SKQ A publication from
to issue 3
This issue of SKQ features an update on what the SK team has been working on, including an introduction to our new investment research partner, Square Mile, as well as some food for thought on planning and protection. Mindful that many students will be gearing themselves up to return to school and university, we have added our new â&#x20AC;&#x2DC;Money 101â&#x20AC;&#x2122; segment, with Michael providing a few tips on managing money while studying. As always, the team is on hand to discuss any queries or issues you may have. We encourage you to share our magazine with those you think may find it useful.
Emma Head of Client Services If you have any feedback or would like to contribute to our next issue of SKQ, we would love to hear from you. Please send Chloe an email at email@example.com
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Your Essential Plan
The importance of protecting yourself
Square Mile Q&A - Mark James
Responsible Investing: Itâ&#x20AC;&#x2122;s here to stay
Money 101 - University
Your Questions Answered
Get to know Chloe
What is SK working on?
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Your Essential Plan By Emma Saltern
How easy would it be for someone acting as an Executor of your estate to find those all-important documents like your will, share certificates, bank account details, pension details and life assurance plans? Do you know the passcode to your partner’s or child’s phone?” (There is a good scene in the tv show Killing Eve about this).
Personal experience of advising a mother of two young children who had suddenly and unexpectedly lost her husband puts into perspective how valuable having an Essential Plan is. It would have allowed us to provide her with the much-needed reassurance she wanted about her future financial position far quicker. Instead, she had to spend more time than necessary trying to find details and information that was not readily available. This undoubtedly added to her stresses during an already unthinkable situation. SK Financial has created an Essential Plan for you to use, which allows you to keep track of all of your assets and most importantly, let your family know where to find them. Plus, you can list the details of your main advisers. We suggest that you then share it with those who are key to your financial affairs. It is also important that you secure these documents in a safe place, perhaps alongside a copy of your will. If you feel that this would be beneficial to you, please let us know and we would be more than happy to send you a copy of the SK Essential Plan for you to complete.
The ‘Essential Plan’ is a great way of making sure that all of your information is available and in one place for those that might need access to it in case of an emergency (ice). The death of a close family member or friend is always a traumatic time for those left behind. It can often be made even more stressful for those who have been asked to be Executors.
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“The time to repair the roof is when the sun is shining.” JOHN F. KENNEDY
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HAVE YOU THOUGHT ABOUT PROTECTING YOURSELF? By Kunle Olafare It’s a legal requirement to insure your car. It’s a legal requirement to insure your home. It is not a legal requirement though to insure yourself. How strange is that?
Or what would happen if you were to die prematurely. Will your loved ones be looked after financially? Will they incur any debts? When you feel that you and your family would be financially secure in any given scenario, it gives you and them the financial freedom to deal with the emotional and practical side of the situation. You should discuss this with your partner and agree a course of action. You can also use us as a sounding board just to make sure you have addressed all areas.
Have you ever considered what your value to your family is? Or how your family will cope financially if you are unable to work if you were: • to lose your job – do you have an emergency fund to meet your short term financial needs? • to have an accident and are unable to work for a prolonged period – what income would you receive from work? If you run your own business, how will you be able to earn?
No one plans to become ill. To be fair not many of us want to think about it as it can be too depressing and upsetting. But it doesn’t mean that we shouldn’t make a plan.
Here are four questions to ask yourself.
1 Do I need to insure myself? 2 Do I have an emergency fund that can cover my fixed expenditure for six months?
3 What protection polices do I have in place? If so... 4 Are my protection policies suitable for my needs?
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SQUARE MILE Q&A with Mark James Client Relationships Director, Square Mile
Having carried out an extensive due diligence process, we identified Square Mile as our new investment research partner. Kunle caught up with Mark James, Director at Square Mile, for a five question interview.
If a Fund Manager is not doing what they should be doing and we can’t understand the performance, we won’t recommend the fund. Our job purely is to keep on top of these areas whilst looking for new funds to fill any gaps in the market. Part of the mandate with SK is to have a cap on annual fund charges. Tell us more about that.
Is it true that my knowledge of Dallas was the reason for us first meeting? You were at a conference I believe, a few years ago and met Alex Farlow who we call Dusty Farlow, the character in Dallas - you spotted that connection. I guess that was the start of this relationship! Tell us and our readers more about Square Mile. We've been going for six and a half years now. A few of us and our Managing Director were born out of a business named Old Broad Street Research, which was founded way back in the late 90s. Five of us started the business. Today we are a team of 38. Tell us more about how Square Mile analyse funds. We could choose funds based on past performance. The past however has gone, what really counts is the future. We believe in not trying to pick the best funds, but the funds that are most likely to achieve their objective. The first thing we say to a Fund Manager is put away your fact sheets and prospectuses and tell us what you are trying to achieve in this fund.
Cost is important. There have been many surveys produced that show that high costs eat into your pot. Equally important though, is value for money. What you don't want to do is to cut costs so much, that the client then gets a substandard product. So what we've agreed with you is a very happy medium. On what I would call a hybrid portfolio, we've agreed a maximum cap on costs (0.55%). I think it’s important for clients to be able to understand that their costs will not go over a certain amount, but we've agreed a level where we can still add significant value through fund choice. How do you see Square Mile and SK working together? We see ourselves as an extended part of your team. We will work alongside SK to help create and continually monitor a range of model portfolios. We will form part of your Investment Committee and attend your quarterly meetings. We will support you in any way we can so you can deliver the best outcomes for your clients. You will also benefit from access to our Academy of Funds, which provides a 1st class fund research platform and you can speak directly to any of our investment professionals at any time. We will also provide you with regular updates and outlooks on the financial markets. We are looking forward to this working relationship. Likewise Mark!
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RESPONSIBLE INVESTING: IT’S HERE TO STAY
“When I do good, I feel good. When I do bad, I feel bad. That is my religion.” As a firm, what have you done to have a positive impact on your colleagues? As a firm, what have you done to change the way you construct portfolios to have a positive impact on society? How do you see the impact space developing? What are the barriers? The Covid-19 crisis has provided considerable time for reflection on what is important. The well-being of family, friends, colleagues and more widely, the fragility of our world, has taken on new and material meaning. As this drama unfolds, it appears that this change of priorities is permeating the way we think about investments and financial planning as well.
Square Mile also offers its “Responsible Future” portfolio which comprises a significant number of funds with the Square Mile Responsible rating. This was launched in February 2020, just ahead of lockdown and has performed well relative to the overall market during the large drawdowns during that time. Investor interest in this area is only going to grow. There are a number of megatrends in the market such as opportunities in technological advances, the transition to low-carbon and supply chain disruption. Whilst Covid-19 continues to swirl around us, it only reinforces the delicate balances that exist between the global environment and investors. The importance of using investments as a force for good has well and truly been released from its bottle. There is no going back.
Developments at Square Mile reflect the increasing interest our client base has shown in the areas of responsible investing. In 2019 we introduced our ESG assessments across every fund and fund manager group which sits in the Square Mile Academy of Funds. Subsequently, we have introduced Square Mile “Responsible Ratings”. We rate and review funds to help advisers identify those funds which can help fulfil their clients’ aim to have a positive effect on their own financial wellbeing, and the wellbeing of the world around them. The impact space is also becoming more popular with awareness being amplified during the Covid-19 crisis. Recently, Square Mile completed the acquisition of 3D Investing. This is a service which assesses the impact of funds by examining portfolios at stock level. The 3D approach looks to evidence that funds being awarded 3D ratings adhere to the philosophy of “doing good, avoiding harm and leading change” by mapping their individual holdings to specific United Nations Sustainable Development Goals. SKQ issue 3 | 8
Jake Moeller, Senior Investment Consultant
Money 101 - University By Michael Turner The aim of this article is to provide the basics of financial literacy, for you to share with the young people in your life and hopefully take away some new knowledge for yourself. We’ll be covering a range of topics over the next few issues and as I’m the most recent university graduate in the SK Team, I have put together a few tips for those starting or returning to university this September.
University and finances: things I wish I knew Tip 1 – Make the right choice All of the main high street banks now provide a range of student tailored accounts that offer various benefits. Therefore, surveying the best deal for your specific needs is absolutely necessary. For instance, if you know that you will be travelling by train often during your university life, then selecting an account that offers a free railcard may be the best deal for you. However, finding an account that offers the biggest 0% overdraft will offer more security than the majority of freebies or gift vouchers.
Tip 2 – Be in control of your money When starting university, having two student bank accounts could help you stay in control of your money. Once you have an understanding of your student finances and are fully aware of how much you will receive, work out a weekly or monthly budget for the term. When you receive your loan into the main student account, you can transfer the budgeted amount into the secondary account and use this for daily activities. This will not only help ensure that you stay within your budget, as once the money is spent your account will be empty, but also stop you from dipping into the main pot.
Tip 3 – Take advantage of being a student As a student you have the opportunity to use student apps such as NUS or UNiDAYS that provide discount codes for restaurants, clothing companies and gyms.
Tip 4 – Food shopping made easy If you are able to master the art of food shopping at university, you will find that this is an area of your finances that can save you a lot of money. Planning your meals before the weekly shop will stop unnecessary spending and food wastage, keeping you focused on the food that you really need for the week. Shopping later in the day will also give you a chance to find the best bargains, as shops will significantly reduce the price of food that goes out of date the next day. Buying supermarket own-brand products also offers cheaper alternatives to the big-name brands.
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YOUR QUESTIONS ANSWERED
To date what were the lowest and highest closing valuation dates for the FTSE 100 in 2020?
The lowest date was on 23rd March 2020 where the FTSE was 4,993.90 and the highest valuation date was on 17th January 2020, a figure of 7,674.60. Source: Yahoo
What are the changes in stamp duty?
If you are buying a home in England or Northern Ireland you will now pay a reduced rate of Stamp Duty Land Tax (SDLT) until 31 March 2021. You will pay no Stamp Duty if the amount you pay for your main home is under £500,000. If you’re purchasing additional properties you will still have to pay an extra 3% in Stamp Duty on top of the revised rates for each band This increased rate applies to properties bought for £40,000 or more.
What has been the highest rate of income tax in the UK?
Some of our clients remember this being 83% in 1974! It actually peaked at 99.25% during the Second World War. Source: The Money Advice Service
It does not apply to caravans, mobile homes or houseboats. You must have completed your property purchase by 31 March 2021 to qualify for the new revised rates on Stamp Duty. Any purchases completed before the Chancellor’s announcement on 8 July 2020 will continue to pay Stamp Duty rates valid at that time. You can check how much stamp duty is payable here If you have any questions you would like featured please email firstname.lastname@example.org
GET TO KNOW CHLOE I am the New Business Administrator at SK Financial and have been with the team for two years now. As well as submitting new business proposals, I also lead the marketing for SK, which includes SKQ Magazine and LinkedIn. I am from New Zealand and made the move to London three years ago to tick off the travel bucket list. If I’m not planning my next trip, I’m most likely at the gym, at home tinkering with various crafts or baking treats to take into the office. SKQ issue 3 | 10
Bucket List item Visit 30 countries before I’m 30, 10 to go!
Dream holiday destination; Havana, Cuba – this will hopefully be number 30!
Favourite Series I’m a tv series fiend, some favourites are Sons of Anarchy, Game of Thrones and Stranger Things.
Ultimate dinner guest Will Smith
WHAT HAS SK BEEN WORKING ON? Client Focus Groups We held two client focus groups in June. We wanted unbiased critique and comments on our marketing and client documentation.
Their input showed maturity ahead of their years. An impressive bunch who we hope go on to impress in their chosen careers.
Both groups provided us with great feedback on how to improve our documentation. A notable suggestion was to create a document that explained how we do what we do. What an obvious and good idea!
EY Foundation Participants (Below, from top left) Ben Thomas, Daniel Babalola Harry Smith, Sarah Adama, Mille Mabel Smith, Pedro Evans Haberdasher Participant Kemi Adeyemi
One of the groups were younger people who are mainly linked to either the EY Foundation* or the Haberdashers’ Company**.
David Osibona is a mentee of Kunle’s. His sister attended a Haberdasher school.
Navigating Covid 19
The entire team has been working remotely from home since March and thanks to technology, has meant it is business as usual. We have held multiple team socials including bingo, pub quizzes and a virtual hunt across London.
We are looking into ways of improving our Cyber Security. This includes communication with our clients, sending and receiving documents / information and managing our own IT security. We are currently trialling different services and methods. Once we have new processes in place, we will let our clients know.
Reception are still answering calls at the office and forwarding messages to the team. We are also still receiving all post. We want to return to the office on a gradual basis over the coming months. However whilst we can work from home, we will continue to do so.
Annual Reviews We are in the process of issuing Annual review reports, and you will receive this by the end of the year.
*The EY Foundation works with disadvantaged young people, employers and social entrepreneurs. It helps young people, regardless of background to realise their ambitions and transition into work, higher education or self-employment. We have been working with the EY Foundation since 2015. www.ey.com/en_uk/people/ey-foundation **The Haberdashers’ Company is one of the Great 12 Livery Companies with a focus on educational and charitable activities. We have been connected to the Haberdashers since 2012.
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SKQ issue 3