Dear Friend


Well done to Felix Milton for his brief appearance on MoneyBox Live on Saturday 8 June!  He was thanked and complimented by Paul Lewis afterwards and with offers to repeat his attendances.  It is indeed all good experience and helps to elevate the Firm too – well done him.  He’s beaten me, the old block, to that one….


It was pleasant to be thanked for our somewhat more balanced comments on Woodford Investment Management’s problems.  It is understandable if people have lost money as a consequence of being invested but some of the vitriol is misguided and inequitable even if some of the consequences of the unravelling will continue to hit for some time.  Openwork, the other large network group, has also now cancelled his mandate to manage £330million for them so it is not good news for the Firm.  The mandate of the rather sickly Patient Capital Trust could disappear too though there have been no management fees taken so far, as it was agreed that a dynamic ‘rewards-based’ system would apply and there have been no rewards.  These shares are trading at a new low as I write and are now down 45% from the launch and remembering they went to a premium at the beginning, he and it being so popular…

I wonder how Mr Mark Barnett and the Invesco team (where Mr Woodford was before) will fare – very little comment has been made but the income funds had similar holdings and so would have been blighted too – though a much bigger company could no doubt orchestrate some changes from within to smooth the problems.  They did sell a big chunk of A J Bell which floated recently and that generated a colossal profit – one unlisted stock which Mr Woodford had not continued holding sadly.

The Woodford team has undertaken some considerable sales ready to meet the redemptions after suspension and many of these will have been done at poor prices.  Kier, for example, has slumped to just north of £1 – still ‘cheap’ but the action of a request for funds arguably has crystallised the losses which would not have arisen if investors had stuck-it-out.  I would still like to imagine that he pulls something out of the hat – maybe a big new institutional investor to underwrite any subsequent disposals for a time to let the dust settle.  That would then create a wonderful fillip to performance and be a self-fulfilling good short-term investment, stuffing the short-sellers who have speculated against Mr Woodford.  And as before, I have no position in any of this (it must now be at its nadir at Woodford Patient Capital… still watching but poised to buy… will the Board change the manager… probably unwise to do so but it is hard to know what catalyst will turn things around in a hurry as short-sellers will have been having a field day).  Will you join me buying from these distressed sellers?  Even if there will be troubles ahead for some of the biotech enterprises he has supported (and is obliged to keep supporting with more money as well), some will come good and you need less patience now to find-out than you would have done at inception…


What a rare and pleasant show of commitment.  The directors of Just Group Plc have all declared that they are increasing their shareholdings in the Company to demonstrate their confidence in the future.  Wouldn’t that be nice if it was a more regular feature especially when companies are struggling or their share prices are – especially for those where the directors often have little or no exposure to the host company, which pays their salaries, in the first place.  Many do not even realise that as a director you are not obligated to have any shares in your company at all.  The principle of helping to make sure the Company for which you perform an executive job has to perform well to reward you and not just in salary and golden goodbye even if you do an atrocious job… would be good.


Sorry to those people who have sent money to yet another of these bond companies like LCF.  Harewood Associates has just appointed administrators and these people will take a pretty penny from the process too.  Why invest with an unregulated firm?  DON’T DO IT.  Oh yes, it sounds lovely – ‘backed by the security of property’ ‘building houses’ and the rest but it is no surprise.  When things go wrong it goes wrong big time.  Peer-to-peer groups are similarly problematical and just because you may have done one or two that worked… it doesn’t mean they all will and we haven’t had a property market wobble yet either.  Some of these are lending in new areas as well and as ever, it is fine when all goes swimmingly but when that stops….  There are many new ones out there and their tests will be when things change.  If you must, buy a portfolio of the quoted vehicles both to diversify and also so you can liquidate when you want rather than find out you can’t have your money back either.  Fraud has to be clamped-down too – the LCF issue has many things selling very high, as well as the £60million ‘commission’ paid to the marketing companies to raise the money.

