Team No Comments

ESG… the ‘new normal?’

Firstly, yes, this blog is called ‘the new normal’ and yes, I know you may be fed up of this phrase (believe me, I am too!), but dare I say it? Is ESG ‘the new normal’ when it comes to investing?

You may have seen some of our posts over this past year on ESG and sustainable investing.

We posted a 3 part series over the summer called ‘What is ESG? – An Introduction’, this was written by us to help our clients really understand what ESG is, and it’s a good thing we did… a recent study was undertaken in this industry and it was found that the majority of clients didn’t understand what ESG was, in fact it was found that people thought it stood for ‘ethically sourced goods’.

Google searches also show an increase of 216% in the term ‘ESG’ since 2018. This shows if people don’t know what it is, they want to learn.

Over the summer we wrote;

What does ESG stand for?

ESG stands for Environmental, Social and Governance

But what is it?

Investopedia definition for ESG is;

‘Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.’

ESG is more of a theme or a set of principles to follow rather than a single set principle.’

In case you missed it, please revisit this blog series using the following links: What is ESG? – An Introduction – Blog Series – Part 1, Part 2 and Part 3.

One Planet, One Society, One Economy

ESG is a set of principles throughout not just investing, but throughout the world.

Climate change is a factor within ESG principles, but why is it important to focus on climate change?

Well we are one planet. We are one society and one economy. Yes, I am aware that sounds very ‘tree hugger-ish’… but look at how issues caused by climate change can affect society and the economy.

You will have seen hurricanes, floods, the wildfires in California and Australia on the news over the past few years. These are all driven by global warming. Since 1980, the cost of weather related catastrophises has been over $4,200Billion.

Boris Johnson recently announced that the aim is for the UK to have no sales of new fossil fuel cars by 2030.

Climate change is not an abstract future concept anymore and ESG isn’t just the latest trend, it is a future state of being, it’s an input into the outcomes of the future and it’s about companies embracing opportunities and making changes now to invest in the future.

The concept of ‘ESG’ or ‘ethical’, ‘socially responsible’ isn’t new.

Over 30 years ago, in 1987, there was a study by the Brundtland Commission called ‘Our Common Future’ which said that;

‘Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs, guaranteeing the balance between economic growth, care for the environment and social well-being’

ESG has been gaining momentum for a while now as climate change and other social issues presented themselves but then of course, the pandemic hit.

Many investors probably assumed that the ESG focus would fade however it was only strengthened, with people looking at how everybody working from home would reduce carbon emissions, international travel was halted which again contributed to the drop in carbon emissions and early on in the pandemic when companies had to send employees off to work at home or on furlough and their mental and physical wellbeing became a focus.

Sustainable investments were once few and far between and usually meant sacrificing returns in order to stand by your beliefs, but these days, you would be hard pressed to find a company or an investment that doesn’t have some form of ESG policy or statement. Of course some may just be doing this to ‘tick the boxes’ but some will be actively involved in ‘doing the right thing’.

ESG has momentum now, we no longer think you have to sacrifice returns either!

As we have said before, ESG is not a tangible ‘thing’ that you can see or hold, it is in fact a complex interconnected system of ideas and processes.

Think of it as a journey, rather than a destination.

Andrew Lloyd


Team No Comments

Do Active Managers Truly Deliver in Volatile Times?

Please see the below content from Blackfinch Asset Management:

The role of an active manager is to make investment decisions based on analytical research, forecasts, judgement and experience with the aim of outperforming a specific benchmark or achieving a target return. This is as opposed to passive management, which involves tracking a market index.

The optimal environment in which active fund managers should thrive is when there are heightened levels of stock market volatility. Large swings in market direction create attractive investment opportunities as well as compelling exit points for profit taking. Arguably, markets have rarely been more volatile than in 2020. As a result, we’ve been extremely vigilant in assessing and monitoring the actively managed funds to which we allocate within our portfolios.

Our Approach to Active and Passive Managers

We’re whole-of-market investment managers, meaning we have the luxury of being able to make investment decisions freely, without fear of compromise. We’re unbiased in our investment selection. This extends not only across underlying fund houses, geographic regions and asset classes, but also when it comes to selecting between active and passive mandates.

We blend active and passive strategies within our portfolios, recognising the benefits that both approaches bring. When selecting an actively managed fund, we expect to clearly see value being added over and above an equivalent passively managed fund.

It’s important to establish whether a fund is delivering outperformance versus its selected benchmark. We’re also just as concerned about how it’s performing against its comparable peer group. This helps us to ensure that our investment screening process enables us to identify active managers with the ability to deliver attractive risk-adjusted returns versus other similar mandates.

Active Equity Managers

Equities are the main driver of performance in most portfolios. Our most recent assessment showed that, out of all actively managed equity funds to which we allocate, 84.6% have outperformed their respective benchmarks this calendar year. Perhaps even more comforting is that when compared to their peer groups, an impressive 92.3% of our underlying funds have outperformed their peer groups.

North America

Notably, within the North American equity sector, one of our core active equity funds has delivered a year-to-date return of 84.5%. This is some 71% ahead of the base market and equivalent passive mandate.

Asia and Emerging Markets

China, emerging markets and Japan have also been areas where our active managers displayed strong returns over equivalent passive and sector comparators. Of course, past performance should not be used as a guide for future returns. These impressive returns do mask some periods of significant volatility. However, when used at the correct weight and managed appropriately, these funds can be a fantastic component in a portfolio.


On the flip side, within our UK equity allocation the margin of outperformance from active managers was far less, particularly in the large cap space. While outperformance was achieved, the difference between active managers and their passive equivalents was around just 2-3% after fees. We feel this performance differential is down to the notable challenges that the UK market has faced this year above and beyond the pandemic. For this reason, we remain comfortable in maintaining our current underweight to the region.

Ongoing Assessment and Monitoring

As ever, we’re conscious that the investment backdrop can change at a moment’s notice and we remain vigilant in our allocation to active managers. This is reflected in how we stick to our established process and also highlights the importance of regularly screening and assessing both active and passive mandates. This discipline helps us to ensure we don’t become wedded to ‘star’ managers and continually focuses attention on selecting the correct strategy depending on the particular stage of the market cycle.

As you may have seen with some of our other blog content, we regularly share updates from Blackfinch Asset Management as we believe they are a very good investment management firm. They have a good solid ESG proposition built in to their investments and as you can see in this article, they have a very good approach to investments and are varied in their methods to help deliver the right returns depending on the clients circumstances.

As Blackfinch note in the article, they are conscious that the investment backdrop can change at a moment’s notice and remain vigilant in their allocation to active managers.

We share the same view, and one of the ways we remain vigilant is by staying up to date on markets by taking in a wide range of views from across markets to help us get a handle on what’s going on.

We are also vigilant with the investments that we recommend to our clients and review these on an ongoing basis to ensure that they are doing exactly what they say they will and looking after clients assets in the right way. This is part of our ongoing research and Due Diligence.

Please keep an eye out for further updates from both us and from a range of different fund managers and investments houses.

Andrew Lloyd


Team No Comments

Where are we now? (Part 2)

As we discussed in Part 1 of this blog: , I had the privilege of listening to a great interview held between Karen Ward of J. P. Morgan and Dr. Gertjan Vlieghe, a voting member of the Bank of England’s monetary Policy Committee.  This blog covers the second half of the interview, which I have based on my notes and which hopefully does not distort the discussion.  To re-iterate, the following is based on my interpretation and I believe I have been faithful to the key content and questions and answers discussed.

Karen raised the topic, ‘About negative interest rates and stimulating growth?’

Gertjan responded, ‘Macro Economists think about ‘real interest rates’. These have been around for a while.  It’s (about) nominal interest rates at 0% or below.  If you lower interest rates further, banks will start to lose money, lose deposits and therefore can’t lend.’

‘In reality, (in Europe) there has been no large-scale withdrawal of deposits. People/corporates are willing to pay to keep deposits in the banks.  Is the UK fundamentally different?  Probably not.  So, it (negative interest rates) could achieve further stimulus to the economy.’

Gertjan continued, ‘My reading and very extensive studying found that it did not impede lending and it did not reduce bank profitability.  It worked as intended.  The risk of unwinding macro stimulus is low’, (in Gertjan’s opinion).

