IFA Magazine - Issue 48

For today’s discerning financial and investment professional

May 2016

What does the Trump phenomenon mean for investors?

The Chancellor’s latest ISA variant isn’t without it’s faults

I S S U E 48

Common standards for paraplanning?

Mike Donovan Tax adviser on EIS investments

CONTENTS May 2016

CONTR I B UTOR S

3 Steady as she goes

4 News

Brian Tora An experienced associate from one of the top investment management firms.

14 Masterful inactivity

Richard Harvey a distinguished independent PR and media consultant.

16 Dispelling the valuation myths

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

20 Are multi-asset funds like self driving all terrain vehicles?

Michelle McGagh brings a wealth of experience on industry developments.

24 Educating Lisa

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Michael Wilson Editor in Chief editor ifamagazine.com

EIS - a tax adviser’s perspective

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Sue Whitbread Commissioning Editor sue.whitbread ifamagazine.com

Should there be common professional standards for paraplanning?

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Alex Sullivan Publishing Director alex.sullivan ifamagazine.com

Age - is it really just a number?

36 By the pricking of my thumbs...

40 Career opportunities

IFA Magazine is published by IFA Magazine Publications Ltd, Loft 3, The Tobacco Factory, Raleigh Road, Bristol BS3 1TF C

2016. 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

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ED’S WELCOM E May 2016

Steady as she goes We’ve had a few tricky starts to the year in world markets since IFA Magazine first launched in 2011, but this has been one of the most challenging in living memory. The Footsie’s 9% drop in the first 13 trading days of 2016 was enough to jangle even the stiffest nerves, and the renewed round of losses in February, down to 11.3% by midmonth, provoked a round of squawking about heads and shoulders among the technical analysts.

It’s a good job, really, that advisers make most of their money by encouraging their clients to buy for the medium term and to hold fast through short-term panicky periods like these.

But twitchy clients aren’t good for anybody. So where is today’s hell-in-a-handcart anxiety coming from?

Worry about politics, not the economy Not from the state of the world economy, we’d guess.

Global economic growth for 2016 might have been downgraded by the big agencies – the OECD by 0.3% and the IMF by 0.2%, much to George Osborne’s discomfiture – but those revisions still left figures of

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3.4% and 3.0% respectively, which are really not so terrible. And China’s depleted growth this year is looking more like 6.7% in official terms and well above 4% by all but the very bleakest forecasts.

So where are those damned political worries coming from? From Europe, of course, where the explosion of the migrant problem has caught the EU leadership in general tension and disarray just at the moment when a bit of solid collaboration might have come in handy.

From America, where Donald Trump’s increasingly disturbing campaigning style has got some observers wondering about the very health of the democratic process itself. From Japan, where Shinzo Abe’s ‘Three Arrows’ government is having to dig its way back out of the mire after a final-quarter GDP shrinkage that seemed to question its political determination for a while.

The Brexit issue And yes, from Britain, too.

George Osborne’s second bungled Budget delivery in March came just weeks before the country was due to make one of the most critical decisions of the

last half-century, and it didn’t do anything to make David Cameron’s leadership look any stronger.

Even the prospect of Brexit has already damaged the pound and raised fears about the viability of European trade deals – even though a post-Brexit Britain would still look a lot like Switzerland or Norway in the way that it, perforce, fitted in with its European neighbours. There’d really be no alternative, whatever Nigel Farage says.

Sell in May? Forecasting has always been a fraught business, and this year is a tougher call than usual. But really, do you see the global economic order collapsing about our ears? Could a newlyelected President Trump ever subjugate a Republican Congress majority that largely detests him? Would Europe’s leaders really fail to regain their composure and their sense of shared purpose?

Will we find ourselves queuing for visas to get onto the Paris trains?

Somehow I don’t think so.

Hold your nerve, clients.

Michael Wilson, Editor-in-chief

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N EWS May 2016

FCA says reforms will make financial advice better for consumers The FCA predicts that thanks to recommendations from the Financial Advice Market Review (FAMR), published last month, millions of people could have improved access to financial advice.

One of the main FAMR recommendations is that the regulator and Government need to intervene to ensure that both consumers and the industry benefit from new and cost-effective ways of delivering high quality advice and guidance.

The main areas of concern which need to be addressed, outlines the review, is the affordability and accessibility of financial advice and guidance; what’s known as the ‘advice gap.’

The FAMR recommendations include suggestions as to how people should engage with advisers and seek guidance; changes as to the definitions of financial advice; and, the need for a new advice new framework.

The review was co-chaired

by Charles Roxburgh, Director General, Financial Services at HM Treasury and Tracey

McDermott (pictured), acting Chief Executive of the FCA. McDermott said: “This review has taken place against the backdrop of social and demographic changes which have led to an increasing need for individuals to take more responsibility for their own financial future. But we know that people often find it difficult to engage with financial matters and we need to make it easier for them to do so.

“The package of reforms we have laid out today will help increase both the accessibility and affordability of the advice

and guidance to ensure that consumers get the help they really need when they really need it.”

Roxburgh said: “At a time when more and more people are seeking financial advice and guidance, we have set out how we can deliver a vibrant financial advice market that works in the interest of all consumers.

Our recommendations will increase the amount of affordable, high quality financial advice that is widely available so it’s easier for people to access it at every stage of their lives.”

Don’t panic

prices began a steady recovery, with Brent crude rising from a January low of $27.50 per barrel to $38.50 in March. A Goldman Sachs forecast of $20 per barrel may have stiffened the market’s resolve.

Global markets remained subdued in March, with prices suppressed by continuing worries about China, the low levels of international oil prices and the possibility of a Trump presidency in the US November elections. Oil

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N EWS May 2016

Paying for financial advice, from the pension pot Highlighted in last month’s publication of the FAMR recommendations is a call for the Government to make it easier for people to access financial advice by using money from their existing pension pot.

The statement from the FCA said: “To make financial advice more accessible, FAMR has called on the government to allow consumers to access a small part of their pension

No let-up

pot to redeem against the cost of pre-retirement advice. This will ensure that consumers can access financial advice at a key milestone in their lives and feel confident in making financial decisions as they approach retirement.�

Allowing money from the existing pension pot to pay for advice, at the appropriate time, has been generally welcomed by the industry.

House price affordability, expressed as the ratio between average house prices and gross local earnings, is at its worst level in eight years, according to a study by Lloyds Bank. The affordability of a house has now dropped to levels not seen since the last housing boom, with Oxford prices topping the league at almost 11 times local average annual earnings

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FCA reveals findings of thematic review on meeting investors’ expectations

The East also rises China is set to grow by 6.5-7% during the current year, according to government pronouncements made in March. But this time Beijing’s projections did not include a target for international trade: during 2015, 6% growth had been targeted but both imports and exports were reported to have contracted. Meanwhile, the growth rate of fixed interest investment is projected to have fallen sharply from an alarming 15% in 2015.

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FCA’s thematic review published in April found that fund managers were generally taking the right steps to ensure they manage funds as they say they will.

However, they highlighed that the industry considers how it communicates when funds are linked to financial benchmarks; they stressed it is also vital that funds keep investment practices under review so they match their stated aims and strategy, irrespective of whether the fund is still actively marketed, because investors base their decisions on this information.

Distributors, such as financial advisers, must also ensure that they have the correct documents from the fund manager to ensure the appropriate information can be passed on to the client.

FCA highlights rise of robo-advice as RBS chops advisory jobs Just as the use of roboadvice was highlighted the FAMR recommendations, it was followed by news that the Royal Bank of Scotland (RBS) has chopped over 200 advisery jobs.

The FCA statement said: “FAMR also highlights the increasing role that technology can play in creating a more engaging, cost-effective advice market.

It recommends that the FCA extend the work of Project Innovate and establish a unit to help firms develop their automated advice models.”

RBS is cutting 220 staff who act as face-to-face advisers.

They will be replaced by an automated online service. It

appears that only customers with over £250,000 to invest, will be able to speak to a human adviser.

An RBS spokesperson told the media: “Our customers increasingly want to bank with us using digital technology. As a result, we are scaling back our face-to-face advisers and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest.”

It’s likely that other high street banks will follow the example set by RBS and provide robo-advice for customers with lesser amounts to invest.

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N EWS May 2016

SimplyBiz Chairman says an ‘Aladdin’s cave of opportunity’ awaits advisers The Chairman of compliance and support services group SimplyBiz says that the recent Budget and the FAMR Final Report have left him “…more optimistic about the future of advice than at any point in the past 20 to 30 years.”

Ken Davy made the comments during a webconference hosted by SimplyBiz. The online conference also included Dominic Grinstead, Managing Director of MetLife UK, and Alistair McQueen,

Aviva’s Senior Pension Policy Manager.

Davy particularly welcomed the fact that FAMR had created wide-scale opportunities in the corporate market. He said: “The employers’ £500 contribution to pensions advice is an ‘Aladdin’s cave’ of workplace opportunities for advisers.”

McQueen added: “Employers have played their part in auto enrolment, advisers too can now step up.”

However, Davy was disappointed that most of FAMR was concerned with longer term considerations, but hoped that more would be done to improve access to advice for consumers in the short term. But, he was pleased that the high quality of professional financial advice had been recognised in the report.

As for the budget, Davy said it was “a dream budget for savers, strivers and entrepreneurs.” He went on to add that this Budget has “dramatically increased demand for advice” creating a wealth of opportunities for this industry.

No 15 year long stop for advice, says FCA With the Financial Advice Market Review (FAMR), came disappointing news for many IFAs with confirmation that there will be no provision for a 15-year long stop clause.

