Insights

Insights & News

by Graham Bond 29 Jun, 2017
Here's an update on Personal Finance Portal. From the 4th July our client portal will have a new look and feel about it. 
The software provider we work in conjuction with have revised the format to make it easier to use for our financial planning clients.

The Personal Finance Portal is a quick and secure way to obtain up to date valuations on your pensions and investments. It also offers you a way to communicate safely with us as the service is encrypted. The same cannot be said about email, which is not secure. 

The aim is to make the navigation easier to use and to provide more information to you on your finances. 

The video below shows some of the improvements that will be made. We hope you find it useful and informative. 

To access our portal please click this link

If you would like to find out more about the Personal Finance Portal please feel free to contact  us on 01454 321511. Consilium Asset Management offer Independent Financial Advice to private and business owners in the Bristol area. 
by Graham Bond 21 Jun, 2017

Over the month weeks and months, we are looking to improve the personal finance portal (PFP) for our clients. The first stage is to introduce a live chat, audio and video service whilst clients are logged into PFP. This is the first level of improvements we will be making over the coming months. The live chat service is safe and secure.

by Graham Bond 19 Jun, 2017

Quite often friends and clients ask me about the best pension plans and I can understand. Pensions are complicated, even more so since Pensions Freedoms came into play.Successive Governments have tinkered with the pension rules and regulations time and time again. I started in the Financial Services Industry in 1984 and I can say each year the government has made some sort of change. Sometimes for the better or worse, but usually it adds another layer of complication. Terms such as Lifetime allowance, Fixed Protection, Capped and Flexi Access Drawdown are technical terms that generally confuse the public.

In its simplest form a pension is a savings contract with tax breaks written under pension rules.
by Graham Bond 16 Jun, 2017

“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon.

 Rather than ebbing and flowing with investor sentiment, uncertainty is an inherent and ever-present part of investing in markets. Any investment that has an expected return above the prevailing “risk-free rate” (think T-Bills for US investors) involves trading off certainty for a potentially increased return.

 Consider this concept through the lens of stock vs. bond investments. Stocks have higher expected returns than bonds largely because there is more uncertainty about the future state of the world for equity investors than bond investors. Bonds, for the most part, have fixed coupon payments and a maturity date at which principal is expected to be repaid. Stocks have neither. Bonds also sit higher in a company’s capital structure. In the event a firm goes bust,

bondholders get paid before stockholders. So, do investors avoid stocks in favor of bonds as a result of this increased uncertainty? Quite the contrary, many investors end up allocating capital to stocks due to their higher expected

return. In the end, many investors are often willing to make the tradeoff of bearing some increased uncertainty for potentially higher returns.

by Graham Bond 14 Jun, 2017

 If like me you’re fed up with TV coverage of the election and a hung parliament, then there is some good news. Stock Markets did not fall off a cliff edge and although the UK is experiencing some political turmoil, the rest of the world seems to be getting on with business as usual.

The current challenges facing the UK cannot be underestimated, but consider some of the issues we’ve faced over the last forty or fifty years. If you’re investing for the long term, markets tend to be efficient and take into account all the information available. Long term investors are rewarded for the additional risk they are taking by investing into Stocks and Bonds.

However, there are some things investors can do to help ensure if there is a fall in Stock Markets. They can help limit the downside impact of temporary falls in the value of their investments.

by Graham Bond 02 Jun, 2017

Market indexes. You read about them all the time, such as when the FTSE 100 broke above its 2000 highs in 2015, and again in 2016, when it broke 7000. In our last piece, we explored what those points actually measure (not much in reality), which isn’t always what you might guess. Today, we’ll take a closer look at the mechanics of indexing, to gain a better understanding of why they do, what they do.

 

The Birth of Indexing

When you hear the term “stock index,” you’re in good company if the first thing that comes to mind is the FTSE 100 Index. We’ll talk more about index investing in our next piece, but we’ll note here that, despite its familiarity, the FTSE 100 is a babe in the woods compared to the world’s first index. (It only began in 1984); that honor goes to the Dow.

 

The Grand Old Dow

As described in “Capital Ideas” by Peter Bernstein:

 

“The first Dow Jones Average appeared in the Afternoon News Letter on July 3, 1884. It consisted of the closing prices of eleven companies: nine railroads and two industrials. [Charles] Dow’s idea was to provide an overall measure of the performance of active companies, at a time when an average day’s activity on the New York Stock Exchange was about 250,000 shares.”

 

Eleven companies, nine of them railroads, wouldn’t make for much of a market proxy these days! And yet the Dow still only tracks 30 stocks, as it has since 1928. Plus, it still uses mostly the same methods for tracking them. As expressed by James Mackintosh, a senior market columnist for The Wall Street Journal (the effective birthplace of the Dow): “It’s time to ditch the Dow. After 120 years, the venerable Dow Jones Industrial Average is an embarrassing anachronism, abandoned by professionals and beloved only by a media that mostly knows no better. It needs to be updated or, better, replaced.”

 

And yet, despite its flaws, the Dow persists. Markets are made of people, and people can be sentimental about their past. More pragmatically, the Dow serves as a time capsule of sorts, offering historical perspective no other index can match. It’s also just plain familiar. As its parent company the S&P Dow Jones Indices says, “It is understandable to most people.”

 

How Do Indexes Get Built?

What about all those other indexes? New ones come along whenever an indexer devises a supposedly better mousetrap for tracking market performance. If enough participants accept the new method, an index is born.

 

That’s our free markets at work, and it sounds simple enough. But if we take a closer look at the various ways indexers track their slices of the market, what may seem clear at a glance is often seething with complexities just under the surface. Here are some (not all!) of the ways various indexes are sliced and diced.

 

Which Weighting?

How much weight should an index give to each of its holdings? For example, in the FTSE 100, should the returns delivered by Royal Mail (0.23% weight) hold the same significance as those from HSBC (7.3%)?

·        The Dow is price-weighted , giving each company a varying weight based on its higher or lower share price. As Mackintosh explained, “share prices are arbitrary, as they depend on how many shares are issued; some companies have very high prices, which give them more influence on the Dow, even though they may be less valuable overall.”

·         Market-cap weighting is the most common weighting used by the most familiar indexes around the globe, such as the FTSE All Share. It factors in outstanding shares as well as current share price to give more weight to the bigger players and less to the smaller fry.

·        Some indexes are equal-weighted, giving each holding, large or small, equal importance in the final tally. For example, there’s an equally weighted version of the FTSE 100, in which each company is weighted at 1% of the index total, rebalanced quarterly.

 

There are many other variations on these themes. The point is, indexes using different weightings can reach significantly different conclusions about the performance of the same market slice.

 

Widely Inclusive or Highly Representative?  

How many individual securities does an index need to track to correctly reflect its target market?

·        As mentioned, the FTSE 100 nominally represents thousands of publicly traded U.K. stocks. A throw-back to simpler times, it’s unlikely you’ll see other popular indexes built on such modest samples. In its defense, the FTSE favors stocks that are heavily and frequently traded, so prices are timely and real … at least for the 100 stocks it’s tracking.

·        At the other end of the scale, the FTSE All Share tracks 627 stocks, and some track shares numbering in the thousands.

·        The S&P 500 falls somewhere in between, tracking around (not always precisely) 500 publicly traded U.S. securities.

 

Tracking a Narrow Slice or a Mixed Bag?

What makes up “a market,” anyway? Consider these possibilities:

·        If an index is tracking any asset market, should that include real estate companies too?

·        If its make-up tends to include a heavier allocation to, say, value versus growth stocks, or commodity compared to Industrial stocks how does that influence its relative results … and is it a deliberate or accidental tilt?

·        Is an index broadly covering diverse sectors (such as representative industries or regions) or is its focus intentionally concentrated?

·        If it’s tracking bonds, are they corporate and municipal bonds, or just one or the other?

 

The Use and Abuse of Indexing

How well do you really know what your index is up to? Remember, in Part I of this series, we described how every index is a model – imperfect by definition. How might each index’s inevitable idiosyncrasies be influencing the accuracy of its outcomes?

 

We’ve just touched on a few of the questions an indexer must address. Like the proverbial onion, many more layers could be peeled away and, the deeper you go, the finer the nuances become.

 

One practical conclusion is that some indexes are much easier to translate into investable index funds than others. In addition, some lend themselves better than others to a sound, evidence-based investment strategy. In fact, indexes often may not be the ideal solution for that higher goal to begin with. In our next and final segment, we’ll explore the strengths and weaknesses inherent to index investing .

by Graham Bond 31 May, 2017

If you are a trustee of a charity or any other form of trust then you will have certain responsibilities to ensure the terms of the trust are adhered to. Your responsibilities can be split into a number of areas. These are:

by Graham Bond 26 May, 2017

You may all be aware of the increase in Financial Scams and Identity theft. As individuals there are things we can do to protect ourselves against unscrupulous people and firms.

