FA Magazine - Issue 57 - April 2017

For today’s discerning financial and investment professional

April 2017

N EWS

REVI EWS

ISSU E 57

COM M E NT

ANALYSIS

Make It Your Business

The tax efficient investment market has changed significantly in recent years.

There has never been a better time to get involved, as high value clients are gaining interest in this sector and it’s exactly where you can add tangible value.

Complex structures and investments with higher risk profiles mean that clients would benefit from your advice. Without it, they may invest anyway and could make ill-informed decisions, whilst dis-intermediating you from the process and reducing your revenue potential.

Whether you’re already advising on SEIS, EIS, BPR or VCT products, or perhaps considering them for your clients’ portfolios then contact us at GrowthInvest. We’ll show you how you can consolidate historic investments onto our platform and build a diversified portfolio from a wide range of managed fund or single company investments. Through our intuitive online platform you’ll be able to offer your clients exclusive access to real portfolio growth, secure in the knowledge that these government-backed schemes offer unique tax efficiencies.

Visit us to learn about the products, the pitfalls and how best to advise on this dynamic and evolving sector.

So make it your business, before someone else makes it theirs...

Find out more at growthinvest.com

CONTE NTS April 2017

CONTRI BUTORS

5 Editor’s Welcome

6

CAREER OPPORTUNITIES Brian Tora

News

an Associate with investment managers J M Finn & Co.

10 Richard Harvey

Eastern promise

a distinguished independent PR and media consultant.

12 The outlook for multi asset income

Neil Martin has been covering the global financial markets for over 20 years.

14 Better business - small wins lead to victory

Brett Davidson FP Advance

18 Adviser Spotlight–Julie Lord and Gretchen Betts

Michael Wilson

24

Editor-in-Chief editor ifamagazine.com

Rebel Yell

26

Sue Whitbread Editor sue.whitbread

ifamagazine.com

Alex Sullivan Publishing Director alex.sullivan ifamagazine.com

The risk of risk-profiling

30 Modern distribution models

32 Success through acquisition – a case study approach

36 Half Full, Half Empty?

IFA Magazine is published by IFA Magazine Publications Ltd, The Tobacco Factory, Loft 3, Bristol BS3 1TF Tel: +44 (0) 1179 089686 © 2017. All rights reserved ‘IFA Magazine’ is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies. Wherever appropriate, independent research and where necessary legal advice should be sought before acting on any information contained in this publication.

IFA Magazine is for professional advisers only. Full details and eligibility at: www.ifamagazine.com

40 Career opportunities

E D'S WE LCOM E April 2017

Nobody’s Perfect Nobody said it was going to be easy being prime minister, says Michael Wilson.

Some people, it seems, really do have greatness thrust upon them. A year ago, if somebody had told you that Hammond and May would soon be running the country, you might have been idly moved to ask what Clarkson would be doing? But time, inevitably, wears away at the flippancy of questions like that.

These days it’s the USA that’s being run like a game show, and the UK that’s trying determinedly to stick to the programme schedule despite a series of late and urgent newsflashes that keep on disrupting the show.

Now, I’ll admit that IFA Magazine has not always been kind to Theresa May in the past. We’ve called her dogmatic, overbearing, unelected, and not always good at choosing her battles. Maggie May, we christened her just a few months ago, and it was only half in jest.

And a Remainer, to boot! Which didn’t seem like a promising starting point for the leader who would take us out of the EU, and who would be required to face down 27 other member states who had no great incentive to make concessions for us. It was always going to be a job for somebody with the ability to go selectively deaf while fearlessly repeating her mantra, over and over again in the teeth of hostility. And the odd thing is, Prime Minister May is turning out to be rather good at that.

requirements has struck terror into the CBI, which is quaking at the prospect of going off an export cliff without a hang-glider.

Chancellor Philip Hammond has been forced to bite his lip at his boss’s refusal to bend on the European banking passport. And May’s faith that Donald Trump will fully honour America’s special relationship with a post-Brexit Britain is currently costing the Whitehall mandarins no end of sleep.

The Budget decision to clobber the mainspring of UK enterprise and initiative by landing extra taxes onto self-employed workers and risk-takers was always indefensibly clumsy. But it was about to get worse.

Mutiny below decks This Welcome article very nearly ended with a stalwart hail to HMS Brexit, as her Master and Commander steered her bravely out into the Channel to do battle.

At which point, unfortunately, she hit the dockside in a big way.

Just as we were going to press, Hammond abruptly withdrew the proposed changes to self-employed national insurance contributions, leaving a £2 billion per annum hole below the waterline which he had no obvious

way of filling. And chief Brexit negotiator David Davis confessed to Parliament that he hadn’t bothered to buy any nautical charts – or rather, that the government hadn’t even attempted to weigh up the cost of a hard Brexit. But that no deal at all would definitely leave carmakers facing 10% tariffs and dairy and meat producers up to 40% worse off on their EU export efforts.

At which point Boris Johnson came above deck to splutter that Brexit with no deal would be “perfectly OK”. Only to walk into a straight punch from Davis, who said he only dealt in fact, and that “throwaway lines in interviews” weren’t helping matters.

The two were still scrapping as we went to press. And as the ship left port for the conflict zone, Cap’n May seemed to have her hands more than full. Not so much Top Gear as Carry On Up the Continent. Good luck with that one, Ma’am.

Michael Wilson, Editor in Chief IFA Magazine

Faults and all She still makes dreadful mistakes.

Her insistence that she’d rather have no EU agreement at all than one which didn’t meet all her

I FAmagazine.com

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N EWS April 2017

Better together - new alliance to enhance and promote professionalism in financial services and promoting high standards across the sector.

In March, news broke that three leading chartered professional bodies, namely the CII, CISI and Chartered Banker Institute had launched the Chartered Body Alliance - aimed at helping consumers recognise the benefits of engaging with qualified sector professionals.

PLAYING IT SAFE HAS NEVER BEEN SO EXCITING.

While retaining their own identity, governance and areas of expertise, members of the Alliance have published the “Chartered Body Commitment”, stating how they will work together to achieve greater public benefit by raising professionalism and trust across financial services

It is understood that a range of initiatives will be undertaken, including jointly promoting the importance of professional status, explaining how their respective qualifications represent the “gold standard” across the sector, hosting joint events, and seeking to respond with a united voice to sector consultations that affect members across all three professional bodies.

Here at IFA Magazine, our view on this is that any initiative which helps consumers to better understand the value of seeking sound professional advice is to be welcomed. We wish the new alliance well in its mission.

Top quartile since launch

LET’S TALK HOW. CUMULATIVE PERFORMANCE (%) 1 Year 3 Years 5 Years Fidelity Global Dividend Fund

23.2

55.8

108.2

MSCI AC World Index

36.7

55.1

91.0

IA Global Equity Income

27.7

39.9

74.6

This advertisement is for investment professionals only and should not be relied upon by private investors. The value of investments and the income from them can go down as well as up and clients may get back less than they invest. Performance: Morningstar as at 28.02.2017. Basis: bid-bid, income reinvested in GBP. Launch date is 30.01.2012 Peer group is the IA Global Equity Income sector. The fund should only be considered as a long-term investment. As a result of the annual management charge for the income share class being taken from capital, the distributable income may be higher but the fund’s capital value may be eroded, which will affect future performance. This fund invests in overseas markets and so the value of investments

N EWS April 2017

Consumer borrowing turning downward billion in December. But that was where the optimism faded.

Measured as a year-on-year growth rate, January’s 10.3% result was a disappointment after the 10.6% figure for December and a 10.9% rise in November.

That, according to Reuters, was the first “back-to-back slowdown” recorded since mid2012, when Britain's economy had been grappling with the global financial crisis.

The consumer borrowing boom appears to be slowing after last winter’s spending splurge, according to new data from the Bank of England. But it might be too soon yet to start worrying.

Statistics for January, released in early March, show that consumer credit increased by £1.42 billion - up from a rise of just under £1

BoE governor Mark Carney has welcomed the beneficial effect played by consumer spending over the last year, acknowledging the way that it has boosted economic growth at a time when manufacturing was relatively short of confidence. But he has also said that the Bank expects the pace of consumer demand

growth to slow during 2017 because of the fall in the value of sterling, which he believes will result in higher prices and reduced spending power.

Those inflationary worries – together, perhaps, with the US Federal Reserve’s determination to raise US interest rates – appear to have been responsible for an unexpectedly strong sell-off of gilts, but this time by foreign investors. BoE data showed that net sales had totalled £7.59 billion in January compared with just £2.97 billion in December.

On the plus side, however, new productivity figures have indicated that Britain’s manufacturing sector appears to be on course for a strong performance during the first quarter of 2017. Here’s hoping.

FIDELITY GLOBAL DIVIDEND FUND In uncertain times, it pays to take a prudent investment approach. That’s why this fund’s focus on high-quality stocks with strong balance sheets and predictable cash flows is so appealing.

Its global remit can provide significant diversification benefits to a portfolio, providing a broader income stream that helps to lower volatility.

Over the 5 years since launch, the fund has significantly outperformed both the index and sector average – and with lower volatility and drawdown. Now, that’s something to get excited about.

Go to fidelity.co.uk/gdf

can be affected by changes in currency exchange rates. The fund may also use financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. Investments should be made on the basis of the current prospectus, which is available along with the Key Investor Information Document and current and semi-annual reports, free of charge on request, by calling 0800 368 1732. Issued by Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. UKM0317/19104/SSO/0917

N EWS April 2017

What’s in a name?

Standard Life and Aberdeen to merge of the Combined Group, with Simon Troughton, Chairman of Aberdeen, becoming Deputy Chairman. And Keith Skeoch, CEO of Standard Life, and Martin Gilbert CEO of Aberdeen, will become co-CEOs of the new group.

The group will operate under new branding drawn from both the Standard Life Group and the Aberdeen Group.

Standard Life and Aberdeen Asset Management are to merge, creating one the largest global investment companies, looking after assets of around £660 billion and employing some 9,000 people.

The Boards of both companies agreed to an all-share merger.

Following completion of the merger, Aberdeen shareholders would own approximately 33.3% and Standard Life shareholders would own approximately 66.7% of the combined group on a diluted basis. The rationale for the merger was to cover areas such as bringing scale, and combining their complementary capabilities to provide comprehensive products which cover developed and emerging market equities as well as fixed income, multi-asset, real estate and alternatives.

Once the merger is confirmed as proceeding, it will be subject to approval from shareholders and regulators, Sir Gerry Grimstone, Chairman of Standard Life, will become Chairman of the Board

8

Ryan Hughes (pictured), head of fund selection at AJ Bell comments: “This proposed merger makes strategic sense for both parties. Aberdeen has been overly reliant on Asian and emerging markets for a long time, and this has created significant volatility in its business performance, whereas Standard Life will see those Asian and emerging market assets as very complementary to its fixed interest and UK asset base.