The FCA said: “After careful consideration of the evidence FAMR has concluded that relatively few complaints relate to advice given by independent

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financial advisers 15 years ago or more. As a result FAMR has ruled out recommending a 15 year long stop as this would inappropriately limit protection for consumers on long-term products.”

IFAs have argued that such a stop-clause is necessary as not only do attitudes change over such a long period of time, but that regulators could

also reach back and deem that actions, or products sold at certain times in the past, were inappropriate and thereby actionable.

Such a clause would have removed some degree of uncertainty for IFAs as regards their professional and personal commitments.

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N EWS May 2016

Budget 2016 Focus •

•

•

Chancellor George Osborne’s spring budget was forced back into its red box after proposals to reduce CGT thereby benefitting the more affluent while cutting credits for some disabled people, was savaged for what was felt to be insensitivity in the run-up to the June EU vote.

Other notable budget announcements were : • The high rate income tax threshold is to rise to £45,000 with the tax-free personal allowance rising to £11,500 from April 2017.

• The higher rate of Capital Gains Tax is to be cut from 28% to 20%, and from

•

18% to 10% for basic-rate taxpayers from April 2016.

Class 2 National Insurance contributions are to be abolished, affecting self-employed workers from 2018.

The annual ISA limit is to rise from £15,240 to £20,000 from April 2017.

The bombshell announcement was that of the new Lifetime ISA for the under-40s, with the government putting in £1 for every £4 saved (see article on pages 24/25).

From April 2017, those who open an account between the ages of 18 and 40 will receive an added 25% bonus from the government on any savings they put in before their 50th birthday.

The Money Advice Service, which has provided free financial guidance to consumers since its launch back in 2010, is to be abolished.

It will be replaced by a smaller money guidance body, according to the Treasury. The Pensions Advisory Service (TPAS) and Pension Wise will also be restructured, with the aim of supporting financial capability amongst consumers.

Pension confusion reigns The vast majority of new pensioners cannot understand the new state pension which came in on 6th April, the parliamentary Work and Pensions Committee revealed. It said that 55% of claimants would get less than £155.65, mainly because of contracting-out or contribution gaps. And that only 13% of people reaching state pension age in the first year of the revised system will get the new flat rate.

Old Mutual to split into four Old Mutual is to split into four separate companies.

The decision came after an internal strategic review and stories in the media about certain parts of the AngloSouth African group being targeted by private equity groups about to launch bids.

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The four companies will be known as Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management. The separation is not expected to complete until 2018.

Group CEO Bruce Hemphill said: “The strategy we have

announced today sets out a bold new course to unlock value currently trapped within the Group structure. He also said that he believes that “our four strong businesses are well placed to continue to perform strongly in their domestic markets.”

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N EWS May 2016

Hargreaves backs Brexit The co-founder of Hargreaves Lansdown has come out in favour of Brexit.

Peter Hargreaves told BBC’s Today programme that the “unknown” factor of the UK’s withdrawal from the EU could stimulate the country, providing it with a fresh start.

He said on the programme: “I’m firmly convinced, that day – hopefully – we decide to leave, that little bit of insecurity, that little bit of unknown will be an absolute

fillip to everyone…It will be a great incentive for us to go out and prove that it’s right.

“When Singapore became independent from Malaysia, that little insecurity that they were no longer part of Malaysia, it was an inspiration…I honestly think that would be good for us too.”

Hargreaves emphasised that he was not speaking on behalf of the Hargreaves Lansdown, but was expressing his own opinion.

Standard Life - owned 1825 buys financial planning firm Baigrie Davies

Standard Life’s rapidlygrowing financial advisory business 1825 has established a foothold in London, with Baigrie Davies being its third acquisition this year and fourth in total.

Baigrie Davies will form its “London regional

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N EWS May 2016

office”. The firm has 30 employees including 11 financial planners and five paraplanners. Managing Director Ian Howe will continue to run the business.

Founder Arthur Davies will also remain, whilst cofounder Tom Baigrie will leave to concentrate on his other business, protection broker, LifeSearch.

1825 recently revealed plans to acquire Munro Partnership and Almary Green. Through this latest acquisition, the business will grow its assets under advice by a further £400million.

Tavistock acquires Abacus

Abacus, which consists of 45 mainly self-employed financial advisers covering the North East, the Midlands and the South West, will become a wholly owned subsidiary of Tavistock. The brand will remain active within Tavistock.

Abacus Founder and Managing Director Malcolm Harper (who will continue to head-up the business) said: “I’ve been searching for the right partner to help me take Abacus to the next level, and Tavistock

Tavistock Investments acquired Abacus Associates for £5.165m. Tavistock, which is an integrated financial services company, completed the acquisition of Abacus, an independent financial advisory business headquartered in Hereford, on 1 April.

impressed me as the best option. They provide a range of discretionary investment solutions that will suit many of our clients and share our ethos for transparency and quality of customer care. The transaction has also ensured the potential for a retirement exit for each of our advisers at a time that suits them. I will remain as a significant stakeholder in the enlarged Group and am looking forward to working with the Tavistock team.”

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N EWS May 2016

P2P Peer to Peer lending began within an ISA framework for the first time, following changes in last year’s Budget.

The Innovative Finance ISA (IF ISA) enables lenders to earn their interest free of income tax. But Lord (formerly Adair) Turner, an ex-head of the FSA, warned that the sector’s risk was growing and that failures were to be expected. Later this year, IF ISAs are to be extended so as to include debt-based crowdfunding.

Sterling’s uncertainty Uncertainty about the UK’s June referendum on Britain’s membership of the European Union is suppressing sentiment among UK businesses, said the Bank of England’s policy committee.

And that uncertainty in the markets over the outcome is a “significant driver” behind the steep weakening of the pound.

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Changing the narrative ­– EIS, VCTs and BPR campaign seeks adviser input There has been further progress this month on the ground breaking initiative led

by Paul Wilson (pictured), Chairman of IFA Magazine publications, as it now reaches out to advisers for input.

The campaign is working to change the unwarranted negative narrative around EIS, VCT and BPR schemes where they are being erroneously associated with socially unacceptable aggressive tax schemes.

With the release of the Panama Papers, the unprecedented leak of files from the database of the world’s fourth largest offshore law firm Mossack Fonseca, the public confidence in legally permissible tax focused investments has become further eroded. Whilst this is completely unrelated to EIS, VCT and BPR schemes, it further highlights the need to ensure that these investments are seen by the public to be entirely mainstream, and just as acceptable as making an ISA or pension investment.

Achieving this will depend on successfully demonstrating the excellent work done by the sector on delivering the fundamental goals of the government, and by extension society, in funding and enabling the next generation of UK businesses.

IFA Magazine’s sister publication EIS Magazine is driving forward this initiative arguing that it is time for these schemes to be considered in their own right as valuable investments,

and for the broader impact they have on growth in the economy rather than simply for their tax efficiency.

Wilson comments “The project is moving forward and we are now in research gathering mode. This is where we need the help of advisers. We are keen to hear from as many advisers as possible about what specific information they would like on EIS/VCT/BPRA to help them in discussions with clients and also when conducting due diligence so they can identify which funds to recommend with confidence. We also want to hear how advisers would best like to receive that information. Once we have this information we will then look to set up a working group of IFAs to establish their requirements going forward.”

To find out more and to register your interest, advisers can visit: www.EISmagazine.com /ifa-campaign

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B R IAN TORA May 2016

Masterful inactivity Brian Tora takes a look at what the Budget and the forthcoming EU referendum might mean for stockmarkets

As Budgets go, George Osborne’s latest offering was not the most exciting happening of the year.

One commentator even described it as “quiet”. With the referendum on Europe just three months away from his delivery at the dispatch box, perhaps his caution was understandable. The subsequent repercussions, though, were altogether much more interesting than the events on the day.

Iain Duncan Smith’s resignation has been described as the most significant political resignation since Sir Geoffrey Howe effectively torpedoed Prime Minister Margaret Thatcher below the waterline. Many considered his actions to owe more to his support for the “Leave” lobby in the upcoming referendum, though he went out of his way to emphasise just how dangerous he considered the planned disability welfare

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equities were little changed initially – an indication of how our FTSE 100 Share Index is more reflective of the global economic situation than of the goings on in Westminster.

of positive measures. True, the cut in the Capital Gains Tax rate is a boost for some investors, though in truth only the seriously well off are likely to benefit as current allowances already mean that few suffer this tax. As for the Lifetime ISA, while it might help some wishing to save for a home of their own, it is hardly likely to change the nature of savings in this country.

The fact that fuel duty was left unchanged and no further radical reform of the pensions market was included will be welcome to many, though this latter omission was well signaled in advance. There must be an element of politics in such a decision as the grey vote will become increasingly important in subsequent elections and could be crucial in June’s referendum. It is disappointing not to see more action on the deteriorating demographic picture, but then the costs could be staggering and paying for such measures as improved long term care will have to come from somewhere – and we tax payers look the most likely source.

Looking for the positives Elsewhere, most of the good cheer that came out of the Chancellor’s red box had more to do with what he didn’t do than the introduction

Tricky times ahead?

So we are left with the referendum as the most likely shorter term influence on markets, which suggests the next few months could

cuts to be. Unsurprisingly, the first action his successor, Stephen Crabb, undertook was to put the implementation of the cuts on hold.

You might think that this particular ministerial storm has little to do with markets, but the fact that it highlighted both the split in the Conservative party and the fact that the outcome of June’s referendum is far from certain. Sterling took a hit when markets reopened after a weekend of generally bad tempered banter between opposing sides, though

For me, a policy of masterful inactivity looks just about right as we head for June. I don’t see the Budget having much of an effect

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B R IAN TORA May 2016

prove tricky. The pound is certainly not enjoying the uncertainty, even if equities remain at the whim of world economic trends. Remarkably, China seems to have departed from the headlines on the financial pages, though any further wobbles there could reintroduce the world’s largest economy as a major source of worry.

