Category Archives: Wealth Management

PM+M Two-Wheeled Professionals Networking Ride

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The afternoon of Wednesday 19 April saw the third 2017 gathering of PM+M’s two-wheeled professionals cycle-networking ride. The weather, yet again, was kind and the group met at The Green Jersey in Clitheroe to head out for 25 miles of pleasant riding and business-related conversations. Thanks to modern technology and GPS tracking the route can be viewed using the following link https://www.relive.cc/view/949367024  but took in Bashall Eaves, Cow Ark, Whitewell, Chipping and Chaigley.

The turnout, as ever, was excellent and we certainly weren’t short of representation from many different disciplines including lawyers, bankers, estate agents, marketing specialists andmore!

As ever the conversation flowed as well as the route and I am aware of at least a couple of follow-up meetings in the diary. Post-ride feedback was as positive as ever and the format universally praised. Collaborative communication within the group is so good that the route was planned to allow one of our riders to swing off home on our return to Clitheroe in time to successfully sell a car without missing the ride!

If you are interested in an invite to the next event then please get in touch.

Neil Welsh - Navy
Neil Welsh
Independent Financial Advisor
Email: neil.welsh@pmm.co.uk
Tel: 01254 679131

Who Wants To Work Forever?!

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Hardly a month goes by without the Government releasing another report on pensions and the past few weeks have been no exception. Analysis by the Department of Work and Pensions has suggested that people under the age of 30 may not get a pension until age 70. A second report by John Cridland CBE for the Department for Work and Pensions has recommended that those under the age of 45 may have to work a year longer to age 68.

The root cause of the problem is that life expectancy seems to be ever increasing with the average retiring worker now spending twenty plus years in retirement. When the State Pension was first introduced in 1908, retirement age was set at 70. However, only one in four people reached that age and life expectancy was only 79.

So, how do you avoid working until you are 70? Of course, the answer is to save more! As a rough rule of thumb take the age you start your pension and halve it, and this is the percentage of your salary you should set aside each year until you retire.

The above is of course simple in theory but much more difficult in practice, as life, children and mortgages get in the way! It is always better to be saving something rather than nothing and the magic of compound growth should not be ignored. For example, if you save £100 per month for thirty years and with an average growth of 6%, you should have a retirement fund of £104,608.

For further information on pension planning contact Antony Keen, PM+M Wealth Management Director, by phone on 01254 604303 or by email at antony.keen@pmm.co.uk.

Inheritance Tax And The New Residence Nil Rate Band

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Much of my time is spent advising clients on inheritance tax, both the current liability on their estates, and what can be done to address it. It’s an emotive subject, with many clients feeling aggrieved that the wealth they have created over their lifetime is being taxed again on death.

In response to this, the former Chancellor, George Osborne introduced additional measures to potentially reduce the tax take for the treasury, and allow people to pass on more of their money to their families on death.

On death, if you leave assets to anyone other than your spouse, inheritance tax is paid at a rate of 40% on any assets you hold above the nil rate band; this currently stands at £325,000 each (£650,000 for couples).

It has long been the objective of the Conservative Party, to increase the point at which inheritance tax becomes payable by couples to above £1 million. The simplest way to address this would have been to increase the nil rate band to £500,000 each. However, for political and financial reasons this was not the solution George Osborne devised.

An additional nil rate band was created of up to £175,000 each, relating to the family home.  This will be phased in over 4 years from 6 April 2017, starting at £100,000 each and increasing by £25,000 per year over 3 years. This is in addition to the existing nil rate band. Thus, if you as a couple have a home worth £350,000, you may eventually be able to pass on a joint estate of £1 million without being subject to inheritance tax.

This all sounds good news but it should be noted that not everyone will qualify.  Here are a few key points:

  • If your estate is worth more than £2m your entitlement to the residence nil rate band starts to disappear;
  • The rules stipulate that homes must be passed on to direct descendants, by which it means children and grandchildren;
  • I’ve had to inform clients who are leaving all their assets to nephews and nieces that they won’t get this additional relief;
  • Step-children and adopted children are counted in the definition as children so that is welcome;
  • If leaving the property into a trust, it must be one that creates a fixed entitlement to the property to a direct descendant, it can’t be wholly discretionary;
  • If one spouse doesn’t use their residence nil rate band, it can be passed on to the other spouse to use on the second death in the same way as the ‘normal’ nil rate band;
  • It can only be claimed against one property so two properties totalling £350,000 may require you to claim this relief against the higher value property only; and
  • There are also a myriad of rules relating to downsizing, which will probably require further revision by the Government to ensure they work in the way intended.