“If the merger goes ahead, investors can expect a long period of fund range consolidation as the combined group looks to cut costs.

This could create a period of uncertainty but until more news becomes available investors would be wise to stay patient.

“This merger is a continuation of consolidation in the asset manager industry and I would expect to see more as the market appears to move towards huge combined groups or small specialist boutiques.”

Bitcoins in record territory Just to prove that sometimes you can never tell, the bitcoin switchback has kicked back into action during the last three months with a surge to an all-time high of $1,245 in mid-March – a huge 61% gain on the $775 that was being offered in mid-December, and 27% above its previous high of $979 in December 2014. Indeed, the gains would have been even more than that for a sterling investor because of the corresponding increase in the dollar’s value.

This is all a bit embarrassing for those who’d been predicting that a government crackdown on Chinese bitcoin trading (which is estimated to comprise more than 90% of the global market) would bring about a collapse in values.

As far as can be ascertained, the most recent price surge seems to reflect a growing willingness by governments to accept the idea of using blockchain technologies of various kinds. Accompanied, in some cases, by the accreditation of financial instruments denominated in bitcoins.

Don’t run away with the idea that this is an open door, because most of the funds concerned are actually very small. One that’s being considered by the US Securities and Exchange Commission is an exchange traded fund of just $1 million.

But, taken as a whole, crypto currencies such as Bitcoin, Dash, Monero and Ether have been adding as much as $5 billion a week to their collective valuations. Well, that’s what Coindesk says, anyway. Who are we to doubt it?

I FAmagazine.com

FOR PROFESSIONAL CLIENTS ONLY.

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Insight has delivered precision-engineered credit strategies for more than 10 years. With £523bn under management and 100 fixed income specialists,1 Insight is one of the three largest fixed income managers in the UK.2

BNY Mellon Global Credit Fund BNY Mellon Emerging Markets Corporate Debt Fund BNY Mellon Global Short-Dated High Yield Bond Fund Insight Corporate Bond Fund Insight Inflation-Linked Corporate Bond Fund

Find out more. www.bnymellonim.com/insight-fixed-income

Source Insight as at 31 December 2016. 2Source: eVestment AUM as at end of September 2016.

1

The value of investments can fall. Investors may not get back the amount invested. For a full list of risks applicable to these funds, please refer to the Prospectus or other offering documents. Before subscribing, investors should read the most recent Prospectus and KIID for each fund in which they want to invest. Go to www.bnymellonim.com. Investments should not be regarded as short-term and should normally be held for at least five years. These Funds are sub-funds of BNY Mellon Global Funds, plc, an open-ended investment company with variable capital (ICVC), with segregated liability between sub-funds. Incorporated with limited liability under the laws of Ireland and authorised by the Central Bank of Ireland as a UCITS Fund. The Management Company is BNY Mellon Global Management Limited (BNY MGM), approved and regulated by the Central Bank of Ireland. Registered address: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland. These Funds are sub-funds of BNY Mellon Investment Funds, an open-ended investment company with variable capital (ICVC) with limited liability between sub-funds. Incorporated in England and Wales: registered number IC27. The Authorised Corporate Director (ACD) is BNY Mellon Fund Managers Limited (BNY MFM), incorporated in England and Wales: No. 1998251. Registered address: BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Authorised and regulated by the Financial Conduct Authority. Insight investment’s assets under management are represented by the value of cash securities and other economic exposure managed for clients. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and its subsidiaries. Issued in UK by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority. AB00058-002. EXP 30 Aug 2017. T5290 02/17

EASTE RN PROM ISE April 2017

Eastern promise Investors in the Far East have generally been well rewarded over the last year, but are there problems ahead for markets in Japan, China and India? Brian Tora considers the threats and opportunities and suggests that the investment party isn’t over quite yet.

With all the excitement engendered by the election of Donald Trump as US President, not to mention Brexit, several European elections and continuing concerns over debt in the Euro zone, it has been all too easy to ignore what is going on at the other side of the world. True, China has received the odd mention recently, primarily as a result of President Trump promising trade barriers against the world’s second largest economy, but Japan and the rest of the Far East appear to have dropped below the investment radar.

As it happens, both China and Japan have rewarded investors well over the past year. If there are any concerns over whether China will be impacted by a more protectionist United States, there has been little sign of it.

And Japan, while still looking demographically challenged and over indebted, is maintaining momentum in the stock market, even if indices are still little

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more than half the level reached nearly 30 years ago.

But debt is an issue in these countries. China, which is home to four of the five largest banks in the world in terms of assets, has seen its share of global debt

With the Indian population expected to overtake that of China in a decade or two, the opportunities for the world’s largest democracy do look exciting

multiply fivefold over the past decade. Under prime minister Abe, Japan has embarked upon a massive quantitative easing programme to try to boost the economy. Inflation is being actively encouraged there, though as in other countries

that have adopted easy money policies, it has failed to develop to any great extent.

Natural successors For investors, the Far East was long considered the natural successor to the wealthy developed nations of Europe and North America. Large, aspirant populations, enjoying a strong work ethic and coming from a lower economic base – it seemed they must enjoy significantly faster growth as industrialisation and globalisation took hold.

Indeed, this has been the case, although there is little doubt that valuation levels got ahead of the game. The retrenchment in markets appears to have come to an end, so it is the future with which investors need to concern themselves. The omens look encouraging. China grew at 6.7% last year according to recently published statistics. India’s fourth quarter GDP numbers came in at plus 7% - down from the

I FAmagazine.com

EASTE RN PROM ISE April 2017

previous quarter’s 7.4%, but still ahead of expectations.

with interference from the government a perpetual threat.

for the world’s largest democracy do look exciting.

India trails China significantly in terms of per capita GDP, so has considerable ground still to make up. Moreover, Chinese growth is moderating – a trend confirmed by recent money supply figures.

But with a growing middle class and a high savings rate, it seems that China can maintain above global average economic growth simply on the basis of internal demand, something which is becoming increasingly important to the nation.

India looks exciting

As for Japan, the jury is still out on whether Abenomics will work. A weakening yen has helped the nation’s competitive position, but this has also reduced the returns to UK investors. While Japan has the lion’s share of global business leaders, it probably offers the least appealing prospects amongst these three giants of Asia.

China crisis?

But nothing is ever so straightforward that an investment call is obvious.

Could a credit crisis de-rail China’s growth? Possible, but at least Chinese personal debt is relatively low and there is a current account surplus, so the economy does not look at as great a risk as many feared. It remains a tricky market, though,

I FAmagazine.com

So might India prove a better bet? The decision last year to cancel many of the bank notes in circulation highlights a

Investors would do well to keep Far Eastern markets in their sights

potential risk here. India is very much a cash economy. As such it is open to corruption and tax avoidance. Indeed, these are the reasons for the action taken by the government as they sought to uncover money not declared to the authorities. But with the Indian population expected to overtake that of China in a decade or two, the opportunities

While the more statesmanlike speech delivered to Congress

by President Trump at the very end of February did much to calm nerves in America and its allies, investors would do well to keep Far Eastern markets in their sights. The new President’s desire to create jobs in the US could well be fulfilled by the infrastructure and defence spending plans he has outlined, so perhaps any impact on China will be limited after all. The economic focus of the world looks set to continue to drift east.

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SPONSORE D FEATU RE April 2017

The outlook for multi asset income Eugene Philalithis, Portfolio Manager, Fidelity Multi Asset Income Fund

Recent rises in inflation have been fuelled by higher energy prices and other inflationary pressures. Labour market tightening has created stronger wage inflation, pushing up overall inflation globally. Any further rise from here, however, is likely to be gradual.

Our subdued (if stronger) inflation outlook is supported by the ongoing impact of

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deflationary forces on the global economy. Ageing populations, an overhang of debt and subdued demand are such examples in developed markets. Will we see China moving to become an inflationary force globally, with prices in the country’s manufacturing sector picking up recently? While we expect China to remain reflationary for now, this is likely to be a short-term phenomenon, as the authorities attempt to tighten policy to gently slow the economy and the potential for a weaker renminbi going forward.

Managing political risk Across our income portfolios we avoid positioning around election outcomes, instead seeking to minimise the impact of any volatility. A populist victory in France would likely be negative for French assets, so we have a short position on French bonds with market pricing currently unattractive

as French spreads have already widened significantly.

Our short positions in US, European and UK equities across our income funds are intended to protect in a risk-off market environment rather than to

Across our income portfolios we avoid positioning around election outcomes, instead seeking to minimise the impact of any volatility

explicitly generate returns. While this may mean more subdued performance in market rallies, our income portfolios should be better protected during market drawdowns.

I FAmagazine.com

SPONSORE D FEATU RE April 2017

Investment grade strategy brings rewards Investment grade bonds have been actively allocated to each of the main regional investment grade bond markets. We are most constructive on Asian investment grade bonds, with the market’s shorter duration and relatively higher level of additional credit spread, lessening its sensitivity to higher interest rates. Over the last few years we have seen improvements in the quality of issuer in this market, which further supports our positive view on a relative valuation basis to other regions.

As a defensive asset, US investment grade bonds offer a relatively good income, acting as a diversifier to some of the more

I FAmagazine.com

volatile asset classes. However we may start to shift the allocation from high yield to investment grade bonds at the margin. While only incrementally, it signifies the future direction of travel.

European loans are one of our preferred asset classes, particularly considering the seniority of loans to high yield bonds

Opportunistic changes within hybrids Hybrids remain our favoured asset class, with little at either the market or asset class level to change our positive view. Any allocation changes are therefore more on an opportunistic basis.

One example was our decision to participate in a capital raising exercise by one of our current loans vehicles. With default expectations low and comparatively high yields, areas like European loans are one of our preferred asset classes, particularly considering the seniority of loans to high yield bonds. European loan markets have historically performed better than high yield bonds across the various Eurozone crises post-2007.

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BETTE R BUSI N ESS April 2017

Better business small wins lead to victory Being a great adviser is about a whole lot more than being technically strong and giving your clients great advice. Genuine business success involves having the right mind-set and one which allows you to grow and flourish as a professional. In the latest in his series for I FA Magazine, Brett Davidson of FP Advance reminds us of the power of small wins in our quest to get better rather than bitter.

There are two huge mistakes we can make as human beings: 1 Comparing ourselves to others 2 Failing to notice the small wins Recently, I’ve had two reminders of the power of incremental improvement and how important it is to focus on oneself, rather than comparing to others.

The first one came when I joined a ski instructor’s course a year or so back in Saas Fee, Switzerland.

I was a late starter to skiing which doesn’t help, however this was something I’ve always wanted to do. My goal was not to become an instructor, but I felt it was the best way to improve my skiing in an intensive focused period of time.

Most of the other students were 20 year olds on a gap-year course, and we all lived together in a hotel.

That was an experience in itself and loads of fun.

