ISSUE 23
SELLING AN AIRCRAFT IN A MARKET IMPACTED BY COVID-19
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FROM LAUGHABLE TO LUXURY
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•EDITOR’S INTRO•
Editor’s Intro HANDS UP IF YOU REALLY HAVEN’T FOUND YOURSELF RETHINKING YOUR LIFE THIS YEAR!
have missed its meteoric rise - I caught up with the iconic Rathfinny Estate to hear their take on Britain’s new luxury viticulture.
Not all of us have taken on big changes, but most have had to make a myriad of small adaptions to how we think, live and work. How many of these changes are permanent could be anyone’s guess. But what’s for certain is that PCD and our members are going to carry on adapting and thriving.
Take a look at The Privateer for our perspective on the steady growth of interest in ESG. Already on the rise before 2020’s global pandemic, this looks like a trend that’s here to stay. This week I found myself in conversation with the young private banker nextdoor. He reports that ESG is a hot topic for his clients, particularly the younger generation looking to build their own, sustainable wealth. Over the road, an aging friend told tales of his stonking capital gains tax bill on the sale of a business – I better not steer him towards Tax corner!
One of the bigger shifts has been our attitude to travel. I was fascinated to read about the (sonic) boom in private jet use in this edition. Elsewhere, executive coach Mark Evans is on hand to guide us through the benefits of putting our career plans in order. His advice focuses on knowing yourself – but for anyone who feels they’ve spent enough time in their own company of late, there’s exciting news from PCD’s own David Bell. Catch up with his plans for new networking events that are lively, participative and designed to fuel business opportunities here.
I hope you enjoy reading this edition as much as we enjoyed creating it. As ever, we’re keen to hear from you, so please do drop us a line if you have any ideas for new features or comments on what you’ve read. Stay safe and keep adapting!
Fingers-crossed, we’ll all be back together for live events soon. And when we are, I hope we’ll be enjoying a glass of English sparkling wine. Few of us can
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• W H AT ’ S N E X T B Y D AV I D B E L L •
What’s Next by David Bell One thing we have noticed though, is that the networking is still missing from the new environment. As the Autumn progresses, more people will feel the need to find new potential avenues for business in this new normal. More webinars is not the answer, but more tailored and bespoke use of Zoom will be part of that picture.
SINCE MARCH WE HAVE PLOUGHED HEADLONG INTO DIGITAL METHODS OF CONNECTING OUR COMMUNITY ONLINE. OVER THE SUMMER, I SPOKE TO SO MANY PEOPLE SUFFERING FROM WEBINAR FATIGUE OR THE DEMANDS OF THEIR SCHEDULE OVER ZOOM. The digital environment can be frantic, removing the natural downtime that exists between physical meetings or interactions. It is possible to slip into the habit of carving the day into 30 minute blocks with one call following the next.
PCD is designing and delivering a range of opportunities for members to participate in more live and interactive sessions with small groups of high quality professionals from the key services and jurisdictions working with HNW families. We will work with members and sponsors to design and execute these sessions built around key regions or themes within sectors. Using the functionality of Zoom breakout rooms with well curated guest lists, clearly defined agendas and follow up opportunities, we hope to bring about the renaissance of online networking in the professional services sector - it is new and improved #networking 2.0. Watch this space!
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• W H AT ’ S N E X T •
Upcoming Events UK & EU Series: Disruption in Wealth Management 9 September 2020 | 2:00 pm - 3:00 pm
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UK & EU Series: Channel Islands Relocation 11 September 2020 | 11:30 am - 12:30 am
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UK & EU Series: HNW Relocation to Gibraltar 16 September 2020 | 2:00 pm - 3:00 pm
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US & Canada Series: Foreign Grantor Trust – US & Foreign Settlors of Foreign Trusts & US Trusts 17 September 2020 | 3:00 pm - 4:00 pm
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View all upcoming events •5•
•FROM LAUGHABLE TO LUXURY•
From Laughable to Luxury international awards, and English sparkling has become the bubbles of choice for some of Britain’s most exclusive events.
PCD CLUB MAGAZINE EDITOR ON THE EFFERVESCENT RISE OF ENGLISH SPARKLING WINE. Not too long ago, English wine was viewed with suspicion and derision in the UK. Internationally it was unknown. But thanks to a combination of growing expertise, warmer summers and ideal geography, the past decade has seen English sparkling wine go from strength to strength.