Karen then asked, ‘But has it worked?’  (in Japan and Europe)

Gertjan responded, ‘The question is, if negative interest rates were never used, would it be even worse?  Actually, it would have been.’

Karen went on to enquire, ‘How will this interest rate persist?  How will it reverse?’

Gertjan answered, ‘I am a believer in the ‘low for long’ story and the importance of demographics. We have seen a big increase in longevity without a commensurate increase in the retirement age.  Reduced capital amounts for businesses and increased need for savings generates a world where the equilibrium for interest rates is very low.  Look at what is happening in Japan – look how their interest rates are.’ 

Gertjan further discussed the global ageing demographics, except for the Middle East and Africa, who are much younger.  He added ‘The one way to adjust this is to increase the pension age.’  He did not clarify whether he was referring to the State Pension age or the minimum pension age – probably both!

Karen then went on to ask, ‘What are the Bank’s specific forecasts for inflation?’

Gertjan replied, ‘Now at 0.5% for the next two quarters, then it will rise and be roughly at target in 2 years and slightly above in 3 years.’

Karen continued, ‘Is there a risk post-vaccine of seeing a bottleneck-demand pushing up against supply?’

Gertjan responded, ‘If inflation is rising because the economy is roaring back, we will take action.  The Covid shock is dominant on demand but there is some element of supply shock.  We are looking for a sustained inflation affect.’

Karen moved on and asked, ‘Climate change – who’s responsibility is it?’

Gertjan replied, ‘It is not for the Bank of England to decide how green the economy should be – it is political.  We (the Bank of England) have a mandate for financial stability.  If you look long-term, certain assets could potentially lose a lot of value.  Fund Managers should take this risk seriously, so you don’t start losing money.  We (the Bank of England) want to lead by example – everybody should do this kind of reporting.’  I believe he was referring to environmental-based reporting.

One of Karen’s final questions on the matter was, ‘Should we review our framework and targets?’

Gertjan answered, ‘The Government sets us an inflation target of 2% CPI.  It’s OK for us to periodically review our toolkit.’ 


The whole interview was just over an hour long but was well worth listening to.  I understand that Gertjan is only one voting member of the Bank of England’s MPC, but if they all have his level of understanding and grasp on the issues and potential solutions, then I think we are in good hands.

The Bank of England’s independence and the range of tools available to them will help the Government with their drive to get the UK economy fully recovered as soon as possible.

We still have our headwinds, but distribution of vaccines will considerably aid our recovery here in the UK and globally.

Steve Speed


Team No Comments

Where are we now? (Part 1)

I had the privilege of listening to a webinar on Wednesday afternoon, which was hosted by Karen Ward from J. P. Morgan and also featured Dr. Gertjan Vlieghe.  Karen is JPM’s Chief Market Strategist for EMEA (Europe, Middle East and Africa) and Dr. Gertjan Vlieghe is a voting member of the Bank of England’s MPC (Monetary Policy Committee). 

The interview covered a wide range of important topics and I took notes in order to interpret the speakers’ key points.  Please note: Gertjan did point out that the opinions expressed where his views and not necessarily those of the Bank of England’s MPC.

Karen on the topic of the Pfizer vaccine:

‘A 90% efficacy rate is a ‘Game Changer.’  The timing is excellent (of the vaccine against the current backdrop of a high second wave of the virus).  How quickly will we get to that important point of herd immunity?’

Karen went on to ask Gertjan, ‘If the vaccine is distributed, could we be looking at a very strong bounce back in the second half of 2021?’

Gertjan replied, ‘Only if the vaccine works. In a way, the vaccine is already in the forecast. That is precisely what our central forecast is.’

Karen then asked, ‘What will you be tracking to assess the degree of long-term scarring?’

Gertjan’s response was ‘Unemployment dynamics – it’s difficult to all get back into a job.  There is still some slack in the economy and levels of unemployment will not come back down for a long time.  We will need stimulus.’

In relation to Brexit, Karen asked, ‘How is it going and what are the changes that will affect Q1 2021 and the longer term?’

