'But that lane is moving faster.....'

                                             

See the left lane in this image? what happens if you jumped into it..? would you get there quicker?

So, last week I found myself travelling to Billericay, Essex. I was going to an Investment Forum, where all the great and the good in the world of Investment Fund Management were about to unveil their new investment strategies.

So I set out at 6am as my journey took me east along the A14, then south on the M11 and then I joined the 'road to nowhere' (Chris Rhea's description of the M25) and finally, a couple of A and B roads. So as you can imagine, I got caught in a few jams and whilst sitting in 'neutral' a blog arose from the ashes....

People behind me started to swing out from behind me dropping into nearside or outside lanes, as traffic appeared to move quicker either side me. No indicators appeared to be working, which was amazing considering most of those moving were new cars (at this point, I shall refrain from naming the makes of vehicles, but we all know what make must clearly offer indicators as optional extras!) Torvill and Dean had nothing on the pirouettes being performed as cars swayed in and out of lanes, trying to outmanoeuvre the next driver and get ahead of the game. At this point, I confess to joining in, but taking a more sedentary passage and using Mirror, Signal, Manoeuvre, as I was taught.

By the time the traffic flowed, those that sashayed, were caught behind lorries and then when they tried to get out into the middle lane, no one let them out-sniggering as they went passed!

I arrived at the venue a few minutes later that I anticipated, but certainly less stressed that those beating their steering wheel in frustration.

So where am I going with this?

Clearly, investment markets have not played out the way we all thought they would. I think we all knew there would be some up and down stuff (Volatility) but that's something we need, in order to drive growth, however, such bouncing around historically, would see investors hit the exit button, or at least make huge changes to your investment strategy.

In the same way, that swinging left and right on a motorway might appear you're getting somewhere, but the stress involved in your timing to not only get out, but when do to get back in can be just as traumatic.

Making subtle changes & keeping the investment strategy is one thing, coming completely and sitting in cash or near cash (very low risk) for your entire investment, isn't going to cut the mustard, because we have seen the growth investment funds can achieve. Last week for example, the Japanese stock market grew by 7% in one day. Sitting in a cash account, that same growth would taken 10 years to be achieved.

I know its difficult, but its a case of holding firm and staying true to the investment strategy you have chartered and remembering why you invested in the first place.

See you soon,

Victor.

If I've piqued your interest, then come and have a look at my website; www.business-ifa.co.uk. This blog is based on my views and cannot be assumed as financial advice. I am an authorised representative of Ringrose Grimsley Ltd, who in turn are authorised and regulated by the Financial Conduct Authority No:228585

Death of a salesman?

Hello.

Now normally, I'd be posting about financial services, but I was recently involved in a bit of a Twitter issue. It revolved around someone else's blog that said Social Media should not be associated with marketing...er..

From day one, I have and will continue to use social media as a marketing tool-I'm marketing myself! Of course I want to educate, share and promote but make no bones about wanting to meet more clients, with the view of doing business. Social Media gives me an opportunity to show my personality, thoughts and ideas and hopefully, gives enough information for perspective clients to get know me.

Don't get me wrong, I'm not advocating the 'bot' posts and the automatic direct message asking me to connect on other platforms, but I am quite happy to see someone sharing information, which I'm sure is done to start building the three fundamentals of 'Know, Like and Trust'

We seem to be classing 'selling' as a dirty word and I really don't know why. We have come a long way from the days when selling meant rolling up your sleeves to reveal an arm length of watches, or buying perfume from a chap with a suitcase, both with slick haircuts and shiny suits.

Today's salesperson actively listens to what is being asked by a potential client, is keen to establish what the client hopes and aspirations are with regards to this potential purchase ('I want these glasses to make me look trendy' or 'I want my website to show I'm professional' even ' I want to ensure that, when I die, my family are more than adequately provided for financially') and will then be able to help the client make an informed decision which not only cements a sale now, but will ensure that the client not only comes back for repeat orders, but recommends you to others.

But any sale cannot begin, until you have someone to sell to and for that, gone are the days when you could knock on someone's door, or make an unsolicited phone call. These days it is about putting out interesting information in a way that makes people come to you. You then need to keep them interested with further information, or get involved with online discussions, so people can get a feel for who you are. Maybe you then meet up to talk some more about what you both do, perhaps help each other in your respective businesses and refer people to each other......

And that, ladies and gentlemen, is selling-you sold yourself to someone, who believes in you enough to collaborate with. Don't be ashamed-be proud.

Take care,

Victor.


