Happy New Year

Welcome to 2013 and best wishes to you all for a prosperous year ahead.  We are certainly looking forward to what promises to be a busy and positive year at Platinum.

By the end of January we hope to launch our regular newsletter, which aims to keep you informed of current issues, key dates affecting your money and relevant news about the financial markets. We will also let you know what’s happening to various members of the Platinum team.

The media are already focusing on the latest changes to legislation in the financial advice sector and if you’ve not already done so, I would suggest you read an earlier blog titled “Things Are Looking Different…”

You can rely on us to keep you informed and we look forward to catching up with our clients over the coming months.

Things Are Looking A Bit Different…

The start of 2013 marks the introduction of some major changes to our industry, although many  won’t be felt by our existing clients.

Approximately six years ago the Financial Services Authority, in its role as regulator, started working towards what has become the Retail Distribution Review (RDR) with the aims of improving professionalism, knowledge and transparency within our industry.  This objective culminates in the implementation of the RDR as of the New Year.

What do these changes mean for both us and our clients?  They reach across all levels of our industry but some of the more noticeable ones are:

  • All advisers will now need to have achieved a higher level of qualifications than previous.  Although this doesn’t affect us directly (we have held the necessary qualifications for some time) it means some financial planners are moving away from qualified financial advice.
  • The definition of adviser and the meaning behind the word Independent Advice (or what is described as Restricted Advice).  Firms can elect to either operate in a restricted manner, offering advice on a ‘whole of market basis’ or tied to one or more providers or they can elect to operate on an independent basis.  We have chosen to retain our independent status as we feel this offers the best outcome for our clients. We feel we can continue to ensure our clients needs are met by utilising the best financial products, funds or providers as dictated by their needs and desires.
  • How we are paid – commission on new investment-related plans will no longer be offered and this will be replaced by adviser charging.  In reality there is little change for our existing clients and the majority of new clients because there have always been costs for advice. Previously these have been associated with plan charges and commissions; the costs will now be explicit and clearly demonstrated.  We have always prided ourselves on not being swayed by varying commission from providers and have consistently maintained our fee costs in line with any commissions so that clients clearly understand the costs of advice.  This will continue and as previously you will have the choice as to whether to pay our fees direct, or whether those fees are paid by the provider and the costs to be deducted from the investment product or plans.
  • Greater accountability for ongoing advice and looking after those existing clients whose plans and situation we review on a regular basis.  This is a major step forward for our industry and is certainly something we welcome.  The majority of our business is built around our existing clients and maintaining their investments so we welcome the opportunity to demonstrate our value to both our clients and the FSA.  It will be a positive move for the industry as a whole if it moves to a similar focus of looking after their existing clients.

In short the RDR changes are very welcome news for Platinum and will result in a better industry and better outcome for all consumers. However there may be some disruption over the initial few months of the new legislation and I would urge our clients not to panic when the media starts to focus disproportionately on specific parts of the legislation which can create concerns.

We are here to help and if you have any queries at all, please do not hesitate to get in touch.

There are other changes and effects of the RDR which will filter through over the coming 12 months but the above are the most headline-grabbing.  Rest assured, we will continue to monitor all our clients investments and keep you informed as to any actions which may be required.

The Chancellor Has Some Good News!

Although politicians from all sides argue about levels of debt, rates of debt reduction and economic growth, the Chancellor made several announcements which – on balance – could have a positive impact to many of our clients.

Modest increases to ISA allowances and the Inheritance Tax threshold will allow people to save a little more and avoid unnecessary tax.

Greater impact though is the changes to pensions legislation.

The reduction in lifetime allowance to £1.25m and a cap of a £40,000 per annum contribution is likely to only affect the minority because the average yearly pension contribution is around £6000  (or £500 per month).  For those affected by the contribution cap, there are alternatives to pension planning which could help meet any financial planning needs.  We are happy to explain these if you think it applies to you.

The major positive impact is the re-introduction of the 120% GAD limit for those clients accessing their pensions under Drawdown.  Whilst annuity rates continue to languish at record low levels, the direct increase of 20% in terms of income withdrawals will be very, very welcome.

If you want to discuss the budget statement or its impact please call or e-mail us.

Investing In Ethics

eth_bk

In recent years there has been an increasing interest in ethical funds. However, as with most moral or ethical issues, things aren’t always clear-cut and sometimes it can be difficult to decide where you would draw the line in terms of what companies do.

