Wealth Creation

By: Lee Goggin, co-founder of findaWEALTHMANAGER.com

Lee Goggin, co-founder of findaWEALTHMANAGER.com

When it comes to finding the right wealth manager, the journey might feel quite daunting. After all, it is a significant decision entrusting your hard-earned cash with another individual, not to mention that the sector is notoriously discreet and you may not have heard of many of its best respected brands. 

However, with rising inflation, debates around the future of interest rates, and increased taxation, there is no time like the present to get in touch with a wealth manager to explore the best options for your money. Below I look at the three top factors to consider when shopping around for the right wealth manager for you.

Dismiss the question, am I wealthy enough?

One of the first steps in finding the right manager, is gauging which firms offer assistance to your level of assets. The UK is a crowded and highly varied market, and it can take a lot of research to find the right firm for you. To add to this, recent regulatory pressures, as well as competitive pressures, have caused many wealth managers to review their business models and instead focus on areas where they can be more profitable. By raising the minimum wealth level for prospective clients, many have been turned away by wealth managers.

Yet many firms have gone in the other direction and have reduced their minimum asset thresholds; clients should never have to feel that they haven’t got enough money to approach a wealth manager. In fact, the question of ‘have I got enough money’ should be eradicated. There are services such as our own which will take out the stress of the selection process and find the right firm that matches your wealth needs.

Value is key

Once you have taken the first step and started compiling a list of shortlisted firms, the next most important consideration is costs. This is especially necessary if you have a list of firms which all offer broadly identical services in terms of investment offerings, individual attention from advisers, and any additional services such as financial planning advice.

In a nutshell, you want to keep costs as low as possible whilst ensuring you’re on track for the best possible performance for your profile. Some firms which offer really solid performers will only change 1.5% or even less for a significant portfolio, whilst providing an excellent personal service. If you’re receiving quotes for more than that, ask for the firm to justify their high fees with performance data. A small increase in fees can add up to massive one when compounded over the years.

If you remember nothing else, ask for the firm’s Total Expense Ratio (TER), which is the total cost of running your portfolio, including all charges and costs. This will provide you with a clear picture of the final costs and how much of an impact the fees will have on your final investment returns.

Some clients are happy to pay a small premium for a premier service or for superior returns, but this should always be a conscious choice. If the wealth manager is charging a TER in excess of about 2%, then do not be shy about asking them to justify that fee with performance figures going back a number of years. Be specific that the figures should be for a risk profile which is similar to yours.

You will always get what you pay for in wealth management, as with everything else in life. But you must insist that you really do get the investment returns and service standards which warrant the price. If the potential provider isn’t being transparent with the value of their offering, it’s time to look elsewhere.

In it for the long-haul

A consideration that is often forgotten is the emotional aspect of finding a wealth manager. Your prospective wealth manager is one which you hope will be with you in the long haul to help you plan for the major financial commitments that comes your way in life.

One way to gauge your potential relationship with the wealth manager is asking for their own history, such as how long they have worked at the firm, whether they have dealt with clients who have similar needs to your own, and, importantly, what the process is if they were to leave the firm.

Alongside assessing the longevity of the potential relationship, the perfect wealth manager must also be aware of your financial personality. They should take the time and effort to get to know you as an individual during the assessment, and to understand your risk capacity and tolerance, as well as your reactions to market-moving events. 

A wealth manager could create the perfect investment strategy in theory, but unless they take in your financial personality, the strategy is made almost redundant as the investor will lack faith in the plan due to it not matching their own. This personalised service is why, after all, we use human advisors as opposed to robo-advisers. The perfect wealth manager should be there to not only manage your investment, but also manage you as an investor throughout your wealth journey.

Are you searching for the best Forex Brokers List in the world? If so, then you came to the right place. This article will give you some insight as how to find the best list for Forex trading. Once you are done with this, you will have a clear idea about which brokers should be on your list.

There are many varieties of Forex brokers. For instance, there are the full-service brokerage firms such as banks, investment companies, and insurance companies. The retail or ‘traditional’ brokerage firms trade currencies in the same way as the larger firms. However, their services are limited by the fact that they have not been licensed to trade currencies.

A number of small online broker firms also trade the Forex market. The advantage of trading online is that it provides investors the ability to trade in the Forex market from anywhere in the world. You can access their services at any time, day or night, and you can start trading as soon as you feel comfortable doing so. Many new investors prefer to trade online because there are no hassles and often you can do it from the comfort of your own home.