Gertjan responded, ‘This is a longer-term issue. There is a trade-off between sovereignty and smooth and open trade.  It will have a purely economic consequence. We will have less trade, less competition and less technological diffusion.  This is very important for the country, but not for monetary policy.  It has also dampened investment (in UK businesses).  To what extent are UK firms ready?  How much disruption will there be in the short term?  How will financial markets react?  This will impact on monetary policy; it’s about how smoothly we transition.’

Karen on Central Banks, ‘Have Central Banks been monetarily financing governments?’

Gertjan replied, ‘On ‘Co-ordinated action’, I’m not entirely happy with it.’  Fiscal policy is doing the heavy lifting and monetary policy is helping. 

He continued to remark on QE (Quantitative Easing), ‘We expand reserves beyond what banks really need.  The macro-economic impact is very small and expansion in reserves does not lead to a proportionate response in lending.  In 2008/2009, re QE, we had no high inflation.  If inflation does come back, we know what to do; there is no constraint.’

Karen’s next question was, ‘Could a government less focused on austerity contribute to a higher velocity of money?’

Gertjan responded, ‘Completely, absolutely.  Timing is crucial in relation to the government flipping back into debt reduction mode.’

Karen then asked, ‘What can the Bank of England do to support the economy?’

Gertjan replied, ‘The impact of QE on the economy is state-contingent.  When market functioning is impaired, QE can have a big impact.  Expectations of future real interest rates are really very low.  The stimulus power (of QE) now is very low.  With regards to technical constraints, it’s important to understand that they are self-imposed – we can change the rules.’


This update is based on my interpretation and notes from the first half of the webinar’s discussion and I have tried to stay faithful to the content.

From my point of view, I was happy with the Dr.’s input as he obviously understood everything in detail and had no problem with any of the questions put to him by Karen.  He also gave me confidence (based on his views), that these people on the Bank of England MPC really do know what they are doing and are a great aid to the recovery of our economy in the UK.


Over the next few days, I will work on a precis for Part 2 of the webinar for you, which starts with a discussion on negative interest rates.

If you have any topics that you think we should cover on markets, advice or planning issues, please let me know.

Steve Speed


Team No Comments

Vulnerable Clients

The FCA have always had a focus on Vulnerable Clients – in particular, how firms manage and deal with Vulnerable Clients.

Following Covid-19, this focus was heightened given the significant impact of Covid-19 on people’s health (both physical and mental) and finances (stock market drops or possible furlough/job loss).

A key element of the FCA’s focus is on the importance of protecting vulnerable clients at this time and firms should expect to receive continued and increased scrutiny on what they are doing to identify and deliver good outcomes for their vulnerable consumers.

What is a ‘Vulnerable Client’?

FCA Definition: A vulnerable person is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.

In 2018 the FCA Estimated that 50% of adults display 1 or more characteristics that show potential vulnerability. This means that 24m adults in the UK showed signs of vulnerability.

Following COVID-19, it is now estimated that 1 in every 6 adults show signs of vulnerability.

What are the 4 key drivers?

Given the broad scope of the drivers, it’s likely that most people will experience one or more of these drivers at some point in their life.

How do we support Vulnerable Clients?

We have implemented a Vulnerable Client Policy which details how we spot the signs of vulnerability and how we manage and support our client’s needs.

In addition to our policy, we regularly provide training to all staff regarding Vulnerable Clients to highlight our requirements as a firm, the drivers and impact of vulnerability and how to spot and manage vulnerability.

We have a Vulnerable Client Champion (that’s me!), to help make sure that we support clients in the best possible ways and to constantly review and challenge our own internal processes to make sure we are strong in our focus in delivering the right outcomes.

We make it our goal to make sure the fair treatment of Vulnerable Clients is properly embedded into our culture, policies and processes to make sure that we can provide clients with any additional support needs that may be required which helps us deliver the best outcomes for our clients.

Ensuring that this as embedded into our firm’s culture helps us support our clients during periods of vulnerability which is the time when they need it most.

This year has been challenging in many ways and we have recently reviewed our internal training and policies to ensure that we take the potential impact of Covid-19 in how we help provide the best advice and support for our clients.