Rathfinny Estate in East Sussex was founded in 2010 by husband and wife, Mark and Sarah Driver. Once a working arable farm, the first vines were planted in 2012 and today Rathfinny comprises over 200 acres of predominantly Pinot Noir, Chardonnay and Pinot Meunier.
In just 10 years the number of UK Nestled in the South Downs National vineyards has doubled, growers have Park, an area of outstanding natural been recognised with highly regarded beauty in Southern England and a site perfect for growing sparkling wine grapes. The light, thin, clay loam soils over chalk are free draining and very similar to the Champagne region of France. The chalk provides a ready source of water for the vines during the drier summer months. And the warm semicontinental climate and long summer days ensure perfect ripening, and the proximity to the sea helps mitigate frost risk, a major problem in cooler climate vineyards in northern Europe. The demand for English wine is increasingly popular as more consumers
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•FROM LAUGHABLE TO LUXURY•
- Rathfinny is one of the leading wine estates for wine tourism. With a Tasting Room that has been awarded the Plate Michelin 2020, on-site guest rooms, a Cellar Door, tours, tastings and walking trail, Rathfinny Wine Estate is leading the way with guest experiences – on a par with estates in Stellenbosch or Napa look to support their local businesses and Valley, but a lot closer to London. their workforces and understand where their goods come from. For Rathfinny We’ll give the final word to former Hedge and many other English sparkling Fund Manager and Rathfinny co-owner wine brands, you can now enjoy these Mark Driver: “Our ambition is that in home-grown wines in many of the top twenty years' time you will walk into a restaurants/bars in the country (The bar or restaurant in New York or Beijing Ritz / Dorchester etc), often replacing and you’ll be asked, ‘would you like a the French ‘house pour’ with an English glass of Champagne or a delicious glass sparkler. of Sussex. I can recommend Rathfinny." And the attraction doesn’t end there Cheers to that!
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
Selling an aircraft in a market impacted by COVID-19 Written by Duncan Aviation
BY TRAVELLERS WHO WANT TO MITIGATE EXPOSURE TO A DEADLY VIRUS. AS TRAVELLERS ARE BECOMING SKITTISH ABOUT BEING CRAMMED INTO AIRPLANES FILLED WITH HUNDREDS OF PEOPLE FROM ALL OVER THE WORLD, MORE AND MORE OF US ARE TURNING TO PRIVATE AVIATION. A LARGE PORTION OF THE DEMAND FOR PRIVATE TRAVEL IS DRIVEN
According to Forbes, an observatory study done by European private jet charter operator GlobeAir found that transiting passenger terminals at airports and flying on a commercial airliner create around 270 possible person-to-person interactions where one could be exposed to Coronavirus versus fewer than 20 on private flights. Individuals in a position to do so are finding ways to reduce the risk and
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
stress caused by the pandemic. GlobeAir has reported a 67% increase in new clients who were historically frequent business or first-class travellers. A majority of these newly acquired firsttime private flyers have declared they chose business aviation to lower the risk of infections.
global private aviation lawyer, focusing on advising ultra-high net worth individuals and their businesses. Paul has advised clients that together hold more than $250 billion in published wealth and handled over $15 billion in aircraft transactions as well as on contentious matters over his years.
“We are in a so-called ‘buyers’ market’, Those individuals who are able to fly not a bargain shoppers’ one,” Paul says. privately are being driven by health, “But, I am sure there has been and will be hygiene, and convenience factors. Why a bargain or two to be found.” risk being crowded into an airplane cabin with hundreds of individuals, of Paul has been advising his clients, which you have no idea where they’ve including a few newcomers, that aircraft been, when you can board your private values were softening pre-crisis and have aircraft and go wherever you please, certainly softened further. However, whenever you please? they have not fallen off of any cliff.
What does the private jet market look like?
