much like painting by numbers, whilst piecing together a finished product, felt disjointed and somewhat fraudulent. There is some dreadful dialogue and utterly unbelievable explosive consequences, of course.

However most disappointingly was the hype around the appearance of Monica Bellucci as the oldest actress to play a “Bond girl” Lucia, who was 50 when the film was made. Disappointing on several counts, that the term girl is continued to be used to describe a woman, (or is Bond a boy?). That she is in the film for probably no more than 2 minutes, her role is entirely superficial for moving the plot along.  Strikingly, her character serves merely to play the stereotype damsel in distress that takes a split second for Bond to reassure and to lead to bed. Ultimately Bond’s next conquest is the much younger Madeleine Swann, played by Lea Seydoux (29 during the shoot).

Whilst the rest of the world is moving towards more equal rights and attitudes about gender, Bond remains clearly confused, we get to peak into his flat, which appears to reflect a man without any significant connections, whilst frequenting a world of high living, the reality at home is rather different.

Given this, I am left feeling that Bond has been dealt the inevitable blow of consumerism dictating art… as is increasingly becoming commonplace. It would seem that there is now very little attempt to be subtle about product placement, with the film serving more as a long advert (and long it is at 2 hours 28 minutes). The question that we are left to reflect on is what does it say about us if we want to be Bond? as GQ seem to think many men would wish. Despite being all the action, there is some incredibly lazy thinking.

So with that in mind, here is a video I came across about how expensive it is to live like Bond… should you wish to do so.

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

Spectre in Bond?2023-12-01T12:19:49+00:00

NS&I Pensioner Bonds

Solomons-financial-advisor-wimbledon-blogger

NS&I Pensioner Bonds

Her Majesty’s Treasury announced the new rates for the NS&I Pensioner Bonds last week. These look incredibly competitive for fixed interest rate cash deposits (bonds). These will be offered in the new year at some point in January. There will be a 1 year fixed rate of  2.80% and a 3 year rate of 4.00%.  There is a maximum investment of £10,000 into each. You can have both (£20,000 in total). The interest will be added at each anniversary.

bond-pic-2-600x325

The World Is Not Enough… well £20,000 isn’t

When comparing Bond rates for cash against market equivalents, they are incredibly good – but clearly restricted to a maximum holding of £20,000 per person, I expect that there will be a high demand and as a result the offer could be withdrawn fairly quickly. Blink and you may miss it.

If you would like more information about this please consider the NS&I website. Remember that this is for cash balances that you can afford to lock away for 12-36 months. If you expect to have this money longer than that, then please consider proper investment advice as despite the fact that these rates are “good by comparison” they would be an unwise use of your money as a long-term investment plan (5 years or more). Cash is for your emergency safety net and planned expenses in the 0-48 month window.

Pensioner Bond

The “Pensioner Bond” is only available to those aged 65 or over… which if you are interested would enable 4 of the living 6 actors that played James Bond, 007 to apply.

Timothy Dalton (70); George Lazenby (75); Sean Connery (84), Roger Moore (87). The current James Bond Daniel Craig is 46 and his predecessor Pierce Brosnan is currently 61. The other Bond story is that the new 007 film “Spectre” is scheduled for release in November 2015.

Dominic Thomas

NS&I Pensioner Bonds2023-12-01T12:39:44+00:00

Focus – lessons from Sundance

I’m lucky enough to have fairly easy access to London and as a consequence, some really great stuff. At the weekend I managed to spend time at the Sundance London film festival (which I also attended last year). This is a showcase of independent films, largely brought over from Utah, where the Sundance organisation, set up by Robert Redford is based. The great thing is that you get to meet and hear from people that love making films. Their common trait, forgive the pun, is their focus. There is an unmistakeable sense of “doing the thing they love”. Not simply for those in front of the camera, or whose name you may know, but a real sense of drive and desire to make something that says something of value.

David Arnold, is a successful British composer, who has already built a considerable body of work within the film world. You might know him best for his work on the more recent James Bond movies. Now I enjoy music and listen to a lot of it, but to my shame, I’m not terribly much of an expert when it comes to classical music, despite my father’s operatic background, and my years in the school choir – I’m certainly no composer. So I am in some awe of those that can create music, but I had never seen the process of scoring a film so wonderfully explained. David walked the audience (of which around 50% were composers) through his catalogue and his process. He then demonstrated the various techniques he uses to structure the music to the film and build it layer by layer, whilst all the time being mindful that changes may need to be made due to editing of the film itself. It was fascinating. There was a real sense of his humility in being able to appreciate the contributions of others, whilst also remaining focused on the task at hand – for which he has a clear passion.

Whilst I’m not making music, his explanations and processes resonated with me. When I’m constructing a proper financial plan based upon someone’s values, it is very much a layered approach, with the need for editing and re-working. I like to think that on occasion I really help people find their personal rhythm in their own lives and values, but I’m stretching things. I certainly love what I do and enjoy the creative aspect of my work, but it isn’t really a masterpiece, but I do hope that I’m helping others (my clients) to make a great work of their lives, by really thinking about how they want to live them out…. not your run of the mill financial stuff.

Dominic Thomas: Solomons IFA

Focus – lessons from Sundance2023-12-01T12:23:35+00:00
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