SKQ A publication from
Welcome to the second issue of SKQ, we hope you enjoyed our first one back in March. We are in challenging times. We are all having to find different ways of adapting our behaviours and working to new routines to deliver family, work, and personal outcomes. Typically, we are more comfortable with a pattern and routine, than with change. During a time of crisis I always think of this: Two frogs are dancing on top of a milk churn when they fall in. One frog panics and thrashes about, saying, "We'll never get out!" until the frog drowns. The other frog thinks, â&#x20AC;&#x153;I must keep calm, there must be a solutionâ&#x20AC;?. The frog slowly swims round and round, thinking for hours until this frog notices that the milk has turned into a pat of butter. This allows the frog to jump out. A major part of life is change, good or bad, we will all experience it at some time. This issue features some helpful information regarding Covid-19, as well as tips you could apply during any other time of change or stress during life. It does help to stay calm. It does help to have a plan. It does help to talk. We are here to listen.
Kunle Chief Executive We encourage you to share our magazine with those you think may find it useful. If you have any feedback or would like to contribute to our next issue of SKQ, send Chloe an email at firstname.lastname@example.org SKQ issue 2 | 2
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WHY IT PAYS TO PLACE YOUR LIFE INSURANCE IN A TRUST
When it comes to planning your family’s financial future, it makes good sense to take all steps possible to protect their standard of living. Arranging your life insurance in the right way, to give your loved ones the maximum possible benefit, is an important consideration. You don’t have to put your life cover into trust, but there are a number of benefits to doing so. A trust is an asset that is set aside to benefit a particular person (or group of people) called the beneficiary. Until the beneficiary is intended to benefit from the trust, it is managed by a trustee. A trust generally offers greater control over the pay-out, increased tax efficiency and allows you to use the policy for estate planning.
Better Control A trust makes sure the money goes to the right people at the right time. For example, if someone didn’t have a trust and they weren’t married or hadn’t made a will, the surviving partner may not be entitled to the policy proceeds.
Faster Payments With a trust, proceeds are paid out quickly. As long as there's at least one surviving trustee, there is no need to wait for probate.
Avoid Inheritance Tax Money paid out will not be part of your estate, helping to reduce any Inheritance Tax liability. However, the following should be considered: •
Once your policy has been put into trust, you cannot change your mind and take the policy out of trust later on.
You would give up ownership and sole control of your policy, although you would be one of the trustees, so during your lifetime you would have some control.
There is usually no additional cost to putting life assurance into trust and minimal additional paperwork. Some existing policies can also be transferred into trust.
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YOUR QUESTIONS… ANSWERED This is where we answer those questions you’ve always wanted to ask, but never quite got round to. Whether you want to know more about us, how we work, our business or of course about the wider finance sector, this is the place to come.
What does MJK stand for?
MJK stands for Morrison Jopp Kleinwort. It’s a deferred group personal pension plan that Kunle set up with Standard Life in 2009. It offers discounted fund charges for former employees of Dresdner Kleinwort and Kleinwort Benson Private Bank. Kunle named it after Garry Morrison who was the Standard Life Director that helped him set up these special terms, the J is for Larry Jopp, Kunle’s former coach at Kleinwort Benson and the K is for Kleinwort not Kunle!
What happens when the fixed rate product on my mortgage ends?
The product will revert to the lender’s standard variable rate. However before this, we can look at your options. This could be to re-mortgage or some lenders offer a Product Transfer option, which involves no underwriting or property valuation.
How much should I have in an emergency fund?
We suggest that if you are in paid employment, you should aim to have an emergency fund of a minimum of six to 12 months of fixed expenditure set aside. For clients that have stopped working and are living off their pensions and investments, we suggest a minimum of 12 to 24 months. If you have any questions you would like featured, please email email@example.com
GET TO KNOW NEIL I’m one of the Directors and have just passed my 13th anniversary at SK. As you can imagine, I’ve seen the firm change immeasurably over that time and I’m delighted that we now find ourselves working within such a strong team, helping a wide range of interesting clients. On a personal basis, I’m kept incredibly busy by my two daughters Abbie and Georgie (pictured). My wife Julia and I seem to take it in turns to act as a taxi service for them,, whether it’s swimming, dance classes or brownies as the weekly activity. With any time that’s then left over, I am a lover of all things sport, with a keen interest in football, cricket, boxing, golf, amongst others, although my days of playing most of these are now behind me unfortunately (or perhaps fortunately, if you ask some of the people I played with!).
On a Saturday night, you will find me: On the sofa, with a glass of wine, watching either a film or the boxing (depending on what I’m allowed).