Paul Jebely, managing partner and co-chair of private wealth at US-based law firm Pillsbury Winthrop Shaw Pitman is widely regarded as a leading
“I believe that a lot of the factors supporting historically stable aircraft values will be absent going forward, though at the same time the original equipment manufacturers (OEM) have thankfully (though involuntarily) reduced production rates for this year,” Paul says. “Separately, I do have clients with upcoming new large cabin deliveries and I expect to be delicately negotiating concessions with OEM’s in the near future.” Paul has started, and closed, sales, purchase and re-financing deals in the US and Asia since April with more to close over the next few weeks in both
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
regions plus the Middle East, all of which team has already closed 13 aircraft are secondary market transactions, and transactions. one with a newcomer buyer. Duncan Aviation Aircraft Sales & Acquisitions expert, Tim Barber, How has COVID-19 recently closed on a European-based Global Express XRS that was to be affected aircraft relocated from Farnborough, United transactions? Kingdom, to Duncan Aviation’s newest full-service maintenance, repair, and overhaul (MRO) facility in Provo, Utah.
Since the world started to change in March 2020, and business jet utilisation decreased across the board, the Duncan Aviation Aircraft Sales & Acquisitions
Tim anticipated an environment where travel was going to be increasingly difficult due to worldwide restrictions and travel bans, and knew he would improve his chances of selling the aircraft if he had it relocated. In addition to the travel restrictions put in place by the United States and the United Kingdom, Duncan Aviation banned all but essential travel for its team members
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
in order to comply with World Health Organisation guidelines to flatten the curve in the early days of the pandemic, benefiting client and prospect safety.
Aircraft financing
“At that stage, around 90% of enquiries were from the United States, so it was a matter of maximising the opportunity based on aircraft location,” Tim says. The aircraft sold just 69 days after being Managing Director and Head of UBS brought to market. Corporate Aircraft Finance Johan Blitz had a similar experience as Tim. According to AMSTAT, a business aircraft market research platform, the “The logistics of closing deals on prestandard Global Express XRS listing has owned aircraft have created new been on the market for 254 days. This challenges,” Johan says. “Aircraft viewings aircraft was the fourth Global Express are challenging, pilots are having to XRS to sell this year, with the others quarantine, reduced administrative taking an average of over 200 days to support at the registries, and reduced sell. staffing at some MROs all pose certain challenges.” “A very cooperative client, an equally pragmatic buyer, and a great team at In light of low or even negative interest Duncan Aviation were the reasons this rates, clients keep looking for ways to aircraft sold in such a short time,” Tim invest and in turn banks are keen to says. “This really demonstrates what advise on the topic and are motivated Duncan Aviation is capable of doing, to lend. Johan says some clients are even during a global pandemic.” looking to refinance their aircraft in order to raise liquidity, and a number of buyers of new aircraft have postponed their deliveries as best they could. “When COVID-19 hit, the initial thought was that it wouldn’t be much different from SARS/MERS,” Johan says. “However, that escalated fast and
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
our clients were somewhat paralysed by these developments. We were impacted quickly, however business started to come back around early May, and in the last six months we have seen deal numbers similar to prior years. Deal sizes have been smaller because of financing more pre-owned aircraft and consequences of refinancing deals with lower market values on three- to five-year-old aircraft. As we’ve always done at UBS, we will continue to look after and help our customers to the best of our ability.”
First time aircraft buyers Tim stresses the importance of choosing an aircraft broker who will have the client’s best interests in mind.
z Key missions and evaluation parameters z Technical analysis z Financing alternatives z Aircraft management structure (inhouse vs. management company) z Financial analysis Tim says, “Through our acquisition services, we help those looking to purchase or upgrade aircraft identify the right make and model to best meet their flying missions, obtain that aircraft at the best purchase price and ensure it is equipped to maintain the highest long-term market value.”
Taking the right tax advice
“Duncan Aviation began as an aircraft sales company in 1956, and we are known for finding clients the right aircraft – not just an aircraft,” Tim says. “We de-risk the purchase, reduce the surprises with forthcoming maintenance; we understand where technical issues may arise, and overall we make the client’s life easier.” Nic Arnold, who specialises in looking after PwC’s more complex Private Office For first-time buyers, it is important to clients, reiterates the need to get good tax have a well-designed aircraft acquisition advice, especially when a client is new to plan. An effective plan consists of the the market. “I completely understand the following elements: increased interest in purchasing private jets given what we’ve been through z The organisation’s aircraft needs over the last few months”, says Arnold;
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•S E L L I N G A N A I R C R A F T I N A M A R K E T I M PAC T E D B Y COV I D-19•
“however there is more need than ever to past may well be unadvisable today and ensure that clients take holistic tax and pilots and potential owners often don’t structuring advice which is tailored to realise this. their specific situations.” Nic has seen a number of examples of private clients and businesses activity looking at aircraft purchases during the pandemic, with even a conversation forged during NHS clapping leading to new client work to advise on the use of a corporate jet within a family business.
