Happy Father’s Day for Sunday, to all the fathers out there… this year, Citywire was keen to run a piece on fathers and sons working together and we were selected. It is published here… Father’s Day: How Philip and Felix Milton run a firm together so you can read all about how we addressed working together!
So the Winter Fuel payments are being partially restored. What an awfully clumsy and foolish piece of policy that was – not necessarily the removal of the benefit from the wealthy but how it was orchestrated. This shambles will cost the Country more than had it continued unchanged and yet the cuts initially were stated as necessary for the money it would save the State – or to pay unfunded, above-inflation increases in public sector pay not matched by any efficiency savings. Hmmm.
The suggested cost of £1.25billion to the economy for the reinstatement is as unfunded as Liz Truss’ budget giveaways (which are very likely to have boosted the economy) but what the electorate believes is even worse is that Sir Keir and Rachel Reeves are both saying they can afford it now because the economy is ‘now on a firm footing’ – what statistics have they been reading; do they think people are stupid? The colossal increase in public spending will also have to be funded somehow… taxes will rise.
Unsurprisingly the cost of employing people rose in the quarter as the Living Wage rose by 6.7%, way above inflation. Unemployment ticked higher too and vacancies are falling as employers are holding-off on new recruits as they absorb the swingeing increases in National Insurance – just another tax. This absence of confidence in the economy saw retail sales see their slowest growth of the year with spending appetite down.
So the ‘Spending Review’ is behind us and what a colossal overspend of money we don’t have that is. So far, the markets and the Pound have not reacted negatively but there is concern, grave concern, especially in terms of the ramifications. If global investor confidence is shattered if growth doesn’t appear then we should be tackling that from a rather dire position. Then right after, April’s economic figures showed the economy contracted by a worse than expected 0.3% and exports slumped – goods’ export values dropped 14.6% over 2024, so when the Government talks about ‘economic stability’ it is somewhat disingenuous! The month-on-month comparison with the US fell by 32.7%, the most since records began.
Investment opportunities
Well, have you missed your chance? Well, if you are not invested as we have been, to some extent yes, you may well have done insofar as some of the best opportunities are concerned. The truly tremendous value offered within the UK market over the last few years (not so much because of general prospects but simply because so many great investments were far too cheaply priced) has gradually been disappearing because of some stellar gains. On top of this, discounts on closed-ended funds (Investment Trusts) have also provided fantastic return opportunities above the mainstream markets too.
So yes, in more recent years and excluding the Pandemic ‘opportunity’ the best time to invest was maybe before October 2022, before the ‘turn’ and when pessimism was still rife. Then, so many situations were just so cheap and often giving ludicrously high dividend income yields too and helping us generate a ‘sustainable’ by-product income of up to 6% from a ‘balanced’ strategy, whilst not compromising opportunity for increases in that income as well as capital gains overall – both attributes which have indeed happened.
Yes, we are still very comfortable, presently, but we can see a time when those special conditions will not pertain like they have been and as so many of our choice stocks have enjoyed significant increases in prices. I can see that time being harder down the line but today, we still have more than enough options for deployment of capital we realise from assets we think have run too far and indeed, new money subscribed by clients.
North Devon Business Action Awards
It was a pleasure to be the main sponsor again for the North Devon Business Awards and to see a packed theatre in Ilfracombe with all the contenders for the various awards. We have been supporting these since they started now and well-done Rob and his Team of volunteers for all their hard work!
Well done to all the winners and indeed all the entrants – all are winners to have entered and even to have been considered!
Pictured above presenting the award to overall winner Scribbleton and founder Sarah Cole are Business Action publisher Robert Zarywacz and myself representing Philip J Milton & Company Plc as awards’ sponsor. Image: Business Action
Good news/bad news
Too late – we had started buying but Blackstone has agreed a bid for Warehouse REIT. Still, a small profit for a few of our clients – it all counts but we’ll have to recycle that cash into similar fresh opportunities. Trusts are fast disappearing and Saba has threatened more corporate raids too, so we shall have to wait and see.
Still, based on the ‘sector’s’ average discount, if all those ‘discounts to net asset value’ disappeared, we’d see an uplift of about 16% in capital values – most investors out there will never see any of that as they have open-ended ‘funds’ via their ISAs, Pensions, Bonds, etc and not this medium we like so much.
It remains ‘funny’ to me that in the days of ‘independent financial advice’ that so many advisers of all ilks don’t use Investment Trusts, either because of accessibility issues, size constraints or simple ignorance (not wishing to be patronising) but sadly, it’s all true. For us, it’s a simple extra return, bonus opportunity for clients and in the price for nothing. It makes no difference to us – just what is best for clients. The Regulator suggests that advisers should consider the suitability of all asset types when advising clients – so how come these seem to pass them by?
The value of advice
So ‘Oxford Risk’ tells us that in the UK, investors sold-off £4billion of unitised funds in the first quarter of ’25, as the Trump-inspired panic took hold. Well, we didn’t and in fact, we had funds to invest in cheap things which had fallen.
Just think, if these investors had stayed put, then in most cases not only would their values be back where they were but they could have been higher again (especially as the hardest hit segment was ‘UK All Companies’ apparently). Why didn’t our clients join the panicking throng? Maybe it is because at our cost we mailed them all to give our latest views as well as eshots and sending them more frequently then, to reassure (not in blind faith either)?
How much did those withdrawing investors lose and then the costs of possibly reinvesting later… all saved for our clients… where presently we charge nothing for advisory oversight and our management fees are fair 1.5%pa or 1.25% for pensions, with no VAT – and no minimum either. From peak to trough, that was a loss of 12% instead – so much for self-investing without a trusted independent adviser, I guess!
The cost of advice and its value
Curiously, FT Adviser has run an interesting article on Defaqto’s research into balanced funds, notably Managed Portfolio Services’ defensive comparators run by 122 discretionary managers across 900 portfolios. The heading makes interesting reading:- ‘Low cost does not equal high returns’.
This must upset the constant pressure on advisers and managers to cut charges as the apparent ‘only’ way of enhancing outcomes – or for investors to seek the evidently ‘cheapest’ fund options (eg index-trackers). Of course, cost is important but actually what are you receiving for what you pay?
For our clients, we hope we demonstrate that indeed the optimum outcome is the most important achievement (including financial planning advice as well as investment performance) and not what any headline may suggest something ‘costs’. Indeed, if an adviser or fund doesn’t charge enough to sustain its business then it won’t be around for that long and then, how much does that cost the investor to have to change horses? Don’t cut off your nose to spite your face!
Despite this significant value to our clients, according to Baring Money, the ‘Advice Report’ 2025 finds that even fewer consumers are prepared to pay for advice, with only 39% of non-advised investors and cash-only savers with over £10,000 willing to do so. This is despite very high satisfaction rates from those seeking advice generally.
At least there is one good thing – ‘finfluencers’ (upon whom many of the younger unadvised relied) are being drummed out of business now by international regulators as they are breaching the law! Three have been arrested in the UK and myriad posts taken-down.
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
