Close the door on the way out...

No prizes as to what I'm eluding to in my blog this week. All of us would have woken up last Friday with a myriad of thoughts running through our head. From "yippee" to "Armageddon out of here."

Irrespective of mine or anyone else's viewpoint, life goes on and indeed, 6 days later, one could argue, what was all the fuss about?

Financial Markets have weathered the initial storm, some companies that threatened to leave the UK if we voted out are rethinking things-some have even come out and said they're staying, The USA has changed it stance slightly on trade deals from "get to the back of the queue" to "of course we will consider trade deals with the UK" and we have countries like New Zealand, Australia and South Korea at the front of the queue, waving order forms at us.

Even the EU-yes, the EU say that so long as we agree to the four core principles of Freedom of movement-workers, capital, goods and services-we can access the single EU market (amazingly, those that we had, while we were a member state!)

My own view, is that this vote was a political one and not a financial one. Financially, the UK is fundamentally sound. We have cash stocks, we have a thriving and growing economy. We have financial stability. Politically I think we are all over the place, as demonstrated by the lack of trust the public have with all political parties-52% of voters decided to ignore the request by the three main leaders in the UK and voted against them. We most certainly didn't appreciate The President of the United States saying what he did either. So now we face uncertainty with no Prime Minister as such, a Labour Party that is so divided, one wonders when it will return as a credible opposition and a Lib Dem party that is rebuilding itself. So what next?

Well a vote 'Out' was a vote for uncertainty,that's for sure. We will see a new Prime Minister and possibly a new leader for the opposition, will this lead to a General Election? who will trigger Article 50 (the document that dictates how we exit the EU)? what will happen when we do trigger it?

Europe also have some up and coming issues: Greece has yet to be resolved. Jean Marine Le Pen, leader of the National Front in France, is calling for a 'Frexit', Geert Wilders, head of the PVV-a right wing party in Holland,is looking for a 'Nexit' and Austria was very close to be led by an Ultra Right political party. Oh, and lets not forget the US elections as well.

Clearly, over the next few months, any of the issues I've outlined-or indeed a collaboration of, will have an effect on world trade, economies and investment markets. As I write this, Boris Johnson has decided not to stand for leader of the Conservative party. I'd imagine so as not to run against Michael Gove.

So, with uncertainty, comes a time to look at your investment strategy. Whether your ultimate risk levels are none, or off the scale, in an ideal world, we should 'be prepared' and look at spreading things around. I've said this before, but if we look at the British Summer, would you invest in Sun cream and Ice Cream, or Sun cream and Umbrellas?

Just in case you're wondering-the picture? the door to my office and its always open!

Have a great week,

Victor

Victor Sacks is an Independent Financial Adviser and Company Director of VS Associates Ltd. VS Associates Ltd is an Appointed Representative of the Sense Network and is registered with the Financial Conduct Authority no:725170

If Victor has piqued your interest, why not get in touch? check out his website: www.vsassociates.co.uk or email him: victor@vsassociates.co.uk

follow on twitter:@SmartSacks

'My Mum Said if I have to ask then I can't afford it.....

Value......?

Maserati, Ferrari, Breitling, Rolex, Laboutin. Hand Made Suits, Business class, bespoke furniture...

For some, the above names and items will not only evoke thoughts of a few zero's at the end, but also perhaps, quality-maybe even a big tick on the Bucket List of life. Over the years, these names and items have built their own value and are synonymous with quality-yes, we can always luck out and buy one of the aforementioned that was made on a Friday afternoon, but the aftersales service will be just as good and you'll be even more pleased you spent £850 on a pair of shoes.

You'll notice that 'Financial Advice' was missing from the list-yes I cant believe it either! In a recent article (Financial Adviser 1st June 2016 page 10 to be precise) was an article that got me. It's not a new story, but it got me thinking. the headline says 'Brits wont pay more than £50 per hour for financial advice'

Now when the going rate roughly, is £125-£150 per hour, there is a bit of gap-like turning the Marianas Trench on its side sort of gap-in cost vs value.

On the next page was an advert about the CII awards and the various categories you can enter into to (Let me tell you how brilliant I am and maybe I'll win). But if I fail to show value to my clients, then potentially I wont have a business to shout about and the CII will lose serious amounts of subscription money as advisers drop off the radar because they can't get the income they need (not want), because no client is prepared to pay the going rate. Now I'm sure I've over egged and exaggerated things to make my point, but it is a point worth making.

In whatever industry we work in, there are always assumptions made that a client 'knows' what the basics are of our job and what we do and we decide not to showcase it. In the case of a Financial Adviser, the 5,000 strong poll is telling us we need to elaborate more on the 'behind the scenes' work that goes on, so we can build up our value and that when that bill is put in front of them, it is accepted without hesitation, because the value has been perceived.

For example; when I've met a client to discuss investment or pension, I will come away with documents that will help me understand a client. I use that information to decide where, of the 3,000 or so investment funds available to me, I am going to recommend my client to invest and I wont spread across all 3,000 but maybe 15/20 which I have to whittle down. Once I've the investment funds sorted, where am I going to hold them? does my client want 15/20 bits of paper through their post every quarter? or would they prefer one place, where they can log in and see everything? if the latter, there's 60 odd places those 15/20 funds can be held-my job? who's best for the client? what were their requests? and that's just to get things going. Once a quarter, I'll look at everything again and check it's all running ok. Rarely, what I have just described, will anyone be told that's what happens.

For the sake of all our businesses, let this be an 'under the hood' check. Do I have a brand name that exudes value and quality? Do I tell my clients exactly what I'm going to do, or do I assume they know, because of the job I do?

Maybe, next year, I'll re-write this blog and hopefully my business will sit alongside those I listed.

Have a great weekend

Victor

Victor Sacks is an Independent Financial Adviser and owner of VS Associates Ltd. VS Associates Ltd is an appointed Representative of the Sense Network and is Registered with the Financial Conduct Authority.

If Victor's View has piqued your interest, then give him a call on 07866 504896. email him victor@vsassociates.co.uk or visit www.vsassociates.co.uk

Victor can be followed on Twitter (@SmartSacks) LinkedIn and Google+

'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