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  • 16 December 2014

    The FMB way of working...

    Of late I have acquired several new clients and a discussion with one in particular reminded me of how thorough we are with the things that we do here at FMB.

    During a recent initial meeting, the client could not believe that I did not look through all her investment information which she had brought with her. Instead we sat back and got to know each other over a cup of tea and talked about what was important, including her objectives for her wealth and of course explaining how we work here at FMB including what to expect from us and what we expect from our client.

    She confirmed this was so different to a previous meeting she’d had with another advisor from a building society, who seemed so absorbed by the historic statements that she had brought with her that they hadn’t even questioned the purpose of her visit that day. That ‘uneasy and rushed’ experience led her to the internet to search for another adviser which is where she came across our website.

    For simplification, our process is broken down in to six stages here at FMB and we encourage questions from our clients throughout to ensure that there are no unpleasant surprises; just certainty, clarity and peace of mind.

    We are always grateful for feedback from our clients and to monitor client’s satisfaction with our services, we periodically send out a simple questionnaire. We are confident we do the right thing but it’s nice to be reminded that our ordinary way of working, is found to be, to some, quite extraordinary.

    If you would like to know more about our services or would like a no-obligation initial meeting, please do not hesitate to get in touch.

  • 11 December 2014

    'Tis the season to be silly!

    Being a Financial Planner is a serious business, but our profession does have its lighter moments. Those of you of a certain age may recall Jasper Carrot, and his funny insurance claim sketches. If not, here are a few examples:

    "The accident happened because I had one eye on the lorry in front, one eye on the pedestrian and the other on the car behind."

    "I started to slow down but the traffic was more stationary than I thought."

    "I pulled into a lay-by with smoke coming from under the bonnet. I realised the car was on fire so I took my dog and smothered it with a blanket."

    Q: Could either driver have done anything to avoid the accident? A: Travelled by bus?

    The claimant had collided with a cow. The questions and answers on the claim form were - Q: What warning was given by you? A: Horn. Q: What warning was given by the other party? A: Moo.

    "I started to turn and it was at this point I noticed a camel and an elephant tethered at the verge. This distraction caused me to lose concentration and hit a bollard."

    "I didn't think the speed limit applied after midnight"

    Q: Do you engage in motorcycling, hunting or any other pastimes of a hazardous nature? A: "I Watch the Lottery Show and listen to Terry Wogan."

    "First car stopped suddenly, second car hit first car and a haggis ran into the rear of second car."

    "Windscreen broken. Cause unknown. Probably voodoo."

    "The car in front hit the pedestrian but he got up so I hit him again."

    "The other car collided with mine without giving warning of its intention."

    "In an attempt to kill a fly, I drove into a telephone pole."

    "I had been shopping for plants all day and was on my way home. As I reached a junction a hedge sprang up obscuring my vision and I did not see the other car."

    "I was on my way to the doctor with rear end trouble when my universal joint gave way causing me to have an accident."

  • Some good news for the average UK homebuyer!

    Stamp duty is now a graduated cost as oppose to a fixed cost - Much the same as income tax.

    Ok, excellent, but what does this mean in practice?

    An “average” UK home, valued at £275,000 would have been subject to a 3% fixed charge under the old stamp duty rules, or a charge of £8,250. Now, under the new rules, that same home will face a charge of £3,750. This figure is calculated using the following rates:

    • No stamp duty to on the purchase price up to £125,000;
    • 2% duty on the purchase price between £125,000 and £250,000;
    • 5% between £250,000 and £925,000;
    • 10% between £925,000 and £1.5 million;
    • and 12% over that.

    Hopefully this will mean that a property which may have actually been worth, say £270,000, would have previously been valued at £249,000 to avoid crossing a stamp duty threshold. Under the new rules, we should see houses fetching true and fair values, as oppose to stamp duty driven ones.

    Under new rules, the cross over point will be homes valued at £937,000 or more. After this, the new rules will adversely affect a purchaser.

    Interesting or not, the measures are designed to benefit the majority and make the UK housing market a fairer place.

  • As the end of Parliament approaches, George Osborne delivered his pre-election Autumn Statement.

    The key change was a rise in stamp duty for high value homes; could this be the Conservative answer to a ‘Mansion Tax’?

    Will it be enough to sway voters who feel this Government have not done enough to address the perceived growing polarisation of wealth?

    The move to allow spouses to inherit ISA status will be seen as another pro-marriage element to Tory Policy and may appease calls from their support base for more tax breaks for married couples.

    There was not much in the statement to please higher rate tax payers who may feel that every political party has them in their sights to pay down the deficit. An increase in the threshold, although small, is the first rise for 5 years.

    Further pension changes were announced enable beneficiaries of annuities to be paid tax free. This does not apply to defined benefit schemes, the Chancellor seems determined to bring the attractiveness of personal pension arrangements in line with company and public sector pensions which makes me wonder what his long term plans are for the public sector.

    The policy of enforcing tax on global companies generating profits in the UK may be a vote winner, but it remains to be seen if those taxes can be collected. Perhaps the public has high expectations of what national governments can enforce in a global business community. Combined with a tougher tax regime for banks will these policies be enough to persuade floating voters that the Tories are penalising the “bad guys”? George Osborne will be aware of the absolute need for the UK to remain competitive whilst balancing social discontent at home.

    The growth figures the OBR are predicting certainly make it look like recent policies are moving us in the right direction compared to France, however as David Coombs (Head of Multi-Asset Investment at Rathbones) pointed out at our FMB seminar yesterday- no matter what economic road we take we will not escape the drag of the impending Eurozone recession.

    David warned that whatever the outcome of the election markets would be volatile for the next couple of years. A Labour victory would see jittery markets as spending increases with no plan to reduce the deficit, a Tory victory would lead to two years of hyperbole over “Brexit” (our departure from Europe) and with the distinct possibility of a 1974 style hung parliament there was no sign of calm waters ahead. On a positive note he did emphasise that with volatility comes opportunity for investors!

  • Financial advice usually relates to a particular financial problem or area on which you are looking for help or guidance on and in the majority of cases, the advice relates to an individual financial product or investment.

    Financial planning however is more holistic and is the process of properly managing your finances in a way that allows you to achieve your life goals. The process assesses your financial situation as a whole and provides you with direction and control over all of your financial decisions.

    Financial planning enables you to see the ‘big picture’ and find answers to important questions such as:

    • How much do I need to earn/save in order to maintain my current lifestyle in retirement?
    • When will I be in a position to work because I want to, not because I have to?
    • Am I able to pass on money to my family, or create a legacy and still be sure I’ll never run out?

    Quite simply, how much is enough?

    As we all know, things in life do not always go as expected. Your financial plan can be tweaked to incorporate these changes and see how they impact your goals both short and long-term and what action needs to be taken in order to get you back on track.

    Read more about Financial Planning here

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