The bears are out Interestingly, a major investment bank conducted a survey of its principal institutional clients recently and it will hardly come as a shock to learn that sentiment has turned down since they last took the temperature of investors last autumn. Around 60% of those polled operated mainly in equity markets, though there were plenty of replies from multi asset managers.

Dollar bulls continued to shrink in numbers, while the outlook for our domestic market – and many other developed ones for that matter – was viewed less favourably than before.

Not that sovereign debt had gained in popularity, suggesting that most professional managers still expect interest rates to rise before long. Nor was there a dash for cash, with many institutions suggesting their cash levels were lower than last autumn. And there was an appetite for risk, with emerging markets attracting a greater following. In other words, managers will always find something to back, regardless of the overall outlook, financial and other crises excepted, of course.

For me, a policy of masterful inactivity looks just about right as we head for June.

I don’t see the Budget having much of an effect. There have been times when the contents of the Treasury briefing notes will have been pored over by analysts endeavouring to determine who the winners and losers might be after some radical taxation changes.

On this occasion I think we can confine ourselves to following the opinion polls and, perhaps more importantly, the bookmakers odds on Brexit.

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VALUATION MYTH S May 2016

Dispelling the valuation myths

I

f you’ve been following the recent series of my articles on “Strategising your exit” in IFA magazine, which outlined how to prepare your business for sale, you might be interested to read a recent valuation report which was shared exclusively by The Beaufort group at a Gunner and Co. seminar in London in March.

How can you value an advisory business? This is a question which I’m very frequently asked, to

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which I believe the answer is that like everything else, something is only worth what someone is prepared to pay for it. So many factors are involved, such as aligned cultures, systems and processes, the strength of a brand, and very often, timing.

Having our ear to the ground, Gunner & Co. are great partners to find the very best partner/ buyer for you, who will see value in the specifics of your business.

It’s always great to have some top level trends though, and The Beaufort Group has teamed up with a corporate finance and an accountancy business to analyse recent deals to look for trends in valuation, you can download the full report at www.ifamagazine. com or contact me for a copy.

Louise Jeffreys MD, Gunner & Co. 0117 9926 335 Louise.jeffreys@gunnerandco.com

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VALUATION MYTH S May 2016

When it comes to valuing an IFA business for sale, there are many important factors which come into play. National financial advisory and discretionary fund management firm The Beaufort Group has teamed up with corporate finance firm Asgard Partners and accountancy firm Taylorcocks to compile an independent report on current valuation methodologies for UK IFA businesses.

The research analysed an extensive set of M&A data points to arrive at trends in valuation, overlaid with the views of leading practitioners Looking at four principal metrics used for valuation methodologies - recurring income, EBITDA, total turnover and AUM - the report delves into the ranges within valuations, as well as some of the underlying qualitative conclusions which underpin the highs and lows of these ranges.

At a high level, the report calls out the following key verdicts: • Profit is considered a more important basis of valuation than recurring income • Tempting, but highly conditional offers may

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well leave vendors disappointed in the end • Limiting risk remains a key concern for acquirers • A strong brand catapults valuation, over and above a collection of individual advisers Furthermore, in setting appropriate multiples, some acquirers will factor in revenue and cost synergies over and above the intrinsic value of the business. The report considers that high recurring revenue multiples remain possible, but only when: • There is a likelihood that client fees can be increased or funds moved to an inhouse proposition

The research finds that profit-related valuations are usual for most large M&A transactions • An acquirer can realise substantial cost synergies, for example where premises can be closed, or the number of staff reduced.

Diving deeper into the key metrics, the research has identified ranges of valuation

within a given metric, and sets out how a business will attract a premium multiple.

Recurring income The report describes an expectation there has been, of a 2-4x recurring range.

The report describes a belief that most recurring revenue valuations are reducing, with a move to an earnings basis for valuation. The belief is that recurring valuations actually achieved are now moving within a lower range.

If a higher range is sought, this is typically predicated on moving a pre-RDR 0.5% trail to newer charging models at up to 1% p.a.

They state that this recurring revenue methodology best suits businesses of retiring individual IFAs, where the difference between turnover and profit is less, and the adviser will not be staying on, removing the conflict of changing the business operations.

Typically this recurring income valuation is calculated as an average of income over the deferred payment period, which can lead to problems: • If there is leakage on transfer, e.g. clients prefer to take their business

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VALUATION MYTH S May 2016

elsewhere if they dislike the acquirer’s methodology • Recurring income offers may be predicated on the successful transfer of clients to an acquirer’s investment process • Acquirers may not pay cash – some offers may even be 100% in shares with uncertain value EBITDA/Profit The research finds that profit-related valuations are usual for most large M&A transactions. Value can be attributed to existing profits, rather than expected future profits from a change in business model. And then the report seeks to compare these larger transactions, with what are often smaller, less publicly available transactions.

The report references a published quarterly report

by BDO, where the average exit value based on private company transactions was 10.9x EBITDA in Q4 2015. So, they summarise, an assumed average for IFA businesses could be 10x, with a range expected based on the quality of the underlying business.

The drawbacks of this method of valuation, they state, are: • Where profits are considered low, offers may require an uplift in profits over an earn-out period for the full value to emerge

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• Acquirers may not pay wholly in cash. Sharebased considerations needs clarity around when and how shares of the acquirer can be encashed AUM IFAs tend to be primarily advice businesses, rather than asset managers. However, many have introduced centralised investment processes, and may even have gained discretionary permissions. This, concludes the research, means that the asset management element can be valued like a separate business.

A key conclusion of the findings is that these valuation methods are rarely used in isolation The valuations analysed in the report found the trend of 2.1-2.4% of AUM as representative. Higher quality businesses were seen to attract premium valuations of over 3%, often where discretionary permissions were in place.

One of the findings from the report, was that if businesses don’t have their clients’ money under discretionary management (where there are discretionary permissions), the valuation could be

lower due to more onerous/ risky processes, required for rebalancing and switches.

Conclusion A key conclusion of the findings is that these valuation methods are rarely used in isolation and, more often than not, metrics are blended to arrive at a robust, lowrisk valuation.

Another key call out is the importance of thinking beyond the headline price.

The terms and conditions of any offer are equally important and should be examined carefully as part of any assessment of an offer.

The full report, available at IFAmagazine.com, includes the detailed ranges of valuation by each of the metrics, and the underlying deal data used to identify these trends.

Commenting on the report, the Beaufort Group’s executive chairman, Simon Goldthorpe said: “As Harold Macmillan observed ‘events, dear boy, events’ are what IFAs coming up to retirement or planning to sell their businesses ought to fear most.

Legislation, regulation, the state of the economy, the appetite for acquisition and consolidation all play a role in what businesses are bought and sold for.”

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Discover more and visit: www.leggmason.co.uk/retirement/ or call +44 207 070 7444 * The Fund changed its name on 24/11/2015. The fund was previously called the Legg Mason IF Western Asset Global Blue Chip Bond Fund (prior to 29th June 2015, the Legg Mason Global Blue Chip Bond Fund). The objective and investment policy of the Fund has also changed; therefore performance prior to 24/11/2015 was achieved under circumstances that no longer apply. This is a sub-fund of Legg Mason Global Funds plc (“LMGF plc”), an umbrella fund with segregated liability between sub-funds, established as an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities (“UCITS”) under the laws of Ireland as a public limited company pursuant to the Irish Companies Acts and UCITS regulations. LMGF plc is authorised in Ireland by the Central Bank of Ireland. It should be noted that the value of investments and the income from them may go down as well as up. Investing in a sub-fund involves investment risks, including the possible loss of the amount invested. Past performance is not a reliable indicator of future results. The information and data in this material has been prepared from sources believed reliable but is not guaranteed in any way by any Legg Mason, Inc. company or affiliate (together “Legg Mason”). No representation is made that the information is correct as of any time subsequent to its date. Before investing investors should read in their entirety LMGF plc’s application form and a sub-fund’s share class KIID and the Prospectus (which describe the investment objective and risk factors in full). These and other relevant documents may be obtained free of charge in English, French, German, Greek, Italian, Norwegian and Spanish from LMGF plc’s registered office at Riverside Two, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2, Ireland, from LMGF plc’s administrator, BNY Mellon Investment Servicing (International) Limited, at the same address or from www.leggmasonglobal.com. This material is not intended for any person or use that would be contrary to local law or regulation. Legg Mason is not responsible and takes no liability for the onward transmission of this material. This material does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. Issued and approved by Legg Mason Investments (Europe) Limited, registered office 201 Bishopsgate, London, EC2M 3AB. Registered in England and Wales, Company No. 1732037. Authorised and regulated by the UK Financial Conduct Authority. This information is only for use by professional clients, eligible counterparties or qualified investors. It is not aimed at, or for use by, retail clients.

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M U LTI-AS S ET FU N DS May 2016

Are multi-asset funds like self driving all terrain vehicles?

Ben Kumar, Investment Manager at Seven Investment Management takes a look behind the scenes at the decision making process behind multi-asset funds and concludes that diversification through investing in different asset classes is key.

The conventional impression of a fund manager is of a desk piled high with research papers and annual reports; of screens filled with charts and tables; of trips to factories in far flung locations; and of hours of internal debate about the fundamentals of one choice over another. The point of all of the above is quite simply to ensure that the manager makes the right decisions - it could be in pharmaceutical equities or Emerging Market bonds. The ultimate aim is that within their area of expertise, that they pick the best of the options available, buying the winners and avoiding (or

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even selling short) the losers.