A new norm among high net worth individuals
“The tax environment for private jets has changed significantly over the last few years and this needs to be taken into account when bringing an asset Döhle Corporate and Trust Service like this into your personal or business Limited Business Development Director life. The income tax rules have changed Allister Crossley said that... for business use, and attitudes to VAT planning have tightened considerably”. Read full article online Nic also observes that the way private aircraft were commonly operated in the
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• TA X C O R N E R •
Tax Corner with Lancaster Knox
Written by James Heathcote | Director, Private Client Advisory
Hunting for the Capital Gains Tax Crystal Ball I’m sure it won’t have passed you by that the Chancellor of the Exchequer, Rishi Sunak MP, has written to the Office of Tax Simplification (“OTS”) requesting a review of the Capital Gains Tax (“CGT”) regime. This is hardly surprising, with the Government needing to bolster its finances for a post-Covid recovery. The scope of the review is very broad, and HM Treasury is clearly of the view that there is a multitude of options for simplifying the regime and generating additional income. Of course, no one knows what the recommendations of the OTS will be, or how many of those will be taken up by the Government. Nonetheless, now is still the time to consider clients’ tax positions and to think about what might be down the road.
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• TA X C O R N E R •
• Boris Johnson appeared to rule out a wealth tax during Prime Minister’s Questions – but increased taxation based on the value of assets can come in many guises, so don’t rule out something that looks like a wealth tax under a different name. • There is a significant and growing body of advisors who expect the rate of CGT to be aligned with income tax. This would partly return the regime to the pre-2008 standard, but is likely to be exceptionally unpopular with high earners who might see their CGT rate increase to 45%. • There is a clear allusion in the scoping document to Family Investment Companies (“FICs”), of which HMRC are already acutely aware and suspicious. As well as possible changes to the taxation of gains made by FICs, there may also be wider recommendations around income tax and corporation tax. We’d recommend structures are reviewed well in advance of any potential changes.
• The Chancellor has requested that CGT be reviewed in terms of its interaction with other taxes. Previous suggestions have included the abolition of the tax-free base cost uplift on death, so we can expect there to be wideranging considerations put forward by the OTS. These are just a few of our thoughts on what we might expect to see from the OTS review, but there really is no crystal ball. Nonetheless, it is incumbent on us as advisors to prepare for seemingly inevitable change and to begin those conversations with our clients in good time. Get in touch: As always, please do not hesitate to get in touch if you would like to have a confidential discussion about anything private client tax-related.
James Heathcote E: james@lancasterknox.com M: +44 (0) 7557 647 543
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• T H E P R I VAT E E R •
The Privateer entire operating model, which will have far reaching impacts. When the serial networkers from business and politics gathered at Davos for the WEF conference this January, they had little concept of how much the world was about to change, but Sustainability and Environmental considerations for investors were the top of the bill.
We won’t forget 2020. WE WON’T FORGET THE WAY THE WORLD STOPPED TRAVELLING, COMMUTING, SOCIALISING AND GATHERING. WE WON’T FORGET THE WAY TECHNOLOGY KEPT US MOVING FORWARD IN A WAY THAT WAS NOT POSSIBLE FOR PREVIOUS PANDEMICS. The COVID era has accelerated trends that existed in remote working, communications and video conferencing at breakneck speed. Many people are now saying we can’t go back. The pandemic has provided the opportunity for many companies to rethink their
Amin Rajan, chief executive of Create Research, a consultancy, believes the recent growth of ESG investing is likely to continue, even in a prolonged period of economic uncertainty that potentially offers lower returns. “If anything, it is likely to enhance the appeal of ESG investing once the dust has settled,” he says. It is a view echoed by wealth managers across the UK, according to a survey carried out by the FT and Savanta, the market research company. Almost nine in 10 wealth managers polled believed that the COVID-19 pandemic would result in increased investor interest in ESG investing. Wealth managers such as Rathbone Brothers, Canaccord Genuity Wealth Management and James Hambro & Partners were among the 35 per cent that expected significant increases, while 52 per cent expected
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• T H E P R I VAT E E R •
a slight increase. Only 3 per cent of those polled said they believed interest in ESG would slightly decrease, while 10 per cent expected no change. A growing number of Financial Institutions are applying for B Corporation certification (assessed by the not-for-profit B Lab) which is given to for-profit organisations who achieve at least a minimum score against a set of social and environmental standards. B Corps have been around in the US since 2007, with brands like Ben & Jerry's and Patagonia achieving certification. At the time of writing there are 2,778 B Corp organisations worldwide, in 60 countries. In 2015 the initiative launched in the UK and there are now 193 B Corporations, including household names: Propercorn, JoJo Maman Bebe, Innocent drinks and Abel & Cole. The expectation from younger clients of wealth managers that their professional advisors comply with ethical standards is becoming the new normal. The market is responding to this trend with a stronger product offering that is a core pillar of their process.