When looking for the best Forex list, you will need to ensure that it does not contain too many common scams. There are many websites that promise high returns on your investment, but these promises often prove unfulfilling. To avoid falling into such enticements, you will need to first ensure that the list you are looking at is legitimate. If you are dealing with an online broker, then you should be able to verify the legitimacy of the firm by contacting the Better Business Bureau or the local chamber of commerce. If you have friends or relatives who are involved in trading, talk to them about the various firms that they have traded with and what they think of the firm. Alternatively, you could even use a specialized search engine such as Yahoo or Google to find top forex brokers list.

Once you have the list in hand, you will need to identify those brokers who you believe are reliable. If you wish to trade on the Forex market regularly, you should ensure that your broker is dependable and trustworthy. Some of the most important factors that you should consider when choosing a Forex broker are the types of trades that they offer, their fee structure, and whether they have a market-link system with several international banks. If you have friends who are traders and are willing to help you choose a broker, you should consider asking them for advice.

Once you have narrowed down your list of top choices for the best Forex broker, it is time to check out their trading platform. Before selecting a specific broker, you should thoroughly test out their trading platform since you will likely be using it once you start trading. Investing a few hundred dollars in a trading platform can go a long way, since most traders do not fully understand how their platform works and what they should look for when determining which is the best platform.

Since Forex market makers control the supply and demand of currencies, brokers are required to be certified by a particular market. In order to be accredited, brokers must successfully pass several exams given by the AMEX. Brokers also are required to successfully complete a course in order to be re-accredited. This certification is a great asset if you want to hire the services of a particular broker.

Finally, Top 10 Forex brokers are regulated by the Commodity Futures Trading Commission (CFTC) and The National Futures Association (NFA). These agencies perform inspections of brokers’ businesses, as well as their activities. Brokers are strictly required to inform both the CFTC and the NFA about any instances that they are engaging in transactions with a customer. In addition, brokers are required to register with the SEC and meet other legal requirements with regards to their businesses.

This is a Sponsored Feature

The new UCL Global Business School for Health (GBSH) has recently entered into a Memorandum of Understanding (MOU) with Prince Sultan University in Saudi Arabia, dedicating themselves to working together to improve global health.

By entering into this new collaborative relationship, the two institutions are committed to working together to enhance their development efforts in the healthcare sector. This will include undertaking joint research, developing specific projects around global health issues, and cooperating on the design and delivery of executive education courses, degree programmes, and study trips abroad.

The UCL GBSH is the world’s first business school dedicated to health and healthcare management. The new school aims to elevate the global impact of healthcare delivery and transform healthcare access, experience, and outcomes around the world. They will achieve this by empowering healthcare management leaders of the future through high-quality education so they can make a difference to healthcare systems globally.

Professor Nora Ann Colton, Director of the UCL GBSH, said: “The College of Business Administration at Prince Sultan University is an excellent business school training professionals across a number of areas of business. We believe that this collaboration will strength our education and research approach to healthcare management and business while enhancing our global connections and offering.”

The Dean of the Faculty of Population Health Sciences at UCL, Professor Ibrahim Abubakar, said: “I am very pleased that our new Global Business School for Health will be collaborating with the College of Business Administration at Prince Sultan University. Our shared interest in advancing world class education and research for health businesses globally will be mutually enhanced by this agreement.

Prince Sultan University, the first private university in Saudi Arabia, is also driven by a shared purpose to make the world a better place through education, research, and innovation. They aim to provide the Middle East with a quality education to the highest international standard.

Dr. Ahmed Yamani, President of Prince Sultan University, said: “Our partnership with UCL demonstrates our continued commitment to work closely with world-leading educational institutions. PSU is truly proud to be directly linked to one of the milestone changes in the Higher Education System in this country, and that is the introduction and establishment of private higher education.”

Professor Mohammad Nurunnabi, Aide to the President on Ranking and Internationalisation, said “We are proud to partner with UCL, a world-leading university. This partnership aligns with our vision to provide the Middle East with quality education of the highest international standard, and our commitment to Saudi Vision 2030.”