Inheritance tax is an area where many people will require advice. If you wish to receive advice on the Residence Nil Rate Band or any other inheritance tax matter, please get in touch.

Written by Richard Hesketh
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Richard Hesketh 
Client Manager
Email: richard.hesketh@pmm.co.uk
Direct: 01254 604340

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Jane Parry 
Managing Partner & Head of Tax
Email: jane.parry@pmm.co.uk 
Direct: 01254 604329

 
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PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

Trumping the market!

shutterstock_353116961The vote is in and Donald Trump has been voted President, words perhaps few people expected to read this morning and a deja vu feeling of Brexit!

Whilst investors and markets would undoubtedly have preferred the more stable influence of Hilary Clinton, Trump as President might not be a disaster. It is worth noting that the power of the President’s Office is limited by the Constitution, through the chambers of Congress and the Supreme Court. The Federal Reserve also remains independent.

So what does Trump mean for investors?  Initially, as we saw with Brexit, markets are likely to be volatile and we have already seen falls in the Asian markets overnight; the FTSE is currently down 1.2%. During volatile markets, and especially when you may be showing some short-term losses on investments, it is tempting to sell and wait for the markets to improve before reinvesting.

It is perhaps useful to look at market patterns and history before making the decision to sell.  According to Fidelity International, an investor who invested in the FTSE All Share Index for the last fifteen years, but missed the best ten days would have achieved an annualised return of 1.46%, against 5.69% by those investors that remained invested. Missing the best forty days reduced your annualised return to -5.62!

Often the largest returns are achieved shortly after these falls, so the message is simple. Provided you have a clear investment strategy and review process in place, you should hold your nerve and investments, and over the medium and longer term you will be rewarded.

Like a game of Top Trumps, if you hold the quality cards you win over the longer term.

For a review of your pension and investments, please contact Antony Keen by emailing antony.keen@pmm.co.uk or by calling 01254 679131.

State Pensions Update

shutterstock_151661894The Department for Work and Pensions (DWP) is writing to over 100,000 people with bad news about their state pension.

The single-tier state pension was introduced in April 2016, but the way in which it was announced has drawn criticism. The lack of publicity surrounding the flat pension of £155 has prompted the House of Commons Work and Pensions Select Committee to state in a recent report that government communications were “contributing to confusion about the new system.”

The DWP has now announced that it will be sending letters to over 100,000 people telling them that they will not qualify for any state pension at all. This loss is the result of a change to the qualifying requirements for a state pension.

Under the previous system, an individual only had to have had one year’s National Insurance contributions/ credits to accrue a small entitlement to a state pension. Under the new single-tier system, there is no entitlement until ten years’ contributions/credits have been clocked up.

Pension legislation is continually evolving and very rarely does it lead to an upgrading of benefits. For example, if you were a member of a final salary pension scheme between 1978/79 and 1987/88 you could also be on the losing side because under old rules your guaranteed minimum pension (GMP) would have been inflation-proofed by the state, but this is no longer the case.

These two examples are a reminder of the importance of obtaining projection of your pension benefits and reviewing whether your current provision is likely to meet your retirement needs. You may wish to seek expert advice to avoid potentially costly pitfalls.

If you have any questions or worries about your pension, please get in touch with our wealth management team on 01254 679131 or email wealthmanagement@pmm.co.uk.

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

Networking, Not Not Working!

PM+M Business Professionals (on 2 wheels)

Tuesday, 5 July, saw the inaugural PM+M Business Professionals (on 2 wheels) bike ride round the Ribble Valley. Setting off from The Green Jersey in Clitheroe, six riders, representing law firms, accountants, wealth managers, banks, telecoms providers and more set out through Bashall Eaves, Cow Ark, Chipping, Longridge, Stonyhurst, Mitton and back to Clitheroe. The ride was then uploaded (obviously) and followed by a coffee and a recording of the final 5km of the day’s Tour de France stage. Responsible riding saw the riders two-abreast and changing ride-partners regularly in order that everyone had a chance to talk to each other. Subjects throughout the day included Brexit, mergers and acquisitions, employment law, the bike retail industry, currency volatility, investments and portfolio building, advances in telecommunications technology and cycling fashion (or lack of).

The ride was a resounding success and without doubt question professional connections were made or built upon. There is a clear appetite to repeat the exercise and to include those riders who sadly couldn’t make the debut ride, as well as further invitees.

The last word must go to one of our merry band, who uploaded the ride to Strava under the title ‘Networking, Not Not Working!