I hear more mainstream wealth managers discussing their ESG focus than ever before. In a marketplace where there are few differentiators between service providers, this is one and it is here to stay. •17•
•SOLVING A PROBLEM•
Solving a Problem by Mark Pearce Written by Mark Pearce | Partner | Gateley Legal algorithms, no suitable registration system exists in the UK. While the original author of an algorithm is usually easy to determine, many algorithms now self-learn and the question of ownership therefore becomes more complicated and almost science-fiction like.
ALGORITHMS ARE DESIGNED TO SOLVE PROBLEMS BUT WHEN IT COMES TO LOOKING AT HOW THEY MIGHT BE TAXED IN THE UK THE SITUATION IS MORE COMPLEX THAN THE ADVICE ON FACE MASKS. The first point to make is that current UK tax legislation is as outdated as an Amstrad is to a modern Apple. Given that the ‘main’ statutes for income, capital gains and inheritance tax were written in 2007, 1992 and 1984 respectively it is no surprise that there is no helpful section entitled “taxation of algorithms”. To decide how an algorithm should be taxed one needs to consider both the purpose of the algorithm and where it is being ‘exploited’. From an intellectual property perspective, an algorithm is usually treated as unregistered copyright and, while some countries do have an embryonic system for registering
Unlike a physical asset, an algorithm can be used anywhere in the world (and often in more than one jurisdiction simultaneously), which means that the copyright in the algorithm is often valid and enforceable in all the signatory countries to the Berne Convention of 1886. That’s currently 178 countries, most of which do not have any suitable legislation for taxing an algorithm. Once you have considered the ‘primary’ taxing jurisdiction, you then need to consider whether the person writing the algorithm is carrying on a trade. What were their motives for writing the algorithm in the first place? As many algorithms were not initially written with the view to the global phenomenon they are today (FaceMash, the precursor to FaceBook, was written by an intoxicated Mark Zuckerberg to compare girls on campus) often you will find that the use
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•SOLVING A PROBLEM•
of the algorithm is not a trading activity and, therefore, any profits you receive will be classed as royalty income and not trade receipts.
that a systematic and logical approach may be the best place to start (after the aforementioned cold towel and stiff drink).
Similarly, if you are not going to utilise the algorithm yourself, you may want to licence it to a third party in return for a licence fee. While it can be argued that such a receipt is trade income, the case of IRC v Sangster held that licence fees paid to an inventor are not trade receipts. Instead, the income is, again, treated as royalty income under s.579 ITTOIA. Royalty income is treated as being situate where the copyright is being exploited. So, what does that mean for an algorithm that can, literally, be exploited anywhere and everywhere simultaneously? After a cold towel and a stiff drink, consider an example where I write an algorithm in the UK that will predict the results of the pillow fight league in Canada (yes, it’s a real thing). If I use that algorithm to place bets with counterparties in the US with any winnings paid into a Swiss account, where is my algorithm being exploited? Algorithms are not the only modern concept that show how outdated our current tax regime is, but they highlight several of the challenges tax practitioners face when approached by a modern tech entrepreneur. Perhaps it is not ironic
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•POST-LOCKDOWN VISITS•
Post-Lockdown Visits Photos of the places we've visited since escaping lockdown
PCD’s new office David Bell
A beautiful beach in West Do
rset.
