All posts by Patrick Doherty

Lasting Legacy IT Disruption Can Have In Consumer Banking - TSB Bank
BankingSecurities

The Lasting Legacy IT Disruption Can Have In Consumer Banking

Lasting Legacy IT Disruption Can Have In Consumer Banking - TSB Bank

The Lasting Legacy IT Disruption Can Have In Consumer Banking

Recent statistics show that TSB, whose catastrophic IT transfer meltdown last year is still having lasting repercussions for clients, has come last in a consumer poll on the effectiveness of its online banking solutions. Staff Writer Hannah Stevenson explores how this is the direct result of the bank’s meltdown last year.

Last year, TSB lost thousands of customers when its IT systems switchover caused widespread outages and led to consumers and businesses being unable to access their accounts.

At the time, Paul Pester, TSB Chief Executive Officer, commented on the issues by saying:

“We’re making progress in resolving the service problems customers experienced following our IT migration, and we will continue to work tirelessly until we have put things right.  I know how frustrated many customers have been by what’s happened.  It was not acceptable, and was not the level of service that we pride ourselves on – nor was it what our customers have come to expect from TSB.

“It has been a difficult time for customers and I am grateful to them for their patience. I would also like to say thank you to our Partners for their enormous efforts.  They have done everything in their power to continue serving our customers, and I am proud to see that the values on which the Bank has been built have shone through during this time.

“Our priority in the second half of the year continues to be putting things right for our customers.  Looking further ahead we are determined to get back to bringing more competition to UK banking and ultimately making banking better for consumers and small businesses.”

Shortly afterwards, Paul stepped down from his position, showing how detrimental the issues had been to his career. Commenting on the changes, Richard Meddings made it clear that the IT problems were a key driving force in this decision.

“Paul has made an enormous contribution to TSB. Thanks to his passion and commitment, TSB is today one of the UK’s strongest challenger banks, serving over 5 million customers across the UK. On behalf of the TSB Board, I want to thank Paul for everything he has achieved as CEO and pay tribute to the contribution he has made in bringing greater competition to the UK retail banking market.

“Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration. Paul and the Board have therefore agreed that this is the right time to appoint a new CEO for TSB. Our goal is therefore to allow a full search to commence, without any distractions, enabling TSB to build for the future.

“Meanwhile I have been asked by the Board to take on the role of Executive Chairman on an interim basis. Together with the Executive Committee, we have three immediate priorities: to complete the work of putting things right for customers; to enable the bank to achieve full functionality – including the availability of all product services and launch of a leading Business Banking offer; and appointing a CEO for the next chapter of TSB.”

Later, TSB had a further issue, with smaller problems causing the bank further problems throughout 2018.

Andy Cory, identity management services lead at KCOM commented shortly after TSB’s second issue with authentication, which saw clients locked out of their accounts.

“A broken authentication system has an instant impact on customer loyalty. If a business cannot provide easy access to its services without sacrificing security, it only has itself to blame when its users desert.

“The problem is balancing access with security. Too easy to get in and you risk leaving customers unguarded; too many security measures and it becomes offputting for users.

“Fortunately, there is a way to achieve the best of both worlds. Frictionless customer authentication – where users can access online services with zero input into the identification process – is becoming a reality.

“For example, geo-location and geo-velocity checking allow companies to trace a user’s physical location and how far they have travelled since their last login. Taken together, they verify if the user is who they claim to be and make any manual input from the customer unnecessary.”

The latest results from the Competition and Markets Authority (CMA) showcase the long-term detrimental effect that the IT issues have caused. In the personal banking space the firm was last for its online services, but within the business banking space TSB was last in almost every category including online banking services, highlighting how much more important IT stability is for businesses. 

There may also be other factors at play, including poor interest rates, lack of availability for certain financial products and poor customer service as a whole, but there is clearly a link between the lack of faith consumers and businesses now have in TSB’s IT infrastructure and its poor ratings in this latest poll.

Looking ahead, TSB needs to restore faith through new initiatives and by showing its clients that it has truly put its IT failings behind it. For more of the latest news, insight and banking knowledge, subscribe to Wealth & Finance International Magazine HERE.

