RDR Thoughts

November 11, 2011

Thanks to SLI & Prudential for hosting a dinner last evening; an informal round table (literally) discussion on the omnipresent RDR in Standard Life’s impressive office in George Street (must be money in them thar GAR’s)

Wherever IFA’s gather, there will never be shortage of opinion (and ego) and I usually go out of my way to avoid such gatherings for fear of developing a criminal record for some sort of assault or bodily harm.

That said, I’m getting better at containing my feelings (I think…) and being very selective as to whichever event I attend.

I”m still curious enough or too fearful of missing something to cut out attendance at industry bunfights completely, but have been to a few things of late that have taken away good hours of my life that I can’t get back.

I avoid anything that looks like a fund launch, investment view, product launch and especially anything organised by a compliance/network firm.

Technical information, business process structure and understanding improvement along with anything to do with bashing active fund management usually blows my skirt up.

Clearly I now get invited to very little.

What’s my point?  Well, it was curious at the meeting last night about the wildly differing opinions on what, how & why the RDR might be (no surprise) for the businesses involved and the industry generally but…

The Elephant not mentioned in the room was, for me, who’s going to tell the public and when?

What are IFA’s doing to advise their current and potential future clients about what the RDR means for them?

After all, its going to impact them the most.

I’ve gone all overboard and written a “white paper” (very grand) on what RDR might mean for the consumer and if you’d like a copy, please let me know.

Be warned; it’s a weighty tome and you may lose several units of time from your life that you certainly won’t get back from me.

Let’s be having you.

Roland Oliver

11/11/11

 

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Cash flow modelling and utility bills

June 10, 2011

Whilst working with a client this morning and using our Voyant cash flow process, a couple of very interesting points where raised.

Our client noted that this approach of getting into the real detail of his income, expenditure, assets and liabilities then testing different financial scenarios was the only way to plan. He felt that this was a serious way to approach his Wealth Management plan and it was the first time he felt fully involved in the process.

During the meeting, he noted that since we last spoke a few weeks ago, his monthly payment for electricity was to double.

It’s not been a good week for the majority of Brits as we continue to be faced with ever higher costs across a whole range of goods and services we need on a daily basis.

Clearly our client wanted to factor in this increase in his monthly expenditure and for him knowing what his financial picture looked like, good or bad, was infinitely better than not knowing.

From the point of understanding the effects of increased cost and from the peace of mind that comes with knowing you’ll be OK financially, cash flow modelling is such an important part of a Wealth Manager’s process.

We find that using this approach allows clients to better understand their financial circumstances “in the round” and avoids falling into the specifics trap and confusion over jargon, policies and industry-speak.

Take Voyant away from me now and I’d struggle to do my job.

As we continue to live through these tough economic conditions the value we provide to clients in managing their cash flow models becomes even greater.

Please call us today and we’d be delighted to demonstrate how our Wealth Management Experience, including cash flow modelling, can put you firmly in control of your financial plan.

Roland Oliver

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The fundamental need for protection

June 7, 2011

Reading an article in the paper the other day reminded me that one of the most basic functions of my job is in ensuring that clients are adequately protected with life and critical illness cover. This is arguably the most important but often the least appreciated part of my work.

We all have stories of untimely death or serious illness and how families been devastated but have survived because of having financial protection in place.

I’m not going to go into all the details of what plan, who with or what type of cover at this stage but I am going to point out some areas that must be addressed.

I will not be alone in noting that clients have a reluctance to paying for something “they may not need” and tend to try and talk the cost of life and critical illness cover down to a budget.

We use Voyant cash flow modelling to determine the actual financial cost of someone dying early or suffering a critical illness which tends to bring some serious reality to the levels of cover needed.

Often clients will have some protection in place (flogged by a bank in many instances) which the level of cover bears no resemblance to the actual level of risk. There are a lot of fans of nice round numbers out there and clients are usually at a loss as to why a particular level of cover has been arrived at.

Establishing with clients the real cost of early death or serious illness by more rigorous methodology is paramount and the costs of providing this cover are then seen in the right context.

I find that people do understand the need for cover and are much happier to have the right level of protection in place once they see the real amount of money required to make sure their family will be financially protected if the unthinkable happens.

Once we have the right numbers established, then using the appropriate trusts to ensure swift dispatch of any monies in the event of claim should be a given.The option of using Relevant Life policies were possible also adds a very welcome 20% corporation tax saving on premiums.

So to summarise, don’t leave it to chance; make sure the amount of cover is relevant to the level of risk and get the proper amount and type of cover you need.

If you need us to give you a more accurate figure as to how much cover you might need, contact Malcolm Stewart our Voyant guru on 0131 273 5202 and he’d be happy to help out.

Roland Oliver

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Working for the Government?

May 18, 2011

I had a friend that years ago had worked out that with his given rate of tax and National Insurance, he was effectively working for the Government until mid afternoon on a Tuesday before he made any money for himself.

Given our current levels of tax, I wonder what he’d make of things now?

He could well be working until late Thursday with top rates of tax being 50%.

We know that reducing the tax burden is one of the 5 key concerns of our clients and that this has never been more acute. I hear from people on a daily basis that they are looking for ways to pay less tax.

Interestingly, they always want to look to the esoteric methods rather than the tried and tested.

So please speak to your adviser and make sure you’re maximising your ISA allowance, pension contributions, CGT annual exemptions, IHT allowances – use a relevant life policy through your limited company if your able and save corporation tax on your life cover premiums.

If you want more, then certainly look at the improved tax breaks Venture Capital Trusts & Enterprise Investment Schemes offer since the last budget (be well aware of the higher levels of risk that might be involved here.)

In short, pay your tax but make sure you take full advantage of the ways you can pay less.

I’ll be discussing the ways you can use financial planning tools to save tax in more detail in the coming weeks.

Call me anytime to discuss this further or any other aspect of your financial planning needs.

Roland Oliver

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