A category of investments known as Socially Responsible Investment (SRI) funds has developed, so that whilst most ethical funds fall within this category, SRI funds can support a much wider agenda. A good example would be where an ethical fund might never invest in a company that carries out animal testing, whereas a SRI fund could support animal testing if there is a sufficiently valid and justifiable reason for such testing.

We have access to schemes that offer access to thousands of different investment opportunities which cover the whole spectrum of funds, from the conventional through to SRI and also those who meet the stricter ethical criteria. This means that return on investment and risk factors can be considered along with your personal beliefs and opinions.

It’s an exciting time for us at Platinum because we believe some of our clients may be wanting to take a more socially responsible approach to their investments. If this is something that interests you, then please get in touch.

Our first foray onto YouTube

2012 is already taking us into new areas, previously unexplored.

In order to welcome clients and explain how we work we have just launched two videos.  The idea is to show the videos on our new YouTube channel, Platinumifs, as well as posting links within our main website.

We always appreciate feedback from clients and contacts so would appreciate any thoughts or suggestions you may offer.

2012 is the year of some major changes…

As we start the New Year hopefully everyone is feeling refreshed, making plans and looking forward to the next 12 months.

 

With his in mind I thought it is worth taking the time to note down some important dates which are due to affect all our lives and financial wellbeing.

 

1.  31st January is the most immediate date.  It is the deadline for all online Self-assessment tax returns (paper submissions were due by 31st October last year).  Equally important is the payment of any tax due for the previous tax year which must be paid in full by the deadline.  Where appropriate tax payers will also have to make a payment on account for the current tax year at the same time, followed by a further on account payment by the end of June.

 

2.  21st March is the date of the annual budget.  This year will be of exceptional interest to all of us as the Chancellor George Osborne is almost certainly going to take the opportunity to announce changes designed to maintain his fiscal tightening and inspire growth.  This will no doubt entail changes to taxation and benefits for companies and individuals.

 

3.  5th April is the year end as always and will probably involve a rush to maximise tax allowances and take advantage of any budget changes.  A major change which is due to take effect this year though is the removal of contracting out and protected rights rules.  For almost every pension plan holder his will mean a reassessment of their plans as many restrictions are removed and many existing plans will stop receiving enhanced benefits.

 

4.  1st September marks the start of Auto-enrolment. The Pensions Reform starts to take effect and the largest UK employers will have to start implementing changes and start providing ‘company sponsored’ pension schemes. These will soon have to be implemented by all employers throughout the UK as their various staging dates are reached.

 

5.  21st December is the date when all insurance companies must remove any gender pricing in any insurance product as dictated by the ECJ.  This will have a huge impact on any insurance related product, from car insurance through to pension transfer values and annuity rates, as companies will have to offer the same rates for men and women.

 

All the above regulatory changes will have an impact.  In order to ensure that you, your company or any friends, family and colleagues are prepared we recommend you seek advice or a review of your circumstances.

Reflection on the past year and a positive outlook for the future…

looking2.jpg.scaled500

As we approach the end of the year, it is worth reflecting upon the turmoil of the past 12 months, how well financial markets have withstood the onslaught and the opportunities for 2012.

At the beginning of the year the outlook was reserved.  The debt mountain was at the forefront of everyone’s minds and there was an awareness of looming cuts and a difficult year.

From the very start there was turmoil.  In January, the year started with civil unrest in the Middle East as countries such as Egypt fought for political reform and leadership change.  This created a spike in Oil prices and fuel costs which would have an impact on everyone’s disposable income.

The earthquake in Japan took everyone by surprise and it’s devastating impact reverberated around the world both financial and personally.  That said the Japanese financial markets soon started to recover as the country started setting about rebuilding their infrastructure.

Soon after, the US politicians failed to reach a decisive agreement on their ‘debt limit’ which failed to convince financial markets that the severity of the debt problem was understood by the political leaders.  This meant the US lost it’s AAA credit rating.  Whilst this didn’t have an immediate impact it was a wakeup call.

Alongside this the Eurozone sovereign debt crisis continued to build momentum as fears moved from Greece, to other countries and ultimately to the Eurozone as a whole.

This was manifested in the price of Gold which soared to new heights as it was perceived as a safe haven away from government debts.

The Eurozone crisis continues to bubble away but markets seem fairly steady as political leaders struggle to come to terms with the necessity of a fiscal union, likely underpinned by Germany.  In line with this the price of Gold has since fallen back from it’s earlier peak.

Closer to home there have been a number of issues regarding spending cuts & changes to public sector pension schemes.  Whilst none of these cuts are welcome the necessity of some change is unarguable and, so far, financial markets & investment managers have been pleased with the overall direction of our economy.