If you’re interested in attending the next PM+M Business Professionals (on 2 wheels) event, please get in touch with either Neil Welsh at neil.welsh@pmm.co.uk or Tony Brierley at tony.brierley@pmm.co.uk.

PM+M Wealth Management Ltd is authorised and regulated by the financial conduct authority.

Don’t panic! A brief message to PM+M Wealth Management clients following the Brexit announcement

Whatever your views on this morning’s result, it has predictably led to some uncertainty and the one thing markets don’t like is uncertainty.  As I write the FTSE is trading at 6,190 having opened the day at 6,350 and having recovered from a low of 5,806 early this morning.  So we can expect some volatility in the short term!

You should bear in mind the following points:

  1. Our investment process involves regular portfolio reviews face to face.  Probably the most important issue we cover at a review meeting is to assess how much cash to hold on deposit and how much to invest.  We encourage our clients to hold sufficient cash on hand to ride out any storms.  It means you can sleep comfortably at times like this because you don’t have to sell when the markets are down.
  2. Not all your portfolio is held on the stock markets and we help you make sure you don’t have all your eggs in one basket.
  3. Sharp falls in markets can happen as a result of economic news or political crises.  The biggest gains can also can be just as unpredictable and often clustered together.  For this reason we recommend sitting tight during times of turbulence.  Missing the best gains can seriously affect your long term returns.

We’ll keep you posted on our views on regular basis over the next few weeks and months.   In the meantime, if you have any concerns please don’t hesitate to contact one of the team.

Tony Brierley – Managing Director, PM+M Wealth Management

PM+M Wealth Management is authorised and regulated by the Financial Conduct Authority.  

What Is Wealth Management?

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This is a question clients often tell me they were afraid to ask.

First and foremost, Wealth Management isn’t a barrier to having a conversation with me or one of the PM+M team. Don’t think about in terms of ‘I haven’t got any wealth to manage’ but rather ‘have I got financial plans for my future?’

There is no limit, value or threshold on who we talk to and who we don’t.  Everyone needs financial planning advice at some time or other and we are always happy to have an initial no obligation conversation.

The term Wealth Management has grown from the segmentation within the financial service industry of those who sell financial products, from those who actually advise. Fundamentally it represents a branch of the industry that turned its back on receiving commission where costs were shrouded by smoke and mirrors, turning instead towards clear and transparent charging for the time, skill, expertise and experience of finding the best solutions to meet client needs.

This ‘new model’ of advice became an industry standard on 1 January 2013 when commission payments were banned under legislation brought in following the Retail Distribution Review. The legislation also meant that a higher minimum level of qualification was required of financial advisers. Here at PM+M this ‘new’ model has been followed for almost 15 years, whilst the professional qualifications have not only been met but have exceeded the new standards.

What does this mean? Simply it means that we put our clients’ financial planning needs before anything else. Of course we expect to cover our costs and to make a profit – in fact it is essential (a non-profitable financial advisory firm is unlikely to remain open) as a profitable firm is likely to be there for many years to come supporting its clients for the long term as well as having the ability to invest in its people and systems.

In very simple terms, whether you call it Wealth Management or Financial Planning, there are three basic steps that drive our actions on behalf of you, the client. These are:

1. Plan for your future
2. Minimise your tax
3. Optimise investment returns

There is a second process that underpins this to give you peace of mind:

  • Assess and understand
  • Set your goals and objectives
  • Detailed plans and recommendations
  • Implementation
  • Monitor and review

Our aim is to support your financial planning journey, as well as that of your family, for many years to come. This is done by giving you the confidence that you have a team of professionals working on your behalf for your best interests.

One thing that helps to separate PM+M from the competition is the fact that we are much more than Wealth Management. The firm was and still is predominantly an accountancy practice with almost 100 years of history and growth. Originating in Blackburn and still based here, as well as having offices in Burnley and Bury, we currently employ 90 people across our various departments providing a range of financial and business services to individual and business clients of all shapes and sizes. Within Wealth Management there are 8 of us, of which 4 are advisers, but in reality our team is closely linked with our wider team of specialists across the firm.  Specialist departments include Tax, Audit, Payroll, Corporate Finance, IT and the ever growing Run My Business. Our specialists are as likely to be found dealing with the tax return of a mobile-hairdresser as they are advising on a multi-million business acquisition.  We work particularly closely with our tax colleagues in providing a complete estate and capital taxes planning service.  Corporate finance can also be very handy if part of your financial planning involves selling your business when you retire.

The fact that we see our relationship with our clients as long term also means that, unlike some advisers, we aim to recoup our reasonable costs over the fullness of time rather than front-loading them with high initial charges. This is a different business-model to most, but reflects the fact that we look after a very significant amount of money for our clients and have done so for many years.

