A PATCHWORK QUILT

TODAY’S BLOG

A PATCHWORK QUILT

One of my old History teachers used to regularly cite the phrase “history is a seamless garment” which he quickly attributed to AJP Taylor (his own Tutor I think). I am not so sure, perhaps it is more of a patchwork quilt.

One of the many common gripes investors have is the great paperchase that they (and we) have to undergo on a regular basis. Well intended regulation, designed to protect has created a mountain of collected paperwork. Sadly, most of it is entirely useless with illustrations that will never be accurate (because they assume a world that none of us live in) and leave you wondering why you bothered with them.

This deep frustration is compounded when mergers and acquisitions happen. Most investors are left to become detectives of their own past, trying to piece together old pension companies and employers who have similar names that are then changed over time as they become consumed by the largest businesses who have largely survived through inertia.

Last week Old Mutual became the new formerly known as. For the “contemporary” music buffs amongst you, this is not the same problem that “Prince” had with his owners, err I mean production company… as he elected to become a “squiggle” so as to avoid confusion that he was not Prince, but the artist (formerly known as Prince) now “squiggle”.

I wonder if Pension and Investment companies might one day become simply are symbol, even then, it wouldn’t really help most of us with our own filing system. We came close recently as Standard Life Aberdeen Investments, tried to make itself edgy, using the name ABRDN. Read that aloud phonetically (a burden?). Some time ago Skandia attempted to use a colon – see below : (at least that’s what I assumed it was).

Solomons IFA blog all in a name

THE EYE OF THE NEEDLE

Anyway, back to Old Mutual – a name that was always going to struggle as a new, innovative brand, they have now become Quilter, (now the headline makes a bit more sense right?) which is (as they all are) a mash up of various companies now selected and reselected to create something that might hopefully suit someone. I am not having a go at Quilter, its simply another example of name changes that I’d suggest may not be “permanent” the irony of this being the name of an insurer amuses me.

Quilter, like those before them, will have written to you if you have an Old Mutual arrangement, or a Skandia Investment Solutions, Skandia, : or Selestia. However, it’s possible that you treated it as unrequested junk mail, not recognising the branded envelope.

The big winners are the printers, paper suppliers and design agencies who all get to re-do their work of a few years ago again, or again again.

However, in this instance, as Selestia, Skandia Investment Solutions and Old Mutual were all really like a basket into which other people’s funds were placed, you have the added benefit of a myriad of fund name changes as well. If you are confused, you have my genuine sympathy and I would encourage you to exercise patience with your shredding, being sure that you are destroying the right documents as even the policy/account/plan numbers may have altered to suit a new computer system.

In fairness to these gigantic businesses, it must be a terribly difficult task to move everyone onto the same technology solution which requires human checking and one of the reasons they amalgamated was to remove as many costs (humans) as possible making the job rather harder than it needed to have been. Still, I am sure that the new digital system that cost the GDP of a small country will not require an upgrade for at least another round of drinks. They may of course find that the benefits of new technology are a double-edged sword, with the ability to move away being easier than moving internally.

So, if you have any questions about the patchwork of possible arrangements that you may have, please ask. Hopefully Quilter will not have us all in stitches. I’m certain that your call is truly important, so much so that finding staff to take it remains the clearest priority.

Alternatively you can let us, your financial planner, worry about this stuff so that you can get on with your life.

Dominic Thomas
Solomons IFA

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

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Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

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

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Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

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

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

A PATCHWORK QUILT2023-12-01T12:13:07+00:00

Skandia Close OId Woodford Funds

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Skandia Close Former Woodford Funds

Its all change at Skandia – soon to be renamed Old Mutual Wealth. On Friday they (OMW) took action which is rather unusual. Funds (INVESCO High Income and INVESCO Income) that had been previously run by one of the most successful fund managers (Neil Woodford) were closed. This follows the exit by Neil Woodford from INVESCO Perpetual who then formed his own investment company (Woodford)… genius name right? Anyhow, Skandia have argued that a lot of investors and advisers are following him getting out of his old funds at INVESCO and moving to his new ones….well his new one (Woodford Equity Income Fund). This is undeniably true. There are costs involved in running the new funds (naturally) and keeping the old ones running (also… naturally). What is exposed in practice is the lack of extra juice squeezed from the annual management charge from INVESCO by Skandia.starmanposter

The CEO of Old Mutual Wealth (Paul Feeney) believes that they “have been between a rock and a hard place with regards to how we manage Neil Woodford’s resignation from these funds and the demand we have seen to move investors into his new offering. We have discretion over these assets being in our life book and therefore have a fiduciary duty to do what we believe is the right thing”. He goes on to state “Whilst theoretically we could have kept the funds open, the demand we have seen from advisers for Woodford would have resulted in even greater redemptions from the INVESCO Perpetual funds. This would have resulted in the TER of the funds increasing and ultimately the Skandia funds becoming untenable”.

(TER is the Total Expense Ratio…or charges in plain English).

So what?

Well, the wisdom of this action will only be seen in hindsight (not a great comfort) and my main objection is the lack of notice. Those that have been happily using the INVESCO Funds concerned (not all INVESCO funds) are being forced to change. This does rather create the impression of selling at a low point and perhaps buying at a high point. The truth is we won’t know until much later. However, what it does expose once again is the problem with “Star Managers” who are a rarity. The only UK Fund Manager more well-known is probably Anthony Bolton, who ran the Fidelity Special Situations Fund very successfully for many years then retired, only to find retirement somewhat unsatisfactory, (I presume) so launched a Chinese fund… which has, not met with the same success. Unlike Mr Bolton, Neil Woodford is sticking with what he knows and can avoid blaming the Chinese for their lack of corporate governance*. This all stems from the belief that investment out-performance is repeatable and sustainable. I don’t subscribe to such a belief when it comes to the long-term (which is the only worthwhile measure of “repeatable” or “sustainable”).