The new UCL GBSH has been established to address issues seen in the global health sector, including labour shortages and gender inequality in leadership, as well as other issues brought to the forefront throughout the pandemic. Through this new collaboration with Prince Sultan University, the schools will be able to devise and provide increasingly effective developments to combat challenges faced by this sector.

By: Tony Xia– director of The Mortgage Agency based in Sydney.

If you feel like your credit cards and other debts have you in a chokehold with no room for air, you can breathe easy knowing that you have a few lifelines.

What’s more, you can actually increase your wealth whilst still paying off your debt.

Here are some strategies you can employ to maximise your savings, minimise your debt, and begin growing your wealth.

How Debt Consolidation Can Help

The debt consolidation loan strategy works by calculating how much money is required to pay off your debts in full, including any penalties for early repayments.

Then, you take out a personal loan for that amount only and pay off all your debts.

Consoling all your debts into one single personal loan can come with many benefits:

• Your debts are all housed in one place, so you only have to worry about one payment to one lender. You know precisely how much the amount will be, so you can plan and budget for it appropriately.
• You have a clear repayment schedule, rather than numerous accounts going off at different times for different amounts. Managing your finances can be much easier when you only have one payment scheduled.
• There is an endpoint in sight. When you have different cards credit cards and loan terms, it can feel like you’re never going to be out of debt and become despondent. When you have an end goal, you can work towards it slowly and steadily.
• If you’re not managing your total monthly repayments, you can structure your personal loan over an extended period and reduce your repayment amount. While this will likely result in more money spent in the long run because of interest, it can provide immediate financial relief to get you back on your feet.

Why Debt Snowballing Can Be Effective

If you don’t want to take out any more loans, the debt snowballing method can be an effective option.

This method takes the smallest debt you have and focuses all your energy on repaying that debt early while still servicing your other debts as required.

Focusing on one thing at a time can help you stay on track and maintain motivation, especially when it’s a small amount and can be paid off relatively quickly with a few extra repayments and cash injections.

The victory of paying off one loan will translate onto the next until you only have a few more long-term loans remaining, such as a car, a mortgage or a tertiary education loan.

Is Refinancing a Good Option?

If interest rates have gone down since you took out your mortgage and you’re stuck with a fixed rate home loan, you can benefit from the lower interest rate by refinancing your home loan to a variable rate mortgage.

Keep in mind that there can be two disadvantages of refinancing to a variable mortgage:

• Refinancing your home loan costs money. Although you can benefit from a lower interest rate, consider whether it’s worth the cost of refinancing.
• Variable-rate home loans can be volatile. If interest rates increase, you could land up paying even more money than you were initially.

But, the other benefit of having a variable rate home loan is that you have the option of linking an offset account.

Why an Offset Account Can Save You Money

An offset account is a transactional account linked to your home loan. The money in your offset account is offset against the balance of your home loan, and you are only charged interest on that.

So, the more money you have in your offset account, the smaller the interest on your mortgage will be.

If you have any savings, it’s a good idea to keep them housed in your offset account.

You can request your employer deposit your salary into your offset account every month. An offset account is transactional, so you can still use the money when and how you’d like. The key to an offset account is keeping the balance as high as possible for as long as possible.

How To Create “Good Debt”

“Good debt” refers to investing in assets that will increase in value, and the loan interest is often tax-deductible. The income generated from these assets can be used to service their debt.

Once you have paid off enough of your mortgage, you can access your property’s equity. This money can be used to put down a deposit on a home loan for an investment property.

Or, if you continue putting savings into your offset account, you could use that money towards a deposit.

In both of these instances, you still have the debt of your mortgage to repay, and you may have other debts you’re busy paying back, too. But you’re creating wealth simultaneously.

Key Takeaways

Being wise about how you repay your debts is important to maintain a good credit score so that lenders are in good faith to approve your future home loan applications.

If you’re struggling to manage multiple debts, consider a debt reduction strategy such as debt consolidation or debt snowballing. The sooner you’re able to get your loan repayments under control without defaulting on any, the better.

Refinancing your home can result in lower repayments if interest rates are lower. And, if you set up an offset account, you can continue paying your previous mortgage amount, and the excess will be offset against the balance of your home loan to reduce the interest.

You can use an offset account as a savings account, and the more money you deposit, the more interest you’ll be saving on your home loan.