As a firm, we don’t just look at helping our Vulnerable Clients as a regulatory issue, we do it because we support our clients at all times, no matter what life may throw at them.

We are all likely to be more vulnerable now following the pandemic and its important to remember, we are all in this together!

Andrew Lloyd

Vulnerable Client Champion


Team No Comments

Market Update and Guidance

Market Update and Guidance – 29/10/2020

As we deal with the health and economic impact of the second wave of the virus in the UK and Europe, markets have hit another patch of turbulence.  We have seen heightened volatility over the last few days.

Why do we have this level of volatility?

The obvious answer is the global pandemic and the impact on our economies around the world.  In addition to this we have the US election and Brexit too to name just a few issues.

The US election has gridlocked the political system in the States and as a result badly needed additional fiscal support has not been forthcoming.  If we get a ‘Blue Wave’ for the Democrats and they are fully in control this gridlock could be resolved fairly quickly and fiscal support could be put in place.

Brexit negotiations rumble on and we could do with a positive outcome.  J. P. Morgan’s base case is that we will get a last-minute fudged deal but there is still a risk of a ‘No Deal’ Brexit.

Volatility could continue with further legs down even as economies and markets recover.  Given time markets and funds will recover.

What is the outlook?

The vaccine (or vaccines) are a key issue.  The consensus view appears to be that we will have a vaccine late this year or early 2021.  This will be a game changer.  Even if we can only protect our Health Workers and the vulnerable initially this should give consumers confidence to return to normal behaviour.

By the end of 2020 we should know who the next US President is, understand our Brexit position and hopefully have vaccines that are starting to be rolled out.

Are there any bright spots?

China and North Asia generally are doing well.  In particular the data coming out of China is really good and they appear to have recovered economically and are growing.  This could have a positive impact not just in the region but globally.

Some sectors have done well too, for example Technology.  We are also seeing more intertest in ‘Green Energy’ as the world starts to grapple with climate change.

Vaccine development is progressing at a pace too.

What might help?

More support from Central Banks such as the Bank of England, the ECB, and the Federal Reserve.  Generally, they look supportive and able to accommodate more help.  The IMF recently indicated that more support should be forthcoming from Central Banks.

Policy support from governments globally will help too.  We need to spend on infrastructure projects and focus on keeping people in work and getting back to work with training and apprenticeships etc.

A weaker dollar would be useful helping Emerging Markets trade and having a positive impact on global trade too.

As an investor what should I do now?

Maintain the status quo and stay invested in real growth assets.  If you are funding pensions and investments keep on funding.  Generally, asset values are low now and should show good returns over the long term.

If you have spare capital now is a good time to invest too if you have the risk appetite.  Buying assets at the right price is the key determinant of long-term investment returns.

Don’t try and time the market, you need time in the market.


The quote ‘The darkest hour is just before the dawn’ seems appropriate.  Said to emphasise that things often seem at their worst just before they get better.  The English theologian and historian Thomas Fuller appears to be the first person to commit the notion that ‘the darkest hour is just before the dawn’ to print.

We don’t know how long this ‘hour’ will be, but progress is being made.

Just be patient, we should be on the way to a brighter future and hopefully with the aid of vaccines our behaviours will become more normal and economies and markets will recover as our activities increase and life returns to normal, a new normal?

Steve Speed


Team No Comments

Investment Risk

All investors should have an awareness of risk, but how many actually understand risk and the different types of risk that can come along with investing.

This blog is designed to give you a basic summary of all the different types of investment risk and highlights the importance of diversification within a portfolio of investments.

What is risk?

Everyone knows what risk is, in the simplest terms, risk is the possibility of something bad happening.

Investment risk is no different. Investment risk is defined as the probability or likelihood of losses relative to the expected return on any particular investment. This includes the possibility of losing some or all of an original investment.

Risk is an unavoidable part of the investment process, even so called ‘risk free’ investments are still exposed to a degree of risk.

Most investors simply think of risk in terms of their investment moving up and down in line with the stock markets, i.e. the market crashes for whatever reason, then the investment goes down. We all saw this earlier this year at the height of the Covid-19 outbreak.