To tell you that I found the course very, very challenging will come as no surprise. However, all the 20 year olds struggled too.

When you think that they had all been skiing since they were four years old, and one guy used to head off to the fun park to do backflips off a professional-sized jump in his lunch break, why did they struggle?

They struggled because they were asked to change the way they ski to fit the course’s way of doing things. It was tough.

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The only way we were able to progress (and stay sane) was by focusing on very small wins; incremental improvement. I can’t say I was always Mr Positive, but when I wasn’t, my instructor (Emma Cairns from Element Ski School in Verbier) would give me a verbal slap and get me focused back on finding the small wins. As one of the weaker skiers in the group and being considerably older than most of my fellow trainees, it was easy for me to start doing the comparing thing, which was a sure fire way to depression.

Emma reminded us of a quote from a friend of hers who said: “When I focus on improving myself I get better. When I focus on comparing myself to others I get bitter.”

Progress over perfection The same message can be applied directly to your life, your business or your career.

• Do you ever do the comparison thing to other businesses or business owners and start to feel less-than?

• If you’re an adviser or paraplanner, do you sometimes feel less-than some of the other smarty pants professionals that you know?

In the modern world it’s easy to feel less-than, despite us being the richest generation in the history of the world. Just ask your parents or grandparents what life was like for them 50 years ago. Chances are it was materially harder than we have it today.

I FAmagazine.com

BETTE R BUSI N ESS April 2017

“Don’t try to become better than someone else; become better than you used to be. Instead of focusing on comparisons, focus on progress and self-improvement”

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BETTE R BUSI N ESS April 2017

However, with the added exposure to 500 pay TV channels, many of which show rich 16 year olds getting a car for their Sweet 16th Birthday, or other supposed reality themes, we can easily feel deprived.

Social media, for all its benefits (and personally, I think it’s mostly positive), also allows each of us to show our own personal highlights reel online. If you start comparing your own ordinary life to what your friends and acquaintances post on Facebook, it’s easy to think you might be missing out and to start feeling less-than.

Whenever that feeling strikes it’s vital to focus back on the wins you’ve been having, no matter how small. Remember, it is progress not perfection that you’re chasing and your life, business, or career is still a work in progress.

“Everything looks like failure in the middle. You can’t bake a cake without getting the kitchen messy.

Halfway through surgery it looks like there’s been a murder in the operating room.” Price Pritchett, author of The Quantum Leap Strategy Incremental improvement My second reminder came from reading a book called Burn The Fat, Feed The Muscle by Tom Venuto. As I read through each chapter I was struck by how Tom’s mental approach to getting fitter and stronger could be applied to any endeavour, including your business.

He made the point that if all we did was one more lift, jump, metre (insert your training exercise here) each day, in two years’ time we’d be amazing. Yet most of us quit when it gets tough and miss out on the spectacular progress we can make from small incremental improvements. Now, as I go and lift a few weights in the gym, if I can do just one more repetition than my last workout I record it as a personal best. It’s amazing how that mindset of incremental improvement helps me to stay positive.

The comparison issue also applies here. I don’t have to be as strong as the other guys in the gym, I

just have to be working on improving myself. This change of mindset has proved very powerful in many areas of my life, not just on the slopes or in the gym.

Here are a couple of pearls of wisdom from Tom: “Don’t try to become better than someone else; become better than you used to be. Instead of focusing on comparisons, focus on progress and self-improvement. Do the absolute best you can with what you’ve got and you’ll be able to look in the mirror every day with the pride and self-esteem of a true winner.”

“There is no such thing as failure. Only feedback, only results.”

All of this clearly has application to your business and career.

Business success in baby steps When you’re already competent at a skill, you know intuitively that you’re not going to have the massive early jumps in improvement you get as a beginner.

However, viewing slow progress or small wins as a lack of progress (especially when comparing to others), can be very frustrating.

It is this frustration which can mean we do silly things, like looking for the massive breakthrough, when in fact all we need to do is get comfortable with incremental improvement. It still gets the job done.

•

Are you quitting on your business or professional services career by getting frustrated and not seeing the power of the small win?

•

Are you needlessly comparing yourself to others, rather than looking for the equivalent of one more repetition than the day before?

If you are, then I hope this article changes your point of view. Acknowledging the small victories and successes can be what turns your good business or career path into a great one.

Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals advise better and live better.

He is recognised as one of the leading consultants to financial advisers in the UK. Professional Adviser magazine has rated him one of the Top 50 Most Influential people in UK financial services on three occasions.

You can follow Brett online and via social media: Twitter: @brettdavidson Facebook: www.facebook.com/FPAdvanceLtd LinkedIn: http://www.linkedin.com/in/davidsonbrett Website: www.fpadvance.com

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I FAmagazine.com

Name

Sector

Country

BlackRock Continental European Income Class A

Managed Funds

Managed Funds

7.31

Legg Mason IF Brandywine Income Optimiser Class X

Managed Funds

Managed Funds

7.20

Jupiter Strategic Bond Class I

Managed Funds

Managed Funds

7.20

Invesco Perpetual Global Financial Capital Class Z

Managed Funds

Managed Funds

6.73

Weight (%)

Invesco Perpetual European Equity Income

Managed Funds

Managed Funds

5.90

M&G Global Dividend Class A

Managed Funds

Managed Funds

5.85

New Capital Wealthy Nations Bond USD

Managed Funds

Managed Funds

5.39

Aviva Investors Property Trust Class 2

Managed Funds

Managed Funds

5.19

UBAM UBAM Global High Yield Solution IHD

Managed Funds

Managed Funds

5.08

Man GLG Strategic Bond Professional D

Managed Funds

Managed Funds

FundsLibrary for Advisers 5.02

60.88

Total

ICB SECTORS

MARKET CAP

You’ll wonder how you managed without us £50bn+

40.34%

£20bn - £50bn

24.69%

£10bn - £20bn

16.52%

£5bn - £10bn

12.74%

£1bn - £5bn

4.60%

£250m - £1n

0.00%

£0 - £250m

0.00%

Bonds

0.00%

Other

0.01%

Cash

1.10%

ICB Level: Industry

Bonds

Financials

Non-Classified Industrials

Consumer Goods Health Care

Consumer Services

Cash and Equivalents Telecommunications Oil & Gas

Technology

Basic Materials Utilites

Managed Funds

Alternative Trading Strategies 0

10

20

30

Weight (%) The Industry Classification Benchmark is a product of FTSE International Limited and has been licensed for use.

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GEOGRAPHY

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United Kingdom

26.28%

United States

16.37%

Managed Funds

10.01%

Direct Property and REITs

6.30%

Cash and Equivalents

4.64%

Download KIIDs, factsheets, ratings reports and more in seconds.

Japan

3.50%

Switzerland

3.44%

Netherlands

2.96%

Germany

2.55%

Other

20.20%

DEBT MATURITY

Summarised Factsheet

Professional Investor Factsheet

Private Investor Factsheet

10 to 15 years

2.82%

5 to 10 years

8.52%

Under 5 years

10.73%

Unclassified

14.11%

Other

53.81%

Cash and Equivalents

Portfolio Analysis

4.62%

Performance

Income & Charges

Name

Sector

Name BlackRock Continental European Income Class A

Sector Managed Fun

A

3.43%

BBB

Non-Classified Jupiter Strategic Bond Class I Invesco Perpetual Global Financial

4.95%

BB

7.02%

B

3.86%

CCC

0.80%

D

0.00%

No Rating

2.29%

Other

Risks

20

Global

Property

Private Investor Factsheet

Professional Investor Factsheet

New M&GCapital Global Wealthy DividendNations Class A Bond USD New Capital Wealthy Nations Aviva Investors Property TrustBond ClassUSD 2

The Industry Classification Benchmark is a product of FTSE International Limited and has been licensed for use.

Weight (%) 19.42

ASSET ALLOCATION Name

£0.50

5.19

Pound Sterling

5.08

21

4.33

6

AUSTRALIAN GOVERNMENT

5.39

Japan

3.85

Unclassified

3.79

Equity-Asia Pacific ex Japan

3.26

Novartis AG

Weight1.54 (%)

Equity-Global Emerging Markets

1.24 19.42

United Kingdom

UK Equity Income

8

UNITED STATES GOVERNMENT

5.85

31/08/2007

Launch Price

Total

% Growth

POUND STERLING RECEIV. 05APR16 JPM

11.19

Launch Date

Cash and Equivalents £ Strategic Bond

PERFORMANCE

Prusik Asian Equity Income Class 1B

IMA Mixed Investment 13.22 20-60

Equity-USANumber Of Holdings

Latest Report & Accounts

UBAM UBAM Global High Yield Solution IHD

100.00

16.65

United States

Johnson & Johnson

Health Care £1bn -- £10bn £5bn £5bn

United States

0.00% 0.67 12.74%

Total

£250m - £1n £1bn - £5bn

Bonds £0 - £250m

22.60% 0.00%

26.28% Other Bonds

1.10% 0.00%

16.37%

Cash Other

0.00% 0.01%

Cash

1.10%

10Y

From:

To:

3 Months

6 Months

1 Year

3 Years

-1.64%

1.29%

-2.28%

12.41%

-

Benchmark

-2.02%

-0.01%

-3.30%

9.13%

20.75%

Sector

-2.02%

-0.01%

-3.30%

9.13%

20.75%

-/-

-/-

-/-

-/-

-/-

-

-

-

-

-

DISCRETE PERFORMANCE Feb 2012 Feb 2013

Feb 2013 Feb 2014

Feb 2014 Feb 2015

5 Years

AAA

3.52%

AA

1.67%

A

3.43%

0.69

19.95 0.00% 4.60%

£0 - £250m £250m - £1n

MARKET CAP

2.82%

United States

21.59% 0.00%

20.20%

Fund

Feb 2011 Feb 2012

8.36% 0.67 16.52%

2.96%

CUMULATIVE PERFORMANCE

Quartile

United Kingdom

2.55%

10 to 15 years

Rank

£5bn - -£10bn £10bn £20bn Telecommunications

Germany

5.39%

0.74

Vodafone Group

3.21%

Over 15 years

0.83

£10bn £20bn £20bn --Technology £50bn

Jan 16

10/03/2016

11.56% 24.69%

Microsoft Corp.