Victor Sacks is an Independent Financial Adviser at Ringrose Grimsley Ltd, who are regulated and registered by the Financial Conduct Authority (FCA no:228585)

If Victor has piqued your interest, feel free to email him at; victor@rgl-ifa.co.uk or visit his website: www.business-ifa.co.uk

Is There a Phoenix?

All you can do is shake your head in disbelief. If Greece were a human being, it's creditors would have sat down 5 years ago, when troubles became known,worked out its income and expenditure ratio, set a budget based on income forecasts and from the surplus and use a percentage of that as a repayment amount. Set a fair interest rate and review the plan regularly, so that in good times, maybe additional payments could be made and in not so good times, maybe a reduced or even no payment made. Yes, it may take a lifetime to pay it back, but with the stress taken away by the fact that the issue is being shared, life carries on.

But Greece is a country, and not a human being, however, it should be awarded some regard and the bigger issues need to be dealt with. The country has debt and it needs to repay it-I have seen reports that call on the 'Marshall' Plan to be replicated for Greece as it was for Germany. (The Marshall plan dealt with rebuilding Germany Post war and the USA agreed to cut in half the debt outstanding.) But we are not post war and to do it for Greece, would mean having to do it for other European countries such as Spain, Italy and Portugal and the ECB (European Central Bank) wouldn't be able to take 50% off of each member states outstanding debt-in my opinion.

We all know that Greece should not have been brought into the Euro, but hindsight is a wonderful thing and we can't drive our cars by the rear view mirror alone, but now that she's in and things aren't working as they should, this is not the time to put a plaster on a wound, its time to work out where the wounds are coming from and why does it need so many plasters?

Greece has now become a barometer-whether she intended to be or not-for the future of the EU and Euro. The UK market wobbled last week which was to be expected as did the European Markets, especially as some Greek debt still lies with the banking sector, which holds significant weight in those indicies..but to see Asian and USA indicies react to that (as well as China's slowdown, granted), tells me that a Greek exit from the Euro, would cause a furrowed brow worldwide, because this 'one continent, one currency' may start to show cracks. 

In my view, that's the rub. In fairness an exit from the Euro, would still leave Greece needing emergency funding. She could reprint the Drachma, but the countries credit worthiness, the banking system etc, would require an emergency cash injection and who would lend Greece the money, if not the EU?

Russia? well, with an 18% debt/GDP ratio (compared to Greece 275%) it could do, but there is no way the EU would allow that to happen, so it would have to continue its support.

And this is where politics come into play. No one is making -it seems-an effort to help Greece come out of this.Meetings,about meetings about meetings help no one and disenfranchise everyone. To sit down and work out a way forward is the most sensible-if painful-way to pull Greece out of the fire. It will be tough, and it will take decades. Having a meeting, agreeing some interim measures and kicking the already dented can down the street does nothing. Angela Merkel et al, do not want to go into the history books as the starters of the end of the Euro, is how they see it. Do it for one country, you do it for all and the EU can't sustain it for all. If Greece exits, does this mean other countries can? does this then mean the UK referendum is a foregone conclusion and even the beginning of the breaking up of the EU?

I am merely a financial adviser, putting a view across as to how I see things, and the viewpoint I make to my clients. It is why for now, I see little value in the European mainstream markets, opting to seek growth from outside of the EU, until these esteemed leaders, see beyond the view of their own political party and therefore, their own self preservation and save this wonderfully historic country, whose main export is Olive Oil and main industry is tourism. I hope that the Phoenix will emerge from all of this.

Thanks for reading,

Victor


Victor Sacks is an Independent Financial Adviser at Ringrose Grimsley Ltd, (www.rgl-ifa.co.uk)who are authorised and regulated by the Financial Conduct Authority no:228585

Victor has is own website :www.business-ifa.co.uk and can be followed on twitter (@SmartSacks) Linkedin and Google +, 

Guidance, Advice or ....?

Since my last blog at the beginning of the month, I've noticed that when it comes to pensions-both for the employer and individual there seems to be a mixture of feelings from confusion/put off, dismiss/defiance and embrace/welcome. So I guess this will be a blog of two halves, yet similar...let's carry on and you'll hopefully see where I'm coming from!

Individual

From an individuals' perspective, the amount of choice as to what to do with your pension pot has changed dramatically. at the beginning of the 21st century, the decision for the vast majority was when will you put funds into an annuity, not will you. Now, 15 years later, we can not only use an annuity, but also use out right to take what we want from our pension each year and vary it annually, to taking the whole pot as cash. With individuals being able to take benefits from the age of 55, it is incredibly difficult to work out the cause and effect of what we do today and how that will impact us (if at all) later on in life. Consequently the decision is postponed/put off.