Who Are They?

  • Financial fraudsters are after your assets.
  • Identity thieves steal your personal information (often to then commit financial fraud).

 

What Do They Want? Your Money and Your Life

  • National Insurance Numbers, passports, driver’s licences, and similar identifying information.
  • Financial account and credit card numbers.
  • Passwords (or insights about you that help them guess at weak ones).
  • Your and family members’ contact information (name, address, phone, e-mail).
  • Your and family members’ birth dates.
  • Details about your life (interests, travel plans, relationships, your alma maters, etc.).

 

How Will They Get It? However They Can!

  • Real or virtual strong-arm theft; breaking and entering; and scams to trick you.
  • Strangers, strangers posing as someone you know, or someone you do know.
  • Online, by phone, in the mail or in person.
  • Phishing emails and deceitful or compromised websites (tricking you into clicking on bad links or opening infected attachments).
  • Malware infects your device with pranks, viruses and security breaches.

What Should You Look For? Ten Red Flags

1.    An offer that sounds too good to be true.

2.    A stranger who wants to be your real or virtual best friend.

3.    When someone you know is behaving oddly via email or phone. (It may be an identity thief.)

4.    Someone claiming to represent a tax agency, financial or legal firm, police department or other authority contacts you out of the blue, demanding money or information.

5.    You’re feeling pressured or tricked into responding RIGHT AWAY to a threat, a temptation or a curiosity.

6.    You’re prioritising easy access over solid security (weak or absent locks and passwords).

7.    You’re sharing personal information in a public venue (including social media).

8.    Facts or figures aren’t adding up; bank statements, reports or other info is missing entirely.

9.    Your defenses are down: You’re ill, injured, grieving, experiencing dementia or feeling blue.

10. Your gut feel is warning you: Something seems off.

 

What Can You Do? Quite a Lot!

 

Online Protection

  • Software: Keep your antimalware, anti-spyware and operating system software current!
  • Backups: Use multi-version backup software for system and/or file recovery as needed.
  • Passwords: Create strong, unique passwords and periodically change them.
  • Extra security: Use it when available, such as two-step verification or fingerprint access.
  • Phishing: Be careful about clicking links or opening attachments, especially from strangers.
  • Social media: Privatise your profiles and activities so only those you allow in can see them.
  • Wi-Fi: Be extra careful using public Wi-Fi; assume the world can see what you’re doing.

 

Suspicious Phone Calls

  • Identify: Legitimate callers don’t call announced and entice or threaten you.
  • End the call: Your best line of defense is to immediately hang up.
  • Don’t cooperate: Never share your credit card number or any other sensitive information.
  • Investigate: End the call and contact the alleged source directly to inquire further.
  • Report: Report the suspicious number to the relevant authorities.

 

Credit and Records Management

  • Watch for inconsistencies: Look for odd transactions in your financial statements.
  • Watch for missing statements: In case your account has been redirected elsewhere.
  • Monitor your credit reports: Request and review your credit score regularly.
  • Consider a credit freeze: If you rarely apply for loans, you may want to freeze your credit .
  • Follow up promptly: If something seems “off,” immediately change any login passwords, and promptly contact the service provider and appropriate authorities.

 

Personal Security

  • Remain on guard: There is still plenty of old-fashioned theft going on.
  • Secure it: Lock up your desk, files, car, mailbox and rubbish bins.
  • Shred it: Use a shredder to destroy any paperwork you do not need to keep.
  • When you’re out and about: Keep a close eye on your purse or wallet everywhere you go.
  • Filling in forms: Don’t provide your Social Security Number unless actually required.
  • Banking: When using an ATM machine, look for others around you or signs of tampering.

 

What If They Succeed? Act Promptly

  • Online : Promptly change passwords on any affected accounts; recover backups as needed.
  • In general : Check in with any bank or other institution involved, and the government agency responsible for overseeing the breach: HMRC for tax fraud, or the FCA for anything else.
  • Financial : If you feel your financial security has been compromised, we’ll want to hear from you as well! We’ll do all we can to help you fix the breach and minimise any damage done.

by Graham Bond 25 May, 2017

Personal Finance Portal (PFP) has evolved and can now give you access to your entire financial portfolio including all short, medium and long-term savings and investment information in one place 24/7 – anywhere, on any mobile or web device. It features redesigned screens and layouts which makes it much easier for you to use. There’s even a dedicated mobile phone app for iPhone and Android users coming soon.