Once you have all of your debts under control, you can focus on creating “good debt”. You can use the equity from your home or the funds in your offset account towards a deposit on investment property and begin your journey to wealth creation.

Author: Tony Xia

Tony is the director of The Mortgage Agency based in Sydney. He is specialising in a holistic approach to home loans to help the clients with getting the right outcome based on their specific financial circumstances.

By: Heather C Abbott, BBA, CPA, 

It’s more than just investments, insurance, savings and wealth creation.

Retirement planning becomes more challenging as the length of our lifespan keeps increasing.  When old age security was introduced, the average person was able to collect it for 8 months before they died.  As our time on the planet is increasing, it has created new challenges for how we will pay for our living expenses in to our golden years.

There are those who fell well prepared, but far too many who do not.  

Ideally, you begin looking gat retirement planning early in life. This includes having a will, getting insurance coverage, making a plan for being out of debt before you retire, and taking advantage of any offers of matching contributions to a retirement fund. 

Getting a will can be as simple as creating a legal holograph will, which is a handwritten document with only a few rules that vary by where you live.  It isn’t a great option, but will prevent you from dying without a will while you are getting a good one done with a lawyer.  I emphasize the importance of this all the time.  I have had to deal with being an executor before, and I pity anyone having to deal with the loss of a loved one AND the government rules for the estate.  Having a will is just common courtesy to those left behind.

It is never too early to get insurance coverage, but it can easily be too late.  I have had clients in their 20s who were already uninsurable due to unexpected health issues.  Having a good term policy to cover you in case of an unexpected early death and a more permanent option to cover final expenses is a good start.  You should also speak with a knowledgeable insurance agent about long-term care insurance, and critical illness coverage that may become important in later years.  Long-term care insurance is designed to cover costs of living should you become unable to care for yourself.  Critical illness coverage generally provides a lump sum if you are diagnosed with specified illnesses.  Most policies I have seen cover cancer, heart attack, stroke, and about 20 other illnesses.  On my policy, I added “return of premium” riders.  These are additions to the policy that result in me getting my premium paid back if I do not make a claim on the policy.  One is for “at death”, one if for “at expiry”.  “At death” is if I die before the policy expires, my estate gets the premiums back, the other is for if I live past the expiry date of the policy (age 75) I will get my premiums back.

The third point I mentioned above was to say yes, whenever possible, to an employer (or someone else) matching your contributions to your retirement fund.  You are likely aware that a good return on your investment in a year can be 5-10 %.  If someone is matching your contribution, that is a 100% return on your money.  You have doubled what you have.  Do not pass that up unless you absolutely do not have the cash flow to make the contribution.  

When receiving contributions from others, you should be aware of the term “vesting”.  Vesting refers to the amount contributed by others, becoming yours legally.  Just because the government or an employer puts money in it may not remain yours if you withdraw your money early. There can be a period of time before the money they contribute “vests” and will become yours.  Simply ask, or read the details on the agreement and look for the phrase “contribution vests after…” and it will tell you how long it takes before the money is legally yours, even if you make an early withdrawal. 

A key step to build a solid foundation for your money, both now and into retirement, is to have clarity with your numbers.  Unfortunately, this is not commonly taught in schools. Even accountants and financial advisors are not generally taught an effective method to do this.  It is a crucial step in not only feeling confident and empowered with your money, but also in planning.

To get started, look at where your money is going now and where you want it to go in the future.  Your bills may look completely different in retirement based on the lifestyle changes you want to implement.  Getting clear on what you want is a critical starting point.  Creating a plan to achieve it will bring both relief and hope. 

Once you get that plan made you will be ahead of most of the population.  Defining targets and goals are very important to success.  If I hand you a ball and simply say “hit the target”, you will look at me quizzically because I did not tell you what the target is, so how are you supposed to hit it?  It is the same with life, if you simply get up every day and go through a routine without setting any goals, it is highly unlikely you will change your life.  Take the time to imagine what you want and challenge yourself with the question, “How did I achieve that?”  Your mind will take a completely different approach to solving this question than it would trying to answer the question of “How can I do this?”  It is a small difference in the wording that can produce huge results.  

One of the big issues I have seen when people start looking at what they will do in retirement is overwhelm and panic that they begin to feel when they don’t have a plan or a large amount of savings and investments.  Starting early is a great way to avoid this, but I do have one other idea.