Hyper short-term investments what are millennials investing in
FinanceTransactional and Investment Banking

Hyper-short-term investments: what are millennials investing in?

Hyper short-term investments what are millennials investing in

Hyper-short-term investments: what are millennials investing in?

Despite the stereotype of the younger generation being frivolous with their money, it seems they are actually one of the savviest generations when it comes to turning a profit on their own. While they are hesitant to invest in stocks, millennials and generation Z are tapping into the hyper-short-term investment of fashion and beauty. For example, there’s a huge market for buying and selling trainers at the moment, or in vintage fashion.

In particular, limited-edition trainers have a huge appeal across the world, with people willing to camp outside of stores to pick up a particularly lucrative pair.


Art flipping

According to Business Insider, rich millennials are snapping up art as financial assets rather than as part of a potential collection — 85 per cent of millennials purchasing artworks say they are aiming to sell in the next year. Buying art with the intention of selling it on quickly is known as art flipping, and it’s something of a controversial subject in the art world. There are some who consider the process of art flipping as a potentially devaluing practice that harms the artist and their work.

The process can also seem more logical than artistic too, as many such purchases are made purely on the work’s monetary value. However, the piece’s social media hype can also spur rich millennials to part with their cash in a hopes of a quick resale profit — Instagram has been highlighted by Adweek as a viable platform for creating social media adoration for artists.


Clothes

One of the reasons why the younger generations are turning more to side-hustles and reselling as forms of investment is that the turnover is incredibly fast thanks to apps like Depop. There are so many stories about how entrepreneurial millennials are sniffing out limited edition items from the most popular brands, such as Supreme, during their famous limited edition ‘drops’, then rapidly reselling them.

Of course, the initial purchase is an investment, with many resellers spending hundreds of pounds or more on such a venture, but the resale of these goods can certainly turn a profit. It also taps effectively into the Instagram world we’re living in too. Sellers often combine their shop platforms with their social media accounts to merge both modelling and selling the items.


Shoes

The most sought-after trainers tend to be either limited edition or classic trainers for that much-loved vintage style. People are willing to set up camp outside a store before a particularly hyped drop of limited-edition trainers, in order to grab them at retail price, then sell it on for much higher prices. Some might seek to resell the items quickly, but there’s certainly a case to be made for popping a brand new pair of limited edition trainers away for a few years before reselling in hopes that their much-hyped status will only increase that price tag as the years roll on.

Arguably the biggest market in reselling is that of sneakers and trainers. Much like clothing, the main draw here is in limited edition shoes — but the sneakerhead culture is not anything new. In fact, it began nearly 30 years ago, though it’s enjoyed a huge resurgence in the last few years.

 
Sources:

https://www.sofi.com/blog/millennial-investing-trends/

https://www.adweek.com/digital/influencing-the-art-market-millennial-collectors-social-media-and-ecommerce/

https://www.businessinsider.com/rich-millennials-investing-art-flipping-build-wealth-2019-4?r=US&IR=T

https://www.standard.co.uk/fashion/should-you-be-investing-in-sneakers-a4014486.html

https://www.theguardian.com/fashion/2017/oct/23/teens-selling-online-depop-ebay

4Stop - Most Innovative Risk Management Platform (Western Europe)
Risk Management

Most Innovative Risk Management Platform (Western Europe)

Most Innovative Risk Management Platform (Western Europe)

Thanks to its impressive industry expertise, 4Stop, a leading fraud prevention provider, solves businesses riskbased approach through a modern, all-in-one KYB, KYC, compliance and anti-fraud solution at an international level. To celebrate the firm’s win in this year’s competitive FinTech Awards we profile it and share an insight into the innovative solutions it has to offer, speaking with members of the senior team to understand the true value of this exceptional solution.

Since its inception in 2016, 4Stop has onboarded various clients within its target markets of Payment Service Providers, Payment Gateways, eMobile payments, eCommerce, eWallets, and Cryptocurrency.

As all the founders of the company have collectively over 60 years of experience within the risk management realm, they understand the need for a simple, fail-safe, future-proof solution that businesses can effortlessly manage their risk requirements and more importantly with absolute confidence. When they first started their firm, their focus and challenges were to establish a product to resolve the cumbersome processes surrounding KYB, KYC, compliance and fraud prevention globally.