It now transpires too that the marketing company (Surge, which collected £60million in gross commission) for collapsed Bond fund LCF spent £26million on advertising its bonds to unsuspecting novices – £20million of that on Google.  That was effectively 10% of the capital collected.  The whole affair is disgraceful.  The sad thing is that despite warnings I may make through this medium, people will still do ‘it’ tomorrow.


We all read the stories of income inequality, poverty, austerity but are there any ‘good news’ stories which the media – and hence the public – are suppressing?  This is no excuse for constantly striving to improve everyone’s lot (and especially that of the ‘poor’) but when will some consideration be given for what ‘we’ have already and the great strides we have indeed made over the years?  Last weekend we had to travel and the volume of traffic was colossal.  We are grateful we do not have to do this every week as many do but compared to the literally somewhat empty roads after the 2008/9 economic turmoil, the amount of people, businesses etc which can afford to run vehicles and then to spend on expensive fuel – it is not a  ‘right’ but a choice and they can afford to do that.  The explosion of holiday accommodation through Airbnb has seen a colossal increase in the numbers having holidays and short breaks because they can afford them.  Then last week, much to the pain of those who would like to own their own homes but don’t yet, the numbers of adults owning a second home has increased by 50% in the last ten years.  One in ten adults has more than one home – that’s 5.5million people.  (The ownership problem needs to be addressed somehow but is not easy – basically prices are too high and it might be the case that they need to fall considerably to allow the balance to alter but…).  Yes of course many of these homes will be with mortgages but you have to have a credit record which allows that so well done to those who have attained that, even if they are likely to be an atrocious investment going forwards now, for many years hence!


There is, as ever, received wisdom about taxes being inequitable to the poorer of Society.  To some extent it is ‘obvious’ – the more of your income you spend the greater the likelihood that you spend more on invasive taxes of one form or another.  However, some new research by the Institute of Fiscal Studies (funded by ESRC) may debunk some of that, especially as tax allowances have been cut or withdrawn totally for the wealthy over latter years.

It has found that the tax system here is progressive and takes considerably more tax from the rich than the poor.  The IFS’s research is based on the ONS statistics and the impact upon household income.  The research found that ONS figures failed to account for employer NI, mis-measures top incomes, failed to treat taxable benefits correctly and mistakenly classified many people who spend a lot of money as ‘poor’.  It has also been slow to update inflationary bases.

The research showed that people living in the richest 20% of households had £96,000 a year of income from work, pensions and investments.  Those in the bottom 20% averaged £7,700.  However, after adjusting for Social Security and taxes the figures netted-out to £64,000 and £12,500 and a differential of ‘only’ five times after all.  On VAT, it concluded too that as richer people spend more, rich and poor tend to pay a similar proportion of tax.


Stock market investments can offer income through the payment of dividends and interest and good opportunities for capital appreciation over the longer term. By this, generally we mean periods in excess of five years, preferably much longer. However, we can never promise you particular returns, especially in the short-term. At any point in time but especially in the short term, your capital could be worth less than the original amount invested as some of the selected holdings may fall in value, regardless of expectations at the time of acquisition. We may also invest in funds that hold overseas securities. The value of these investments may increase or decrease as a result of changes in currency exchange rates. Returns achieved in the past cannot be relied upon to be repeated.

To remind you, why do I send out occasional emails? Because everyone can save money. We have no connection with any companies mentioned and you have to make your own contacts and satisfy your own enquiries. What is in it for us? If we can prove that we are knowledgeable and that our service and advice have good value, then you might contact us for professional financial planning and investment help. You don’t have to do that though and there’s no charge for emails. If simply they save you money, then accept them with our compliments! However, you’ll know where we are!

If you have any queries of any form or indeed any subjects you think I could include, please contact me. I also refer you to our website We celebrated our thirtieth anniversary in 2015 and have been publishing a well-respected independent column in the local Paper for most of that time and free client newsletters as well.

Do not forget however the usual caveats – this is not ‘advice’ and you are encouraged to seek that before embarking upon any financial route involving investments, etc.

My best wishes

Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB

Chartered Wealth Manager

Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers