A Financial Advisor comments …

The New Year – Source: Philip Hanley

My “ethical and responsible” financial adviser, Philip Hanley, posts a blog most weeks to help his clients see the wood for the trees in matters financial, as well as passing a critical if occasionally sceptical view on Brexit, Covid and the world.

Here’s an extract from his latest blog:

So this time last year I was driving for at least two hours a day.  Appointments included tea, coffee and chit-chat, so lasted twice as long. I went to the gym every day, went shopping, out for meals and to the cinema at weekends. I fitted in the occasional holiday and twice-monthly trips to London. Time, I know, is a relative and entirely man-made concept, man. But why do I now have less of it? Please help. If you have the time.

“New president, new Brexit deal, new vaccine hope – could 2021 be a shot in the arm for investors?”

Whatever the current state of the markets, I’m still asked ‘what do you think we should do, given the current state of the markets?’ There is, of course, always something to worry about. In the last 10 years, Grexit, Brexit, Russia, China, Trump, No Trump, Corbyn, oil, wars, bankers, all reasons to invest, not to invest or to run for the hills. But we’re all still here and those who stayed invested in something boringly medium risk are still much better off than they would have been had they left it all under the mattress. Or in the bank. Keep that glass half full.

“Robos retreat from UK retail business”

Despite the lockdown boom in DIY investing, the DIY investment platforms cannot, it seems, make any money. They’re closing left-right and centre and many of those still around, despite big backers, look doomed: Investec, £20m write off, Nutmeg loses £22m, to name but a couple. Maybe it will come down to the survival of the big names. But since the biggest, Hargreaves Lansdown, has had to carry a pretty big can for its clients’ Woodford losses, even their business model has started to look a little shaky. Schadenfreude? Mich?

“AFH [Wealth Management] in £225m private equity takeover”

‘Consolidators’ have become a thing in our business in the last few years. These are firms with a cache of (usually borrowed) funds, buying up smaller advisers’ businesses to build big, national businesses. The theory/spin is that this will lead to greater security for clients, economies of scale, continuity of service etc. Thing is, it’s all been tried before, many times and the reality is a cumbersome giant with a big turnover of advisers which becomes a target for the regulators and a compliance nightmare. What’s the answer? In this case, sell out while you can to a Cayman Islands company owned by a Chicago-based private equity firm. Who I’m sure will have every client’s best interests at heart

“LV= sale to US private equity should complete by end of 2021”

Another big name looking like it will be sold out is LV=, Liverpool Victoria in old money.  Why do these companies ditch brand names that have been around for donkeys? Once again, their board will allegedly do very well out of the deal which is, of course, pitched as great news for policyholders, financially sound etc. etc. Interestingly enough, they wrote to tell my client, from whom I rather embarrassingly heard the news, but not to advisers, and its Christmas timing meant just a few brief trade-press mentions and not a lot of roof-top shouting. We await developments.

As usual Philip gives us food for thought on several topics:

  • Time really is relative!
  • Will 2021 be kind to investors?
  • Can the DIY investment platforms survive?
  • Do US private equity takeovers offer customers a better deal?

Ed: Philip Hanley can be contacted at https://www.pjamesfs.com/

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