This drive led 4Stop to develop an all-in-one solution encompassing global data aggregation that resulted in a full suite of KYB and KYC data sources, and their proprietary risk management tools paired with automation and integrated analytics, all from a single AP. Removing the market pain point of multiple integrations and patchworked solutions to fully address risk management requirements.

Thanks to this unique technology, the firm now allows its diverse range of clients to easily perform required validation, verification and authentication at the point of onboarding through to transactional processing, both at the merchant and merchant consumer level.

Over the past three years the adoption and usability of the 4Stop solution have been well received. By encompassing a complete end-to-end solution for KYB, KYC, compliance and fraud prevention, 4Stop allows businesses to enjoy a single-view-ofrisk and it has already been proven to dramatically improve their overall performance and bottom line.

Today, the firm has achieved proven results for its clients and have cemented its place as a true revolutionary within the risk management and technology space. Businesses that have utilised 4Stop’s anti-fraud technology experience a 66.6% reduction in chargebacks in the first 2 months with an average of 81.5% approval authorisation rate. Additionally, businesses that have implemented the cascading KYC verification technology, have seen a growth of 10.9% in savings within the first two months.

4Stop’s revolutionary KYB solution is now leading the industry by performing granular business underwriting in near real-time with comprehensive data analysis surrounding business’ online presence, operational performance, structure. Comprehensive data analysis surrounding the business’ online presence, operational performance, structure, and compliance adherence. Enhanced by additional KYC due-diligence performed on directors/ UBO’s and required document retreival, businesses obtain all the data and documentation they require to confidently onboard businesses.

It is this unique solution that has driven 4Stop to win one of the 2019 FinTech Awards from Wealth & Finance International Magazine. Ingo Ernst, CEO of 4Stop, comments on the firm’s success in this award’s programme and how it is the direct result of the firm’s expert team’s hard work and dedication to excellence.

“This award is another great milestone for 4Stop. Our ever-changing online landscape demands innovation and for everyone at 4Stop, our focus is driving our technology advancements as an equalized force across all aspects of our product offering. Our teams’ hard work, diligence and passion have been the pathway for our success and we greatly look forward to continue bolstering our products to support online risk management.”

Seeking to change the face of risk management for the better, 4Stop’s KYC data hub solution encompasses one of the largest KYC data aggregations in the industry to provide true worldwide KYC data coverage. As a result, clients have access to thousands of global data points and hundreds of KYC data sources with real-time and on-demand activation. Additionally, this data creates full market profile data simulations in a seamless manner and allows businesses to make quantifiable decisions based on data science. Through 4Stop’s cascading verification logic costsavings on KYC data performance is maximised and the best data experience output is obtained. 4Stop continuously aggregates global data and KYC data sources so businesses can continue to enjoy all the data they require from their initial integration with zero touch on their IT and internal development resources.

Dedicated to safety as well as efficiency, 4Stop’s cutting-edge anti-fraud technology provides an automated and multi-faceted rules engine that performs real-time analysis with automated system actions through to providing granular risk monitoring and integrated intelligence. Businesses can apply risk thresholds and anti-fraud parameters per merchant, sub-merchant, region, type, market/ industry, date/time, etc. Clients have full control of their risk management in a fully automated manner. Through the single-view-of-risk, overall monitoring and risk analysis processes are efficient with minimal requirement for manual intervention.

Improving businesses authorisation rates, dramatically reducing chargebacks and accelerating their performance, the Businesses all-in-one solution provides everything required to manage risk from a single API.

Whilst its fully integrated solution is revolutionary in the FinTech market it enables 4Stop to overcome the KYC industry issue of managing so much data safely and effectively. The firm is constantly seeking to enhance this product for the benefit of its clients across the financial and business markets. 4Stops’s continued technological investment is based on a few variables within the market landscape.

By closely engaging within the industry through networking globally with key market leaders, events and conferences, close client engagement and staying abreast of global payment and risk management centric reports and trends.

Through this process, 4Stop develops vigorous assessments of the market landscape, emerging trends and evolving regulatory requirements, all of which are funnelled to their executive and product innovation teams to drive product expansion and ensure 4Stop’s all-in-one risk management solution remains leading-edge across the various industries in the market they services.

