Good afternoon. Interesting news for car finance companies over the weekend as compensation will be far more limited than worst fears. It is not as if users did not know what they were going to pay for their car loan, so I am all rather cynical of this – as I was with the PPI scandal – payment protection insurance.
I mean, would the same factors be applied to the sellers of all forms of other products and services along the lines that ‘the salesman or organisation did not disclose the amount of commission which was involved in the contract’? An element of common sense has to be engaged.
However, I’d love to see an extension of regulatory enquiries and compensation to include the sale of these modular, holiday or park homes or caravans, especially those completed on regulated finance – any takers? However, should it really include all goods and especially any on finance and ‘pay later’? It is so upsetting to see parasitic claims’ chasing companies receive a bloody nose too, ahem – they won’t be so interested in acting for tiny claimants who don’t have to use them to receive their compensation anyway, in most cases. The amount they took on PPI and miss-sold pensions has been obscene – money which should have gone to the afflicted people, not them. The worst we saw was 48% commission and VAT – almost half the victim’s money simply waiting at the FSCS for them to request it. This has included lawyers and barrister firms as well, believe it or not! Maybe the Regulator will cut them out altogether and force the car finance firms to calculate all the amounts due and trace all their relevant customers rather than people having to claim anyway (so those who don’t receive nothing) – that is common sense.
These firms are not to be confused with the very few genuine CMCs (which are often advisory firms too, like ourselves) which actually assist and guide people who need real help in claims of true miss-selling and past scams. Proper CMC regulation has closed most of the worst firms but the adverts out there and the unsolicited calls tell you it’s still going-on.
Global economics and politics
In the US, despite President Trump’s meddling, the economy saw a useful 3% growth but that’s postponed the likelihood for a further early reduction in interest rates there and the US Dollar strengthened against leading currencies. Here at home, the numbers of estates paying Inheritance Tax rises to 31,500 and the amount collected hits another record of £6.7billion for 2022/3, the latest figures.
It had to happen though… all those nice blue (or green) days on the markets turned into something of a red day last Friday. The headline figures weren’t much but I had already sensed that sentiment was about to change and in fact I had shared that at our Investment Committee on the Wednesday.
Readers will recall that markets have an uncanny knack of being like a coin – either all news is good news or – you have the picture. It’s not quite like that (yet) and may not develop into a universal deterioration but certainly there was a cold wind blowing through markets to meet President Trump’s latest tariff announcements. Sterling has been weakening too – if that persists it will be yet another self-inflicted problem for Chancellor Reeves – and we’ll all have to pay.
Meanwhile our ‘balanced strategies’ (whatever one of those ‘is’) can still generate an income of around 5%pa so that’s not bad at all bearing in mind capital preservation and appreciation potential are on top, let alone increasing income as dividends are raised. The dividend yield on the US market (S&P 500) remains a wholly uninviting and unexciting 1.25% – and that’s where over 70% of all money in shares is invested – but yes, certainly not ours. Where’s yours?
Less independent advice
So, giant Quilters is soon to stop giving independent advice. It is moving across to a far more limited ‘Restricted’ model only selling certain ranges of products. Quilter firms which have been independent will have to conform and make orphans of the non-conforming products I guess, or leave the network…
I’m sorry but for a firm of that size not to guide and advise on the whole market is ridiculous. Perhaps I should not complain though, as those firms like ours (and their participating investors) recognising that true impartial advice means there are no ties whatsoever in what is recommended (or what investment arrangements are bought and managed for clients), will see investors make their way to their doors. Ours are open. We welcome new clients!
Fortieth celebration
The plans are progressing for our celebration for ongoing, participating clients, on 20 September. Meantime we shall be continuing our series of ‘looking-back’ over what we have seen and endured these last four decades. It’s been a great ride – albeit not all ‘ups’ but we’ve emulated Rudyard Kipling at many tumultuous events –
‘If you can keep your head when all about you; Are losing theirs and blaming it on you’ https://poets.org/poem/if
… but we’re still here, riding high and continuing to do our best for our clients, with our contrarian approach (meaning independently minded and not simply doing what everyone else might be doing at the time) and concentrating on service and care but naturally with the best of qualifications and skill sets behind that.