I'm also seeing personally and reading about those individuals that want to take their pension pot as cash, without acknowledging the emergency tax that will be applied to the amount taken after the tax free cash element is taken. For example, according to statistics, the average pension pot size is £32,000. The tax free cash element is generally 25% of fund value (in this case,£8,000 and therefore, £24,000 is taxable and will be assumed that you earn this monthly amount every month!

With £24,000 equating to £288,000 for a calendar year, it is easy to see how 45% tax would be charged (as well as the loss of your personal allowance) on some of it (anything over £150,000 and 40% on the majority of it (£31,786-£150,000) and 20% on a bit of it (up to £31,785). On £288,000 a tax bill of  £115,742 is created, which is roughly 40%. So cashing in the aforementioned pot of £24,000 could mean £9,600 is removed in tax, leaving you to fill out a P50Z and claim back the tax taken which will be refunded to you....by HMRC.

So we've met confused and defiant, how about embrace?

there are more and more individuals discovering 'Moneywise.co.uk' as well as seeking out Financial Advice to help them make a decision. I'm seeing more 50yr olds that ever before, who are trying to understand the rules as they stand, so that when it comes to 55, they know the route they want to take-subject to no unforseen events happening.

Employers

With Auto Enrolment now rolling out to micro and start up businesses (I had my first letter last week, and there are two of us in the business), more and more employers need to look at the cause and effect of Auto enrollment, if nothing else, the fact that a companies' salary expense is going up by 1% a year over the next 3 years. Yet I am meeting quite a few who decided to throw away the letter from The Pension Regulator, only to find that the implementation of Auto enrolment is government driven and not a hoax, nor will it disappear if a change of government takes place as all parties have agreed to the policy. Yet, there are some employers who welcome the idea and look to implement it early,using it as a recruitment tool/retention idea.

Conclusion

As I said at the beginning, two different sectors, but common threads nonetheless. Taking either decision on your own can be daunting, because no one website can see you and your circumstances and no amount of website 'guidance' and can truly give you the advice needed. You will be able to get to grips with the options, but which option-or options (you can have multiples)-is right for you?

Thanks for reading,

Victor

Victor Sacks Dip PFS
Independent Financial Adviser


For a free face to face,non obligatory first meeting for those within 20 miles of Peterborough, or anywhere in the country via Skype, please visit my website: www.business-ifa.co.uk

Victor Sacks is an authorised representative of Ringrose Grimsley Ltd (www.rgl-ifa.co.uk) who are authorised and regulated by the Financial Conduct Authority No:228585

This blog is based on Victors' views and not to be considered as advice, and everyones' circumstance is unique.

My Beautiful Neighbourhood

My Beautiful Neighbourhood

The Band Space wrote a song in 1996 called 'Neighbourhood' so while listening to that tune, I thought about this blog post.

This is a picture of my street. Honestly it is, in fact I'm at the end of my drive, looking left. So why post this? well.....

Dependent on your neighbourhood, house prices have rocketed in recent years. My own house has increased in value by 30% in the two and half years I've owned it. Up and down the UK we are seeing huge increases in property values, due to a mixture of lengthy low level interest rates, Mortgage tightening, & demand outstripping supply and as long as huge swathes of the UK remain green and our rolling countryside to remain as such, interest rates remain low and very slowly increase (as expected) and mortgage lending remains under tight controls (as expected) we can expect more of the same. At this point the well used phrase of 'If you always do, what you've always done, you'll always get, what you've always got' doesn't seem so bad, does it? hence the huge drive for people who have significant equity in their house, bank account, ISA's or pension to invest in property. (Now before I go on, this is not a property bash post, this is an awareness and my opinion-that's all.)   

I can fully understand the drive to property. We are a unique country that strives to own its own house and not only that, continue to move (around 8 times is lifetime average) hopefully upwards, to the biggest house we can comfortably afford-unlike our European counterparts in Germany, who rarely move once they are in a house and our Scandinavian colleagues who mainly rent and use surplus funds to buy antiques, pottery etc. Yet investing into property (and only property) brings various risks to the table:

Liquidity Risk

My office took a call from a woman who required short term lending. She has a gearing ratio of around 70% on her property portfolio and one of her tenants is refusing to pay rent and she wanted to borrow £6,000 to start legal action-she has no cash herself as she invested it in property.
This was a genuine call made last week on 4th June. Now many will tut and roll their eyes and it may be rare. but I bet she isn't alone-No mortgage or Bank would offer any further advance to her. Living proof that you can have all the property you want, but you still can't break a brick off your investment property and take it to the supermarket to get your shopping.