“4Stop has been designed to be future-proofed from a single API for our clients to manage KYB, KYC, compliance and anti-fraud technology on a global scale. It is our continued responsibility that the product does just that. Expanding our fraud technology and data aggregation accordingly to stay relevant to the rapid evolution of online payments and engagement.” States Brian Daly, Head of Product Implementation and Innovation, 4Stop.

At the point of inception 4Stop launched with a full suite of KYC data sources and their proprietary anti-fraud technology that encompasses a multi-faceted automated risk rules engine with cascading rule performance and automated system actions, alongside a dashboard with realtime intelligence and multiple reporting widgets. In early 2019 4Stop launched its global end-to-end KYB solution. Seeking to build upon its current success, moving forward 4Stop will continue to aggregate data and expand its KYB and KYC solution, in conjunction with furthering its features available such as machine learning to support the anti-fraud and risk monitoring technology. The firm has also recently completed a German-based €2.5 €Million Series A Round Investment from Ventech, the leading pan-European VC fund investing in early-stage tech-driven start-ups. This financing will help the company to expand its solution and drive real change in the market.

Ultimately, 4Stop is a global product with clients worldwide. In the coming years, the business has established a focused acquisition plan specific to regions and markets within Europe, Asia and the United States. These developments will drive the company to even greater global recognition and truly prove it as a pioneer in the risk management technology space. As many companies seek a single provider to manage all parts of their risk management cycle, 4Stop will become a key part of the payment’s ecosystem and the central aggregation hub in the eco-system.


Contact Information:
Name: Ingo Ernst
Address: Neusser Str. 85, Köln, Germany, 50670
Telephone Number: +49.151.1101.7175
Web Address: https://4stop.com/

Issues

Q3 2019

Welcome to the Q3 edition of Wealth & Finance International Magazine for 2019. Every issue we endeavour to provide fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes. Putting aside, at least for the time being, the tumultuous stock markets and dire warnings from financial experts on the topic of an ‘imminent’ global recession, we are focusing – as ever- on more optimistic shores.

Take, for instance, Inbound FinTech, a multi-award-winning growth agency that specialises in the financial sector. In the years since its establishment it has proven a crucial tool for the sector’s shining stars as they look to capitalise on a wealth of opportunities. Group CEO Sheila Mitham took a moment out of her busy schedule to tell us more.

In a very different vein, we profiled MPA Financial Management to see how they have thrived in their role as Independent Financial Advisers. The key to the firm’s success has always been their ability to serve their client’s best interests, helping them to achieve a secure financial future.

Here at Wealth & Finance we sincerely hope that you enjoy reading this issue and, as always, we look forward to hearing from you.

Banking the Unbanked - Wealth & Finance Interational
BankingCash Management

Banking the Unbanked

Banking the Unbanked

  • About 75% of adults earning less than $2 a day don’t have a bank account
  • More than 2.5 billion people around the world don’t have a bank account
  • The poor face bureaucratic, travel distance and cost barriers

Millions of people around the globe lack power, credit and internet which result in them being unbanked. Being unbanked means not having access to the services of a bank or similar financial organization.The challenges are manifold; from not being able to receive deposits from an employer, to no credit history and being excluded from lending, to lacking the ability to safely save money or transfer money.

In 2014 there were 2 billion unbanked people. Account ownership is almost universal in high-income economies, hence, all unbanked adults live in developing economies. China and India, despite having relatively high account ownership, claim large shares of the global unbanked population because of their size. 225 million adults living there are without an account. China has the world’s largest unbanked population, followed by India (190 million), Pakistan (100 million), and Indonesia (95 million).

 

What are the challenges in banking the poor?

Three quarters of the world’s population, living in poverty, are unbanked. This is not just because of poverty, but also due to the cost, travel distance and amount of paperwork involved in opening an account. Our bank account number is almost as intrinsic to our identity as name and date of birth. Getting a job, renting a house and having an internet connection at home would be nearly impossible without some sort of financial inclusion.

Yet today the unbanked population stands at a staggering 1.7 billion globally, according to data released by the World Bank.