Nick Portet
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•POST-LOCKDOWN VISITS•
Dinner with a view on the Isle of Man Lucy Verdon
First time paddleboarding when visiting my family in Teignmouth first time on public transport since the end of February! Lucy Ashworth
Share yours! Tag @ PCDClub on LinkedIn with the hashtag #PCDPostLockdown •21•
•INVESTMENT CORNER•
Investment Corner
with Kleinwort Hambros Written by Alan Kinnaird | Senior Private Banker | Kleinwort Hambros ALAN KINNAIRD IS A SENIOR PRIVATE BANKER AT KLEINWORT HAMBROS LEEDS OFFICE AND IS A KEEN SUPPORTER OF THE PCD CLUB LOCALLY AND NATIONALLY. Following various discussions with PCD members, Alan noted some demand for a slightly more detailed assessment of markets given that there are so many factors at play; not least COVID-19, Government stimulus packages and of course a US election later this year. Alan works alongside Nick Manning and reports into Richard Brown, Head of the Yorkshire office. At Kleinwort Hambros, the team offers access to award winning Discretionary Portfolio Management, Lending and Wealth Planning for Private Clients, Trusts, Solicitors, Accountants and IFA’s. The summary covers the major asset classes and Kleinwort Hambros’ current positions. If you wish to reach out to Alan Kinnaird he can be contacted on tel: 07790 384 173, or by email: alan.kinnaird@kleinworthambros.com We hope you enjoy this month’s article.
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•INVESTMENT CORNER•
Inflation a big risk, but not a major worry Inflation always matters. In the conduct of economic policy and in the management of portfolios it is always a factor to be considered. In an era of unabashed money printing on the part of central banks, it matters more than usual – and it is, perhaps, the most important single factor affecting the way in which we manage investments. However, while inflation is potentially a big risk, we are not particularly worried about it at present. The Federal Reserve quintupled its balance sheet during 2009-12 in response to the havoc wreaked by the Global Financial Crisis, and there were fears that an inflationary wave would be triggered. Instead, prices have remained muted over the past
decade despite massive quantitative easing (QE). Essentially, for “liquidity” to result in inflation, money velocity (i.e. companies/consumer spending) must stay high as must the money multiplier (i.e. companies/consumer borrowing); both tend to collapse in a recession. It is true that the scale of the central banks’ bazookas is much bigger this time, but so is the demand destruction being wrought across the global landscape. The chart below shows money velocity for the US: money has been created but the slowdown in circulation has more than offset it, and inflation has been falling. Inflation is likely to remain tepid due to huge slack that occurs in recessionary times such as now. And there is plenty of slack given double-digit unemployment in the US; a similar level is likely in the UK as the tapering furlough schemes fully cease in October.
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•INVESTMENT CORNER•
Our view on inflation is premised on the current fiscal (i.e. double-digit fiscal deficits) and monetary paradigms (i.e. helicopter money) not becoming oftused, but remaining rare and crisislinked. If such expansive policy does become the norm, then inflation would likely result. However, we have faith in the independence and competence of central banks and other policymaking institutions not being profligate, and therefore this imprudent use of these extraordinary tools is unlikely.
environment, being bought both by those who fear inflation as well as those who fear the consequences of the Coronavirus-linked recession. But gold tends to be quite sensitive to the real yield available on safe-haven government bonds. Paradoxically, therefore, rising inflation might well undermine the gold price.
In the event inflation were to rise unexpectedly, we would likely move towards real assets, inflation-linked bonds, and hedge funds that are able Nonetheless, we are not complacent to to exploit such conditions. Having said the threat should we be wrong. Should that, we are not close to such a state, and inflation rise, the risks to markets – neither do we expect to be. across asset classes – are severe. While central banks would surely tolerate above-target inflation for a time, at some Bottom line point base rates would have to rise to At present, we remain underweight riskbring rising prices under control. Rising assets in general. However, the equities rates would directly bring the prices of we do hold are largely tilted towards the bonds down and lead equities to be less US market where returns have generally attractive as future cash flows would exceeded those from other regions. have to be discounted at higher rates. US equities are expensive, there is no Furthermore, the current very low level doubt. However, with rates near zero, of rates means that it is relatively cheap there is a good case for a higher than for banks to support weak borrowers usual tolerance to elevated valuations, through the recession. Higher rates particularly for large-cap technology would make that more difficult and companies that appear to be immune to would be likely to trigger increased loan the business cycle (“secular growth”). losses and a deeper recession. Other assets will likely be impacted too, but not in ways one might expect. Gold has performed well in the current
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•INVESTMENT CORNER•
Access the latest content here To collaborate with us on upcoming PCD webinars, contact members@pcd.club
• Y O U D E C I D E W H AT ’ S R I G H T F O R Y O U •
You Decide What’s Right for You probably not working for your employer either. So maybe its time to get ahead of the problem. Think of all your friends who have had change forced upon them. What is the most common refrain? ‘It was the best thing that ever happened to me’ or ‘I wish it had happened years before!’. Imagine the benefits of making change happen rather than change just happening to you.