Tenant Risk

How good is your tenant and want insurances and assurances do you have in place to cover such an event, or a gap in tenancy. Having investment property is great, but what happens when it is not producing an income?

Neighbourhood Risk

Neighbourhoods change. I was brought up in the East End of London. In the late 70's and early 80's immigration and strike action caused friction in many areas and those that lived there, couldn't wait to get out and now places like Hackney, Shoreditch, Bow are cool and trendy areas to live in. Who would've guessed it?

Correlation Risk

If everything you own is in one area then Correlation risk exists. By one area I mean any investment area: Cash, Stocks & Shares, Soft or Hard Commodities, Antiques, Property etc. because if that sector fails, then you have nothing that will grow. Suncream and Ice Cream generally get sold when the weather is warm, so if the sun is out, you're doing fine, but if its -7 out there, not much going on. Far better to be in Ice cream and Overcoats, if you get my drift.

Summary?

A little of what you fancy does you good; everything in moderation. We hear these platitudes daily, normally lifestyle related. But in the investment world, diversifying is king, Have property of course, but have some cash as well and some commodity stocks and Mutual Funds and Pictures, antiques, pottery.......

Take care

Victor

This blog represents a personal view and is not to be taken as financial advice as that can only be given when fuller circumstances are known


If my blog(s) have piqued your interest then do get in touch!

www.business-ifa.co.uk

Victor Sacks is an Independent Financial Advisers with Ringrose Grimsley Limited. They are authorised by the Financial Conduct Authority no 228585 www.rgl-ifa.co.uk

At least you can predict an Eclipse!

Well the eclipse came and went and it was predicted to the hour as to what would happen....If only life were that simple!


I just wanted to share my thoughts (with the help of some financial analysts) on the financial markets. Now, as you know I can't predict the market and let's face it, if I could, would I be writing this blog? 'Course  not, someone would be doing it for me! But I can share my views and thoughts, which are mine...more or less, but please don't take this as gospel, as this is nothing like predicting an eclipse.


So...where are we? Well, believe it or not, we are in a pretty good place. We have seen a fantastic run on US Equities and there appears to be no stopping it's growth, with S&P 500 Index, expected to show another double digit growth return this year. The UK's retail sales were up 5.5% year on year (although not high enough to raise inflation) and the far east, particularly Asia Pacific,  continues to grow and more unexpectedly than ever, the UK bond market defied all analysts predictions and delivered another fantastic growth performance.


After all this good news, there has to be some bad, right? Well.....we obviously have terrorism, but we have in general, been dealing well with that since 9/11, however, we need to be mindful of Mr Putin, Greece and the European Central Bank (ECB) as well elections here in the UK and USA.


At this point, speculation takes over: A Greek exit (or Grexit, as it's known) is not predicted, for that to me, would signal the demise of the Euro, every member state taking back it's debt and chaos for years will ensue. Mr Draghi (Central Bank President), will continue I feel, to roll out Quantitative easing for the Eurozone to begin a large scale, asset purchase and hopefully, so will the Eurozone consumers. Germany is currently leading the way, with both food and non food sales volumes rising. I am also factoring in Mr Putin bows to worldwide pressure and removes Russia from the Ukraine conflict and that Oil prices stay moderately low, which undoubtedly help the growth continuation of China, India etc.


I genuinely don't think I'm a million miles away here with my thoughts, although you may well disagree on some aspects! my core belief, is that a global strategy is required as well as a truly diverse investment portfolio.


Let's see what happens and at least we won't need a pinhole camera to do so.

If my blog has piqued your interest, then please do get in touch via www.business-ifa.co.uk

my thanks to Maria Toschi of JPM Asset Management & Guy Monson of Sarasin & Partners whose published articles in 'Wealth Manager' magazine (19/3/2015) have been used for inspiration.

It's not going away!

Hello Blog readers!

I know, I haven't been seen for a while. The truth is, that I've been roped into walking Hadrians Wall for Great Ormond Street Hospital and what with training, fundraising & the day job...well I just run out of time!

So what, am I on about? Auto Enrolment that's what. Yes, the Labour party driven scheme to get all those earning more than £10,500 per annum, over the age of 23 and under State pension age, into a pension scheme. 

I am just amazed (and I guess I shouldn't be, but I am) at the 'laissez-faire' attitude of business owners, perceivingly willing, to take on The Pension Regulator (TPR) in a game of 'dare.' In other words, thinking TPR will not take the action they have the legal powers to enforce and if there are enough likeminded businesses, that a Class Action of sorts could break out.