“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future.”

 

What further challenges stop people using a bank?

FairPlanet researched further, and even with access to a bank, evidence suggests people will still not trust the bank, the service is unreliable, and withdrawal fees are prohibitively expensive. People are not inclined to borrow because they do not want to risk losing collateral. While expanding access to various banking services (for instance, by lowering account opening fees) will benefit a minority, broader success may not be obtainable unless the actual service quality is vastly improved. Moreover, there are challenges on the demand side. Increased work needs to be done to understand what savings and credit products are best suited for the majority of the unbanked living in poverty.

 

Problem solving?

Blockchain payments allow for cheaper money transfers and lower account fees while upholding security and transparency. Open banking allows for new players to enter the field and begin assisting the underbanked in ways that have never before been allowed, and blockchain technology is poised as a key component in the entire process. With are a few companies emerging in this field and companies, such as FairPlanet, that host these payment methods, we can see a push for financial inclusivity. Serving adults who live on less than $5 a day is not only possible at scale—to a large degree, it is already happening.

Issues

Q2 2019

Welcome to the second issue of Wealth & Finance International Magazine for 2019. As always, we are dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes. This issue we are looking forwards. More specifically, at how to secure the future, whatever the coming years may bring.

With that in mind, we have spotlighted a number of firms and practitioners who are in the market of protecting the future – whether that be through providing financial advice, security solutions, or future-proof banking services. On the cover of this month’s issue is Azizi Bank, who have swiftly become one of Afghanistan’s largest commercial banks. We spoke to Dr. (Prof) Mohammad Salem Omaid, CEO of Azizi, who discussed the bank’s mission, vision and plans for the year ahead.

Elsewhere in the issue, we sat down with Christian Holland, Director of FACET, who offered some insight into the firm’s investment management services. As independent wealth managers, FACET have forged an impressive reputation through an ability to cater to the needs of their clients, providing impartial and unbiased advice that achieves results.

Finally, we profiled Redwood Bank to discover how they are revolutionising traditional banking services to cater to British SMEs.

Here at Wealth & Finance we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Laura Brookes | Editor

[email protected]

+44 (0) 20 3970 0082

Predictions which 2019 will bring for the future of fuel
Articles

Predictions which 2019 will bring for the future of fuel

Predictions which 2019 will bring for the future of fuel

Predictions which 2019 will bring for the future of fuel

Here, with car dealers, Lookers, who have a variety of car servicing plans, we take a look. The average price of a litre of petrol at the end of 2018 was £1.21 in the UK, whereas a decade ago the figure was closer to £0.89 per litre. Price surges are reflective of steep inflation at various historical points, but what does 2019 hold for our empty tanks?

Current predictions suggest that the number of cars globally will double by the year 2040, which leads to questions over how this will affect the prices on forecourts around the world. Petrol is an expense which many people must factor in to their weekly budgets, and the fuel industry has maintained a constant upward gradient as the car market continues to grow.


The rise of petrol prices

The price of petrol has sparked many protests in countries across the world, and 2019 has begun on a gloomy precedent with the continued uproar by the yellow vest protesters in France. The grievances were sparked by the current French president Emmanuel Macron, as his government introduced a series of taxes which hit petrol with a stark price increase. Paris was engulfed by the initial outcry of dismay, with public areas being set alight by demonstrators. The protestors eventually weighed in on the government, as the carbon taxes have been scrapped because of the ‘gilets jaunes’ activism (yellow vests), with blockades, violence and even fatalities symbolising the dismay over rising fuel costs.

The average rate stands at £1.26 per litre in France, and the proposed taxes would have increased this by 0.091 per litre. The taxes were designed to support Macron’s environmental reforms, and to bring about a reduction of carbon emissions produced by French motorists. The eco-friendly stance aligns with attitudes reflected in laws established by the European Union to target carbon dioxide emissions in the automotive industry. As of 2020, fines will be enforced for manufacturers who fail to meet emission standards, and this could provoke more leaders to follow in the footsteps of Macron by enforcing taxes on petrol to curb consumption.