3.44%

DEBT MATURITY

5Y

18.45% 40.34%

France

Oct 15

10/03/2015

3Y

Switzerland

3.50%

Other Jul 15

1Y

Non-Classified

Health Care

5.85

Apr 15

6M

Bonds

£20bn £50bn+- £50bn

Global

-6

3M

1.47

20.34% 1.35

4.64%

-4

3.26

Non-Classified

6.30%

-2

Managed Funds

£50bn+Health MARKET CAPCare

Cash and Equivalents

Netherlands

5.08

Technology

Non-Classified

10.01%

5.39

Managed Funds

MARKETTelecommunications CAP

11.19

0

1M

5.19 Fun Managed

Country

Bonds

Total

13.22

2

-8

Managed Fun Weight (%)

Direct Property and REITs

Switzerland

100.00

Managed Fun

Direct Property Total ManHealth GLG Care Strategic Bond Professional D and REITs

Managed Funds

Japan

4.12 Managed Fun

Managed Fun

Specialist

Global Bonds

6.00

Managed 5.67 Fun

UBAM UBAM GlobalBond HighProfessional Yield Solution Man GLG Strategic D IHD

Europe Excluding UK

4

6.30

UBAM UBAM Global HighTrust YieldClass Solution Aviva Investors Property 2 IHD Sector

Aviva Investors Property Trust Class 2

Mixed Investment 20-60% Shares 16.65

£ High YieldFund Currency

Income

Total

Name

Global Bonds

Summarised Factsheet

Managed Fun

Developed Government Bonds

30

Weight (%)

GEOGRAPHY

£43.81m

7.74 Fun Managed

M&G Global Dividend Class AEquity Invesco Perpetual European Investment Grade Bonds

4.62% Admin & Trading

Fund Size

Capital Class Z

Cash and Short-maturity Bonds

10

53.38

Invesco Perpetual European EquityCapital IncomeClass Z Global Financial

Real Estate

67.84%

CashRatings

Benchmark Europe Excluding UK

KIID

Managed Fun 16.32

High Yield and Emerging Markets Bonds

UK Equity Income

Specialist

Jupiter Strategic Bond ClassIncome I Legg Mason IF Brandywine Optimiser Class X

1.67%

IA Sector

DOCUMENTS

Managed Fun

Developed Market Equities

0

Weight (%)

Legg Mason IF Brandywine Income Optimiser X BlackRock Continental European Income ClassClass A

AA

£ Strategic Bond

Multi Manager Team

Yes

3.52%

NameDETAILS

Managed Fund Since: 31/08/2007

Yes

SIPP Allowable

ASSET ALLOCATION

TOP 10 HOLDINGS

MULTI MANAGER TEAM

United Kingdom

NISA Allowable

AAA

ASSET ALLOCATION

FUND MANAGERS

Unit Trust

Fund Domicile

Name

Register in less than a minute at www.fundslibrary.co.uk 5.39%

Fund Type

PORTFOLIO ANALYSIS

MARKET CAP

Over 15 years

OVERVIEW

KIID

Latest Report & Accounts

3.21%

France

Overview

DOCUMENTS

ADVISE R SPOTLIGHT April 2017

Adviser Spotlight - Julie Lord and Gretchen Betts In this popular monthly feature, I FA Magazine talks to leading advisers about what’s working well in their financial planning businesses. This month we’re off to Wales, as Sue Whitbread talks to Julie Lord and Gretchen Betts following the launch of their brand new financial planning business, Magenta Financial Planning, in 2016.

that we can help them to feel secure and happy and help them to make the most of their lives.

Gretchen: I’d been working alongside Julie for the last 3 ½ years and had lost faith in the service I could provide to my clients as part of a large wealth management company. They were changing their approach to using cashflow planning (i.e. not using it!), and this opportunity, to work with Julie again and to be part of creating something new, was something I had to grasp with both hands.

What was your experience of setting up Magenta as a new FCA registered and authorised business? Were there lots of ups and downs?

Magenta Financial Planning is a very new business – what was it that made you decide to set it up in the first instance?

Julie: As you know Sue, I ran Cavendish Financial Management in Cardiff for 17 years, before selling the business to AXA. After various mergers and acquisitions, I found myself working for a large investment based company which did not suit me (or indeed my clients!) However, I still really love working with people to help make their dreams come true.

That’s why I set up Magenta, as a new company where I could continue to look after most of my original Cavendish clients (who were very happy to follow) and employ all the old values to ensure that the clients receive a really valuable service. It’s great

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Gretchen: Our first challenge was choosing a name for the business. We felt it should be one that people could remember and pronounce easily and that also had some meaning. After much debate we settled on Magenta. This was because colour psychology suggests that it represents the colour of cheerfulness, happiness and contentment and most people feel more optimistic in the company of magenta. Also, the colour is meant to push you to take responsibility for creating your own path in life. This felt like it suited us, as well as reflecting the service we wanted to provide in our business.

The FCA application process was onerous and very detailed. We used a third party compliance consultant to support us in this and doing so was very valuable. For any others going down this route, my tips would be:

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ADVISE R SPOTLIGHT April 2017

To me, financial planning is all about personal engagement with a client and having a genuine interest in their goals, their ambitions and their family

• Be very methodical in your preparation • Work hard on producing a very strong business plan with back up financials • Be true and honest about what you really want your business to be • Establish who your bankers and accountants will be early on in the process and ensure that they understand the timeframe and deadlines you will face in the application process.

• Get a PI quotation well in advance • Plan in detail your capital adequacy requirements, based on your forecast figures We double and triple checked our application – and even then we received some further questions from the FCA. Overall, it took about a month and a half to prepare the application and then 4 months for the FCA to approve it (by their timescales this is actually very good apparently!).

Of course we have had our ups and downs and in the early ‘settling in’ months this happened quite often.

However, the joy of working in a small business is you can make decisions to change things quickly if necessary and can surround yourself with a group of people who you can rely on to support you through those ups and downs.

Julie: Anyone who knows me will appreciate that I am a “big picture girl” so I wisely left all the nitty gritty stuff to Gretchen who is great on detail and implementation. We make a very good team! On

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balance there were no big problems – we were buoyed by the excitement of starting our new business and remained positive at all times.

Julie, you’ve been a leading light in the UK financial planning profession for many years now. Can you give us a potted history of your career prior to setting up Magenta? Are there particular things that you have learned from experience which you wanted to do differently at Magenta? What is it that keeps you inspired and motivated year in year out to keep working with clients and running a financial planning business?

I set up Cavendish Financial Management in 1991.

We were one of the first fee based financial planning companies in Wales and I was the first Certified Financial Planner. Right from the outset I wanted to provide advice and guidance to help clients achieve their desired future lifestyles rather than just sell them financial products. I wanted to change to a professional services model to align better with clients; build a stronger business and get away from a commission/sales bias.

The business was transformed when we discovered Prestwood financial planning software and were able to model future scenarios for clients. This became (and still is) the most valued part of our service and it enables clients to make properly informed decisions about their future lives.

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ADVISE R SPOTLIGHT April 2017

As you say Sue, I’ve been around for a while! Readers will see from my biography that I’ve been committed not only to my own professional development as a financial planner but also to do my bit for the development of the UK financial planning profession in various ways.

a fun and profitable way forward for a business and cannot effectively be delivered by large companies.

Magenta has adopted this philosophy and I continue to be rewarded and inspired by the sheer joy of seeing clients achieve their goals and dream lives as a consequence.

In 2006 I set up a synergy group with other likeminded planners in other businesses to promote best practice and to deliver cost savings and great new business ideas.

What are the key principles on which the business is run?

This made us very attractive to AXA who purchased Cavendish in 2007. The same Cavendish philosophy and service became a cornerstone of the Bluefin Personal Consulting service, employing the same small company ethos, processes and principles within the larger business. This business was sold to Towry in 2013.

We want every client’s experience to be a good one, giving them confidence from the start that we are there to support them. Value, transparency, challenge and great delivery are aspects that our clients love

I left Towry in July 2015 with a view to setting up another smaller business to provide bespoke financial planning services, rather than just investment management. While waiting for authorisation for the new firm, I worked with Keri Carter at Broadway Financial Planning, one of the original synergy group members.

In 2015 I became a Director of Prestwood Software and am committed to helping other financial planners to improve their client offerings by including cashflow modelling and comprehensive lifestyle advice.

Experience tells me that the bespoke, comprehensive lifestyle planning service that we provided at Cavendish is still what clients really value. It is also

20

Julie: Our main objective is to work together with clients to build plans for their future security and happiness. The clients must come first. We want every client’s experience to be a good one, giving them confidence from the start that we are there to support them. Value, transparency, challenge and great delivery are aspects that our clients love.

We have set the business up to be honest and open, engaging our staff in the Magenta brand and all within a happy, positive workplace environment.

We are also passionate that if we can save a tree or two by cutting down the length of reports / paperwork or by using technology to improve our communications, we will.

How do you deliver the service to clients?

What technology do you use? How is the business structured in terms of personnel and the roles you fulfil?

Gretchen : We believe that only by having a small team can we offer the level of service we strive to deliver. Our team consists of just four individuals.

Each of us knows about every client and can readily assist whenever they contact us. Client feedback indicates to us that having a friendly, recognisable voice at the end of the phone is very important. For us, consistency is vital.

We use Prestwood Software for our back office system and cashflow modelling andTransact for the majority of our invested assets. We have a client secure document portal to exchange confidential documents and save on snail mail. We have also embraced social media in a big way.

As Managing Director, I run the business day to day, managing queries and personnel, as well as seeing clients. As Chief Executive, not only does Julie continue to see clients but she also uses her vast

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ADVISE R SPOTLIGHT April 2017

experience and excellent reputation in the profession to raise our profile, to network and generate new business opportunities.

We have an excellent back office team, who deal with all our administration and paraplanning needs and who fully engage with our ‘client first’ ethos.

What is your approach to investment management?

Julie : We follow a passive / evidence-based approach to investing our clients’ portfolios. We don’t try to time the markets, stock pick or beat the market, and we don’t pretend to be investment specialists, so we outsource the investment management of our client’s portfolios.

All we aim to do is to obtain good returns, at the lowest possible cost and in line with our client’s attitude to risk. Most crucially, we do this with reference to their personal lifetime cashflow forecast, which helps us to see what returns are required by them in order to achieve their goals.

We have an investment committee that meets 6 monthly to assess the current strategy and any

changes that may be required in relation to risk levels, our chosen providers and more specialist options, such as ethical investors or for specialist tax planning strategies.

Marketing is often something that financial planning firms find tricky. How are you promoting the business? What is working for you right now?

Gretchen: Since launch we have been focusing mainly on our social media presence and on developing our website. It is vitally important that our online 'story' reflects our business values and how we want to be perceived externally. Sometimes it can feel like you are putting content out there and just not getting anything back, but if you don't get involved with social media, you will certainly be left behind.

I manage all our social platforms via Hootsuite, which makes this manageable and posts can be scheduled in advance. This includes Facebook, Twitter, Linked In and Instagram. It's still early days, but the message is starting to get out there and this is reflected in our SEO data. Innovation is high on our

We don’t try to time the markets, stock pick or beat the market, and we don’t pretend to be investment specialists, so we outsource the investment management of our clients’ portfolios

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ADVISE R SPOTLIGHT April 2017

agenda in 2017 and we will be specifically looking to use more video or vlogs.