I completely get why a business owner would not Parley with Auto Enrolment (AE). It is time consuming and creates additional expense, when businesses are yet to feel the comfort and joy of being out of recession. It is the last thing any business owner wants, especially when you are looking at 3% of salary roll and the individuals having to cough up 5%, when they probably haven't had a pay rise in years.

On the flip side of that, is the seismic shift of how long we live for and what we do for a living. Going back 30yrs, my parents would talk about ' three score and ten' being the average (that's 70 years) and any more is a bonus. Based on an Internet search I did today, average life expectancy is 81.2 years, male and female combined. With 1m business owners yet to stage for auto enrolment, we are seeing more and more people leave employment and become self employed or owner directors. For those setting up a Limited Company, an accountant is likely to recommend paying yourself a salary below National insurance levels,  with the remainder being topped up by dividends. As a self employed person, your national insurance contribution is a flat rate of £2.75 a week plus 9% of profit over £7.9k. So what am I getting at? We are living longer and our state pension is effectively being reduced, when compared to the percentage of national earnings it set out to be worth (around 25%) due to our changing work patterns of owning our own business. By design, due to our own work and lifestyle changes, coupled with living longer and having more babies survive at birth, we need to take more responsibility for our financial future and this is clearly something we are not used to doing.

Our generation (40-60 yr olds) will probably be the first to experience no set retirement age. Retirement as such, maybe a shift change in work patterns, rather than a work full stop, as it is unlikely we will have enough money set aside to stop work altogether. 

So rather than 'having' to work, wouldn't it be better to 'want' to work? It might need more financial sacrifice now, but it could mean financial enjoyment later on as well, for you and more importantly,  for the next generation. 

As an Independent Financial Adviser,  I'm always happy to talk to business owners and if your business or home is within 50 miles of Huntingdon, Cambridgeshire then my first meeting is free and without obligation. Please have a look at my website: www.business-ifa.co.uk and I look forward to seeing you.

Victor

Here's another...and another...

Well hello and a happy new year!

Christmas came and went, but the extra pounds on the waistline still remain...oh well....

I have dispensed with a picture for this blog, opting to focus on content, although there was a comedian before my time who used the catchphrase 'and another thing...' though I've no idea who he was.

I refer to the pensions minister, Steve Webb for this month's title. Not content with allowing a 55 year old to fully crystallise their pension fund for cash, he is proposing to allow people to reverse out of annuity.

Now I'm going to go out on a limb here...In my opinion,  I can see  those with a pension fund of around £20-30k going for full encashment. There is a very good chance that this will be the most amount of money that person has seen in one lump sum and after years of scrimping and saving, wants to be able to celebrate retirement. There is also the hard, honest fact that the additional income available from that size pension fund (maybe £1500 a year) may not be significant enough, to make a difference to the household budget. Anything beyond that fund value, must be looked at many ways before going for the full cash value, because when £2,000, £3,000 or £4,000 per annum can come into a household each year, every year then due diligence must be performed. 

To reverse out of an annuity in an entirely different scenario. An annuity on the face of it, is an insurance contract. Using current base rate, health, age and sex of the individual a rate of return is given, payable every year until death and possibly continuing at a reduced rate to your surviving spouse, until they die. So an annuity could have a life span of 40 years. Behind the scenes, the annuity company needs to make its money work, after all, it can't just stick it in a bank account and rely on the interest. So using complex financial instruments it set's itself up to ensure that not only are the payments out agreed, but that there is some growth as well, not only from the instruments,  but also on the dynamics of the clients themselves...In other words, they die earlier than expected.

So this system has worked for centuries.  But now, it's mooted that you can cash in your annuity. How will the annuity company cope? Would it pay out the full fund value, or would penalty clauses apply? Who would recommend you remove funds from an annuity? Bearing mind, that, if you're a male over 55 and taking a statin, then you're quite likely to benefit from an enhanced Annuity of around 6% per annum. If the annuity company saw that funds had to be more readily available,  could they make enough return on capital to pay the levels they pay? Would rates have to be reduced?

There are times when over tinkering just leads you back to where you were, with no benefit and a lot of time spent on it. With Auto enrolment hitting smaller and smaller businesses,  I think the working public have enough to deal with on pensions at the moment, without another possible addition. 

Too much choice leads people to be confused and as such, defer things, or worse still, make a quick decision to go for the wrong option.

If my blog has caused you to stop and think, then please, get in touch via www.business-ifa.co.uk my first meeting either at my office or yours is free and without obligation on either side.

Take care and see you next time.

Victor

PS.  Please forgive this shameless plug. From 2nd- 6th March  I'm walking Hadrians Wall for Great Ormond Street Hospital..to find out why, please read my story at www.gosh5015.co.uk thank you