In practice this has exposed the problem of chasing the curve, hoping that because of the past, the future will yield similar results. It is pretty difficult to dissuade most investors from this sort of “top of the pops” behaviour given the tide of marketing and “evidence” of out-performance (by which I mean rather meaningless charts, designed to show certain events in their best possible light).

Is this the best way to invest? Yes if you are in first and out first…but to do that requires courage, conviction and perhaps some inside knowledge, most lack the first two sufficiently and the last is illegal. For those impacted by this move, we will be in touch (as will Skandia… sorry I mean Old Mutual Wealth).

Dominic Thomas

* CityWire 2014-04-01 “The Chinese Are Great Liars

Skandia Close OId Woodford Funds2023-12-01T12:39:28+00:00

Out with the old, in with the…. Old?

Solomons-financial-advisor-wimbledon-blogger

Out with the old, in with the… Old?

Well, the day has finally come. Skandia is being consigned to ancient history. Not precisely true, the parent company Old Mutual are rebranding Skandia from the end of this month as Old Mutual Wealth. As of 22nd September all references to Skandia will cease. So as with the multitude of “rebranding” of insurance companies in the past, will this one be any different? (other than a very good day for the printer). Skandia, er.. sorry Old Mutual are adamant that this is much more than a new coat of paint and a rebrand. They believe that this marks a new start and more innovation and giving customers what they want. Old-Mutual-wealth-BANNER

Skandia have certainly been a highly innovative company. Market leaders in the world of multifund offerings, enabling IFAs to offer a broad range of funds and the ability to construct some really good portfolios for clients. In fact few could really touch them, Fund Managers beat a path to their door simply to get onto the list as the first and largest fund supermarket in the UK. Times have changed and from an outside observers perspective the key changes seem to be – technology, regulation, competition and a change of parent. It remains to be seen precisely how Old Mutual Wealth will fare, but certainly the future will be far more competitive and require considerable foresight and innovation to keep pace, let alone lead the platform market, which is now rapidly becoming a crowded place.

If you have any Skandia arrangements, you will be getting a letter from them explaining the changes and the new branding very shortly.

Dominic Thomas: Solomons IFA

Out with the old, in with the…. Old?2023-12-01T12:39:26+00:00

Skandia Increase Charges

Skandia Life are increasing charges on several of their older policies. Skandia call this the monthly maintenance charge, most call it a monthly policy fee. As inflation appears to be falling, it is a little surprising that Skandia have decided to generally increase their charge by over 5% in most instances. However be advised that these charges apply to pretty old style policies. If you have one of these old style policies, you will be contacted by letter from 22nd October. Skandia have historically only worked with independent financial advisers, so the policies listed below are those that you would have taken out through an IFA at some point in the last 20 years or so.

Skandia Increase Charges

Life products Percentage increase
Maximum Investment Plan Maintenance charge to increase from £3.27 to £3.45 a month. 5.5%
Skandia Endowment Plan Maintenance charge to increase from £3.27 to £3.45 a month. 5.5%
Skandia Lifetime Plan Maintenance charge to increase from £3.27 to £3.45 a month. 5.5%
The Skandia Plan Maintenance charge to increase from £3.27 to £3.45 a month. 5.5%
High Investment Bond Maintenance charge to increase from £40.56 to £42.84 a year. 5.6%
Pension products Percentage increase
Executive Pension, Free Standing Pension and Personal Pension – series 4 Maintenance charge to increase from £2.85 to £3.01 a month. 5.6%
Executive Pension, Free Standing Pension and Personal Pension – series 3 Maintenance charge to increase from £4.33 to £4.57 a month. 5.5%
Executive Pension, Free Standing Pension, Personal Pension and Trustee Investment Plan – series 2 Maintenance charge to increase from £4.17 to £4.40 a month. 5.5%
Personal Pension Income Plan – series 1 Maintenance charge to increase from £4.17 to £4.40 a month. 5.5%
Executive Pension, Free Standing Pension and Personal Pension – series 1 Maintenance charge to increase from £4.17 to £4.40 a month. 5.5%
Executive Pension Plan Maintenance charge to increase from £4.06 to £4.28 a month. 5.4%
Skandia Pension Plan Maintenance charge to increase from £4.06 to £4.28 a month. 5.4%
Self Administered Pension Plan Maintenance charge to increase from £4.06 to £4.28 a month. 5.4%
Skandia Professional products Percentage increase
Executive Retirement Account Fixed rate administration fee to increase from £3.59 to £3.79 a month. 5.6%
Free Standing AVC Account Fixed rate administration fee to increase from £3.59 to £3.79 a month. 5.6%
Personal Retirement Account Fixed rate administration fee to increase from £3.59 to £3.79 a month. 5.6%
Select Personal Pension Account Fixed rate administration fee to increase from £3.59 to £3.79 a month. 5.6%
Personal Retirement Income Account Fixed rate administration fee to increase from £3.59 to £3.79 a month. 5.6%
Skandia Increase Charges2023-12-01T12:23:00+00:00
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