What inspires you? People who make a difference to other people’s lives.
First job: Trolley Boy at Sainsbury’s.
Most daring thing you've ever done: Run a Tough Mudder which is a 12 mile long endurance obstacle course raising money for charity.
Next holiday is: My back garden by the looks of it. SKQ issue 2 | 5
WELL BEING: random acts of mindfulness The past few weeks have highlighted the importance of looking after ourselves and each other, both mentally and physically. Our wellbeing affects how we handle stress, relate to others and make decisions. We asked our extended team (IT, Marketing, HR, Legal and Risk) to share a few tips on the things they have found useful while being at home, as well as for dealing with everyday stresses;
1 When working from home, at the end
7 Get some sunshine – if possible.
of your work day go for a walk or do an activity in the garden. It helps create a clear distinction between work time and after work relaxing.
8 Always make your bed, check out the speech by Admiral William H McRaven. www.youtube.com/watch?v=3sK3wJAxGfs
Have a routine that you stick to Monday to Friday. It’s important to be able to differentiate between a week day and a weekend day.
Focus on the things you can control and not the ‘what ifs?’.
10 Take time to relax and do the things you enjoy.
4 List three achievements at the end of the day, big or small.
5 A family walk first thing every morning, no matter the weather.
6 List five things you’re grateful for every morning.
Stay connected with others. Zoom, Facetime and Skype are all great for keeping in touch with friends, family and work colleagues.
Activities like craft, jigsaw puzzles and games are great relaxation, as they allow your mind to focus on the task at hand and calm a racing mind.
Use the ‘Calm’ app for sleep, meditation and relaxation.
Also, check out the Coping Calendar, 30 actions to look after ourselves and each other as we face this global crisis together www.actionforhappiness.org/media/863032/coping_calendar.jpg. SKQ issue 2 | 6
“Have a routine that you stick to Monday to Friday. It’s important to be able to differentiate between a week day and a weekend day.”
“ALMOST EVERYTHING WILL WORK AGAIN IF YOU UNPLUG IT FOR A FEW MINUTES,
INCLUDING YOU” ANNE LAMOTT
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WHAT LESSONS WILL WE LEARN AS WE ESTABLISH A NEW NORMAL? By Chris Fleming, Investment Services Director, Square Mile
When faced with an economic crisis, the first port of call is often the history books, firstly to compare its significance relative to past events, and then to find parallels to help one navigate through the upcoming choppy waters. History doesn’t repeat itself, but it does rhyme – as the quote goes. The relative significance of current events is well reported on an economic level and, and more sadly, on a personal level. When we look back at the headline crashes of yesteryear however, they all seem to point towards a similar theme - greed or complacency. The Great Depression followed the rise of a young nation that ended with wild speculation across the New York stock markets. The roots of the 1987 crash were fuelled by US dollar manipulation and exacerbated by uncontrolled algorithmic trading. In 2001 the dot com bubble burst was based on the speculation around tech start-ups and 2007/8 originated from overleveraged levels of debt and was magnified by complicated derivative structures. SKQ issue 2 | 8
However, this crisis is not driven by greed or complacency and whilst the financial world did learn from past episodes by putting in place tighter controls and regulation, it is likely the future focus will be on science and healthcare rather than just financial markets. With a personal eye to the future, many of us are now working from home, having most of our supplies delivered, even having dinner parties and going to the ‘pub’ online via video streaming apps. These are all things one would have deemed unimaginable at the start of the year. Many of these activities will revert to the way they were in time, however a ‘new normal’ will evolve.
THE POWER OF COMMUNITY SPIRIT
“Alone, we can do so little; together, we can do so much” HELEN KELLER We have all been part of an imposed change. Something that has been great to see over the last few weeks is people working together, the sense of community and the overwhelming acts of kindness. Neighbours have taken to their balconies and their doorsteps to sing happy birthday to a person living on their own or to applaud the NHS on a Thursday night. Captain Tom Moore is a national inspiration with his footsteps helping to raise over £30 million for the NHS by doing 100 laps of his back garden. The millions of rainbow drawings in the windows of homes around the United Kingdom are a reminder that the young want to play their role in these acts of kindness.
Our team have also noted some very local highlights. Hollymount School in West Wimbledon shared their message of kindness, spotted by Kunle on his daily walk. In the village where Emma lives, children have been decorating stones and leaving them outside for people to find on their daily walks. Someone also organised a bear hunt. You were given a number to display on your window along with a teddy and the children have to go around the village trying to find them all. Her family has been kept busy trying to find all 150!