However, in actual fact, this is only one type of investment risk. Investment risk can be split into many different types of risk.

The main two types of risk in investing are market risk and investment specific risk.

Market Risk

Market risk is also referred to as systematic risk. This is the risk that affects the markets as a whole and cannot be avoided.

This is the risk that the stock markets will go down (or in some cases ‘crash’) as a result of news or events, such as terrorist attacks, global pandemics (as we are all now very well aware), changes of government or changes imposed by governments (such as tax changes), changes in interest rates, inflation or other general changes in the economy.

Investment Specific Risk

This is also known as non-systematic risk. This is the risk specific to a particular company or investment and can be described as news or events that are specific to that particular company which is unrelated to the systematic risks described above. Examples of this type of risk include, technology breakthroughs which may make a product obsolete or a new competitor coming to the market offering the same product/service etc for potentially more competitive cost.

This can be avoided or diversified away by for example, including investments with multiple companies so that if the investment in one goes down, this will only be a smaller part of a portfolio of investments compared to having 100% of an investment in one company.

Other types of risk include the following;

Inflation Risk

Inflation risk is the risk that inflation will undermine an investment’s returns through a decline in purchasing power. Bonds and cash are most subject to inflation risk.

You may think that cash is a risk free investment however if inflation is higher than the interest rate then the real value of the cash is eroded as it will now buy less than it would have at the time of the deposit.

The best way to avoid inflation risk is by investing in ‘real assets’ such as equities, property etc, which are known to beat inflation over the long term, keeping only the necessary emergency funds in cash so that these are easily accessible.

Interest Rate Risk

Interest rate risk is the potential for investment losses that result from a change in interest rates. If interest rates rise, the value of a bond or other fixed-income investment will decline, and if they fall, the value goes up.

Changes in interest rates can be caused by the general economic cycle (booms, recessions) and government fiscal and monetary policy.

This type of risk can be reduced by investing in shorter duration bonds or in cash.

Credit Risk

Credit Risk mainly affects bonds. This is the risk that the bond issuer will fail (default) to meet their obligations to pay interest payments or return the capital invested. This can happen if the institution issuing the bond gets into financial difficulty or has its credit rating downgraded.

This can be avoided by investing in government issued bonds which are generally secure as they are government backed or by diversifying bond holdings as with investment specific risk, so that losses from one will not affect the others.

Currency Risk

Currency risk is the possibility of losing money due to unfavourable moves in exchange rates.

Investments that operate in overseas markets are exposed to currency risk. For example, if a UK based investor invests in a US Equity fund and Sterling strengthens against the Dollar. This erodes the real value of the Dollar dividends paid into the fund. If Sterling falls, the overseas investment tends to rise.

This can be diversified away by investing in a range different world markets, as not all currencies move in the same way at the same time.

Liquidity Risk

Liquidity is how easily an asset or security can be bought or sold in the market, and converted to cash.

Property is one of the most illiquid investments, how easy is it to release funds if needed if they are tied up in property? Again, diversification of investments can help with this type of risk.

Event Risk

Event risk refers to any unforeseen or unexpected event that can cause losses for investors in a company or investment. This links into market risk, investment specific risk and credit (default risk). For example if a company is unable to pay interest/dividends or return the capital invested due to a specific event (credit risk), either due to a global event such as terrorist attacks or war (market risk), or due to a specific event within a company (investment specific risk).

This can include events such as an industrial disaster such as oil spills. Event risk also incorporates the ‘acts of god’ events such as hurricanes, earthquakes etc.

As with market risk, certain events cannot be diversified away but for the more company or even industry specific risk, a well diversified portfolio can help with these elements of risk.

Political Risk

This is the risk that Governments (or potentially new governments in the lead up to an election) will change monetary or fiscal policies, such as increasing taxation.

However global political risk is also a contributor to the risk and volatility of UK investors.

For example, have you checked the stock markets (like the FTSE 100) lately? How many times do you see an article starting with ‘FTSE down (or up) as Donald Trump says… well ‘something controversial’?

Operational Risk

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, systems or external events.

This includes the risk of the transaction failing to settle, fraud, misleading reports/ valuations, system failures, trading errors, regulatory risk and staff (human) errors.