It is important to us that our messages show that we are approachable and friendly in the “people” side of the business and that we really show our personality as a brand. We have produced a series of videos about the team "get to know Magenta" and "client stories" (case studies). We have also used my cat, Basil, to add some humour and fun to some of our posts and videos. He is our Fluffy Motivator and we have included him on our website too. He is very popular on social media, with over 10,000 followers himself on Twitter, and we get quite a few people asking if they will get to meet him! We have a way to go to get Magenta's twitter feed up to this level, but we’re working on it. In a novel twist, we’ve even got Magenta logos on a Cortina rally car to build our brand!

In addition, we aim to update our blog with relevant technical information or human interest topics each week. Keeping this relevant and current is a high priority as this shows your website is up to date and current. Our clients like our stories and regular email news about the Magenta team.

Looking ahead, what is your vision for the future of the business?

Julie: We will continue to be small and beautiful! We have no plans to be much bigger, but want to work

efficiently and give excellent service to our clients.

Lifestyle financial planning will always be our focus we just want our clients and our team to be happy.

What would be your best tips for firms on what makes a great financial planning business?

Both: 1. Love your job 2. Take pride in your work 3. Delegate the investment management and spend more time talking about peoples’ lives and not their money.

4. Be less stuffy What do each of you enjoy doing outside work?

Julie: I play tenor saxophone in a local swing band. I keep fit by running, cycling and doing Pilates. I love dancing, skiing and golf (although haven’t played for a while!) and have recently taken up rally driving.

Gretchen: I’m a self-proclaimed cat lady and adoptive Mum to Basil the Persian cat, so I spend some time pampering him and tweeting! I also do a weekly tap dancing class and Ceramics night course.

I have one nephew and I love getting to see him as often as possible.

JULIE LORD Julie is a Chartered and Certified Financial Planner and Chief Executive of Magenta Financial Planning. She was an Institute of Financial Planning Board member for 15 years and is a former IFP President. She has been a member of the FSA Training Advisory Panel; Chairman of the IFP Education Committee and member of the ISO working party and is keen to ensure that all professional advisers are well qualified to deliver the best possible advice to the public.

As well as being a Chartered Fellow of the CISI, and a Fellow of the PFS, Julie has won numerous Financial Planning awards and is a regular writer and presenter of financial issues in the trade and consumer press.

She is very passionate about providing the best quality advice to clients and ensuring that financial planning businesses are embracing the best possible practices in order to deliver this service effectively and profitably.

GRETCHEN BETTS Gretchen is a Certified Financial Planner, Chartered Wealth Manager and Managing Director at Magenta. She began her career working with a Financial Planner within an accountancy practice, providing administration support and in 2006 started as an adviser herself. After studying and gaining her Diploma in Financial Planning in 2009, Gretchen has progressed to become a Certified Financial Planner and a Chartered Wealth Manager.

More recently, Gretchen worked for a large wealth management firm in Cardiff before starting Magenta Financial Planning last year.

Gretchen is passionate about working closely with clients to understand what they really want from life and to create and implement a lifetime financial plan to help them achieve their dreams. She is keen to embrace a modern approach to marketing and business and manages all of Magenta’s social media streams.

22

I FAmagazine.com

ACQUISITION AND SALES

O F I FA BUSINESSES Retirement?

Time for a change?

There are countless reasons to dispose of an IFA business, just as there are countless reasons to get hold of one.

W E A RE A SPECIA LIST F I NANC IAL S A L E S , CO N S U LTA N CY A N D BR O KE R AGE B US I N ES S .

Gunner & Co.’s mission is to work directly with you, whether you are looking to realise the capital in your business, or you are looking for growth through a merger or acquisition.

We consider every business to be unique, and therefore finding the right solution for you starts with a thorough understanding of your business operations and your wish list.

Only from here can we make valuable introductions which align to both party’s needs.

If you would like to discuss options to sell, exit or retire, or acquire IFA businesses, please get in touch for a confidential discussion.

louise.jeffreys@gunnerandco.com

gunnerandco.com

RICHARD HARVEY April 2017

Rebel Yell Contrary to popular opinion, Baby boomers and Generation X do not have things all their own way, says Richard Harvey. They have their own problems, and those include supporting the needs of Generation Y.

With the FCA announcing that some 85,000 interest-only mortgages will mature this year, with a similar number in 2018, those IFAs canny enough to specialise in giving advice on equity release will become as alluring to the over-55s as a hot date with Michael Bublé.

Equity release has principally provided older home-owners with an opportunity to wipe out outstanding debts, from the sum left on their mortgage to those credit card balances which they may have rattled up over the years.

However, a recent report in The Guardian asks whether equity release could play a bigger role in helping younger people onto the housing ladder. Which seems fair enough, but hardly the sort of advice I'd expect from a paper normally associated with policies designed to reduce us all to financial equality. Indeed, what about the less fortunate folks who live in social housing, and have no equity to release?

The Guardian article quoted research from Key Retirement which stated that almost a quarter of people who released equity last year used the money to help family or friends, not just to help the kids onto the housing ladder, but also to co-fund their weddings.

24

White wedding The latter idea strikes me as particularly ill advised. We all know that soon-to-bewed Shaznay will seize the opportunity as a personal mission to bust the £24,000 cost of the average wedding, order a frothy white dress the size of the 02 arena, a horse-drawn Barbie pink coach to take her to the church, and a reception costing the annual debt of a small South American nation.

Britain's largest specialist consolidator of closed life and pension funds, has revealed it has prevented some £30m of potentially fraudulent pension transfers

Still, this kind of lavish gesture from Nan and Grandad might at least help counter the argument that somehow baby boomers and their forebears have filched the future of the younger generation (incidentally, did you know that the Commons Work and Pensions Committee have been enquiring into whether we are being fair to the different

generations in our society? I would have thought there were more pressing issues to consider, such as how to stop government spending money that it doesn't actually receive in tax revenues).

Never mind that Nan and Grandad saw their meagre savings wiped out by inflation in the 1970s; copped accidents and diseases from working in heavy industry; or that their tax allowance has been slowly whittled away until it's the same as those in work.

And they also had to put up with Ted Rogers hosting '3-2-1', the most incomprehensible TV game show ever broadcast; that the haut-est of haute cuisine was steak, chips and Black Forest gateau at a Berni Inn; and that Ronnie Ronalde, a man whose sole talent was whistling at the same volume as a Boeing 777, could top the charts with an execrable ballad called 'In A Monastery Garden'.

Baby boomer or Millennial? You choose.......

Somehow, it's become acceptable - no, make that 'obligatory' - for the elderly to fork out their savings, and even slugs of equity release, to The Young Ones (© Cliff Richard) rather than treat themselves to a few comforts in their latter years.

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RICHARD HARVEY April 2017

Catch my fall Of course, that's if they have any savings left. Research reported

by Phoenix Group, Britain's largest specialist consolidator of closed life and pension funds, has revealed it has prevented some ÂŁ30m of potentially fraudulent pension transfers.

In the last six months of 2016, more than a quarter of UK adults had received a cold contact call, via phone, email or letter, about their pensions - and, it is painful to report, seven percent had

gone on to release some or all of their pension pot.

It's the sort of scandal into which Baroness Ros Altmann, the former Pensions Minister, could sink her pearly whites, having become such a powerful spokesperson for pensioners in recent years.

However, in an interview with the Mail on Sunday (just to balance out that bit in The Guardian) she is quoted as saying that she has been intimidated by her experiences in the House of

Lords - "I have never before in my life been as frightened as I am now about saying what I think".

Admittedly, she was talking about the Brexit debate. But, returning to more familiar territory, she condemned the government's much-trumpeted triple lock guarantee on State pensions as "a con trick, so politicians can say they are doing something."

Sounds to me that Baroness Altmann may be espying a new career outside of politics. Who could blame her?

It's become acceptable - no, make that 'obligatory' - for the elderly to fork out their savings, and even slugs of equity release, to The Young Ones

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RISK PROFI LI NG April 2017

The risk of riskprofiling The assessment of risk is fundamental to advisers and planners in their quest to ensure that clients benefit from effective and appropriate portfolio construction and asset allocation. In this, the first of a two part series for I FA Magazine, Keith Robertson casts his analytical eye over the weaknesses of common risk assessment techniques and sounds a warning bell to advisers as to their limitations.

Probably the biggest regulatory and legal risk for financial advisers today is their use of Risk Profiling-cum-Asset Allocation (RiPAA), which has become ubiquitous and the overwhelmingly predominant investment process. However, it is only the latest fad used by intermediaries.

Twenty-five years ago a withprofits fund was the vade-mecum for all occasions, followed by mean-variance optimisation, stochastic modelling, core and satellite, rebalanced 60:40 passive investing, multi asset, multimanager, model portfolios, risk-adjusted and risk-targeted portfolios, etc. – and now, our very latest model: RiPPA with systematic rebalancing!

Its uncritical and unthinking acceptance does not speak well of our sector.

risk-profiling questionnaires.

Each has 5 to 25 multiplechoice questions, from which one option must be chosen in answer to each question, even if none is the answer clients want to give. The questionnaire is marked somehow, and the client informed that, Hey Presto! this gives the perfect asset allocation and portfolio for you to three decimal places.

Investment risk is not fixed and stable, resident permanently within a product, so that financial planners, like pharmacists, can pick suitable remedies off the shelf, confident that investments will be entirely predictable

Science or magic?

RiPPA is often touted as being ‘scientific’ which it is not; it is MAGIC! Consider. You can choose any one of dozens of

26

This basic process is held out to work for any client, irrespective of gender, age, wealth, socioeconomic background or

personal circumstances, educational level, financial knowledge and experience, IQ or other measure of cognitive ability. It supposedly works equally well for a 34-year old entrepreneur who is a member of Mensa as for a recentlywidowed 84-year old retired teacher whose husband had managed all their finances, as for a 24-year old single mother with severe learning difficulties who has just inherited a million.

Now that’s magic!

The driver of this mini-industry is regulatory. The key policy statement reads, “Ascertaining a private customer’s true attitude to risk is critical for any adviser in assessing suitability and making an investment recommendation [FSA 2008, 2011].” While this appears to be clear, even directive, logical analysis shows such a process to be absurd, impractical and impracticable.

This does not mean anyone’s anxieties about something going wrong and losing money is unimportant; it is of supreme importance. But the notion that

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RISK PROFI LI NG April 2017

such concerns can be reliably measured quantitatively at the outset to derive a suitable asset allocation is idiotic. Nobody’s attitude to risk (ATR) is fixed and stable; it is context-dependent and liable to continuing change over time. Investment risk is not fixed and stable, resident permanently within a product, so that financial planners, like pharmacists, can pick suitable remedies off the shelf, confident that investments will be entirely predictable.

you both understand ‘risk’ to be exactly the same thing, neither of you will know what the other is really talking about. Then ask your questionnaire supplier to define what ‘risk’ means when used within their questionnaire.