Looking ahead to 2012 there are some positives for investors.

It is likely the Eurozone crisis will continue to stumble onwards however as time passes each of the 17 Eurozone countries appear to be moving closer together and a long term plan will hopefully start to form.  Once a stable approach is agreed financial markets will start to move forward.

Outside the Eurozone and UK, the wider world is also coming to terms with their debt issues and changes to their political systems.  As with the Eurozone investment managers crave stability and as issues are tackled it is likely financial markets will respond.

Within the UK we are probably in a fairly robust position.  2012 is likely to be a year of little or no growth, however some things may start to get easier as inflation starts to lower and pundits will start to look ahead at 2013 to 2016, when they will see returns on investments.  As a result financial markets will hopefully demonstrate a steady climb from their current position.

In essence 2012 is unlikely to be a year of dramatic stock market climbs but it will hopefully be a year when investors see a steady positive climb in their valuations where they are invested in the right areas.

As always we are happy to discuss the financial future with any of our clients and welcome the chance to meet in the new year.

Is the Euro about to collapse?

rebuild_euro.jpg.scaled500

Recent press speculation has devoted a lot of time to the ‘end game’ which is approaching for Europe and the sovereign debt crisis.

 

A number of issues have arisen over the past few months with the most recent being the signals from financial markets that they are worried about the political leaders ability to take control.

 

Last week the main world’s central banks showed their solidarity in a co-ordinated action to lower interest rates for commercial banks.  This action achieved its goal in that it immediately calmed nerves, however the euphoria will soon dissipate if the 17 Euro countries do not move forward.

 

The sovereign debt crisis, as it is described, needs long term plans.  With their backs to the wall it is likely Germany, France and the remaining 15 ‘Euro’ countries will have to move into a fiscal union.

 

Fiscal union will probably require a new treaty with the 17 ‘Euro’ countries operating as a separate entity within the greater EU.  The new inner EU will also likely have fiscal controls dictated by Germany in return for Germany’s commitment to help support their fellow countries and their huge debt burden.

 

In the long run it is difficult to predict how the EU will develop, however it is almost certain that there are no real alternatives to a common fiscal policy controlled by the strongest country, i.e. Germany.

 

In light of the lack of alternatives financial markets are likely to see a greater fiscal unity as a really positive move, one that offers stability and an opportunity for investment mangers to concentrate on their strengths which are spotting opportunities, and generating growth and income for investors.

 

I am well aware that the regular media updates can be confusing and alarming.

 

As always I would suggest any worried client to contact us immediately to discuss their concerns and we can hopefully offer reassurance and allay any fears.  At the same time we can ensure that their savings, pensions and investments are well positioned for the future.

Does the latest government guarantee give hope to first time buyers and house owners…

housebuild.jpg.scaled500

With great fanfare the government has announced some recent changes to the housing policy and a guarantee scheme for 95% Loan to Value borrowers.

The first change is to what happens to profits made from tenants buying their council houses.  These are to be used by local authorities to help build new council houses.

At the same time councils are to be given incentives and subsidies to refurbish neglected and empty properties.

On its own, this is unlikely to result in a huge leap forward in the housing market but it is an encouraging move in the right direction.

The second, major, announcement was the launch of the mortgage guarantee scheme.  Based upon the Mortgage Indemnity Guarantees of the past, this new guarantee is specifically targeting new build properties only and homebuyers who have been struggling to borrow a 95% LTV mortgage.

Essentially it is insurance, funded by the house builder and the government, to protect lenders should house prices fall further.

In time this should certainly make it easier for borrowers to get the desired mortgage and encourage a few more deals.  The knock on effect will be to help the large house building firms in particular and to get some of the large new housing estates moving again.

For the majority of homeowners the impact will be negligible or, at least, much slower.  For those living in existing properties it is unlikely to create a sudden surge of activity at the bottom rung of the ladder as the target audience for the guarantee are ‘new build’ purchasers.

In short these announcements are good news for house builders and first time buyers on ‘new build’ estates, but it is unlikely to help the mortgage and housing market as a whole.

Did you know… You can watch Asset TV on our website for the latest fund manager insights

assettv.jpg.scaled500

We have the facility on our website which allows investors to watch brief presentations by leading fund managers, economists and investment specialists.

We appreciate that for many clients the video clips may be a little indepth, however there may be the occasional presentation which may be of interest and will relate to you.

We will  however continue to focus on the one to one contact and service which we feel is essential.

For our clients; we continue to actively manage your investments and will certainly keep you appraised of any relevant news and any actions which may be required.

If you have any queries at any time, please contact us.