When most people think of planning for retirement, their mind goes immediately to investments and money saved.  Somewhere through the years, it became a common belief that retirement necessitated you to stop working and generating income.  I believe there is a better way to view it, which can remove a great deal of the stress for the average person.  Work is something you generally want to get away from because you don’t enjoy it for some reason.  That can be because the job is restrictive, unpleasant, tedious or just not fun.  

What if you viewed retirement as a beginning instead of an ending?  You can still end your job, but begin a new career doing what you enjoy.

During our lives, we all accumulate knowledge and experience.  To us, it just seems what we know is common knowledge because it is easy for us. We assume no one would ever pay us to learn it. But, for every skill and experience we accumulate, there are other people without it who want that knowledge or skill, but have not acquired it.  

If you can do what you enjoy and get paid for it, that can be a great addition to a retirement plan.

I propose that you view your retirement not just as money accumulated, but also look at how you can take your life skills and knowledge and get paid to share them with others.  This could be as simple as if you love making quilts, learning how to sell them.  If you are a gardener, you can generate extra income when you divide your plants and sell them.  It could also be a stay at home mom who successfully raised her children and overcame obstacles, who creates a course, or paid membership to help new mothers to do the same.  If you love to do something, and you are good at it, chances are there is an audience that will pay you to get that knowledge or product from you.

Perhaps starting your own business does not appeal to you and you just want to stick with the traditional method of accumulating investments and cash and hoping you have enough to last until you die.  I respect that.  Everyone has their own way of doing things.  Becoming an entrepreneur to fund your retirement is simply an added option.

Abbott Wealth Education

www.hcabbott.ca

By: Harriet, co-founder, CocoFinder

When planning for retirement, the key steps to take include:

Assess Your Retirement Goals

It is good to think about how you want your retirement to look like. Ask yourself questions about your ideal retirement life if you wish to travel the world or live in a secluded community. Note down everything you want to help you in planning further.

Your answers to these questions will help you determine the amount of money you need to save. You can then devise a plan to achieve this goal. It is good to think of ways to increase your revenue and savings while reducing your expenditure.

Check Your Financial Status

Here, you have to be as realistic as possible to see if you can achieve what you want. How much do you earn? How much debt do you have? Are you managing your debt? How do you spend your money? Also, check whether you are saving or investing enough. A professional in finance can help you address these questions.

The best thing here is to understand what you want in your retirement versus what you can afford. Assessing your financial status will help you understand where to start and how to handle the process. It may all depend on your level in your career. The finance professional will be good to give you tips and ideas on what you can manage without straining.

Measure Your Retirement Needs Against Your Income Sources

After ascertaining what you want in your retirement, it is time to check if your income sources and assets can facilitate it. Here, you have to make decisions that will help you save and invest enough to finance your retirement. The first step to take is cutting significantly on your expenditure.  

Theoretically, reducing your expenditure can help you have more money to save. However, it requires discipline and planning. You can assess your investment portfolios, pension pots, and home equity. Have a rough idea of how these will look like when you retire. In many cases, people choose to downsize and move to a smaller home to help get more money to enjoy their retirement.

Understand That You Can Have Unexpected Expenditure

Planning for retirement can fool us into thinking that we have control of everything. We can think of the things that are guaranteed and envision the happiness of enjoying retirement. However, it is good to think of something that you may not expect.

You can always have a contingency fund that will handle unforeseen issues like health problems. You do not want to spend your retirement fund on such occurrences. The money you put aside for these happenings will come in handy.

Start Early

Starting early gives you enough time to capitalize on the power of compounding. If you choose to delay, you may run out of time and end up compromising on your goal. You do not want to depend on your children or family for all your financial needs. The good thing with starting early is that you can do it comfortably.

Remember to decide your retirement age for proper planning. Many people retire at 60, but you can choose to do it at 55. It all depends on how well you plan and execute your goal. Be sure to make enough savings and investments.

Conduct Regular Reviews

The best thing you can do is to monitor your retirement plan regularly. You can choose to do it yearly or twice a year. It helps you understand whether or not you are on track to achieve your retirement goals. Whenever you encounter or make any changes, be sure to incorporate them into the overall plan.

For instance, changes in your income and expenses may affect your plan. To ensure that your plan meets your objectives in the current times, you can always calculate the future value of your savings and investments. You can start by establishing how much you can save in a year.

