Included in this edition of our e-newsletter …
I promise I did not have any special insight into events as I noted that the US looked a tad toppy. However, wobbles about the Coronavirus removed all the Dow’s points added since the New Year but since then they have pretty-much been added-back again. It remains over-extended and with four of the biggest companies in the world now propping-up the US market with market capitalisations of north of $1trillion each. It’s all beginning to look rather ‘silly’. Yes, Apple and Amazon have each reported bigger and brighter profits too at the colossal end but there is a tremendous amount now riding on those good times continuing for ever.
It’s an interesting conundrum too – the ‘Green’ revolution not seeming to hit these companies but when will the environmentally conscientious consumer realise what actually buying all this stuff and having it shipped to us by whatever carbon-generating means and it has to be ‘instant’ so individual delivery mechanisms for every parcel – and also being constructed in carbon-belching countries of the world might also not be a good thing… could these companies become the pariahs of the investing and consuming world or are the green campaigners still too attached to their modern conveniences to sacrifice such things for themselves? It is like electric cars – what about how and where the cobalt is being mined to fuel the batteries… and the lithium too? Are these questions which are too uncomfortable for campaigners to want to raise?
We are very pleased to announce that two staff members have been promoted to our advisory team! They will each be considering working towards the coveted personal ‘chartered’ status which the Firm enjoys as a whole too – still the only one in our immediate area to have done so.
All that said, we are very busy generally at the moment and whilst we hope to attend to all enquiries as expeditiously as we possibly can, please bear with us if there might be a short delay before we can reply. Existing clients will be given preferential treatment too of course, as you would expect!
We are also looking towards creating a Client liaison management structure too to expand the range of competent and capable staff who can assist with more general enquiries and to allow the advisory team to concentrate on more of the complicated and detailed work; the departments will be working together and as such will therefore be able to achieve even more together as a consequence.
Clients will also be pleased to know that we have added more personnel to the administration teams here too; we have always been unusual in that most financial advisory businesses have lots of sales’ staff and only a handful of service and caring staff – we have always had only a few advisers and a big team of staff helping with client servicing as we believe that is very important. At the time of writing, new staff joining us soon and the existing complement total thirty-five!
How much do you pay for adviser servicing? That can simply encompass an annual investment summary and a template letter or of course rather more in-depth review and discussion. A recent survey of 200 advisers noted that 38% of them charged an annual fee of 1% plus VAT for that, typically taken from your investment accounts so you don’t have to write a cheque and probably don’t really see it either! 27% charged 0.75% and 20% charged 0.5% with the rest outside of that (and this wouldn’t include some of the opaque and expensive arrangements like St James’s Place etc). Do you receive value for money? These fees do NOT include the underlying investment management charges which the underlying funds your adviser has used charges to you.
We don’t charge clients anything for their servicing and annual reviews. Clients pay an investment management fee which is not at all uncompetitive compared to the rest of the industry for the management of the capital they have entrusted to us but we don’t then charge another fee on top to review the investments’ suitability on an ongoing basis with them. Effectively that annual review and ongoing servicing is free of charge and whilst it is becoming harder and harder for us to sustain that, we undertook a review recently and felt that this was a core part of our attractive offering – and without lots of other hidden fees either. For example, our pension wrappers have no admin or servicing charges for clients to pay and as most levy – we pay the lot. The primary other charge is the same as all investment institutions have to charge when they buy or sell an investment on the market – brokerage. However, we tend to be quite long-term holders of things and even then, the charges are percentage based so for small deals the cost is unbeatable (and not out of kilter for larger deals where there is a top cap anyway). https://www.ftadviser.com/regulation/2020/02/05/advice-fees-branded-uncompetitive-as-price-clusters-revealed/?utm_campaign=FTAdviser%20news&utm_source=emailCampaign&utm_medium=email&utm_content=
For Organic affected clients, things are progressing at last, I am pleased to say. The FSCS is beginning to issue interim compensation to claimants. Most of the original advisory firms have gone ‘under’ which means the FSCS accepts them for claims. What the FSCS then does afterwards to try to reclaim the money from other sources is up to it. N J Associates Financial Services Ltd initially went into ‘voluntary liquidation’ and its directors signed a ‘declaration of solvency’ but since that, the liquidator has posted a statement of affairs noting it is in deficit so the FSCS can consider claims there. Multicorp Rose Ltd, however, declines all complaints it seems and so whilst it has followed the same process, the FSCS still adjudges that the Company has enough money to meet its liabilities. However, even one claim would see it in default. We are unhappy about this situation and have pressed in all directions but to no avail yet. We have even asked the parent company, Ironmarket Ltd to reconsider its stance but to no avail either.