Unless all three parties understand ‘risk’ to mean the same thing, it will be a case of the blind

leading the blind and heading for serious trouble.

Next, ask your questionnaire supplier to define what ‘risk tolerance’, ‘risk aversion’ or whatever is the trait being measured. If you want to

What is supposed to be measured?

Questionnaire providers are touchy about this. All claim to measure a specific psychological trait: risk attitude (ATR), risk aversion, risk tolerance, risk appetite, etc. The belief that one questionnaire, largely indistinguishable from all the others, should be able to accurately measure one of halfa-dozen discrete psychological traits for purposes of creating a suitable investment portfolio, should itself be a warning.

The notion that a range of traits can each be exclusively, specifically and scientifically measured is hogwash. All use similar questions and, without the manufacturer of trait being identified, it is pretty much impossible to differentiate among them.

Each claims to measure some investment risk-related quantity resident as a psychological artefact within each client: it is the questionnaire’s raison d’être. Advisers should note the regulator’s requirement to ascertain your client’s ‘true attitude to risk’. A good start is to ask the client what he understands ‘risk’ to be. Unless

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RISK PROFI LI NG April 2017

measure anything, you have to be able to define it. If you cannot define it, how can you be certain what you are measuring? The RiPAA manufacturer must also be able to explain how their risk factor (e.g. ‘risk tolerance’) can be distinguished from all the others (‘risk aversion’, ‘risk appetite’, etc.). The next logical step is to require the provider to explain, question by question, how each question can be proven to be measuring only, say ‘risk attitude’, and not accidentally measuring ‘risk tolerance’, or ‘risk appetite’. If questions turn out to be too general or generic and capable of measuring other traits, how can the manufacturer claim to be reliably measuring only their chosen trait?

These questions will clarify whether your risk-profiling provider has an intellectually robust proposition or is a conman. They go to the heart of the unfairness inherent in using such questionnaires and the unnecessary danger caused to clients by misleading them into believing they are participating in an honest, accurate and reliable process.

Petitio principia In logic, petitio principia is about the most egregious fallacy that can be committed. It is a type of circular reasoning where you assume the conclusion in the

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starting assumption; it seeks to prove a proposition when the premiss itself requires proof.

In risk profiling, the fact that a provider claims the questionnaire will measure, say ‘risk appetite’, and it generates a result called the client’s ‘risk appetite’, and everyone acts as if they believed that is what has been measured, does not in itself mean that ‘risk appetite’ has been measured, or indeed that anything useful at all has been measured. Unless the provider has met the earlier tests of being able to define ‘risk appetite’, ‘risk tolerance’ or

Even if the regulator continues to equivocate about RiPAA, it is likely that the courts will decide for them at some point whatever, and demonstrate its questionnaire will measure only that quality in a valid, accurate, precise, reliable and robust way, there is no reason to believe that ‘risk appetite’ or ‘risk tolerance’ etc. even exist in a way that can be measured. One would need to be a very brave adviser to buy into risk-profiling and use any questionnaire which fails these basic tests. Even if the regulator continues to equivocate

about RiPAA, it is likely that the courts will decide for them at some point.

Context-dependent Financial planners know investment advice is, above all, a practical skill. They are well aware a client’s propensity to bear the risk of loss is variable, and dependent on subjective factors prevailing at the time. Whatever ‘risk’ is, advisers practising in 2000-02 and 2007-09 are painfully aware that clients who suffered losses in those crashes wished they had had less. It was not that clients had not been told that financial markets are risky and severe falls theoretically possible; it was that they did not realise they would feel so badly and regretful about loss when it happened.

In other words, feelings about risk are context-dependent.

Risk questionnaire designers never take context into account, because it makes life too difficult. Examining perhaps 200 questions from commonly-used questionnaires reveals they are designed for a crude algorithm to fit answer scores against volatility of assets that are, in turn, used to populate a set of predetermined model portfolios. It is this monocausal interpretation of risk, totally described solely by subjectively selected statistical volatility, combined with denial

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of the contextual reality of risk, that contributes to the entire RiPAA process being useless for managing risk.

We must ask a fundamental question: what should we be trying to reveal by risk-profiling a client? The answer, like ‘risk’ itself, is multi-faceted and dynamic. A client’s willingness, indeed ability, to bear the consequences of something bad happening is never a fixed quantity. It is labile, changing over time according to circumstances (both external facts, and internal psychology) in the future. What you might feel today about hypothetically losing 20% of your wealth, completing an IFA’s questionnaire after a good meal and news of

promotion in your firm, is likely to be very different from what you would feel two years from now when the markets have crashed, recession started, and you have been sacked. Which

An adviser’s job is to assist non-professionals make fully-informed critical decisions, not to push them into a RiPAA sausage-machine of these two scenarios matters?

How you feel right now, or how you are likely to feel when a severe loss coincides with a personal disaster?

If questionnaires were constructed to try to uncover how a client might feel in the future if an investment reverse came coincident with one of the key life events (e.g. loss of job or income, divorce, death of a loved family member, diagnosis of a severe or terminal illness) then they would provide useful information, allowing time to reflect before an unthinking drive to get the person’s cash invested as soon as possible. It is someone else’s money being risked. An adviser’s job is to assist non-professionals make fully-informed critical decisions, not to push them into a RiPAA sausage-machine that magically spews out a portfolio, job done, so the next client can be put through an identical process.

ABOUT KEITH ROBERTSON Keith Robertson spent over twenty years as a practising fee-charging financial planner and investment manager, and was one of the highest qualified practitioners in the UK. Active in both the CISI and PFS-CII, he reviewed and co-authored professional exam course-books, was London’s inaugural Chartered Champion, and continues to sit on CISI masters’ level exam panels and forum committees. Since 2016 he has focused on consultancy and training, particularly investment strategy and risk. He is a fierce critic of current orthodox systematised and quantitative approaches to investment, concerned that advisers are not taught critical thinking to analyse its weaknesses, leaving clients in no position to understand the risks they are being exposed to.

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MODE RN DISTRI BUTION MODE LS April 2017

Modern distribution models In the age of increasing regulatory and administrative burdens, it can be tempting for advisers to focus on one distribution channel to keep the business structure as simple as possible. However, multi-channel distribution models are key for the future, and platforms should be supporting this, writes Richard Goodall, Distribution and Marketing Director at Parmenion.

The regulatory burden faced by the advisers and wealth managers of today is significant. According to the latest survey from the Personal Finance Society, regulation and compliance costs have been identified as a key threat to adviser business success for the fifth year in a row.

As a result, advisers can find it hard to find the time and energy to review their existing distribution models. However, as an adviser, it is important to frequently do just that and make sure that your chosen model is suitable for the business. It is also important not to forget the future and to remember that what works for you now, may not necessarily be right for every client you gain in the future.

It’s a digital world Consumers are increasingly looking for advisers to broaden their propositions and offer more digital services, but this task can seem daunting. People of all ages want to be able to engage with their financial providers through a variety of channels, which includes being able to monitor performance and engaging

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with their investments and their adviser, online. Platforms seem one obvious source of support here.

Many advisers are turning to their platform providers to help them with their digital communication and to access new digital distribution models.

To make advice more inclusive, the industry needs to develop alternative distribution channels that potentially appeal to a new generation of clients

The right platform should enhance your client outcomes rather than complicate them. It should streamline the process of recommending and managing client portfolios to free you to do what you do best. Offering advice to and building relationships with your clients.

A good platform should also be able to support your brand by personalising not only the online experience, but also client facing documents to reinforce your business identity.

Robo vs traditional advice models Robo-advice is certainly the buzzword of the moment. There is no question that there is a role for automated advice. To make advice more inclusive, the industry needs to develop alternative distribution channels that potentially appeal to a new generation of clients who have, for whatever reason, not previously engaged with advice services.

In its current guise, automated advice is perfectly positioned for those people who have simple investment needs or who are not looking for a holistic financial review or planning service. It can offer a personal recommendation, which differentiates it from self-select or execution only strategies. As an adviser, we believe there are many reasons for you to consider introducing robo-style services to enhance your business.

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It gives consumers a choice as to how they access services, can help appeal to a broader range of clients, and can be successfully integrated into a traditional service with the potential to streamline the process and improve client interaction.

By no means does technology replace the need for other forms of communication. The need for human interaction remains.

We are concerned that the term robo-advice implies that there is no role for human interaction with clients when shaping propositions powered by this kind of technology.

We think it is possible to blend smart technology with different degrees of human interaction to create bionic rather than robotic advice. This gives the client

control over the level of personal engagement and automated processing that they feel is best placed to meet their needs.

We think it is possible to blend smart technology with different degrees of human interaction to create bionic rather than robotic advice

Several advisory firms are using our Interact tool (launched in 2014) to reshape their business and operating models in order to ensure that their clients can chose how they interact with them.

Finding the right balance Many advisers now recognise that building the right client journey is the key to their business success. By providing access to tools which add a digital communication or advice element, platforms can help enable you to deliver advice through a series of streamlined processes. This ensures that you and your clients can choose how you work together.

The right platform partner will offer significant ongoing support, including listening to you and tailoring existing propositions to meet your needs.

You are the right person to choose how best to work with your clients. Finding the right platform should simply help you along the way.

ABOUT RICHARD GOODALL Richard is Distribution and Marketing Director at Parmenion. He has a proven track record of helping retail and institutional distributor businesses deliver change through technology and is responsible for leading the Parmenion marketing and sales strategy.

Richard is a well-respected industry figure with previous board appointments at Ascentric and 1st Software/ IRESS. Prior to joining Parmenion, he has been Managing Director of UK Business Transition at SEI, a global provider of institutional and private client wealth management solutions.

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CASE STU DY - MAZARS April 2017

Success through acquisition – a case study approach Mergers and acquisitions continue to stir up interest amongst financial planners and advisers, who have been witness to dynamic changes in the advisory field. Following our in-depth look into the way Newell Palmer handles acquisitions in the March edition of I FA Magazine, Louise Jeffreys of Gunner & Co. continues our series looking at businesses which operate in this area. This month Louise looks at Mazars Financial Planning, to gather an understanding of their aspirations when it comes to making acquisitions.

Mazars doesn’t necessarily come front of mind when thinking of national financial planning firms, but the firm’s continued development in this sector makes them a major player in the field.

The company was founded in 1940 and is the 5th largest accountancy firm in Europe with 18,000 employees and 270 offices worldwide across 79 countries.

Whilst the organisation is headquartered in Paris, Mazars provides clients with a full suite of advisory services, including audit, tax, corporate finance and financial planning from 19 offices in the UK. The UK operations run with a team of 1,700 employees and a turnover of more than £150m, with bullish aspirations to double that by 2020.

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Adding financial planning to accountancy services 21 years ago Mazars recognised that there was a gap in their private client offering. They had focused extensively on their accountancy services over the previous 50 years, without developing their reach into client financial management.