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Where to turn when you need financial support during Covid-19 In a world where we are surrounded by advanced technology and communication, it can be easy to feel overwhelmed by the amount of information available. The best way to quieten some of the ‘noise’ is to always refer to reputable websites and resources.
The measures that have been taken to combat Covid-19 have had a huge impact on households and businesses in the United Kingdom. We have highlighted a few means of support here.
Further information regarding the support available can be found at: www.moneyadviceservice.org.uk/en/arti cles/coronavirus-what-it-means-for-you Other reliable UK sources for Covid-19 information: www.gov.uk/coronavirus www.111.nhs.uk/covid-19 www.nhs.uk/conditions/coronavirus-covi d-19/
If you’re an employee, the job retention scheme can cover 80 percent of your wages up to £2,500 a month.
Self-Employed If you’re self-employed, the self-employment income support scheme might offer you some support. But if your income has dropped significantly, there are a range of benefits you might be able to claim.
There are options available to make your bills more manageable. You can contact your local council and ask to extend your monthly council tax payments from the standard ten months to twelve. For water, gas and electricity, providers have multiple options in place. Contact them directly to discuss your situation.
Mortgage Payment Holiday A mortgage payment holiday is an agreement with your lender allowing you to temporarily stop or reduce your monthly mortgage repayments for up to three months. This a good option if you’re looking to relieve some financial pressure during these unprecedented times. It is important to note that while you are not making mortgage repayments, interest will continue to build at your usual interest rate during the payment holiday and the total amount of interest you pay over the term of the mortgage will increase. When your payments start again, the monthly payment amount will be recalculated based on the balance with the accrued interest. To arrange a mortgage payment holiday, contact your lender and let them know you’re experiencing difficulties due to Covid-19. There will be a fast track approval process in place, and you won’t need to provide evidence or have an affordability test.
Personal Loans and Credit Cards Lenders may be able to offer a temporary payment freeze for up to three months. Like a mortgage payment holiday, you will still have to pay the accrued interest once the deferral period ends.
Scams Unfortunately, fraudsters have been using Covid-19 as a way to scam people out of money. To keep yourself safe, always know who you are dealing with and beware of any requests for your details or money.
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TRANSITIONING TO RETIREMENT “Finances are usually seen as the basis of planning your retirement, but mental and physical wellbeing need to be considered also.”
Retirement can be a challenge, an opportunity or both. It is a time of major change, not only for personal finances but also for our daily routines, our sense of worth and our relationships. Personality style as well as the nature of your working life prior to retirement can both influence the experience of adjusting to retirement and its success.
“It made us realise the value of time for reflection” A successful retirement could be one where individuals look ahead to the change, preferably a good number of years ahead rather than just months or weeks. Ideally, you will have a retirement plan, taking into account some knowledge of how easy or difficult you find major change and how able you are to look forward positively to life without work routines and demands. Without such planning, the transition to retirement may bring fear, anxiety and have you thinking of all the ‘What ifs?’.
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According to the Pension and Lifetime Savings Association, the benchmark for a comfortable annual retirement income is £33,000 per year for individuals and £47,500 for couples. As of September 2019, research done by the Financial Conduct Authority estimated that the average total balance of pension pots after a lifetime of savings is £61,897, which equates to an annual income of approximately £2,500. People tend to underestimate how long they are likely to live, and life expectancy is changing fast. Increasing life expectancy means people may have to save more to get the retirement they want. We discussed the thoughts and reflections with one of our clients, a married couple, to capture some of the challenges and opportunities they experienced.
What were some of your concerns before retiring? Our main concern was money, knowing that there would be a mismatch with half the income but much more time to spend it.
What were you looking forward to about retiring? Spending more valuable time together and enjoying more time with our friends and family.
How did you adapt to the change, did you have any unexpected feelings? Like ducks to water from day one. It made us realise the value of time for reflection, rather than what had, at times during work, felt like fast decision making without enough quality time. Mr - Although I had mainly enjoyed work, it was extraordinary within 24 hours changing from being responsible in my role for hundreds of decisions every day, to then the indulgence of deliberating on a few decisions with time to spare. Mrs - No problem - loved it immediately! We enjoy being able to have more flexibility in our lives.