By calculating the return on investment, you can ascertain whether your savings will help achieve your goals. Here, the rate of interest you earn on your savings and investment is vital. You also have to review any changes in interest rates and your saving patterns.

By: Pratibha Vuppuluri, Managing Director, Global Portfolio and Investments, Unreasonable

Over the last few years, ethical investing has started to grow in popularity among the investment community. With solid returns and balancing purpose and profit, investors can focus their money on supporting ethical investments in important areas such as climate change. In fact a recent study found that ethical funds available to UK investors proved resilient during the pandemic, with the average ethical fund achieving over 4.3% growth over the last year compared with an average 1.5% loss from non-ethical propositions.

Pratibha Vuppuluri, Managing Director, Global Portfolio and Investments, Unreasonable

Traditionally many ethical fund managers have invested in organisations committed to making a positive impact through their environmental, social and governance (ESG) practices. ESG describes three factors to assess corporate behaviour. Environmental looks at their interaction with the environment, such as climate change, biodiversity, carbon emissions, air and water etc. Social looks at the impact on society and communities, including human rights, health and safety issues etc., whereas Governance focuses on how companies are governed. ESG practices are rated by assessing annual reports, media coverage, investment analytics and management data.

While ESG is a popular investment choice for people who want to balance purpose with profit, another option is emerging: Investing in climate change startups.

Why invest in climate change startups 

We’re at such a critical juncture in our efforts to reduce global warming, as the world is still not on track to meet its goal of limiting global temperatures rising by 1.5C. But we have an opportunity to tackle the climate crisis by supporting those companies that can make the biggest difference.

From renewable energy to recycling and reducing plastic consumption to minimising food waste and so much more, climate change startups have developed ground-breaking and scalable solutions to help solve the climate crisis. Furthermore with COP26 coming up in late October / early November, a primary aim for governments and businesses is to harness the power of innovative startups to help them deliver on their goals. This puts startups right in the spotlight making them an attractive investment opportunity, particularly among younger generations who tend to opt for ethical and sustainable products and solutions. Also, as they have purpose baked into their model, investors need not worry about any potential ‘greenwashing’ i.e. misleading environmental claims. 

In particular, high growth Series A / B VC backed technology startups offer solid returns for investors if you back a company with a strong and strategic vision, innovative ideas, cutting edge technology and a talented team. Take Goodr, a sustainable food surplus management platform that leverages blockchain technology to reduce food waste and combat hunger. They provide an end-to-end solution for businesses seeking to earn money from food waste. Goodr coordinates and facilitates the pickup and donation of organic recycling of excess food from large enterprises and venues, distributing it accordingly to communities in need, through non-profits. Goodr is an example of a strong investment opportunity, the CEO Jasmine Crowe has a clear vision with her innovative yet practical approach to reducing food waste, combined with a strong business model and great team supporting her. To date, they’ve raised a total of $2.9M in funding over six rounds. Notable investors include Backstage Capital, Emerson Collective and Capital One Ventures. 

Benefits of a Manager Led Syndicate Platform

While there are simply millions of startups to choose from, it can be hard to know where to begin. Joining a manager led syndicate platform offers you a huge advantage, giving you access to a wide portfolio of growth stage climate change startups. By investing as part of a Syndicate Platform Venture (SPV), you can harness the knowledge and skills of the community of investors who are investing alongside you and participate in funding rounds led by top tier investors. You can also benefit from advisors and mentors running various investment masterclasses and workshops. 

It’s an attractive proposition for those who have a passion to do good with their money but aren’t necessarily ethical investment experts. 

Investing for the future 

Investing in climate change startups is both a financially sound and morally important decision. By doing so, you are helping to advance innovative solutions that can tackle serious issues relating to the climate crisis and driving lasting and scalable change for everyone. 

So, if you’re still deciding where to invest your money, remember that investing in climate change startups means you are not only investing in your future but also the future of our world and the future of humanity.