All I can still say to EVERY afflicted Organic client is – have you logged your claim yet because you are going to be entitled to compensation. Don’t do it via a Claims Management Company as they will keep up to 40% of the money that is rightfully yours. The FSCS will help you for free.
We have been providing free generic assistance as well and one gent (Mr B) was kind enough to call and just could not stop saying how much he wished to thank everyone concerned with assisting him as he just couldn’t have done this alone. Well done team! He has been in touch with the FOS and has passed details to the FSCS; he has had a response from the FOS to say that they will look into it for him and he is now aware that it is just a matter of time and that should Multicorp Rose Ltd, the original adviser, go into insolvency meantime then this would assist him.
TAX RETURN FILING
The job seems to become more complicated every year… This year, 8% of those who should be submitting returns failed to make the deadline so will have automatic penalties. That’s 958,000 taxpayers! 26,562 submitted their returns in the last hour up till midnight! Clearly that was more exciting for them than either celebrating Brexit or commiserating about the same subject… We do offer professional tax services if you need help; avoiding penalties is one of the ways of reducing your tax bill and if it wasn’t obvious but guess whose returns are likely to be top of the ‘let’s investigate’ pile by HMRC if they suggest the taxpayer doesn’t keep good and efficient records? The peace of mind having a professional guiding you (and we also offer creative tax planning advice to optimise your tax position too and something which most accountants don’t seem to do) has to be worth a small payment.
One of the most shorted stocks on the market, the significant gains experienced lately have cost those speculators heavily, suggested to be as much as $12 billion since the start of the year alone and the share price increases for this loss-making company continue. It is now the second biggest car company in the world by share capitalisation. The short sellers still point to the fact that the Company is loss-making and that even recent sales’ increases do not remove their pessimism but how much pain can they endure if the shares keep rising? It’s not one that I’d buy at the moment… is this stock symptomatic of the bubble which is overdue a bursting?
JAPAN VERSUS CHINA
Japan has again over-taken China as the biggest holder of US Treasury Bonds. That all took-place quite quietly but Japan is mopping-up global assets with its excess liquidity. Oddly enough however, despite this significant increase in ownership of overseas’ currencies, the Yen has not weakened but has preserved its status as a relatively important and strong reserve currency. The funny thing will be when or if the big holders of Dollars decide it is time to unload – who will buy them – will the Americans have generated enough capital to buy them themselves…? The equity market is strong there but public finances are still seriously overdrawn…
I don’t mean to be unkind to anyone but why would someone invest £400,000 in an unregulated, offshore foreign exchange currency trading investment as encouraged by his one-man-band chartered accountant who charged a professional fee for his part in the process? We are not talking about a billionaire here – just an ‘ordinary person’ for whom a capital sum was available. For all the regulated things he could have done instead (including forex accounts if he really wanted that), why oh why do that and end-up losing the whole sum and it now costing further fees considering whether he can sue the accountant (does he have any money to pursue anyway…) but of course there is little in writing from the adviser who was never authorised to give investment advice anyway…
I have to ask – are you doing something stupid…? You are not replying to some celebrity’s Facebook advertisement are you, or taking money out of your pension to stick it into a ‘guaranteed’ property scheme or suchlike…? Please don’t – entrust a regulated independent financial adviser and rely upon their judgement to help you to invest in standard, accessible investments for you.
This comes just as the authorities announced that £339 million was lost to fraudsters last year and that is only the amounts reported – the true figure will be far higher than that. Please don’t be included – the latest surge has come from ‘crypto currency’ scams. If you need to borrow our barge pole… just contact us first! https://www.ftadviser.com/regulation/2020/02/05/victims-lost-339m-to-investment-fraud-last-year/?utm_campaign=FTAdviser%20news&utm_source=emailCampaign&utm_medium=email&utm_content=
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 www.miltonpj.net. We celebrate our 35th anniversary in 2020 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