That is how judgement is passed - a good manager outperforms a passive index in his chosen sector, and a bad one underperforms it.

A multi-asset fund manager has a different task. It is not about picking the winners.

It is not about avoiding the losers. It is about portfolio construction. Across a diversified portfolio, the aim is not to have every single position be a winner at the same time – in fact, that’s the worst outcome.

It is about ensuring that the fund is reasonably

well positioned for most investment environments.

“Running a diversified portfolio means always and never having to say you’re sorry.” This line in a piece by an advisory firm in the US sums up for me the challenge that a multi-asset manager faces in their dayto-day job; namely that some part of the portfolio doing well will usually imply that another part of the portfolio is performing less impressively.

This characteristic is what should smooth the return profile of a multi-asset fund

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M U LTI-AS S ET FU N DS May 2016

over the long term, allowing the end investor to sleep more easily at night.

Theory vs Practice A good process should limit the impact of subjective judgements on portfolio allocations, in order to preserve diversification – one that can ensure that the fund remains diversified across asset classes, sectors and geographic regions.

The simplest way to do this is to agree on the minimum allocation to every asset class that is needed to provide long term diversification benefits – which is usually done through mathematical analysis of past returns – and then to ensure that the fund doesn’t fall meaningfully below these targets. In plain English, a multi-asset manager should always be buying assets that they think will lose money in their main scenarios.

This is not as easy as it sounds! Professional

investment managers (along with most other humans) tend to have strong opinions on the state of the world, which can often conflict with maintaining the minimum positions dictated by the

Running a diversified portfolio means always and never having to say you’re sorry process described above.

Given that the fund manager is likely to be well versed in the theoretical benefits of diversification, their argument about why, in a specific case, abandoning it will probably be compelling. It may even be right in the short term!

But abandoning long-term return drivers for short-term performance leads, eventually, to trying to time the market and only pick the best assets.

This tendency means that the simple process above often needs a little bit of help in times of stress (or requires iron will on the part of the manager). This can come from risk analysis, or an independent consultant, or from inside the investment team. The point is always to limit and challenge exaggerated movements in positions, no matter how strong the case seems.

Some of the current problems What to do about fixed income in a rising rate environment? For nearly half a century, quality sovereign bonds have been a nice counterweight to equity, rising in price when stock markets wobble. Now though, we seem to be at the limits of how low interest rates can go (although we thought that a couple of years ago, before negative interest rates were introduced).

US 7-10 YEAR BOND TOTAL RETURN FROM 1995 TO MARCH 2016

452.09 462.35 284.20 96.88

Last Price High on 02/11/16 Average Low on 03/31/92

1995-1999

2000-2004

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452.09 — 350 — 250 — 150 2005-2009

2010-2014

2015-2019

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M U LTI-AS S ET FU N DS May 2016

The chart overleaf looks almost too good to be true.

From 1995 to March 2016, buying US treasury bonds would have gained you a return of 300% - nearly 7% a year annualised. Who would buy an asset at the end of a 30 year bull market that has driven yields down so far, and prices up so high? Surely the end of the run must be nigh? A zero allocation to assets negatively influenced by interest rate rises is a no-brainer?

Or, look at commodities.

As the idea of portfolio construction became more widespread throughout the 1990s, an allocation to commodities became the norm. Yet since 2011, they have lost money every year.

Current market wisdom is that supply is outstripping demand and that commodities will become cheaper and cheaper.

Again, not a likely candidate for portfolio inclusion.

The real challenge for multi-asset The discussion above is misleading, and deliberately so. It tries to get you into the mind-set of a manager whose goal is to pick the best place to allocate capital.

For a multi-asset manager, the answer is

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not straightforward, because the aim is different. The properties of diversification over the long term must be taken into account. The distaste of buying an asset that is almost certain to lose money must be overcome.

Bonds aren’t ideal, but you should buy them anyway.

Commodities are hurting, but you buy them anyway.

A multi-asset manager must spend most of their time convincing themselves that their process is not broken Looking at bonds - over the past few years, despite the dislike of “safe haven” bonds at these levels, they have still acted as protection in episodes of market turmoil.

That characteristic, of behaving differently to most of the rest of the portfolio, has not vanished.

Equally, commodities have been a diversifier too.

They’ve gone down over the past few years whilst equity markets have risen.

That IS diversification,

although it leaves a bad taste in the mouth.

That is the biggest challenge for a multi-asset fund. A multi-asset manager must spend most of their time convincing themselves that their process is not broken, that the world hasn’t changed and that diversification will still be rewarded.

There is some benefit though. A good process should always have a manager taking profits on their top performers, avoiding the chance of ploughing headlong into a bursting bubble. That also feels uncomfortable!

Multi-asset investing is sometimes described as an all-terrain vehicle. That’s a good analogy to extend.

Imagine a self-driving allterrain vehicle, using the best technology there is. The fund manager sets the ultimate destination, and a suggested course. The second-to-second driving is taken care of by the computer (the process). The fund manager’s job is to focus on the destination, rather than to grab the wheel at every hairy moment.

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Offering strategic insight from those with the highest level of expertise, the morning will provide a platform for the very latest strategies and products for wealth and investment professionals who are either using ETFs or considering adding these to their clients’ portfolios.

Hosted by prominent city influencer Brian Tora, leading industry experts will offer specialist insights on essential topics: -

Deborah Fuhr, ETFGI on key trends and flows across the ETF sector Funds Library on market share analysis and ETF investment trading Exploring the potential of ETMFs Assessing the growth of Smart Beta The increasing use of Robo Advice Sophisticated portfolio construction and new products

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Discretionary fund managers Wealth managers Sophisticated financial advisers Financial professionals using ETFs in client portfolios Family offices Private bankers

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EDUCATI NG LI SA May 2016

Educating Lisa The Chancellor’s latest I SA variant isn’t without its faults, says Michael Wilson. But its heart is in the right place.

Sometimes you almost have to feel sorry for George Osborne. Having had his hopes for an ISA-type pension plan squashed by the Prime Minister ahead of this year’s sensitive EU vote on 23rd June – and then his entire Spring Budget plans for welfare cuts abruptly cancelled on pretty much the same grounds – you’d have thought that the sceptics would leave him alone for a few minutes. But no, the flak continues.

The Lifetime ISA, which comes into effect next April, looks like a slightly awkward cross between the Pension ISA that George was forced to retract, and the lifeline for the mortgage industry that has been needed for some years now. By allowing the under40s to save toward either a first home purchase or an ISAstyle pension when they reach 60 – with the added bonus of a 25% government contribution that will turn every £8,000 of a couple’s contributions into £10,000 of spendable money – Mr Osborne could probably have congratulated himself on having killed two birds with a single stone. So why do the doubts persist?

Call me a cynic, but it seems to me that George’s plan has some of the characteristics of a late-cobbled compromise that hasn’t necessarily been thought through. Here’s why.

The mathematics Let’s start with the essentials. From next April,

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anyone under 40 will be able to open a Lifetime ISA fund which will be able to receive up to £4,000 a year of savings.

That’s quite a lot more than the average employee puts into his pension fund, even without the additional pension contribution from his employer which usually goes with it. And, in effect, the Chancellor will be adding in a subsidy worth up to £1,000 a year for a single saver, or £2,000 for a couple. At present levels, the state will be up for making up to £32,000 of lifetime contributions to a saver during his period of eligibility for the Lisa.

In return, of course, the Treasury is freeing itself of a number of up-front tax commitments which will help the Chancellor to achieve his deficit reductions in future

A brilliant idea in principle, but it runs the risk of exacerbating social and economic divisions years. Instead of awarding up-front tax concessions on pension contributions, only to tax the resulting benefits when the account holders actually retire, the ISA approach demands that contributions should be made out of after-tax money, so that the resulting funds can be cashed in tax-free when they turn 60.

That works for the Chancellor because, although

it’ll cost him an estimated £850 million a year in subsidies, it’ll also save him some money when it comes to higher-rate taxpayers.

Why? Because, although the 25% subsidy for a Lisa might look all right to a basic-rate taxpayer, it will come as a disappointment to anyone who was accustomed to getting a 40% or 45% government contribution to an existing pension arrangement. If as seems quite likely, Lisa should morph into a version of the recentlyshelved Pension ISA, this will quickly add up to quite a big cash gain for the Treasury.

Muddied pension boundaries Still, so far so good. What’s the problem with Lisa?

Mostly, say Mr Osborne’s detractors, it’s that it muddies the existing boundaries between pension contributions and other forms of investment, while also widening the social gap between rich and poor in a way which we’re fairly sure that David Cameron never intended.

Let’s start with the pension idea. On the face of it, Lisa ought not to be diverting pension savings away from conventional schemes, because – not least under autoenrolment rules – employees have got to be making those provisions anyway. But here’s the rub. If you offer an employee the choice between a 25% subsidy for a pension that

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EDUCATI NG LI SA May 2016

can also be spent on an early house purchase instead – then he’s going to go for that every time. Why not? Who knows what tomorrow will bring? It’s all about flexibility, isn’t it?

So where does that leave the pension providers?

Under-supported, I’d guess.

If a quarter of the investment turnover that they were expecting to gross goes into Lisas instead – and let me stress, that’s just a guess – then it’s going to create problems for the industry at every level.

Not only that, but it’ll also leave many of the Lisa account holders themselves short of pension savings when they hit retirement age. The worry is that many of them will start out saving for what they fondly imagine will be their pensions - only to blow the lot instead on a house purchase. Remember, you’ve got to be over 55 to grab your cash under the 2015 pensions freedoms, but as a Lisa holder you can have it any time.

Baroness Altmann, the pensions minister, has already slammed the Lisa project for encouraging tomorrow’s pensioners to clean out their savings. “It is vital that we retain incentives for people to keep money for much later in life and not spend it at the age of 60,” she says.