As a result, Mazars Financial Services was set up in the UK in February 1996 offering financial advice to individuals, business owners and trustees, many of whom had been using the firm’s accountancy services. In 2005 the division changed its name to Mazars Financial Planning, as it is known today, and set out its emphasis on providing longterm, independent advice and a bespoke service for clients.

Today the financial planning division looks after clients in the HNW class, managing the holistic financial planning needs of almost 1,500 clients nationally.

Recognising the company-wide focus on excellence, Mazars Financial Planning is a Chartered Financial Planning firm, and a founding member of the CISI Accredited Financial Planning Firms. Of their 18 planners, 11 are Chartered, along with 3 of their 8 paraplanners. A focus on continued technical and professional development is at the core of their team culture, to ensure they are providing clients with the highest standards of holistic planning.

The business has picked up a gamete of accolades, including the Gold Standard Award from AKG for the last 6 years, New Model Adviser Top 100 2016

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CASE STU DY - MAZARS April 2017

A focus on continued technical and professional development is at the core of their team culture, to ensure they are providing clients with the highest standards of holistic planning

TOWER BRIDGE HOUSE, LONDON

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CASE STU DY - MAZARS April 2017

and New Model Adviser Greater London Region winner in 2017.

A strong growth story Mazars Financial Planning has grown consistently and organically since it was set up. Over the last 3 years it has delivered an average of 20% turnover growth annually. This growth trajectory will take Mazars a long way to meeting their financial goals of increasing FUM from £600m to £2bn by 2020. To bolster that growth, Mazars have started looking at the acquisition market.

“We have successfully grown our business organically and will continue to do so,” says Ian Pickford, Head of Private Client

Services, “however acquisitions offer us the opportunity to accelerate our growth plans by adding to our existing skill sets and enabling us to reach critical mass in priority locations.”

Whilst Mazars are yet to make an acquisition in the financial advice sector, they have a long heritage of experience in acquisitions through their accountancy practice and indeed through their corporate finance team, which manages the M&A process for a variety of clients.

Acquisition criteria With no ‘standard’ acquisition process, Mazars looks at each business opportunity independently, however an

essential factor they consider is the cultural fit of the selling organisation. With such a strong internal culture in place, they know that the success of any acquisition will fall strongly on cultural synergies, such as the firm having proven its highly technical planning capabilities.

Location is also important.

Whilst clients and offices are already dotted across the country, there is a strategic focus on London, Birmingham and the North West, enabling these offices to get to critical mass.

Often, they would be looking for advisers in a newly acquired business to remain in post after the acquisition, becoming part of the Mazars team. Joining such a

THE PINNACLE, MILTON KEYNES

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CASE STU DY - MAZARS April 2017

TOWER BRIDGE HOUSE, LONDON

highly-regarded brand can bring significant value to business sellers - and particularly to their clients. The breadth of services, knowledge and skills inside Mazars is a great opportunity, increasing the ‘stickiness’ of clients as the firm undergoes the transition as part of a larger firm.

discretionary and advised assets.

This gives planners the time they need to focus on what they do best – which is in building and supporting long term client relationships to ensure that their financial needs are met

As Pickford explains: “We can add value to a seller’s existing client base across Mazars’s range of services. As a wholly owned subsidiary of Mazars LLP, we have access to the knowledge and skills of a wide variety of professionals both in the UK and in another 79 countries around the globe. We are also building for the future with our vibrant graduate scheme, which is developing quality professionals who are part of our succession plans.”

With no ‘standard’ acquisition process, Mazars looks at each business opportunity independently, however an essential factor they consider is the cultural fit of the selling organisation

A team approach Investment management is run in house, with a team dedicated to investment research and analysis, managing both

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effectively. They can then do this knowing that the technical side of the service, including the all-important investment management provision, is run to the highest standard within the business.

Recognising the continued importance of offering holistic services to clients, an integrated private client team has been set up over the last 2 years.

Here, financial planners work with Chartered tax advisers in multi-disciplinary teams to offer tailored and integrated solutions to clients and their families.

Since Mazars funds acquisitions internally, business sellers have the confidence of the security of their consideration, without concerns of external credit lines or additional third party restrictions affecting a deal. The emphasis on an agreement which makes commercial sense for both parties is at the centre of any deal, along with clear growth opportunities for the future.

If you would like to know more about Mazars’ acquisition plans I’d be happy to share my experience further. Drop me a line on louise.jeffreys@ gunnerandco.com

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E D'S RANT April 2017

Half Full, Half Empty?

Another foaming pint of Olde Wallop for Michael Wilson, as he looks at the prospects for pre-Brexit Britain

“The thing is,” said my mate Steve, as he stared gloomily into his fourth pint, “this Marine Le Pen woman might actually do Theresa May a favour.”

I opened my eyes, perhaps a little more widely than was really called for at that late hour in the Dog and Duck. Of all the great things I value Steve for, his political acumen is not one of them. But on reflection, perhaps he had put his finger on something important?

You see, Steve and his wife both voted for Brexit last June, after some hesitation. They’d finally been convinced that getting £350 million a week back for the NHS was quite an attractive prospect, and house prices were getting too stupid for young people to afford, and it was time to get our country back. Etcetera. No, the connections weren’t that clear to me either, but you know how it goes as closing time approaches.

Either way, 52% of the electorate agreed with him.

Domino theory So, nine months on, and with a hefty dose of buyer’s remorse, Steve was trying to think out the least-worst-case scenario for Theresa May as she prepares to battle it out with the other 27 EU members. And his thinking went like this: Suppose Madame Le Pen gets the French presidency in early

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There can hardly be any institutions that aren’t quietly preparing the parachutes in case we lose the European banking passport that goes with the Single Market

May and starts dismantling France’s entanglement with the Eurozone, while at the same time the Italian banking system falls over and the far rightists assume the high ground in Holland?

Throw in a regionalist revolt or two from Spain, and a few more nazi taunts from Greece, and that would leave the EU facing a schism which might – indeed, probably would – drive a wedge between the provident north and the profligate south. It would certainly push Germany into a corner, which might even give legs to the idea of

a two-speed Europe with a two-layer currency.

And the impact on Article 50 and Britain’s EU membership? Which EU would we be talking about, then? The one that sells more cars to Britain than anywhere else in Europe, or the one that can’t tie its own political shoelaces? (Yes, Steve’s fourth glass was nearly empty.) The one that would miss Britain’s net contributions to the joint European Budget?

Wouldn’t all this give us much

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more negotiating clout than the Remoaners have been reckoning on? And might the whole Article 50 thing, in fact, be a historical irrelevance?

Back to basics A tempting thought, for me at least. But I digress. The two most important trends of the last nine months in Britain have been that the majority of the remaining Brexit doubters have sat down and accepted that we’re going to leave the EU. Although the plunge in sterling that followed Theresa May’s ‘hard Brexit’ speech in February may have given some back-biters a kind of dark satisfaction. (My old granny used to say that the cruellest little words in the English language were “I told you so.” Here at IFA Magazine, we’re getting more positive assessments from the analysts these days, and who would we be to ignore them?

The other major trend is that both the economy and the stock market have done better than many of the Remainers expected.

Which has been a source of some considerable comfort to the Leavers.

We might want to qualify that claim with the observation that the sharp increase in consumer activity is only to be expected if the public expects prices to rise sharply before long.

(Ironically, the exact opposite of the deflationary worry that keeps Japanese or German economists awake at night.) The Remoaning Minnies may try to draw some comfort from the news in early March that retail footfall is indeed going off a post-January cliff – or at least, declining to a fivemonth low. As Larry Elliott wrote in the Guardian: “It is…likely that the prospect of higher inflation prompted

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consumers to buy big ticket items in 2016 that they would otherwise have put off until 2017. To that extent, some of the growth seen last year has been borrowed from the future.”

We might also want to observe that a weak pound has prompted a surge of interest in London-listed stocks from foreign investors who know a good investment when they see one. On that reckoning, much of 2016’s 15% growth in the FTSE-100 was based on market and fiscal grounds rather than on any particularly solid economic underpinning.

A cue for more sniggering from the Remain wing, which also noted with some satisfaction that the index had stalled and struggled through late February – at a time when the Dax was climbing steadily.

Solid enough And yet, none of this quite addresses the issue. On the market valuation side, UK equities are still considered cyclically

cheap – especially by US standards – and yes, there is a good chance that forward valuations may remain in bargain territory, especially if the dollar rises when the Federal Reserve jacks up interest rates.

And on the economy side – heck, we’ve just seen our OECD forecast for 2017’s GDP upgraded to 1.6%, compared with just 1.2% in last November’s assessment.

That shouldn’t surprise anyone who observed that last year’s growth was around 2%, and that the Bank of England itself is forecasting 2%. Or that both the BoE and the OECD say that the impact of Brexit in 2017 and 2018 will be less than expected.

Ah yes, say the sceptics, that’s all very well, but Brexit doesn’t happen until 2019, which is quite a different matter. And by that time we can probably expect that international businesses will

Both the economy and the stock market have done better than many of the Remainers expected

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E D'S RANT April 2017

be rejigging their investment plans so as to accommodate the possibility of damaging trade tariffs and disputes.

Wrong place, right time?

The Vauxhall takeover by France’s PSA looks like bad employment news for the car plants in Ellesmere Port and Luton. BMW is talking about building its electric Mini in Germany, not in Oxford. The Confederation of British Industry has pleaded with the Prime Minister for more clarity about her ‘hard Brexit’ plans, so as to reduce boardroom uncertainty about how best to prepare its members’ investment budgets.

Nobody wants to build a factory if it’s likely to be disadvantaged by trade barriers or by poor international relations, or by punitive taxes that might mean Slovakia becomes a cheaper manufacturing option.

And have we even considered the likely impact on banks?

Yes, of course we have – there can hardly be any institutions that aren’t quietly preparing the parachutes in case we lose the European banking passport that goes with the Single Market.

Without it – or something rather like it – British institutions would be quite literally not entitled to pitch for European business on the same terms as they do now.

That, of course, is a probable overstatement. Mrs May is under no illusions that Paris and Frankfurt and Amsterdam and Luxembourg would all love to have London’s slice of the European pie. And that Donald Trump’s America would be very likely to at least consider re-offshoring any of its London bases that it still wanted to retain any of its fractious dealings with the Old Continent. The PM doesn’t doubt, either, that banks have responsibilities to their

shareholders that transcend their obligations to their host states.

And that’s why she’s keeping her cards so close to her chest.

Chancellor Philip Hammond campaigned mightily for Britain’s continued admission to the banking passport – even if it cost the country billions in back-scratching deals of one sort or another. Officially, he was squashed by the PM in January, when she said that she wasn’t willing to do anything that might mean a more relaxed line on immigration. (A key element of the Single Market, on which the banking passport then rests.) But since then? Whaddayaknow, the government has been making assurances since the start of March to the effect that current EU nationals in the UK will suffer no disqualification or disadvantage. Is this the start of a tactical softening? We can only hope so.