DO YOU ENJOY WHAT YOU ARE DOING? ARE YOU MAXIMISING YOUR POTENTIAL?... AND, IF NOT, WHAT ARE YOU DOING ABOUT IT? All of us, at some stage, have found ourselves questioning our careers. But not many people do anything about it. Whether its fear, apathy or – as now – a horrible market, it’s all too easy to just close your eyes and hope for the best. But beware, inactivity is dangerous because – quite aside from your personal fulfilment - if it’s not working for you, it’s
What do successful people do? They know themselves: their values, strengths and weaknesses and target roles that meet their criteria – where, of course, they do well because the job is right for them. Often they achieve this selfknowledge through coaching. Coaching creates an environment that allows you to step back and reflect deeply on what motivates you, and to create a plan for your future success. And by success I don’t mean money, I mean life satisfaction where you feel engaged, happy, fulfilled and in control.
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Contact lucy@pcd.club
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•CHART OF THE MONTH•
The Implications of an Aging Population Author: Neil Fatherly | Contact: neil.fatherly@btinternet.com THE WORLD IS EXPERIENCING A SEISMIC DEMOGRAPHIC SHIFT - AND NO COUNTRY IS IMMUNE TO THE CONSEQUENCES.
major achievements in modern science and healthcare, they will have a significant impact on future generations.
The chart this week relies on OECD data to demonstrate how the old-age to While increasing life expectancy and working-age ratio will change by 2060, declining birth rates are considered highlighting some of the world’s fastest
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aging countries.
having the oldest population, with 1/2 of its citizens already over the age of By 2050, there will be 10 billion people 65. By 2030, the country’s workforce is on earth, compared to 7.7 billion expected to fall by 8 million—leading to today—and many of them will be living a major potential labor shortage. longer. As a result, the number of elderly people per 100 working-age people will In another example, while South Korea nearly triple—from 20 in 1980, to 58 in currently boasts a younger than average 2060. population, it will age rapidly and end up with the highest old-to-young ratio Populations are getting older in all among developed countries. OECD countries, yet there are clear differences in the pace of aging. For instance, Japan holds the title for
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•LETTERS TO THE EDITOR•
Letters to the Editor Where shall we go? I was fascinated to read the Privateer’s view on the future of the workplace. As someone who already worked from home much of the time I felt smugly ahead of the curve when lockdown struck. But months later even I’m missing the change of scene and new faces that my weekly meetings in London clubs offered. I’m wondering where the new places for workers to meet will be. Will great venues like 12 Hay Hill continue to thrive or will they be overwhelmed by sheer numbers of people looking to enjoy their facilities? Or will we demand a new style of social space – more distanced, less focused on catering and more on safety? I can’t wait to find out! G. P. West Sussex
New balance Like all of us I’ve often struggled to find work/life balance in my career. But now that commuting is limited and working from home the norm, I do wonder how we will negotiate the new balance this requires. I was struck by a young friend of mine – a busy management consultant – who told me of the problems he was having switching between ‘deep work’ and looking up and seeing his girlfriend sitting at the same desk as him. Add to this the reality that the desk is actually their kitchen table in Fulham, and no wonder his mind is swimming. How to make these new sudden jumps from one state of being to another without the punctuation of travel between is going to be a hot topic for us all and a big part of how we manage talent in the future. O.B. West Dorset
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•LETTERS TO THE EDITOR•
Taxing read I can’t agree more with Mark Pearce in the last edition of your magazine, when he maintains that sensible tax planning has nothing to do with tax avoidance. I’m sure I’m not alone in feeling that for too long we in wealth planning have been left to fulfill a basic need to make someone the bad guy. Personally, I’ve always maintained that paying tax is a fundamental obligation that we must all take seriously – avoiders should rightly be called to account. But there are no rewards for paying more than we need to. D.T. Berkshire
We’re looking for stories, ideas and opinions with real appeal for our members. To submit a ‘letter’ for publication in our monthly magazine, simply email your content to lucy@pcd.club. Just two points of general guidance: please keep it short (max 200 words) and exclusive.