“Lifetime savings need to be for a lifetime, with pensions that last into your 80s or 90s. Otherwise, we will have millions of poor pensioners in future.”

home purchase. So what’s a first home? Is it the first home that you’ve ever had?

Or the first home since you divorced your first wife and split the house proceeds and went back into rental? And if that particular loophole is blocked (as it presumably will be), what happens if you meet a wonderful girl and she’s eligible for the first-time buyer withdrawal but you’re not? Will the fire of love withstand the disappointment, or will she go off and find somebody else who can lay his hands on all the cash?

There’s more. £4,000 a year is more than most under40s will be able to set aside after they’ve paid their rent, their mandatory pension contributions and everything else. But it’ll be just perfect for those with wealthier parents who will undoubtedly notice that giving their kids £6,000 a year (for a

couple) will be an excellent way not just of making their annual inheritance-taxexempt donation (£3,000 per person) but also of picking up an extra £1,500 of Lisa subsidy for them along the way.

And that, say the sceptics, is the rub. The Lifetime ISA is a brilliant idea in principle, but it runs the risk of exacerbating social and economic divisions in ways that we’re quite sure the Chancellor never intended. But then, since he was given such short notice before the Budget that the Pension ISA would be a non-starter, perhaps it was a wonder than it ever saw the light of day at all.

The next few months will see the bugs knocked out of the Lisa programme.

It’s going to be an interesting summer.

Socially divisive?

And another thing. The Lisa can only be cashed in as part of a deposit on a first

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TAX ADVI S ER ON EI S May 2016

E IS - a tax adviser’s perspective

By Mike Donovan, Senior Manager at Deloitte LLP

A powerful campaign is underway at IFA Magazine’s sister publication EIS magazine, on changing the narrative around EIS, to broaden awareness of the range of benefits to be gained from investing in this dynamic asset class.

The campaign aims to highlight the role of the fund manager in identifying the strongest businesses in which to invest, the role of the IFA in identifying the strongest funds and establishing appropriate asset allocation strategies for clients including EIS, and also the specialist role of the tax adviser in understanding the client’s specific tax needs to support the IFA in making appropriate recommendations.

In the first of his two articles for IFA Magazine, Mike Donovan, Chartered Tax Adviser and Senior Manager at Deloitte LLP

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takes a look at how EIS investment can interact with a clients’ personal tax position. His second article will be published in the June edition of IFA Magazine.

I should perhaps start by informing you all that I am not an IFA. In fact, I am not even an ‘accountant’ in the truest sense of the word, but rather a ‘Chartered Tax Adviser’ (CTA) who specialises in advising high net worth individuals (business owners, senior executives, entrepreneurs, inherited wealth, etc) to ensure that their personal tax affairs are looked after from a risk, tax efficiency, and commercial perspective.

In a time when technical information/advice is readily available online how do we,

After being held for 2 years, the EIS shares themselves will typically be exempt from Inheritance Tax as professional advisers, distinguish ourselves from the competition? I believe that the only option is to continue to put the client at the core of our proposition; always take a holistic and commercial view when considering their position; and always strive to ‘add value’ wherever possible.

I do not give financial advice, but I do regularly work alongside a number of other advisers (such as IFAs) to ensure that my clients’ wider aims, objectives, and ambitions are achieved in a manner which is both suitable and appropriate to their personal circumstances and tax situation.

In this article, and in the follow up article which will appear in the June edition of IFA Magazine, I will touch upon on the alternative uses of structured Enterprise Investment Scheme (EIS) products. This is not intended to be a ‘technical’ run through of the (extremely complex) rules which are relevant to EIS, but will instead highlight some examples of how, as tax advisers, we see EIS investments our clients have made interacting with their personal tax position.

The aim of both articles is to provide you with an awareness of some wider issues/ opportunities which could be both relevant and of use to your clients, so that you can raise these with your clients and ensure that they are aware of the need to obtain detailed tax advice in this most complex of areas.

Recap of the ‘tax reliefs’ available with EIS These should not be new to the reader but in the interest of setting the scene, the

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TAX ADVI S ER ON EI S May 2016

‘tax reliefs’ available to an individual investor (assuming all necessary conditions are met and continue to be met) are as follows: • An income tax reducer at up to 30% of the level of investment made (tax relief is limited to a maximum investment of £1m p.a.).

Various conditions apply, in particular the individual and their associates may not own more than 30% of the company; • Ability to treat investment (and thus claim income tax relief ) as if made in prior tax year; • Assuming income tax relief is claimed on the investments, then any profit made on the sale of the EIS shares is exempt from CGT and any loss made (after taking into account any income tax relief already given) can be offset against income rather than just taking as a capital loss; • For every £1 invested, up to £1 of capital gains within the past 36m and/or which occur in the next 12m, from the sale of any asset,

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can be deferred. Unlike with the 30% income tax reducer, there is no annual limit on the amount which can be deferred; • Deferred gains become taxable when the EIS investment is sold (or certain other events occur).

Deferred gains fall out of charge completely on death of the investor (if EIS shares still held); • Capital gains arising after 14 December 2014 which qualify for Entrepreneurs Relief (ER) can now be deferred into EIS without losing their future entitlement to ER (NB: care will however be needed in terms of timing when making an election for ER); and finally • After being held for 2 years, the EIS

shares themselves will typically be exempt from Inheritance Tax (IHT), with any subsequent reinvestments within 3 years of encashment potentially then being immediately exempt. This exemption should never be assumed however and a review of the position would always be recommended.

In order to qualify for EIS relief, the EIS company must satisfy a number of conditions, both at the point of investment and during the following three years and tax advice in relation to these requirements is essential.

Independent financial advice is also essential; EIS is targeted to assist smaller companies to raise finance and typically is used in startup situations. Therefore EIS investments can carry significant commercial risk and the shares may be difficult to dispose of.

There are also conditions to be met by the investor which are touched upon later in next month’s article.

Let us start by now looking at some of the opportunities that

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TAX ADVI S ER ON EI S May 2016

can arise when your client invests in an EIS. Please note that all points raised below require suitable advice from a qualified tax adviser before implementation, and also require independent financial advice as to the investment merits of the actions/ options suggested.

1. Ill-timed disposals How many times have you spoken with your client only to find that they/their brokers have realised a significant capital gain in the tax year just passed, whilst holding on to other assets sitting on a capital loss?

Even if there was/is an intention to dispose of these assets they have now lost the ability to offset any capital loss against the gain realised, due to there being no ability to ‘carry back’ capital losses.

One solution however could be to, within 3 years of the original gain being realised (but preferably before the CGT becomes actually payable), invest in an EIS, defer the capital gain, and then consider crystallising your client’s capital loss(es) in the interim so that the deferred gain is reduced/ extinguished when it falls back into charge.

A minor, but important, cautionary note – if clients are deferring capital gains, they need to be aware that when the gain comes back into charge there is always the risk that tax rules may have changed, or CGT rates may have increased. In addition, the value of the EIS shares themselves could of course

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decrease.

2. Keep an eye on your client’s spouse By this, I do not mean literally but rather, as above, how many of you have ever had a client realise a significant capital gain despite the fact that their spouse has significant brought forward capital losses? Why didn’t they transfer the asset in question to their spouse prior to disposal? The reason could be ignorance, restrictions on transfer, possible SDLT

It is possible to defer gains at 18%/28% by making an EIS investment exposure (if there were debt on real property, for example) – regardless, all that really matters is ‘what, if anything, can we can do about it’?

One solution could be for the ‘gain’ spouse to invest in an EIS; elect to defer the capital gain into the EIS shares; transfer the EIS shares to spouse (after having checked this is permitted in advance with the EIS provider); and then when the deferred gain falls back into charge it will be covered by the recipient spouse’s brought forward capital losses.

In order for this to be effective, any gift must be absolute and unconditional and any practical considerations should be taken into account. Other tax implications may also need

to be considered, including certain anti-avoidance provisions. And one final note of caution, if the spouse is non-UK domiciled then the IHT implications of any gift should be considered.

The end result however is the possibility of an outright CGT saving, though there are of course the usual caveats in that the EIS shares could decrease in value, the CGT rules may change, and/or the brought forward losses of the spouse may be utilised in the interim 3 year period.

3. Recent Budget changes concerning the rate of CGT Following the Chancellor’s announcement that the rate of CGT for most assets (excluding residential property and carried interest) will reduce from 18% (basic rate taxpayers) and 28% (higher & additional rate taxpayers), to 10% and 20% (respectively) with effect from 6 April 2016, careful consideration needs to be given to claims for EIS deferral relief.

It is possible to defer gains at 18%/28% by making an EIS investment, and, at the point that the deferred gain comes back in to charge this will be at the prevailing rate of CGT. On the assumption that the rates remain at 10%/20% the gains may therefore come back into charge at a

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rate lower than the deferred rate, albeit the value of the EIS investment itself may have dropped.

When considering deferring gains, it could therefore be preferable not to defer residential property gains if gains have also been realised on disposal of other assets, since the former will effectively still be subject to the 18%/28% CGT rates under the new rules.

Review should be given to any historic claims that have already been made Careful consideration now needs to be made to any claims that are about to be made, and also review should be given to any historic claims that have already been made to see whether these claims could be amended, if possible.

This may for example be the case where gains arising on residential property have been deferred if gains on other assets were realised which could be deferred instead.

4. Time is your friend Finally (for this month’s article at least), if your client does wish to invest in EIS, and you believe it suitable to their investment/risk profile, then do they subscribe now, or do they wait until the tax year has ended?