Operational risk issues at investment banks are costly to address, but the reputational repercussions also can affect stock prices.

Note on Diversification

You can see from each of the types of risk, the best strategy for reducing risk is good diversification.

This reduces the risks of any one particular investment, asset class, market (i.e. UK, Emerging Markets etc). This minimises the chance of an overall portfolio suffering a loss and increases the probability of good overall investment growth.

However, it is important to note, that some risks cannot be diversified against.


Hopefully, this content has been useful in helping you understand the different types of investment risk and the need for diversification although some risks such as market risk, cannot be diversified against.

Its also important that you do not invest in any investment that is higher than your risk tolerance or capacity for loss and to make sure you a comfortable with the level of risk taken and the impact of any potential losses.

Please keep checking back for a range of blog content and insights from us like this blog, and updates and insights from a range of leading fund managers and investment houses.

Andrew Lloyd


Team No Comments

Surprising UK Statistics: Personal Debt & Savings

People in the UK owed £1,681 billion by the end of July 2020, according to The Money Charity’s September issue. These figures have crept up by £28.4 billion comparatively from £1,652 billion at the end of July 2019. This adds up to an extra £539 per UK adult over the past year.

Currently, in England and Wales, approximately 28 people are made bankrupt, 51 Debt Relief Orders are granted, and 159 Individual Voluntary Arrangements (IVAs) are entered into – every single day.

Although there are many contributing factors relating to the above statements, much can be attributed to the events that have unfolded world-wide this year. Restrictions imposed as a result of the Covid-19 pandemic have resulted in job losses which has subsequently affected many people’s financial situation. Addiction, over-spending, and poor money management are also common reasons why one might find themselves ‘in the red’.

From the start of this year until the end of July, the Citizens Advice Bureaux in England and Wales dealt with 2,124 debt issues every day. As the furlough scheme comes to an end over the coming months along with the ban on evictions and the halt on bailiff action, it is likely that these numbers will only increase. How the state of our economy recovers and the consequent effects of this is also to be seen.

According to DWP, 12.8 million households (46% of the total) had either no savings or less than £1,500 in savings. Furthermore, it has been revealed that 19.2 million households (68% of the total) had less than £10,000 in savings.

The reasons why we should save are obvious; comfort can be taken from having cash reserves, particularly in times of crisis. Getting married, getting divorced, having children, or getting onto the property ladder are some examples of milestone events in our lives which often incur considerable cost.

Despite good intentions, it appears that saving is easier said than done. The FCA has revealed that 9 million UK adults rate themselves as having low financial capability in relation to personal wealth, money management, knowledge of financial matters and confidence in buying financial services.

Financial education from an early age in life is vital. We believe this is the game changer and should be a focus of Government, education, and charities. In summary, financial understanding is empowerment.

Chloe Speed


Team No Comments

Tax & Politics

I listened to a technical webinar at the end of last week presented by Prudential and their senior political and technical staff here in the UK.  Following the cancellation of the Budget (was this previously a pre-Budget debate?) they were discussing what taxes might change when and the politics behind it.

Basically, it is a trade-off between what value any new tax might have (how much will it raise for the State?) balanced against the potential political damage any specific tax change may do.

Thankfully, on this basis a lot of the potential tax changes were discussed and dismissed as unlikely.  I don’t think this is the end of the matter, we will need additional tax for the State to pay for the support during the pandemic and strengthen our recently exposed weak spots, the NHS, residential care, social services etc.

We will also need more money to kick start the economy and help us deal with Brexit, fudged deal, or no deal.  As this is the case, when the economy is recovering, and the consumer is spending freely again (post vaccine?) we will see changes to the tax system.

Given the state of our economy and the outlook, the only thing we know with certainty is the tax position and legislation we have in place right now.  If you have the means, why not take advantage of the tax reliefs and planning opportunities that are available today?

It makes good sense to press on with any beneficial planning now using what reliefs are available today, we know the rules now.  For example, pension funding with higher rate tax relief within the pension contribution limits we have currently.

If you would like to discuss your own personal situation, please get in touch.