WIN A BOTTLE OF CHAMPAGNE FOR THE LETTER OF THE MONTH
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•QUIZ•
Quiz Cryptic Cartoon: Contemporary horror franchise
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•MEET OUR MEMBERS•
Meet our Members: Jason Connon What do you love most about your role? It’s such a diverse experience being an insurance broker as no two risks are the same. From personal assets or personal needs, there is always something different when protecting a private client. It’s great to understand a clients assets collection, particularly cars and specialist musical instruments, which is also a personal hobby. We also provide commercial insurance solutions, and with nearly 20 years in insurance, I’ve experienced pretty much every sector of commerce. We support What do you do for Provenance a number of fintech businesses, and it’s Insurance? fascinating to watch them develop and As the CEO of a boutique business, I’ve grow. got a hand in everything that we do. I do have a great team behind me, and How has your business adapted in we all get involved in the running of the light of the current COVID-19 crisis? business, but we all have the same core Internally, we have fortunately had little ethos – clients come first. impact as our infrastructure allowed us to operate remotely in a secure way. I’m mainly found working with clients, However, on facing out to clients and or their other professional advisers, on partners, it was quite a challenge as we the insurance requirements for High are mainly a face to face business, as... Net Worth Individuals, and working closely with our insurance partners to Read interview online secure the bespoke solutions.
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•MEET OUR T MEMBERS•
Meet our Members: Stephen Coulson How has your business adapted in light of the current COVID-19 crisis? We have been fortunate that we have embraced a ‘work from home’ culture for a number of years so it was relatively easy for our employees to make the transition. Despite the pandemic, our business has continued to grow nicely and revenues are up on the same time last year. However, like everyone, we remain extremely cautious about the next 12-24 months ahead. Why did you join PCD? The membership matches our distributor profile and we like the way that David What do you do for Atlas Life? and his team have created such a robust I am one of the founders of the business global network in just a short space of and have day to day responsibility for time. Head Office operations. Have you attended a PCD webinar? What do you love most about your What did you think? role? Yes, there were very informative and the Talking to advisers and their clients speakers all knew their subjects. about the importance of life cover. My top tip for working from home is... Interestingly, their appears to be a Plan your day as if you were going to renaissance gathering pace with more the office, do all the normal things you and more high net worth clients looking would do and don’t shout at the kids!... to include protection products within their personal estate planning. Read interview online
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Home to a 3rd of all UK REITs Responsive. Innovative.
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Thought Leadership Prime or corporate member? Contact lucy@pcd.club to share your news or advertise.
Out of Jersey, into Africa. GlenQ explores taking trust business to the Nigerian market By Ian Quenault and Paul Glennon at GlenQ
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Throw your plastic windows away, think beyond By Marta Bellamoli, Marketing Co-ordinator at Abacus Trust Company Limited
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•THOUGHT LEADERSHIP•
Connect the dots to transform difficulties into opportunities By Marta Bellamoli, Marketing Co-ordinator at Abacus Trust Company Limited
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Shelter from the storm: The dynamic role of the trustee during times of crisis By Joe Woodward, Director - Private Wealth, Oak Group
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(r)Evolution. PSD2, open banking and the future of payment services by Seed
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•THOUGHT LEADERSHIP•
Spike in Demand for Investment Migration Programs in Europe By Amanda Smit, Managing Partner at Henley & Partners
Read article online Fast and Luxurious By ILS World
Read article online PraxisIFM and Oak announce plans to form new expanded financial services group
Read article online Succession Planning: Choosing a jurisdiction By John J. Ryan, Jr. President, CISA Trust
Read article online
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Join the club PCD has responded to the COVID-19 crisis by augmenting our live event programme with digital marketing channels such as webinars, digital publications, private forums for members to share referral opportunities, and a member directory to provide connectivity to professionals even when unable to travel or take face-to-face meetings.
Business development 96% of our current members are actively looking to expand their professional network.
Value 90% of current members surveyed said they have benefitted from their club membership.
Quality connections 100% of members have been in the private client industry for 5+ years. Build long-lasting and mutually beneficial business and professional relationships as part of an exclusive club: contact members@pcd.club. www.pcd.club
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