This may seem like a stupid/ irrelevant question however

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if you wait until the tax year has ended then you will have certainty over your client’s tax liability for the year and can advise on the optimum amount in which to invest – many a time have I seen bestfaith estimates used only for these to be wildly inefficient once it is later discovered that additional tax reliefs are available or income was not quite, on final analysis, at the level originally assumed.

Whilst the risk of ‘oversubscribing’ can therefore be mitigated via waiting until the tax year has ended, this route would expose your client to the risk of the tax rules changing in the interim, the risk of as attractive investments no longer being available (note the cessation of energy generation activities from 6 April 2016), and the danger of missing the 3 year CGT deferral window for certain capital gains which may have arisen some time ago.

Next month I will be looking at some additional opportunities which can arise when considering your client’s holistic Inheritance Tax position, before finishing with a look at some common ‘pitfalls’ which we regularly come across when working with our clients in the area of how investing in EIS interacts with their personal tax position.

Changing the narrative on EIS, VCTs and BPR - EIS Magazine leads ground breaking initiative Over the past five years the editorial team at IFA Magazine and our sister publication EIS Magazine have championed educational insight and investment opportunities within new growth areas for advisers across the financial services sector. Led by chairman of IFA publications Paul Wilson (pictured), the team at EIS magazine are now leading a powerful new campaign to change the negative narrative surrounding EIS, BPR and VCT schemes. It argues that it is time these schemes are should be considered in their own right as valuable investments, as well as for the broader impact they have on growth in the economy rather than simply for their tax efficiency. The campaign is supported by EISA. It is intended that this will help raise awareness with consumers and also support advisers in areas of due diligence. More details on the campaign can be found by visiting: www.EISmagazine.com

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PARAPLAN N ER STAN DAR DS May 2016

Should there be common professional standards for Paraplanning?

With the role of the Paraplanner gaining greater recognition and importance across the Financial Planning profession which it deserves, the current focus on standards is to be applauded, reports Sue Whitbread.

In March, Paraplanners across the UK gathered together at a series of reallife and online ‘Howwows’ to debate and discuss this particular question. With the role of a paraplanner not directly regulated, it’s particularly interesting to see the paraplanner community driving forward the agenda themselves. With key issues such as qualifications, CPD, recognition of standards and many others all under the microscope, the objective of creating greater clarity and consistency around the role is something that will resonate across the advice profession.

Powwows or howwows?

Paraplanner powwows have really taken off over the last few years. Described as “unconferences” they are a series of events organised by Paraplanners for Paraplanners.

Things have moved up a gear this year, with the community now looking to drive forward standards with a series of “howwows”.

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These are discussions where Paraplanners can review the pros and cons of a paraplanner standard, and aim to reach to a conclusion which can then be carried forward for the benefit of not only paraplanners themselves but for the advisory profession as a whole.

Richard Allum of The Paraplanners comments “It’s the kind of issue that’s tailor made for the Paraplanners Powwow for two reasons: First, because Powwowers don’t have to negotiate the policy-making processes of the professional bodies who,

70 per cent of participants were convinced that common standards were a good idea inevitably, will have a big stake in the result of the debate.

And, second, because the new single-issue, workshopstyle, Howwow format lends itself to kick-starting a debate

while keeping its eye on a practical outcome.

“Practically speaking, these initial Howwows were a great way to gauge the appetite for common professional standards among paraplanners and the barriers to their establishment.

“As far as appetite is concerned, there’s no shortage. Following the online Howwow, 70 per cent of participants were convinced that common standards were a good idea and 82 per cent thought that a Level 4 qualification was a minimum standard. Nearly 60 per cent (59%) thought that continuous peer-based assessment of professional standards – like the mentoring model adopted

by UK nursing, was preferable to employer-led assessment of professional competence.

However, the discussion posed just as many questions as answers, for example: • If mentoring is adopted to raise and monitor standards, who would

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become mentors and how would they qualify?

• Will accreditation be the best way to demonstrate professional standards and, if so, will financial advice practice owners and managers recognise it?

• What role – if any – should professional bodies play in the establishment of commonly recognised standards?

It’s these kinds of questions that a group of paraplanners

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will now set about tackling next. By looking in detail at the insights gained from the Howwowers, their aim is potentially to sketch out a route towards the adoption of common professional standards in paraplanning.

So what makes a great Paraplanner?

With the focus clearly on this dynamic and increasing important community within the advice profession, here we take a look at some of the key

attributes which go to make a great Paraplanner. We’re not talking about outsourced or in house, rather it’s a simple look at the kind of work that Paraplanners do and therefore the skill set and behaviours which they need to possess in order to fulfil the role effectively.

Taking a look back Since the early 1990s, Paraplanning has deservedly gained increased recognition within the Financial Planning

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PARAPLAN N ER STAN DAR DS May 2016

profession. However, thinking back to those early days, the use of the descriptor “Paraplanner” was widely used by anyone working in an administration or supporting role within an advisory firm. Thankfully things have moved on and there is now a clearer idea of what role a Paraplanner fulfils within the business. A few years ago, the Institute of Financial Planning drafted a job profile for Paraplanners. In essence it focused on four key areas.

• Preparing and maintaining the client file • Preparing recommendations • Implementing recommendations • Review To do this effectively, Paraplanners need a sound understanding of the Financial Planning process and able to: • Work accurately within a defined business processes, either independently or in a team • Achieve agreed outcomes without supervision • Multi task, prioritise and plan own workload effectively • Pay attention to detail and communicate in an articulate manner

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• Demonstrate excellent inter‐personal skills, both written and verbal • Demonstrate strong analytical, IT and report writing skills They’ll also need broad knowledge of financial services world and have up to date and detailed technical knowledge on all key product and business areas including taxation, regulation, legislation and compliance.

All in all, that’s quite a list and one which clearly shows why so many paraplanners are

There is now a clearer idea of what role a Paraplanner fulfils now as experienced and well qualified (sometimes even more so) than the advisers or planners who they support.

Also important are the benefits which paraplanners provide for the advisers and planners they work with. They regularly act as a valuable sounding board, challenging proposals, clarifying technical issues and discussing alternative planning solutions, all of which really help to

improve the quality of service and advice which the client ultimately receives. Creating financial plans and client reports, conducting research, analysis and due diligence are time consuming tasks that require a specific skill set. Knowing that these are being handled efficiently and effectively by a team member who has that skill set can help to reduce business risk. It also means that the adviser or planner can maximise their time in direct client facing work safe in the knowledge that these core tasks are dealt with effectively and efficiently.

That’s all well and good, but one thing is clear. There remains much debate and discussion about what a paraplanner actually is and what they actually do as it still varies considerably from one firm to another and one paraplanner to another. Over time, the outcomes from the Paraplanner howwows will be very interesting to watch as the community strives for increased recognition and understanding for the crucial role they play in the delivery of the financial planning service for clients.

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PARAPLAN N ER STAN DAR DS May 2016

The Paraplanner Perspective ­— What are the qualities which make a great Paraplanner?

Dan Atkinson, Senior Technical Consultant, EQ Wealth: Paraplanners play a key part in the business that I work for. Our key role is to help ensure that the advice our advisers give to clients is (a) the best advice and (b) communicated clearly.

The product research and report writing that we undertake helps to deliver this. Additionally at EQ Investors we provide technical support to our financial planners.

A great Paraplanner will have a combination of excellent technical knowledge, attention to detail, an analytical mind and the ability to communicate effectively.

Knowledge can be taught and the there are many routes that an aspiring Paraplanner can take. In my opinion a Paraplanner should be (or aspire to be) at least as qualified as the advisers that they work with. Logically the Diploma in Financial Planning offered by the Personal Finance Society would be a good start.

It would then be wise to look at gaining specific knowledge in the areas that your business operates. For example if the company does a lot of work with trusts it would be worth taking modules covering this area of financial planning or looking at the qualifications offered by The Society of Trust and Estate Planners (STEP).

Skills are harder to hone but practice helps.

The most important skill for a great Paraplanner is communication. Getting feedback from advisers is especially useful to develop the way we communicate - not just with clients but within the businesses we work for. There are fewer formal training routes that can help with this, but both the Personal Finance Society and CISI are increasing the help that they offer Paraplanners in this area. I recommend reading well written text and trying to understand why they are clear. There are some excellent blogs about writing such as those written by quietroom.co.uk I FAmagazine.com

Joanna Hague, Paraplanner, Investment for Life: What makes a Paraplanner great? The answer is probably different for every Financial Planning firm you ask.

Given the similarities between the type of work a Paraplanner does each day, no matter which office they sit in, there is likely to be a crossover of skills that make a Paraplanner ‘great’.

Perhaps having an analytical mind, the ability to ‘think outside the box’ and the confidence to suggest their own ideas and challenge the thinking of their adviser are all traits that are essential.

Maybe great paraplanners have the skills to adapt to the processes of the firm and the adviser/s and suggest improvements, rather than insisting on doing everything their own way.

Of all the possibilities, Paraplanners should have the ability to speak to clients, colleagues and providers to explain what they need in order to move forward with their work or answer any questions.

While a certain level of technical knowledge is a must, the people I would consider to be great Paraplanners are those who strive to be better at what they do. They constantly work towards improving the quality and clarity of their work, updating knowledge and keeping track of changes. Most of all, they never forget that their role within any firm is to put their clients at the centre of everything they do so as to help those clients achieve their goals.

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R ICHAR D HARVEY May 2016

Age – is it really just a number?

Richard Harvey debates some of the challenges which face the older generation when it comes to financial planning

As an ex-PR man, I could imagine the look of horror which crossed the face of Leeds Building Society’s publicity boss when he opened the personal finance pages of The Sunday Times to read a story eviscerating an example of the lender’s ageist attitudes (and he won’t be too happy to read this either).