Hopefully, this has helped paint a picture as to what we do and how we do it. What this blog can’t convey is the spirit in which we aim to deliver our service as one of our core values is to have fun – happy people make for a happy firm which makes for happy clients – it really is that simple!

If you want to know more, please get in touch or attend one of our informal seminars where you can get a feel for who we are, what we do and how we do it.

 Neil Welsh – Wealth Management IFA 

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

 

 

Pensions Regulator Toughens Up Over Warning Notices

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The Pensions Regulator has issued a warning to small companies that fail to adhere to the 28-day warning notices to enrol their staff in pension schemes.

The regulator warns that firms could be hit with a fine that will escalate on a daily basis until they comply. 95% of small firms who are required to auto-enrol their employees have now done so, but fines for non-compliance are on the rise.

The Escalating Penalty Notice (EPN) is one of the statutory powers the Pensions Regulator has to help maximise compliance with automatic enrolment duties. It specifies the date by which the employer must comply with certain actions or be subject to a fine. The fine levied for non-compliance is £50 per day for firms with between one and four employees, and £500 a day for those with between five and 49 employees. 96 EPNs have been issued by the Pensions Regulator in the current quarter, bringing the total issued to 127. Swindon Town Football Club hit the headlines as one of the employers fined for non-compliance.

Below is a breakdown of daily fines based on the size of your business:

Number of employees Prescribed daily rate (£)
1-4 50
5-49 500
50-249 2,500
250-499 5,000
500 or more 10,000

The purpose of automatic enrolment is to ensure that all employees are building up a pension scheme to supplement their state pension as increased life expectancy and tougher austerity measures mean that the state pension alone will not be enough to fund retirement for current generations of employees. For more information or advice on how to ensure your business complies and on achieving the best outcome for your business and your employees, please get in touch with Antony Keen by emailing antony.keen@pmm.co.uk or calling 01254 679131.

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

Two Wheels Of Business

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Life is short. We know this but often take it for granted – I’m being reminded that it can be shorter than we expect thanks to my father’s ill health at the moment and fundamentally this is one of the reasons that we should enjoy what we do and be passionate about it. I’m passionate about helping new and existing clients and contacts – I’m also passionate about cycling. Thankfully, since joining PM+M Wealth Management earlier in the year I’m finding that the corporate environment enables me to do both, or at the very least it did this last weekend.

For the uninitiated Colnago is an Italian bike brand, and one which carries the same qualities of prestige, pedigree, heritage, quality and premium as the Ferrari car brand. In actual fact the connection is a strong one as Colnago’s latest bike has been designed in collaboration with the carbon composite engineers within Ferrari to create one of the lightest and most aerodynamic bikes that you can buy today. With the recent growth in cycling popularity and the suggestion that cycling has become the new golf, there is a feel that board-rooms throughout the land have a Colnago (or its equivalent) propped against the desk.

With this in mind PM+M Wealth Management were quick to agree their support of this weekend’s Colnago weekend, organised by Richard Paige of The Green Jersey bike shop in Clitheroe. The event allowed guests to test-ride the latest Colnago range of bikes at the Steven Burke Sports Hub in Pendle on Saturday - this included the Campagnolo Super Record equipped Colnago C60 (a bike that would retail at close to £8,000) amongst others. Thereafter guests rode back to Clitheroe to partake in Italian themed culinary delights from the shop’s café kitchen and to take in the end of the day’s Tour of Italy (Giro D’Italia if you wish) stage on their big screen. Sunday saw the inaugural ride of the UK Colnago Owners’ Club, with a fantastic forty miles of Ribble Valley riding enjoyed by all.

The event brought together like-minded souls, happy in each other’s company and with shared stories of cycling exploits, their interest in Colnago, and the varied justifications used to self and significant others on why a purchase was needed (cyclists inevitably believe that want and need are the same thing). The openness of communication revealed further stories of successful businesses and opened the door to financial planning discussions that would never have happened without the two-wheeled conduit. In time I hope to play an active role in the Colnago Owners’ Club – this post alluding to the multiple benefits I will take from involvement.

I am loving life within PM+M and their desire to engage with, delight and have fun with clients old and new. If you see two smiling cyclists riding along they are just as likely to be talking about pensions as they are about lycra!
AAEAAQAAAAAAAAkRAAAAJGEyOTgyMmVlLWIzYmEtNGM1OC05YjI0LWRlOGM0MDhjZjI3MwNeil Welsh – Wealth Management IFA