Steve Speed


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Financial Advice and The Young Single Woman

Research conducted by Royal London found that people without a financial adviser were more likely to be female, single, earning around £20-£30,000, and under the age of 35. As a 27-year-old single woman, I fall smack-bang into the middle of this category and was disappointed (but not surprised) when the statement presented itself to me. After some research and a lot of self-reflection, I now feel obligated to provide an insight into the intricacies of this finding from a personal standpoint.

‘I don’t earn enough to seek financial advice.’

Talking about money does not come easily for most of us. It is a personal matter and can feel uncomfortable to discuss. Despite this, it is very important that we do talk about the ‘m’ word. At times, my perception of my own finances has made me feel that I did not earn enough money to warrant financial advice. I did not have enough self-confidence to approach a professional from the financial industry. I think my pre-disposed view of a testosterone-fuelled, overly male-dominated Wall Street had led me to believe that investing was not particularly catered towards women.

I am now aware, however, that specialised advice from a professional adviser can help me set realistic financial goals – and reach them. Ironically, my previous perception of my financial status meant that I denied myself the opportunity to strategically grow my wealth in the first place. To back this up, Royal London and the International Longevity Centre UK (ILC) found that, in the space of just 10 years, customers who had sought financial advice were, on average, £47,000 better off than those who had taken care of things themselves.

‘I don’t have time to seek financial advice.’

A young woman living in the 1950’s and 60’s was typically expected to marry, have children, and assume the role of primary caregiver. Times have (thankfully) changed and for the most part, women can now progress into further education and a career of their choice – should they wish to do so.  The ‘modern woman’ is her own person, has her own money, and can have it all. The only downside of this is that many women are required to perform a constant juggling act between family, friends, and career – often prioritising the needs of others before their own. Perhaps women of this day and age are just so busy living a full life, that they do not have time to seek financial advice?

As it turns out, we have plenty of time. On average, women live 5 years longer than men. Therefore, it makes sense for us to prepare for long-term financial stability and the best way to do this is with professional, preferably long-term, financial advice. One of Royal London’s key findings was that those who fostered an ongoing relationship with their adviser were up to 50% better off than those who had only received advice once.

‘I don’t believe that financial advice would benefit me.’

Money makes the world go round and most of us will experience ‘money worries’ at some point in our lives. New statistics from Fidelity International show that 47% of young women have had their mental health affected by financial worries, but only 12% surveyed would ask for help from a financial adviser. When I feel stressed or over-whelmed, I typically tend to seek advice from friends, family or even a work colleague. To improve my general well-being, I might go shopping, force myself to attend a spin class at the gym or perhaps even visit my GP if necessary.

This year, more than any other, has made me realise the importance of looking after my mental health. I recently realised that when I feel positive about my financial situation, I feel positive about myself. Good quality financial advice can improve emotional as well as financial well-being and the practice of sound financial planning in our 20’s and 30’s builds a strong foundation for a secure future.

And the uncertain times that we now find ourselves in makes the prospect of a secure future all the more appealing.

The year of 2020 has been challenging to say the least. Due to the Covid-19 crisis, the UK went into its first national lockdown on the 23rd March, and, by the end of April, my days had blurred into one self-isolated Groundhog Day. I had lost all sense of routine and was struggling to work productively from home. To add to this, my only form of contact with friends and family was via repetitive virtual quizzes. I was then furloughed and spent my days attempting DIY, and my nights battling anxiety caused by a looming threat of redundancy. It is now apparent that my concerns were not without rationale. New findings from the European Institute for Gender Equality and our Institute for Fiscal Studies indicate that women will be disproportionately affected by job losses as a result of the current economic conditions.

Bottom line; women have never been more in need of financial advice than they are now.

Women of the past fought for our right to vote. Today, we are still striving for equality in relation to the gender pay gap, and it now appears that we are stuck in a pensions gender gap too. Research undertaken by NOW: Pensions and the Pensions Policy Institute has revealed that women in their 60’s have an average of £100,000 less in their pension than men do. 

For me, when it comes to a lack of women receiving financial advice; the worst part of it is that this time, we have nobody to blame but ourselves. I, therefore, implore all women to seek financial advice. You may just unlock your financial potential…

Chloe Speed