By: Simon Roderick, Managing Director, Fram Search and  Kelly Biggar, Head of Wealth Management, Fram search 
w: www.framexec.com 

The financial planning industry is one that has been undergoing immense change since the financial crisis. Despite wealth creation in the UK being relatively muted since 2007-08, margin compression, and increased regulation, it still remains a very strong sector to work in. Wealth management also remains very attractive to those keen to invest in the industry itself. From private equity firms to industry consolidators, many seem keen to increase their market share of the wealth management industry. The pandemic has highlighted in many ways the robust nature of the industry, and most firms we speak with will feel they’ve outperformed their expectations since the pandemic started. Yes, markets have helped, clients topped up their investments at the worst of the stock market dip and, in an uncertain world, the demand for advice increases. However, the industry is dynamic and has overcome other challenges in the past.

Simon Roderick, Managing Director, Fram Search

Looking forwards, financial planning firms lend themselves well to remote or hybrid working, meaning there are opportunities for cost savings on office space and, with clients managing far greater aspects of their life online post-pandemic, there are huge opportunities for more interactive and frequent digital communication between wealth manager and client. The once hard to access CIO or senior executive can now speak to a large audiences in multiple locations via the miracle of cost-effective video conferencing, and clients enjoy it. The future looks very bright, but as ever there will be challenges.

According to a study from J.D. Power in 2019, the average financial adviser is about 55, with 20% of industry professionals 65 or older. The industry is nearing a cliff edge in terms of losing experienced advisers. This problem is compounded by the growth strategy of trying to gain market share by hiring experienced advisers with transferable client bases, rather than taking on trainees. In short, unless the industry sees an influx of new talent, there will be too few advisers to manage existing client numbers. This is without factoring in population growth. The Office for National Statistics expects the UK population to exceed 70 million during 2031. There is also expected to be an enormous intergenerational wealth transfer over the next 30 years as baby boomers, who according to the FT control 80% of UK private wealth, pass on assets to younger generations.

Kelly Biggar, Head of Wealth Management, Fram search

Whilst clients can always be lost at the point of transfer, in reality this distribution of wealth to a larger number of the population will mean the need for advisers will only increase and not diminish. At present, many firms are trying to plug this talent gap by asking more of paraplanners. In essence, they are trying to leverage a planner’s time by providing them with more support in the same way a law firm does with their lawyers. The reality is this has been causing huge competition for paraplanners for some time, and this shortage of paraplanning talent – especially as firms are still reluctant to train junior advisers (and of course this takes years and the demand is now) – is causing a bottleneck for many adviser firms. The balancing of short-term needs coupled with demographic and technological shifts will mean that firms need to be agile. As Walt Disney so aptly put it “Times and conditions change so rapidly that we must keep our aim constantly on the future”. 

The future of wealth management for us breaks down into understanding the client of the future, digitalisation, people strategy, and increased focus on acquisition via marketing.

Understanding the client of the future

According to Accenture, women and millennials will be a much larger portion of firms’ client mix. Currently 42% of financial planning clients are female (Source: Aviva Financial Advice, January 2021), and 60% of of Britain’s wealth will be in the hands of women by 2025 (Centre for Economics and Business Research). Yet 73% of female wealth management clients in the UK feel financial advisers misunderstand them. Whilst Aviva discovered that men and women have little preference on the gender of their adviser, this changes if divorced or widowed and 70% of widows in the US change their adviser within a year of their spouse’s death (McKinsey Global Institute). Looking at the bigger picture, wealth will also be more internationally distributed. These changes can’t be ignored.

EY also pointed out that private clients will increasingly look to their wealth management providers to provide more coaching around life goals and budgeting. In an industry that has struggled to communicate its value add to customers, it is around coaching that firms must improve the quality of their message.

Digitalisation

We feel there will increasingly be a correlation between firms adopting technology and success.  Not only can technological improvement free up an advisers’ time, it can reduce the need for back office support, and there are real gains to be had with regards to client interaction. Stereotypes that older clients aren’t digitally engaged are proving to be just that; stereotypes. Even the most simple digital solution, like video calls, will reduce adviser travelling time, and may actually increase the frequency they speak to clients. 

People strategy

Understanding the demographic challenges of the adviser community, wealth transfer over the next 30 years, and the client of the future, it is clear that the industry needs change in three areas, namely: more trainees, gender balance, and diversity.

There are simply not enough advisers with moveable books for every firm to have attracting advisers with a client base as their core growth strategy. Firms who are able to consistently grow organically and invest in more trainees should after a time be able to avoid some of the challenges of being overly reliant on hiring experienced advisers. Trainees at the start of their career are more likely to be digital natives too, who embrace technology as a way of interacting with clients.

