An independent (financial adviser's) view

Only one, trumpet-blowing story for us this week. I’m very proud to say we’ve been awarded ‘Top Firm’ status (once again) and will be appearing in The Times financial advice supplement (once again) on March 18th. Don’t worry, I’ll remind you once or twice if you don’t make a note of the date. The recognition is special as it’s mostly based on the numbers of good reviews we (that’s all of the team) get from clients and others. So thanks to the many who’ve bothered to big us up on the ‘VouchedFor’ website. Anyway. Many of you tell me you skip from here, past all the financial stuff, straight to the review. If you’re a reader not a watcher, sorry, another week of film but I have nearly finished a very long book, thoughts on it to come soon. And I’ll finish with a positive financial fact: between 1980 and 2018, for most of which interest rates and inflation were much higher, the average ‘medium risk’ investment fund grew by an average of 11% a year. Hope for us all.

“Advice is ‘too expensive’ and ‘for the wealthy’, Brits claim”

Is this the fault of advisers, overpricing their advice? Are the ignorant masses to blame, not knowing what’s good for them? The answer I think, is neither, or perhaps a bit of both and a bit of the other. The price of advice is a function of demand and supply. There are many fewer advisers (see last week’s comments) than there were a couple of decades ago, so those remaining will gravitate to the most profitable clients. And if you don’t think you have a problem, why would you pay to solve it? ‘The other’, in this case, is the internet, which can turn us all into doctors, car mechanics, plumbers, electricians; and very easily allow us to invest our money, get a mortgage and ‘move all your old pensions to one, simple, easy-to-manage plan’. All good if the symptoms go away, the car doesn’t break down again, the radiator works and the fuses don’t blow. If not, you’ll need a professional. Later or sooner, I’m afraid.

“BoE raises base rate to 4% marking 15-year high”

Rumours were that, if interest rates went up, it would be by 25, not 50 ‘basis points' (a quarter rather than a half percent, in old money). But they’ve gone for the full half. Here’s me supposed to understand economics, knowing all the theory of monetary policy, and I still don’t get it. Do they think hiking interest rates is ‘bringing inflation under control’, rather than the fact that wholesale oil and gas prices have fallen by nearly 50% in recent months? Will banging up the cost of their mortgages stop striking workers asking for more money? And how will ‘easing labour shortages’ by ensuring employers can’t afford to hire anyone, ward off the long-threatened recession? We’re not America (thank the Lord), we’re never again going to be close to energy, food or car self-sufficiency and ‘reconnecting with the world’ actually means there’s not much we can do about anything; well, not if we carry on as we are. A rethink at many levels is needed. I’d say. Rant over.

“How the world economy could avoid recession”

Fund managers can often sound like politicians; or economists; or even weather forecasters. ‘The chances of a global recession have diminished but we cannot altogether rule it out, which could benefit share prices in cyclical stocks. Do be prepared for the odd shower, particularly over higher ground and although I cannot comment until the enquiry is complete, the minister of course has my full confidence’. In other words, it’s usually more than their jobs worth to stick their necks out and say ‘it’s going to be OK’, just in case it isn’t. I did ask, at a presentation this week, the sort of question that we’re currently often asked by our clients: ‘If we can now get a return of 4% in the bank, what can we now expect from the sort of medium risk portfolio in which most of our clients are invested?’ As you might expect, no hard and fast promises were made. They confirmed, however, that ‘the stock market has outperformed cash in 69% of two year periods and 91% of 10 year periods’. So if you’re able to hang on in there, it’s more than likely worth investing. Nothing new, but still reassuring. I’d say. 

“Claims over illegality in ‘Wild West’ crypto firms”

‘MPs have called parts of the crypto industry a ‘Wild West’ after hearing that the FCA has reported evidence of possible criminal activity’. To quote the great Basil Fawlty (kids etc.), ‘Can’t we get you on Mastermind, Sybil? Specialist subject – the bleeding obvious’. It does somewhat beggar belief that this particular stable door is slowly being pushed to when the horse has not just bolted, but moved to another farm and had several foals. Sorry, enough analogies, but it has surely been common knowledge for years that zillions have been and are being laundered on the crypto-net and that many have already lost their savings in dodgy get-rich-quick scams. Meanwhile, the rest of the legitimate and law-abiding financial services industry (of which I count myself a part) who wouldn’t touch a Bitcoin with a very long stick, are grappling with another huge swathe of regulation designed to ensure that do our ‘Consumer Duty’. Hey ho.

This week, twice the value with a review of two very different but similar, based-on-true-events BritFlicks (a genre favourite of mine). Dave of the ‘Bank of Dave’ is a successful and philanthropic Burnley car dealer who decides to turn his sideline of helping friends and local businesses into a proper, old-fashioned local bank. Set just after the banking crash, he has to fight the regulator and posho establishment, who don’t want a cocky northerner upsetting their applecarts. The London lawyer he hires to help him finds that life and romance in Burnley are actually lovely, and the whole thing makes sense when you find that it’s from the makers of ‘Fisherman’s Friends’ (first one great, don’t bother with the sequel), and is just as much fun, without the shanties. ‘The Lost King’ tells the also-true-story of Philippa, (Sally Hawkins, always brilliant), an Edinburgh ex-wife and mother who becomes weirdly obsessed with Richard III. She travels to Leicester, has a vision of where he might have been buried and organises the dig to find him. There’s conflict again with the poshos, as the university takes all the credit when he’s found just where she said he would be. The stories of both Dave and Philippa are as eccentric as you could wish and are (sorry, cliché alert) ultimately heartwarming, with not a hint of sex or drugs or rock n’roll. And I had a lovely time watching them both. To quote another critic, they'd 'go down nicely with a cup of tea and a biscuit, missus'