But yes, we are indeed still here and stronger, surer, more professional (a constant endeavour!), more solid, sharper, capable… and always reflecting on the last thing that didn’t work as well as hoped, or the mistake which shouldn’t have arisen, to do our best to avoid it repeating.
Good news/bad news
Conduit frustrates the market with bigger than expected reinsurance losses from the Ukraine and also US wildfires so the shares fall 20%. Irritating and the maintained dividend (with a running yield of 9% potentially) did not assuage investor sentiment.
Hydrogen One Plc, a recent addition for us, sacks its manager and engages a new one, with a mandate to review the orderly disposal of all assets. If this happens at the net asset values, there will be a significant uplift in share price but we shall have to wait and see. The shares rally 9% regardless.
Just Group rises 68% on an agreed takeover by Brookfield – a shame as we’d just reprioritised purchases of this one as it had been slipping but sadly hadn’t acquired many more! Drat. Still mustn’t be greedy – that’s still over £700,000 of value increase for funds managed (an extra 0.25% on the total)!
We are winners holding Lloyds, Barclays, Close Bros and Vanquis, as a result of Friday’s Supreme Court judgment on car finance too – all welcome. Close was up 34% at its best today. Our view was that even a far worse outcome was already in the price. It reminds us again – the most important investment anyone can ever make is in ‘patience’ – in what they own and in us too – if the reasons for that are sound of course and not baseless and without foundation.
Property investment scams
At last, the FCA is taking action against the first of many property investment scams across the Country. Concept Capital Group Ltd is accused of breaching myriad regulations by the operation of an ‘unregulated collective investment scheme’. Its ‘modular homes’ have allegedly been sold as ‘investments’ to unsuspecting people with all extra forms of assurances which are not assured.
As readers will know, for far too many years we had been pressing for action against the likes of holiday park/mobile home parks and bungalow/cabin providers who sell units at extortionate prices, in collective sites and some providing ‘guarantees’ which are not worth the paper upon which they are written, in our opinion. Investors have lost millions and commissioned salespeople have gotten rich off their backs. Yes, the scams have involved units local to us too and something needs to be done about them. By all means let sales continue but in a proper, transparent marketplace and under the protections of regulated advice for the sales and the financing.
Maxims – being a better investor – from the ‘Basil of Barnstaple’, No. 2
2. If you invest wisely, say £500, in a speculative company’s shares, the most you can lose is £500. The most you can win is unlimited.
Charity bank accounts
Banks used to offer these without any charges, as a goodwill gesture and shrewd marketing to support their local communities etc. Today, they don’t seem to care about that. Lloyds is the latest, with no justification but simply changing the terms of existing accounts so that charges apply.
Is this really wise of them? There are hardly any transactions on most, often with credit balances and putting the Bank’s name out there. Instead, penny-pinching and just as collectively all the banks are reporting ever-growing profits… enough to make a desperate Chancellor eye another ‘windfall profits tax’. At the same time, no doubt the same institutions’ PR departments will be looking to flag charity causes they can support with grants… why don’t they start a little closer to home? The bad will this approach creates is far more costly to them than the few coppers the charges will raise on those staying.
Incidentally, we provide subsidised terms to charities with interests close to our hearts, including discounted investment management fees. Suggestions of suitable banks in this field are welcome and we shall gladly publicise them, as there are lots of charity treasurers out there fed-up with having to now pay fees.
Crypto comedy – it’s all a bit coin…
I loved Julius Sharpe’s tweet… he noted ‘I tried to explain crypto to my nine-year-old and she said “It sounds like someone is trying to sell you their imaginary friend!”’ Out of the mouths of babes, eh!
AI
Just for entertainment really but we asked Chat GPT what it thought of our present managed assets. It liked what we had and particularly the diversity and risk mitigation etc but clearly didn’t understand, from simple written material it could access, why we held certain things.
One or two stocks we know are ‘expecting’ certain actions of which clearly it is not aware (and those reasons, the extra opportunity) but likewise it is eerily, amazingly clever and at a phenomenal speed which we mere humans can’t emulate! ‘Performance strong’ is something we enjoyed seeing!
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