It is estimated between 11-15% of the adviser population is female. Even if this number was in reality 22%-30%, it is clear from the figures above that the industry needs more female advisers. Indeed, the industry will benefit significantly from an increase in diversity programmes, which will enable it to bring in new experiences and insights. 

The financial planning sector has reinvented itself and adapted because it has attracted dynamic individuals. Continued investment in attracting the right talent is important and hybrid working may well help adviser firms look further afield in attracting talent from previously untapped talent pools.

Acquisition via marketing

In our experience, firms are either fantastic at generating clients via marketing, or it’s not really on their agenda at all. There doesn’t seem to be a middle ground. However, we feel many firms could benefit by increasing their marketing efforts and by looking to other industries to learn. Improvement in this area will not only help support existing advisers in growing their business, but also act as a differentiator in attracting top talent.

Many wealth managers now look forward to the future with real optimism. As restrictions are eased, adviser firms will accelerate their growth programmes, with many looking to grow their firms significantly over the next few years. It will be great to see the next chapter in this industry’s story.

About Fram Search

Fram Search was founded in 2010 by Simon Roderick, who led the Wealth & Asset Management practice of a London based search firm. Fram has a leading wealth management practice placing individuals across the UK into the following roles: financial adviser, investment manager, private banker, sales & marketing, operations, finance, and compliance. 

By Ben Hobson, Markets Editor, Stockopedia

Thanks to social media feeds and 24/7 news cycles, there’s more buzz around stocks and opportunities than ever before. And all that buzz can make it difficult to focus on the long-term.

While it’s true that some investors get lucky with a ’golden’ stock, most successful investors gear their portfolios for the long run. After all, patience is a virtue.

That’s why Ben Hobson, Markets Editor at Stockopedia shares his insights on how to manage your portfolio over the long-term for greater returns.

It pays to have a plan

Depending on the forces shaping the market, investment strategies naturally adapt and evolve over time in response.

As a general rule, the longer your money is invested in a well-balanced portfolio, the harder it’ll work. Having a solid understanding of your financial affairs and knowing what you can safely invest upfront is the best starting point before making any snap decisions.

Remember to factor in lifestyle changes and events which could affect your financial position. It can also be a good idea to set yourself a milestone to reach with your investment before you decide whether to sell; this can help you avoid knee-jerk reactions led by emotion.

Building your custom strategy

Everyone is different – and so are investment strategies. With investment advice coming hard and fast, especially unvetted via social media, it can be tricky to judge your next move.

However, it’s always important to remember that historical drivers of stocks are consistent. 

There’s a simple formula that most seasoned investors use, centred around three key points – Quality, Value and Momentum. By making sure your investment choices tick these boxes, you can expect strong performances in the long-term.

When evaluating prospective stocks, using markers like high profitability, strong cash flows and a durable business model are useful. Be wary of low or no profits, thin margins, debt and precarious balance sheets – businesses with these are usually worth avoiding. 

Searching for the right stock should be thorough. Trends are a significant performance indicator – looking at its history and spotting signs of positive momentum. Share prices that are rising strongly often continue to do so. 

Weathering the storm

Business sectors, stocks and markets move at their own pace and are often interlinked. Changes in one area can directly affect another. So, think about the role each investment you make plays in your portfolio.

Any investor worth their salt would recommend diversifying investments across a range of investment types to protect against volatility.

Diversification can take many forms. Looking at markets in new international geographies, different industries and varying market-cap sizes, for example, minimises exposure to unnecessary risks and maximises opportunities.

Another example is the type of investment itself. Funds and bonds can be less risky than a volatile stock but, having both could help limit losses and increase the chances of a positive return. 

A perfect balance

Once your portfolio is put together, take a moment to prioritise your investments. This way, you’re not worrying over the smallest of market fluctuations.

It’s vital to not get too emotionally invested in your portfolio’s performance. Giving your investments room to breathe is important. A rash decision can leave you missing an uptick in value that could be right around the corner.

There is a common misconception that investors are glued to their investments and capitalising on every fluctuation possible. Unfortunately, this is portrayed as the only viable way to trade all too often.

Overtrading can not only fuel emotional investing, but fees and charges can quickly mount up. Trading fees all chip away at your portfolio, so avoid throwing money at unnecessary trades – especially when you just can’t find anything better to do.