Upstairs, downstairs At the time of writing (midMarch), there was no getting away from the impression that Mrs May was picking up some tricks from the Donald Trump style of politics. Lay down a thundering barrage of uncompromising statements; let Boris Johnson add to the confusion with a rattle of random machine-gun fire from the right flank; and

Mrs May is under no illusions that Paris and Frankfurt and Amsterdam and Luxembourg would all love to have London’s slice of the European pie

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then allow your team to intimate that you might just be prepared to negotiate something a little more accommodating if the circumstances are right. It’s the Art of the Deal, you see. But until then, Brexit means Brexit….

So far, the response from Brussels has been uncompromisingly blunt. Michel Barnier, the EU’s main Brexit negotiator (and a former French foreign minister) is playing for high stakes. And Francois Hollande, the present French president, is probably aiming to pitch for his job when he quits, so that won’t be much better. The Poles tried to dump the straight-talking Donald Tusk, the president of the European Council, with somebody tougher.

(And were expected to fail.)

And Germany’s chancellor Angela Merkel, who has more than most to lose from Britain’s withdrawal, dare not open her mouth until the late autumn when her general election is out of the way. (She is expected to win, but not by much.)

All the while, the House of Lords is insisting on being allowed to inspect and ratify any detailed agreement that the PM and her team might reach with the EU. At the time of writing, the main point at issue seemed to be the treatment of EU non-nationals, but the general impetus was that the legislation authorising Theresa May to invoke Article 50 would need to carry a rider requiring that the final terms of the UK's withdrawal from the EU should be put to separate votes in the Commons and in the Lords.

Would that amount to a veto?

In all probability, no. But it’s indicative of the current mess that nobody seems quite sure.

Either way, Lord Heseltine, an arch-Europhile Tory who supported the Lords amendment, has been sacked from his other

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role as a government adviser on regional growth. Smack. Now sit down and shut up, Michael.

Bonnie Scotland So much, then, for the United Kingdom as a whole. But, as is fast becoming clear, the northern territories have ideas of their own, and they don’t involve an exit from the EU. Westminster is currently trying to make light of Nicola Sturgeon’s heavy hints that Article 50 will trigger what’s being called “Indyref 2”, and that Edinburgh wouldn’t dare attempt an act of secession. It may yet be wrong. But whether such an act could succeed would be another matter.

The reason, as you might expect, is that the continuing slump in oil prices has dealt a severe blow to the country’s dominant industry at exactly the same moment when its banking industry is also struggling to make headway. According to figures published by the Scottish government in January, onshore GDP grew by only 0.2% during the third quarter of 2016, against 0.6% for the UK as a whole and rather more than that for England and Wales.

Expressed as a year-on-year comparison, the improvement was a only 0.7%, against the UK-wide figure of 2.2%.

Unemployment of 5.1% compared badly with Britain’s overall 4.7%, and the fiscal deficit of £14.8 billion in 2015/16 represented 9.5% of GDP, compared with 3.7% for the UK as a whole. On that basis alone, Scotland would crash the Eurozone’s tests for membership of the Euro club pretty badly, and you can’t get into the EU these days without joining the single currency.

But Ms Sturgeon is in a cleft stick of a different sort. Only last August, she said that leaving

Both the economy and the stock market have done better than many of the Remainers expected

the EU would cost Scotland £11.2 billion a year. Not, please note, because of exit penalties but because it would lose so much trade that currently goes out to Europe through its UK membership. Some of it very probably through the banks that currently bring in £8 billion a year and employ one in twelve Scots.

There are those, of course, who say that Scotland within the EU will actually help to support the Scottish banks and may even hoover up institutions currently based in London. I’ll take that with a wee dram, if you don’t mind. Good gracious, closing time already?

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CAREER OPPORTUNITIES Position: Head of Compliance and Risk Location: Henley-on-Thames Salary: £100,000 This is an exciting opportunity to join a forward thinking and innovative practice. You will be responsible for the operation of compliance and risk management, which includes managing the compliance team and providing technical support, advice and guidance to the team and the business; you will oversee the compliance function and ensure that the business remains compliant with all applicable regulations and company policies and procedures. There is also the chance to become a member of the senior management team within the firm and reap the extensive benefits that come with this.

Skills & Qualifications required: • At least 7 years’ compliance and risk management experience.

• Ideally educated to degree level with a relevant industry qualification, such as CISIInvestment Operations Certificate (IOC) or equivalent.

• Ideally achieved or working towards the CISI Diploma or equivalent.

• Previous management experience desirable.

• Previous experience of risk management and working for a fund manager essential.

• Knowledge of collective investment schemes essential.

• Understanding of derivatives, and in particular swaps, futures and options essential.

• Knowledge of property funds and / or PAIFs would be advantageous.

• Understanding of the UK, European and regulatory environment is essential.

• Detailed knowledge of the FCA Handbook is essential, and in particular COLL, FUND, COBS, CASS, SYSC. • Knowledge of MiFID / MiFID II, UCITS V, AIFMD, EMIR and MAR desirable.

• Familiarity with Barra or other risk management systems essential.

• Understanding of FundWare or other IBP monitoring systems essential.

• Ability and confidence to challenge at Board level.

• Ability to gain respect and confidence of peers essential.

• Good working knowledge of Microsoft Word, Excel and Outlook.

• A knowledge of Pulse would be an advantage.

• Able to work on own initiative as well as part of a team, whilst managing workloads.

• Ability to work under pressure is essential.

• Compliance Related • Comply with the FCA’s Treating Customers Fairly requirements, and other requirements set out in the company manual and processes.

• To co-operate fully with the COURTIERS’ Anti Money Laundering requirements.

• To maintain records in accordance with COURTIERS’ compliance requirements as setout in its compliance manuals and procedures.

• Work within the requirements of the Data protection policy.

Position: Self Employed IFA Location: Richmond, London Salary: £100,000 A well established and prestigious IFA firm with a strong Accountancy venture attached, currently require several qualified IFAs to join their expanding team. The organisation offers full paraplanning, compliance and administrative support and a healthy earnings split.

The ideal candidate will need to be ambitious and committed to client service, have excellent knowledge of the financial services market place, be a strong lead generator and fully qualified.

There is an excellent opportunity here to boost and grow an existing client bank, and develop client relationships from the accountancy side of the business.

Skills: • Level 4 Diploma Qualified in Financial Planning • Experience of working within financial services • Excellent communication skills • Strong understanding of the current financial market • Strong knowledge of pensions and investments products

Position: Paraplanner Location: Croydon, Surrey Salary: £40,000 An experienced paraplanner is required to work with the financial planners and client support team to provide clients with a positive, professional experience, offering highly technical and qualified knowledge and ongoing assistance.

Qualifications and capabilities: • Previous experience within a financial services role, ideally in a financial planning practice environment.

• Minimum QCF Level 4 Qualified (i.e. CII Diploma in Regulated Financial Planning or ifs Diploma for Financial Advisers or equivalent) and working towards QCF Level 6. CII Certificate in Paraplanning or CISI Accredited Paraplanner designation will be an advantage.

• Confident and self-assured with a positive approach to change, ability to remain calm and work well under pressure.

• Good knowledge of Microsoft Office/IT skills.

• Working knowledge of Iress, Financial Express Analytics and Voyant/Moneyscope cash flow systems.

• Good planning and organisational skills, with the ability to organise and prioritise workloads.

Position: Compliance File Checker Location: Farnborough, Hampshire Salary: £40,000 A multi-award winning financial services network, is currently seeking a compliance professional to join on a 12 month fixed term contract due to an increase in pensions liability projects.

As a compliance file checker you will be remotely reviewing the suitability and quality of advice given to clients and to ensure that any identified areas of concern or development are appropriately addressed.

Qualifications: • To hold QCA level 4 qualification or able to demonstrate relevant experience equivalent to level 4 • Experience working within financial services.

• Experience working in financial services and within a compliance role, also experience of dealing with the FCA

Position: Paraplanner Location: Sidlesham, West Sussex Salary: £30,000 A well-established Wealth Management practice requires a career-committed research professional who is dedicated to enhancing their knowledge, experience and skills in this area.

Ideally, you will have previous experience as a paraplanner within a fast paced environment and have extensive product knowledge in the areas of pensions, investments and protection.

The successful candidate will benefit from full support and training within a welcoming office environment.

About the Role: • You will be required to analyse a client’s circumstances, objectives and existing financial planning arrangements in order to prepare an appropriate recommendation for discussion with the adviser • Undertaking whole of market research, as required, on all areas of the market, including pensions, investments and protection, both on a client-specific basis and as part of regular reviews of the market place • Liaising with various members of the Research Team involved in Risk and Compliance to ensure that advice is compliant • Provide high quality technical, administrative and research support to the advisers • Provide input to the Research Manager on the suitability of new systems or procedures • Assist in the development of less experienced members of staff Skills: • Previous experience working within a similar role within an IFA practice • Level 4 Diploma qualified or a desire to work towards • A high level of analytical capability with good communication skills and attention to detail, as well as the confidence to interact with clients and providers at all levels • Committed to a career in research • Good time management and the ability to organise and prioritise workload

Position: Paraplanner Location: Clifton, Bristol Salary: £30,000 A well-established Wealth Management practice requires a career-committed research professional who is dedicated to enhancing their knowledge, experience and skills in this area.

Ideally, you will have previous experience as a Paraplanner within a fast paced environment and have extensive product knowledge in the areas of pensions, investments and protection.

The successful candidate will benefit from full support and training within a welcoming office environment.

Skills: • Previous experience working within a similar role within an IFA practice • Level 4 Diploma qualified or a desire to work towards • A high level of analytical capability with good communication skills and attention to detail, as well as the confidence to interact with clients and providers at all levels • Committed to a career in research • Good time management and the ability to organise and prioritise workload

Position: IFA Administrator Location: Leeds Salary: £28,000 A fantastic opportunity with a successful and reputable IFA firm. The role includes giving administrative support to the advisers, management of clients’ accounts with information being updated, arranging meetings and being first point of call for client queries.

You will be amongst a supportive and friendly environment with a group of highly professional and encouraging individuals.

Skills: • Previous experience of working in a similar role within financial services • Experience of using MS Office: Excel, Word & Outlook • Excellent communication skills, both written and verbal • Good telephone manner • Strong attention to detail and high organisational skills • Confident using a range of IT packages • Happy to work in a team • Ability to work in a fast-paced environment and be adaptable to change Responsibilities: • To produce all relevant paperwork for the client, on behalf of the Adviser, including, quotations, illustrations and valuations.

• Ensuring all records and personnel files are updated and organized • To process new business documentation in accordance with the agreed service and quality standards.

• Manage wide range of queries from clients and Advisers taking the appropriate action to ensure the query is dealt with in a timely and effective manner.

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