“We were able to talk openly about wills and end of life planning, which is very helpful and necessary.” In a post working life, how do you fill your day? Mr - Before Covid-19, morning tennis, time with my wife, afternoons meeting friends over coffee, evenings at home but also out meeting friends. Since Covid-19, more time with my wife, exercise walking to the allotment and working there, many video link ups with family and friends in the evenings. Also, time spent on art, music and gardening. Mrs - Going to even more art galleries, cinemas, concerts, walking and appreciating nature and beauty around us. I value being able to spend more time with friends, especially those in need. I always enjoyed cooking and now enjoy it to an even greater extent, having the time to be more experimental.
What are some tips you would give to others looking to retire? Staying as fit as possible so that you are likely to have a longer, healthier and happier life, with good physical as well as mental well-being. Don’t assume it will be easy. It can be if you are good at managing change and happy enough in your own skin to live a new life with fewer responsibilities and less self-worth generated from work colleagues. Don't rush into things - instead enjoy the moment, with time to reflect and time to have a sense of fun. Do some of the things you have always enjoyed that you know make you happy.
What were your priorities when making your retirement plan? To have a whole new exciting stage of life - the third age after childhood, adolescence and working life. Our priorities were to focus more on doing the things we already enjoyed, as well as new interests, combined with financial security so that money was not a source of anxiety.
How has working with an adviser been beneficial in your transition to retirement? Building a relationship with David and growing trust enabled us to feel we were both fully heard and understood in terms of our needs. We were able to talk openly about wills and end of life planning which is very helpful and necessary. For example, indirectly from our review discussions we have now set up Powers of Attorney for later. We have learnt a lot about how financial planning works and the difference between risk levels and the duration of investments, along with likely life stages ahead in later life. We have regular reviews, if the investments are not following the planned trajectory, we are aware of it and have the option of alternative plans. Finances are usually seen as the basis of planning your retirement, but mental and physical wellbeing need to be considered also. SK Financial believe there are five key things to focus on for a happy and fulfilled retirement; • Planning • Structure • Mindset • Knowledge • Advice
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TASTE TESTING: SK RECOMMENDS
Each issue we share details of a few of our favourite things:
To save money...
Chloe Recommends: Teach yourself how to knit with ‘Lauren Aston Designs’. Perfect for gifts or learning a new skill. I have been working on the Dreamy Oversized Cardigan while at home during lockdown.
Kunle Recommends: Whilst reviewing my own financial plan, I checked my utility bills and wondered if there was a better way of managing these. Clients of mine suggested using ‘Flipper’ or ‘Weflip’ and there is also ‘Look After My Bills’.
www.flipper.community www.lookaftermybills.com www.weflip.com
Michael Recommends: The Netflix series ‘Afterlife’ featuring Ricky Gervais. There are now two seasons available to watch. One of my favourite series!
Kunle Recommends: ‘Legacy’, a book written by Jim Kerr taking the principles and values of the All Blacks rugby team and applying them to personal and business life. It’s a truly good read.
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A FINAL WORD ON… THE IMPORTANCE OF A FINANCIAL PLAN AND AN ANNUAL REVIEW Why do you need a financial plan?
Why do you need an annual review?
“When you bought your home did you get a survey carried out?”
Keeping track of your personal financial plan through an annual review is important in any economic climate. During periods of economic uncertainty or volatility, however, careful financial planning and regular financial check-ups are crucial.
“Yes.” “Well, that’s why you need a financial plan.”
Part of our service to you includes an annual review. This provides us with the perfect opportunity to re-evaluate your goals, adjust your investment strategies and take care of simple housekeeping items that may have adverse consequences if left ignored.
We are firm believers in having a plan. When it comes to financial planning it’s useful to ask yourself:
What does money mean to you? How much will you need to support yourself and your family when you stop working? Are you able to stop work early?
Among other things, the following are reasons why an annual review is important: • Your personal situation may have changed • Your lifestyle and financial goals may have changed • You could be affected by changes in legislation • You could be paying more tax than necessary • Your estate plan may be out of date An annual review ensures you are getting the best advice and making the most of the options available to you.
If you were to change career, what impact would that have on your finances? These are some of the many questions that we ask clients when formulating their financial plan. It is important that we learn more about our clients to be able to advise them. We build financial plans based on what we know of you, your personal balance sheet, how much of your capital you are prepared to risk and the income that you are aiming for. Within this financial plan is a “cash flow forecast” that will let you know if you are on/off track to meet your income needs. Your financial plan will help to give you clarity about your financial position and enable you to make more informed decisions. It will give you peace of mind and security throughout the different stages of your life and provide some comfort amid crises, whether personal or global, like the one we are currently experiencing. SKQ issue 2 | 15
â&#x20AC;&#x153;The secret of change is to focus all of your energy, not on fighting the old, but on building the new.
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