According to the paper, Roger Cearns, 71, asked Leeds to transfer his mortgage to a new property. The letter declining the request read: “At an older age, it is potentially more onerous and challenging for some borrowers to sell

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up and move to a different property and new location.

“On average, older people may find moving house more physically demanding and may be more entrenched socially to their existing neighbourhood.”

Defying the assumption that anyone north of four score years and ten obviously spends their days wedged in an armchair watching telly, before shuffling off to bed at 9 with a cup of Horlicks, Mr Cearns speedily banged off a protest to the Financial Ombudsman Service on the grounds the decision was ageist and unfair.

Reason: he is fit, active, still working full time and “I play squash, for God’s sake!”

Rather Insensitive Result: Leeds was ordered to grant Mr Cearns’s request, and compensate him to the tune of £250 for its “rather insensitive” letter.

Over-50s specialist Saga

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R ICHAR D HARVEY May 2016

was more robust, calling it “crass and hurtful”.

The story coincided with new figures showing that life expectancy for those over 65 is now well into the 80s, although women are likely to live two years longer than men (how does that fit with today’s equality agenda?).

As someone of Mr Cearns’s vintage, I meet up with an NHS-sponsored walking group every Friday. Come snow, hail, pestilence or hail of locusts, the walkers stride off into the Kentish countryside for an hour or so, and every one of them is a pensioner.

There are, of course, the 70- and 80-something braggarts who can’t wait to tell you about their latest sky-diving, water-skiing, mountain-climbing exploits.

And then there are the really embarassing individuals who boast about their vigorously active love lives (but let’s not go there).

Times change But, in defence of the Leeds Building Society, it is not unreasonable to question why someone of pensionable age is still paying off a mortgage. Back in the day, getting rid of the property loan was something most people achieved in their 50s, with the resultant saving helping support a more relaxed lifestyle.

However, we live in litigious times, and it’s a brave building society or lender which will refuse a loan simply based on the applicant’s age.

Organisations such as Age UK are ready to defend pensioners to the death (perhaps not the most apposite phrase, but you know what I mean), and will rightfully brandish that claim so beloved of activists and lawyers - “discrimination”.

Maybe it’s no surprise George Osborne has been considering scrapping the 25 percent tax-free lump sum which pensioners can draw off from their savings (indeed, by the time you read this, he may already have done so).

After all, with his plans to eliminate the nation’s deficit, raiding pension benefits still looks a no-brainer.

However, it will be interesting to see if he challenges the recent claim that the liabilities of the NHS pension plan have reached £390 billion. There are no assets, and doctors’ and nurses’ pensions are paid out of current government revenues. No wonder it’s been described as “the world’s biggest Ponzi scheme”.

In 2009, the financier Bernie Madoff, architect of America’s most notorious Ponzi racket, was sentenced to 150 years in jail, and he only fiddled $65 billion.

Any chance that George, and any previous Chancellors still alive, will have their collars felt?

It’s a brave building society or lender which will refuse a loan simply based on the applicant’s age

I FAmagazine.com

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SOAPBOX May 2016

By the pricking of my thumbs...

Look out Barack, here he comes, says Michael Wilson.

What does the Trump phenomenon mean for investors?

To foreigners, he’s the face of America’s shameful isolationism, and of its growing withdrawal from the complicated world of international politics. To many Americans, especially the working class, he’s the figurehead for a wave of public rage that has erupted against the way that nearly all of America’s growing wealth in the last 20 years has gone into the pockets of the top 1%, and hardly any of it to the working man.

And to the Republican mainstream, he’s a problem which, it freely confesses, is largely of its own making.

Love him or loathe him, Donald John Trump is the disruptive expression of a popular sentiment that has remained suppressed for probably too long. Without his chaotic emergence, we Europeans might never even have noticed that Americans work harder, take fewer holidays, earn less and get less benefits than we have ever supposed. Which comes as something of a shock, given that America’s solid economy and ebullient stock market has been one of the few fixed points that the investing world has had during the last six or seven years.

Obama on the political ropes But there it is. There are not many who would disagree

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that President Barack Obama’s loudly trumpeted ambition to even out the social and economic inequalities of the US state has run largely into the sand, as his watch in the White House has seen the rich getting richer and the middle class losing out. Partly, but not entirely, due to the fact that he never had a working majority in Congress.

Which meant what, exactly? That the Republican opposition were able to stymie all of Obama’s attempts to cut the Federal deficit (remember all that Fiscal-Cliff brinkmanship?); to hold back key parts of the welfare reforms; and to stop any real changes to the status quo which his disastrous Republican predecessor George W. Bush had left for him.

Oh, certainly, Obama achieved many popular things, such as bringing home the troops from Iraq and Afghanistan, and staying largely out of new conflicts in Libya and Egypt. But it wasn’t enough to prevent China from muscling in on America’s low-wage manufacturing jobs – how could it have been?

And nor did it give an answer to the world oil price slump which has driven the US shale oil industry – possibly America’s biggest and most successful single innovation of the last decade - to its knees, mired in debt.

Add to all that an acknowledged problem with immigration from south of the Mexican border, and what have you got? The makings of a public revolution against what the American working class perceives as a corrupt and ineffective political system, that’s what. So who do you think the dissidents will choose to lead the charge?

“Shrink the state” Not a mainstream politician, that’s for sure. Instead, this blowsy-haired billionaire believes he can get there by invoking the simple spirit of self-belief that the Founding Fathers laid down all those centuries ago. To hell with an economic policy, Trump seems to say – all you have to do is shrink the state by around $1.3 trillion a year for the next few years, and cut taxes, and free-market capitalism will do the rest. (Well, that and a 15% corporation tax band which seems to have been largely uncosted so far.)

Awkward statistical question - What’s $1.3 trillion a year?

About 7.5% of the whole US economy, since you ask. And how much of the economy does government spending account for? Roughly 24% in a typical year. Which suggests (to the back of my cigarette packet, anyway) that the Trump plan is to chop federal spending by almost a third.

That’ll be hospitals, highways

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SOAPBOX May 2016

Love him or loathe him, Donald John Trump is the disruptive expression of a popular sentiment

I FAmagazine.com

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SOAPBOX May 2016

and welfare, at a guess. All of them solid working-class areas. So has anybody told the voters yet? I doubt it.

“Ignore the whining from abroad” Trump’s other economic policies are loose, to put it mildly. You could call them laissez-faire capitalism, or if you were being less kind you could say they don’t have any proper coherence. What you’ll have noticed, however, is that they rely on interventionist trade strategies.

Trump openly calls China a currency manipulator which has stolen America’s money so as to build its own gigantic force, and he wants a 45% import surcharge to be levied on all China’s sales to the US. But in fairness, leaving aside the vexed question of what that would do to manufacturers like Apple, let’s pause to reflect that it isn’t only Trump who thinks that way.

Wind the clock back five years, and Democrat Senator Chuck Schumer was demanding the same thing. Ronald Reagan, whose ‘unschooled’ approach to politics is often cited by Trump apologists, was also not slow to slam prohibitive duties on Japan’s motor trade during the early 1980s.

Trump says that America must make Europe, Japan and Korea pay their way when it comes to international defence. NATO is out of synch with today’s economic realities, and the liberal whingers need to support themselves – especially in Ukraine, which has no real strategic interest to the US.

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We already know about the 2,000-mile 35 foot high wall along the Mexican border wall that Trump says will cost $8 billion, all of it being

“Wall Street has caused tremendous problems for us. We’re going to tax Wall Street” paid by Mexico. In practice, the Washington Post reports, even just the existing fence has cost $7 billion, so Trump’s calculations seem to be well adrift. But Trump’s point is that America’s economy will gain from having less cheap labour coming in to fill the country’s low-paid jobs, and less Mexican demand for US exports aid for with the money they send home. At least, I think that’s what he’s saying. What do you think?

“Bring the jobs back from Asia” That one at least seems simple, doesn’t it? Put an end to Beijing’s trade undercutting, and the steel and textiles and electrical goods jobs will come back of their own accord. But, as Bruce Springsteen reminded us right back in 1984, long before China was ever in the ascendant, industrial outsourcing is nothing we can blame on anyone except the modern trade economy: “Now Main Street’s whitewashed windows and vacant stores

Seems like there ain’t nobody wants to come down here no more They’re closing down the textile mill across the railroad tracks Foreman says these jobs are going, boys, and they ain’t coming back.”

I rest my case. Pass the whiskey and the dirty bandana, please.

“Tax Wall Street” Perhaps the biggest shivers came in January, when Trump on the Stump accused US financial institutions of being too closely aligned with China – which was why, he said, the stock market rout in Shanghai had infected the US exchanges too. The sharp suits were in cahoots.

“I know Wall Street,” he thundered. “I know the people on Wall Street. We’re going to have the greatest negotiators of the world, but at the same time I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us.

We’re going to tax Wall Street.”

What does that mean?

Nobody really has a clue, but it sounds dreadful. Maybe nothing - but if the working class voter is feeling cheated by city sharp dealers, it has a certain electoral ring to it, does it not?

“Dump the Fed’s independence” Let’s not beat about the bush here. The final year of a US presidential term is always lame-duck territory as far the financial markets are concerned. And doubly

I FAmagazine.com

SOAPBOX May 2016 so when it’s a second and final term of office. (US presidents can have only two consecutive terms, so we can say for sure that Obama won’t be running for the Democrats I November.)

But this time Mr Trump’s luck is in, because Obama’s timing is in the cyclical doldrums and it’s just too tempting to look for easy policy targets. Yes, the US markets spent most of last year riding a wall of worry, and 2016 has been the year when gravity has got the better of it.

