Financial Tips

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Fund Managers Show Their True Colours!

We have written often about the failing of the banks to truly look after their clients who invest with them.

Scandal after scandal has appeared in the press and it was no surprise to hear that Barclays have sacked Anthony Jenkins who was brought in in the summer of 2012 following the departure of Bob Diamond, who left in the wake of the Libor scandal.

Paraphrasing comments in the Daily Mail, he was appointed to steady the ship and he wanted to reduce the importance of the investment arm. It seems that his boss Sir Mike Rake thought differently and wanted to retain its global presence as a major investment bank.

Apparently Barclays are close to naming former JPMorgan banker Jes Staley as chief executive, signalling a renewed focus on an investment banking division that has been pared back over the past three years.

The Daily Mail comments on JP Morgan:

"No bank has paid more in fines for abuse of markets and clients in the period since the financial crisis, shelling out some £26billion for wrongdoings.

It has been involved in every form of bad banking, ranging from Libor fiddling, to anti-competitive behaviour on corporate bonds, illegal credit card practices, misleading investors over 'toxic mortgages' and losing billions in high-risk hedging activity."

It really could not be more damning.

We then read Lloyds staff are being castigated by management for not selling enough products, even though this was proved to be bad for their customers in the very recent past!

Ok, so we know that the investment side of banks have a terrible track record on putting their customers first.

They are only interested in themselves.

It’s called greed and self-interest.
 

• Act with integrity and put the client first
• Be explicit about how we help and the costs involved
• Take time to really understand their needs and concerns
• Work for them and not a product provider
• Actually care about the job we do for them
• Have a long relationship based on trust

• Always put our clients’ interests first and ahead of our own
• Take care of clients’ money as diligently as we would our own
• Only develop, offer and maintain funds and services designed to add value for clients and help them achieve their financial goals
• Make all costs and charges transparent and understandable
• Disclose to investors the source and value of any other material benefit we receive as a consequence of our role as investment manager

• Two large well-known consumer brands, M&G and Schroders are set to leave UK trade body in 2016
• Three more well-known consumer brands, Aberdeen (includes Scottish Widows), Invesco Perpetual and Fidelity also reported to be considering leaving the same UK trade body

• The IA had become "far too aggressive over reforms on the transparency of fund performance fees and transaction costs"
• Dissatisfaction over UK trade body Statement of Principles, this outlined "behavioural standards such as the need for fund managers to put clients' interests ahead of their own."

Hot Topics Q&A: Should I Use My Pension to Repay My Mortgage?

Every week we receive questions from clients regarding all aspects of their financial planning. So, rather than keep the answers to ourselves (and clients) we publish one key topic each issue.
 

Q. I have had an interest only mortgage now for many years and the lower cost rather than a repayment loan meant it helped send my son to a private school.

Of course now age 56, I am looking at how I pay this off if I don’t downsize.

I have a few investments and these are mostly in personal pensions that my accountant suggested I set up many years ago and are worth around £300,000.

I am aware of the Lifetime Allowance problem and have opted out of the NHS Pension Scheme as this together with my personal pensions took me to the limit, and I have Individual Protection 2014.

So ignoring this, would you recommend I use these funds to repay a loan of £150,000?

A. With the new pension freedom rules, giving easier access to your money, this is a question that will become increasingly common.

Research from Partnership, a specialist insurer, shows just over half a million people in the UK plan to use all or some of their pension to help repay their mortgage balance.

Of course there are many things to think of before you make a decision:

• Will you indeed downsize?
• How much retirement income will you need?
• When do you want to semi/fully retire?
• Will you inherit?
• How much can you save before retiring?
• What State & NHS Pension benefits are there?
• What is your attitude to risk?
• Is inheritance tax an issue?

What we suggest you do is look at these issues and get a good idea on how things are looking before you decide anything.

It is vital to have a robust strategy to minimise any mistakes and look at all the pros & cons.

A Financial Planner will build your own financial map to show your expenditure versus your assets.

Crucial factors here are:

• You can access 25% of your funds to get tax free cash
• Any other withdrawals are taxed
• You can nominate your children as beneficiaries for the funds which is inheritance tax efficient

So, for example, 25% represents in your case £75k, and this would pay off half of your mortgage.

This may well be a sensible use of your personal pensions tax free cash, but please do your homework!

Please send us your questions! It's easy to do. Just send an email to us here (and if we publish it we'll make it anonymous).

Wrap-Up - Doopy Do, Doopy Do ..........

Hands up those who love to laugh until the ribs hurt?

I would imagine there is a good show of hands?!

I only have to hear the iconic Dance of the Cuckoos (Doopy Do, Doopy Do...) that was the Theme Song for Laurel & Hardy and I have a smile on my face.

Watching some of their classic scenes on You Tube recently I well and truly tested out the ribs.

The reason I was looking at L&H was that I went to see a tribute to them at the old Georgian Theatre (beautiful place) in Richmond, North Yorkshire with Jeffrey Holland as Stan Laurel.

Jeffrey you may remember from Hi-de-Hi as Spike the young camp comic at Maplins and protégé of Ted Bovis the cynical old comic.

This was a critique by Helen Brown on the show:

It’s late in the day for two of Hollywood’s greatest film comedians as Oliver Hardy is gravely ill in his California home and Stan is visiting. "How are you doing babe?" he enquires of a stark white, empty bed frame.

Holland makes it easy to imagine his friend laying on the bed and when he goes to check whether Hardy’s catheter is full it’s automatic to look for oneself.

Between the platitudes Stan tries to cheer up his friend with reminiscences of their time together, recanting stories, mostly about his own marriages and with ten weddings between them he tells Hardy that he’s happy at last.

"I married some of them a few times mostly to check I wasn’t wrong the first time."

There’s a poignant sadness to the empty stage, but as the lights dim he pulls on his hat and tells a few jokes. It’s amazing how easily Holland becomes Stan and just for a few moments the man with the silly grin is really there.

"I know something you can’t do." he says, and replying to himself in Oliver’s American Twang.

"What’s that then?"

"You can’t strike a match on a bar of soap."

And those blue ridge mountains of Virginia still pine for the lonesome.

It  was indeed a sweet and sour sort of show, with pathos at its core - I loved it.

You also had the opportunity for a Q&A with Jeffrey and I asked which film they were most proud of? "Way out West" was the answer, which I would agree with.

We also learned that Ollie was a very good and obsessive golfer, who as soon as filming was over would rush of to play.

Laurel meanwhile would be obsessing over the rushes and was constantly trying for perfection.

That was why the money was split one third for Ollie and two thirds for Stan.

The origin 0f Ollie's nickname "Babe" was a strange one. Apparently his Italian barber would
rub his face with talcum powder and say "That's nice-a baby!"

Jeffrey is an expert on L&H and founded The Sons of the Desert, the official Laurel and Hardy appreciation society of which he is now an honorary member.

The 20th International Convention will return to England in July 2016. The convention will be held in the Lake District, close to Stan Laurel’s birthplace, Ulverston. The event will be hosted by the Bacon Grabbers Tent (Oasis 113) — find them here.

I’ve now booked to go to see fantastic old trooper Roy Hudd at Wilton’s Old Music Hall in London in December. He is playing the dame in the pantomime Dick Whittington.  

Ribs get ready!!

See you next time.