Frequently Asked Questions
» I am only getting 1% net per annum interest after 40% income tax on my bank deposits. What are the alternatives?
Base rates have been pegged at 0.5% by the Bank of England for 18 months now and we think it is unlikely that we will see any improvement for some time. Income tax rates are the other problem here and they will eat into the already meagre returns, especially if you are a 40% or a 50% taxpayer. The effects of inflation mean that in real terms, many savers are losing money on their cash deposits.
If your cash deposits are not required in the short term, then taking some more risk can increase the potential returns. We have successfully provided income seeking clients with tax-efficient portfolios that produce higher levels of income than cash deposits where risk is controlled in terms of the asset classes chosen.
» I have read about the risks of emerging markets but still find them of interest. Should I buy some exposure?
Ignoring "emerging" markets such as Russia , India , Asia and Brazil is effectively restricting your portfolio to only 75% of the world stock markets by value. We have actively used these new markets to good effect for our clients and we would happily tailor an appropriate exposure to them to suit your own attitude to risk.
» I had a terrible investment experience in 2008 when all my assets fell in value. How did your clients fare?
2008 was a difficult year when almost all most asset classes experienced significant falls in value and high levels of volatility. We communicated regularly with our clients throughout this period of market volatility to inform them of our views. Each client's situation and investment objectives are different so we worked closely with them to advise them on the best course of action for their circumstances.
In many cases our advice was to "hold firm" and not panic into selling at those then low 2008 values.
2009 and 2010 have seen very significant gains in many of our client's portfolios as a result of the investment strategies we recommended.
» Financial scandals such as With-Profits funds, the Equitable Life fiasco, endowments and mis-selling have left me wary of financial products. What has been your stance on these scandals?
We have always been forthright with our views on the malpractices and which have blighted our profession. As part of our service to you, we monitor the financial market and make sure our clients are warned about malpractices and products which we think could cause damage to their future wealth.
For example:
- In 1992 we argued against low cost endowment mortgages.
- In 1997, we went public with our views on the problems at Equitable Life.
- In 1997, we spotted widespread pensions income mis-selling.
- In the early 1990's, we predicted low interest rates.
- In the early 1990's, we drew attention to ineffective pension plans.
- We constantly challenge the government to simplify pensions.
- More recently we have warned of the potential perils of the buy-to-let market.
» Don’t most investment funds nowadays simply follow the stock market? Why shouldn’t I just buy index tracker funds?
Tracker funds appear attractive due to their generally low costs. However looking at costs is only part of the story. We have found that much of the academic evidence which is used to support the case for trackers is outdated and fundamentally flawed in many regards.
We believe that we can deliver better returns for our clients by selecting and monitoring the very best active fund managers on their behalf. Unfortunately some actively managed funds are also effectively "closet trackers", which charge higher fees whilst delivering index-like performance.
We therefore spend a lot of resource on institutional investment research, and conduct rigorous qualitative analysis of funds on your behalf to identify those funds that we believe will out-perform the index. We personally interview the fund managers and only once they have passed through our selection process will we recommend them to clients. We monitor them closely and will actively recommend fund switches with your portfolio where we feel this would be beneficial. We make no charge for fund switches so you can be assured that our recommendations to switch funds are made for only the right reasons.
» I have received bad investment advice in the past. What do you do that is so different?
We are different by design. We are the largest independently owned IFA firm in Scotland and one of the largest in the UK. We have one of the highest ratios of support staff to advisory staff in the business. This means we can deliver an exceptional service to you. We have been recognised numerous times in industry awards including "Best UK Investment IFA" in 2005 and 2007 and "Top 3 UK Investment IFA" in 2010. So others seem to think we are doing something right. But we are not complacent. We continue to invest in the best people, research and systems so that we can remain at the top of our game and deliver the highest quality of advice.
» I have read in the Daily and Sunday Telegraph that charges on investment funds are excessive. What are your views?
As a Telegraph reader you will probably already know that we are regularly asked to comment on this subject and write informative newspaper articles on all aspects of financial advice.
Our view is that excessive commission abuse by certain advisers has definitely inflated the overall costs of investing for consumers. Indeed we believe so strongly on this issue that we have sponsored monthly independent research to identify and expose such practices.
» Most IFA’s I have come across are simply part of a larger group. Each client seems to get the same investment advice. How can it suit everyone?
Clearly the answer is that it can't. We are certainly not in favour of the proliferation of huge IFA networks as we believe it reduces the independence and quality of the advice they recommend . And this can be especially true when it comes to investment .We manage in excess of £800m but we do it from one office and 40 staff. We spend 6 figure sums annually on investment research and each client portfolio is unique to the individual . We think this works and our client satisfaction survey rating of 97% seems to confirm we are on the right lines. Our industry investment awards are also an endorsement of this strategy . Don't just take our word for it and give us an opportunity to tailor a portfolio for you.
» I am a trustee of a final salary pension scheme. Does your investment service have experience of final salary scheme investments? Can you explain the impact of the final salary scheme funding position on my balance sheet and how to take steps to improve this?
Not only is Final Salary pension scheme trustee investment one of the fastest growing aspects of our business but the specialist level of our in-house pensions technical advisory service ensures that trustees such as yourself can be reassured that your own professional responsibilities as a trustee are supported. We have been frequently brought into pension schemes by trustees, particularly since the credit crunch, to help them establish a strategy to rebuild any underfunding.
Because we are smaller than the large national consultancies, we can offer a more personal and bespoke service for small to medium size final salary schemes and can often help to reduce your advisory costs. Most importantly we believe we can bring our significant investment expertise to this market and help to reduce deficits and deliver strong investment performance.
» I currently use a stockbroker. Can my investments still benefit from your other services?
Most stock brokers would not normally offer the same level of pension and tax advisory services which we have successfully built up over the last 35 years. We already work in tandem with many other professions such as stock brokers, accountants and solicitors where we see our skill base as complimentary to much of theirs. Of course another independent look at your existing investment portfolio wouldn't do any harm either.