It’s not just that stock valuations (as measured by the CAPE cyclically adjusted p/e measure) have been riding close to their alltime highs. There’s also the embarrassing way that Fed Chairman Janet Yellen made herself look silly by bungling last December’s decision to raise the US lending rate at exactly the moment when the US economy was topping out before falling again.

Trump’s view of Ms Yellen is as sexist as it’s dismissive. Last October he accused her of keeping rates low as a deliberate sop to the ruling Democrats.

Obama, he said, “doesn’t want to have a recessionslash-depression during his administration,” and she had been malleable enough to oblige him. So now Trump is demanding a public audit of every Fed decision by the Government Accountability Office. Which would mean, effectively, that its independence would be gone.

So let’s be clear. Does the Donald favour sharply higher interest rates? In a word, yes.

And would that help America’s

I FAmagazine.com

industries? Err, next question?

Would it drive up the value of the dollar? Yes, certainly.

So wouldn’t that make it easier for foreign exporters to invade the US market?

Hey, what kind of a liberal question is that?

Here in Britain, we abandoned the strongpound mantra somewhere in the 1980s after Margaret Thatcher’s dream of a sterling domination hit the rocks. And we made the Bank of England politically independent in 1997. From Frankfurt to Toronto, the idea of a politically-tied central bank is an unshakeable anathema.

Not least because a tied bank is an interventionist bank, and we don’t believe in those. But Trump, it seems, does.

Could he do all that?

But all this is slightly beside the point, because it isn’t economics that’s driving this election campaign, but deeplyfelt sentiment. Could Trump get elected in November?

“I don’t care about the Wall Street guys.

I’m not taking any of their money.”

At present, most of the smart money says no. Hillary Rodham Clinton, the shoo-in for the Democrat nomination, has a powerful knack for putting people’s backs up - but she does at least have executive experience, and an ability to get her points across without resorting to Trump’s thinly-veiled threats of mob violence.

More to the point, probably, the chances of even a

victorious Trump getting his way in Congress are slim. The Donald would find himself trying to run a Republican Party that is, for the most part, appalled by his simplistic notions and repelled by his brutalist rhetoric.

Simon Laing, Head of US Equities at Invesco Perpetual, puts it rather nicely. The divided Republicans, he says in a recent blog, might maintain control of the House, but the Senate “would be more of a dice roll.” Indeed, he says, “we may just have a frustrated President who may even end his term early if he wasn’t able to change Washington.”

Comparisons with Ronald Reagan, with his non-political background, are tempting, he says. But Reagan had been a governor for eight years before he ran for President. Whereas Trump has no political experience whatsoever.

“I think Schwarzenegger in California is a closer comparison,” he says – noting that, although popular, the Governator “had achieved virtually zero of what he wanted to due to his inability to alter political process.”

And for the future? “I don’t think that Trump will get in,” says Laing. “But, given he looks likely to be on the front pages until November, he could be another dent in US consumer confidence. At the very least I would say this puts downward pressure on the US dollar and keeps expectations around risk elevated.”

Precisely.

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CAREER OPPORTUNITIES Position: Paraplanner Location: Torquay Salary: £23,000 - £30,000 DOE Our client is looking for an experienced individual to join their growing IFA practice. The successful person will be responsible for writing suitability reports, producing quotations and research.

You will have existing IFA experience, possess excellent attention to detail. Ideally you will have your level 4 diploma and be keen to continue to increase your knowledge and develop in your role The business prides them self on delivering a really great service to their HNW clients and are looking for someone who can support them in doing this by having the capabilities to assist them in developing the systems and services as they continue to grow.

Position: Wealth Management Qualifier and Coordinator Location: Winchester Salary: Flexible Depending on the Individual OTE £30,000 Are you someone that has a background in financial services that understands a range of the products and services available? Are you someone who takes pride in ensuring the right outcome is reached for clients so that they receive the right advice?

If so, we have a brand new position available for someone to qualify leads to pass over to a financial adviser to follow up.

You will not be responsible for generating the leads, this is a qualifying position to ensure that quality is passed in the right direction.

You might be a person with a banking background and so are used to referring on to specialist advisers or you may already have experience in and IFA firm and would enjoy this type of role.

Position: IFA Administrator Location: Bridgwater Salary: £18,000 - £20,000 A well-established and prestigious financial services organisation are seeking an enthusiastic and professional IFA administrator to join their growing business and provide support to successful IFAs within the business.

This is a fantastic position which will give you the chance to gain real experience working with IFAs providing holistic advice.

Position: Compliance Assistant Location: Dorset Salary: £28,000 FTE Hours: Part time 12 hours per week (£8,960) Are you an experience IFA/Financial Services professional that has dealt with compliance in an IFA firm or a Financial Services company before?

Perhaps you are a Paraplanner that has been responsible for compliance duties or even a IFA that is looking to move away from offering advice.

We are looking for an individual that can cover as many of the duties listed below on a part time basis to join a highly reputable IFA firm in the South of England.

You will be given the opportunity to be a key party of the team and ensure the company and staff remain compliant at all times.

Position: Paraplanner Location: Poole Salary: £24,000 - £30,000 DOE Our client, a highly respected IFA firm in Poole has recently made the decision to expand the team and is seeking the right individual to move into an Paraplanner position.

You will be providing a first-class Paraplanning supporting IFA’s in a reputable local IFA firm. Ideally you will have a background in Financial Planning with the Regulated Level 4 Diploma in place.

This is an opportunity to become a key member of the team where you will be valued and supported to progress from within.

Position: Portfolio Administrator Role Location: Welwyn Salary; £16,000 - £19,000 Flexible DOE Are you a Financial Services professional with a background in an IFA firm, Wealth Management firm, Pension or even an Investment company?

Do you want to work in a dynamic team where you will be supported to grow as an individual?

If so, there is a competitive package on offer for someone that wants to progress in the company. Ideally you will have done a similar role and maybe even hold some Financial Services qualifications.

If you are interested, please apply now

Position: Mortgage Adviser Location: London (East) Salary: Self Employed with retainer (Flexible DOE) Are you a mortgage adviser with experience in offering holistic advice in mortgage and protection sales?

You will be CeMAP qualified with a previous experience in a similar role. A book of business to transfer over is not required for this position.

A retiring Director previously used to writing 200 mortgages a year seek and enthusiastic adviser to continue to the business. Commission splits are negotiable and very attractive depending on the individual.

If you are looking for flexibility and to progress your mortgage career, then this could be the ideal position.

Position: Paraplanner Location: Marlow Salary: £30,000 A fantastic opportunity has arisen for a Paraplanner who has experience of working within an IFA practice as well as having financial services qualifications to join a highly reputable firm of financial advisers with a view to growing the business and so you will be a key part of the team.

You will be involved with providing clients with a professional service and have the opportunity to work directly with the IFAs. The business has been credited with developing a rich culture that puts its employees first and encourages personal development.

Your contribution will enable the business to continue with providing a professional service and in return the firm encourages and supports personal growth A fantastic opportunity has arisen for a Paraplanner who has experience of working within an IFA practice as well as having financial services qualifications to join a highly reputable firm of financial advisers with a view to growing the business and so you will be a key part of the team.

You will be involved with providing clients with a professional service and have the opportunity to work directly with the IFAs. The business has been credited with developing a rich culture that puts its employees first and encourages personal development.

Your contribution will enable the business to continue with providing a professional service and in return the firm encourages and supports personal growth.

Position: Client Manager Location: Gloucester Salary: Negotiable depending on the individual If you are experienced in administration as well as having a background in financial services and are currently working in an IFA firm, pension company or investment company then this is a great opportunity to join a hugely successful company. It has a tremendous reputation for not only delivering compliant sound financial advice but also an outstanding client service.

You will be joining a team where you will be a key part of the team, ideally you would have the desire to progress technically with FS exams (working towards the level 4 Diploma) as well as internally within the company aiming to potentially lead or manage the team.

We seek someone that can think outside the box, not just follow instructions but think what else can or needs to be done. We are looking for someone that wants to take ownership of a task or project, set it up and see it through to total completion.

Position: Wealth Quality Reviewer Location: Solihull Salary: £20,000 - £30,000 Are you someone who has a background in Compliance and Financial Services? Do you have experience working with pensions and investments?

If so a hugely reputable IFA firm are looking to expand their compliance team by taking on an additional Wealth Quality Reviewer.

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N EXT MONTH May 2016

N EXT MONTH’S ISSU E...

EIS — A tax adviser’s perspective part 2 Mike Donovan of Deloitte LLP delivers the second article in his series. He will look at some additional opportunities which, can arise when considering your client’s holistic IHT position, plus some common ‘pitfalls’ encountered when investing in EIS interacts with a client’s personal tax position.

Whither the Oil Markets?

Eight years after the International Energy Agency confidently forecast $200 crude, we’re still none the wiser about what drives oil prices, says Michael Wilson. But $30 petroleum has caused real damage to producer countries, to the point where long-standing political alliances are becoming strained. Shale oil? Russia? Saudi Arabia? Nigeria? Venezuela? All are creaking under the strain.

I FAmagazine.com

Brexit – The Good, the Bad and the Ugly With the big EU vote coming up on 23rd June, we look at the practical implications of a withdrawal for British advisers. A short-term hit to sterling? A farewell to MiFID? Lower VAT, lighter banking regulations? A new freedom to attract foreign money? Or a complete turn-off for inward cash from China and America?

Nurturing your client relationships For many advisers client acquisition activities dominate their marketing strategy but that is often at the expense of proactive initiatives around client retention. Sue Whitbread takes a look at some of the initiatives which leading advisers are doing to ensure that they build long term client relationships with clients which, really do stand the test of time.

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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

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