As well as the great functionality you currently enjoy with PFP, you can also now get:

Additional access to PFP Premium

PFP Premium is an additional service that enables you to collate information on your short-term finances like bank account(s), credit cards, loans and mortgages together your advised products, giving you powerful insight into your total net worth. Plus, you’ll also be able to receive alerts and insights into spending and saving habits so you can keep track on how you’re progressing against the goals you’ve set. Why not give it a try?

Of course you can still view your fund information and financial portfolio at the click of a button. So whether you’re looking for an up-to-date valuation of your portfolio, want to assess how you’re progressing against your goals or simply wish to get in touch, PFP has it covered.

Secure messaging between us and you

With email and post increasingly open to being intercepted, we treat the security of the data you share with us with utmost importance. PFP provides you with a secure messaging service, so you can quickly get in touch with us and have the peace of mind of knowing that any information you share is encrypted and completely private.

A secure document vault

PFP provides you with a secure document vault, so you can house all your financial documents online where they are secure and fully backed up - much safer and more convenient than the bottom of the filing cabinet.

The new service will offer improved screens This upgrade will provide improved features for our clients. The link below give an overview of the new PFP

If you are not already using the PFP facility and would like to please contact us.

by Graham Bond 25 May, 2017

Capital Gains tax on shares and investments. When you sell shares, you will either make a profit or a loss. Profits made are classed as a capital gain.

There are some exemptions where capital gains tax (CGT) is not liable:

  • Individual savings accounts (Isa’s)
  • Venture Capital Trusts
  • Enterprise Investment schemes
  • Gifts to Charity
  • Government Securities
  • Corporate Bonds of a qualifying status
  • Transfers of shares between spouses or partners in a civil partnership
  • betting, lottery or pools winnings

Apart from the exemptions, sales or disposal of the shares will normally be classed as a potential capital gain.

Each person has an allowance each year they can use to reduce the amount of CGT they might pay. If your total gains for the tax year are below the “annual exempt allowance” you will not have to pay any tax.

If your gains are over the allowance then tax would be due on the balance. It might also be possible to offset any losses from previous tax years. If you do not use your annual exempt allowance for CGT in a tax year, then you lose it and you cannot carry it forward to another year. The CGT tax rate payable will depend on your total income and any gains made for the tax year in question.

The government changed the way Capital Gains were taxed from April 2015. The amount of tax due will depend whether you are a basic or higher rate taxpayer.

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by Graham Bond 29 Jun, 2017
Here's an update on Personal Finance Portal. From the 4th July our client portal will have a new look and feel about it. 
The software provider we work in conjuction with have revised the format to make it easier to use for our financial planning clients.

The Personal Finance Portal is a quick and secure way to obtain up to date valuations on your pensions and investments. It also offers you a way to communicate safely with us as the service is encrypted. The same cannot be said about email, which is not secure. 

The aim is to make the navigation easier to use and to provide more information to you on your finances. 

The video below shows some of the improvements that will be made. We hope you find it useful and informative. 

To access our portal please click this link

If you would like to find out more about the Personal Finance Portal please feel free to contact  us on 01454 321511. Consilium Asset Management offer Independent Financial Advice to private and business owners in the Bristol area. 
by Graham Bond 21 Jun, 2017

Over the month weeks and months, we are looking to improve the personal finance portal (PFP) for our clients. The first stage is to introduce a live chat, audio and video service whilst clients are logged into PFP. This is the first level of improvements we will be making over the coming months. The live chat service is safe and secure.

by Graham Bond 19 Jun, 2017

Quite often friends and clients ask me about the best pension plans and I can understand. Pensions are complicated, even more so since Pensions Freedoms came into play.Successive Governments have tinkered with the pension rules and regulations time and time again. I started in the Financial Services Industry in 1984 and I can say each year the government has made some sort of change. Sometimes for the better or worse, but usually it adds another layer of complication. Terms such as Lifetime allowance, Fixed Protection, Capped and Flexi Access Drawdown are technical terms that generally confuse the public.

In its simplest form a pension is a savings contract with tax breaks written under pension rules.
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