The Operations Director at PSA Group Maxime Picat has outlined plans for the multinational manufacturer to unveil a whole host of new electric and plug-in hybrid models for 2019, to meet the new emission requirements. As the car market evolves and environmental concerns continue to spread, the actions of Macron could be reflected by leaders across the world in years to come, and 2019 could be a pivotal turning point in this.


Will this have a global impact?

If you are looking to get the best value for money on a road trip this summer, destinations such as Kuwait, Malaysia, Saudi Arabia, and the United Arab Amirates are all known for having below average fuel prices. However, the United States remains an outlier, as the largest economy in the world pays an average of £0.54 per litre. In fact, under current 2019 rates, you could drive the infamous 2,448-mile ‘Route 66’ in a vehicle with an average of 20mpg and it would cost an equivalent of £353 under the American rate. The journey would, however, set you back £792 at the British fuel price.

Petrol prices in the western hemisphere have experienced a different kind of crisis, and the forecast for 2019 remains uncertain. As one of the largest exporters of oil, Venezuelan motorists pay an inconceivable average £0.01 for a litre of fuel, and the country is paralysed by an inflation rate of one million per cent. The rule of thumb for petrol prices in poorer and export countries was maintained for the most part last year, as exporter countries pay notably less for fuel than those who receive it.

Overall, recent increases in petrol prices continue to suggest that rates will climb consistently as 2019 progresses. In Australia, prices at the pump have reached their highest level in four months, after creeping upwards in the final quarter last year. Similar trends are evident as prices have already rocketed in Greece, Iceland, Denmark, and Hong Kong. In Zimbabwe, protests were sparked earlier this year as prices reached an equivalent of £2.55 per litre, an increase which the countries President Emmerson Mnangagwa put down to illegal trading and increased demand.


The home stretch

The tone of 2019 has already been set across Europe where petrol prices are concerned, with protests and fluctuation as well as cultural arguments of conservation arising. In the UK, fuel prices have been the subject of sporadic protests over the past two decades, perhaps most notable in the 2012 fuel crisis. As Brexit unfolds, there is an overarching sense of uncertainty towards the country’s finances, and a potential for repercussions to be felt throughout European markets, all of which could impact the price paid at the pump as 2019 progresses.

 

 

Sources

https://www.petrolprices.com/the-price-of-fuel/

https://www.bbc.co.uk/news/av/world-europe-46405583/france-fuel-protests-who-are-the-people-in-the-yellow-vests

https://www.bbc.co.uk/news/world-africa-46862194

https://www.theguardian.com/world/2018/dec/05/france-wealth-tax-changes-gilets-jaunes-protests-president-macron

http://fuel-economy.co.uk/calc.html

http://www.mytravelcost.com/petrol-prices/1/8/

https://www.bloomberg.com/graphics/gas-prices/#20184:United-States:GBP:l

https://www.businessinsider.com.au/petrol-prices-australia-rba-gdp-2019-3

https://www.petrolprices.com/news/reviewing-petrol-prices-year-looking-forward-2019/

https://www.autoexpress.co.uk/car-news/consumer-news/93906/diesel-pump-prices-go-up-despite-reduced-wholesale-costs

blockchain
BankingFinance

Swiss President Ueli Maurer to Attend 4th International Blockchain Conference

blockchain

Swiss President Ueli Maurer to Attend 4th International Blockchain Conference CV Summit in Zug

The CV Summit, held in the heart of the Crypto Valley, in Zug, Switzerland, has become one of the most important blockchain events in Switzerland. The summit’s 4th edition on March 27th will revolve around #BUIDL, focusing on the development of the technology instead of crypto speculations. The welcome address will be held by the President of the Swiss Confederation and Finance Minister Ueli Maurer, who is a strong advocate of the blockchain technology and the Blockchain Nation Switzerland.

The 4th edition of the CV Summit starts on March 26th with an Open House networking afternoon and the CV Competition Top 10 pitches at the CV Lab’s newly inaugurated Liquid Lounge. The Top 3 projects will then present their blockchain solutions the next day at the official CV Summit. The CV Competition is a startup contest for blockchain projects. Each competition targets a specific industry: this year everything revolves around the real estate industry. The winner receives $100,000 in funding, expert coaching and complementary working space at CV Labs.

On March 27th, the official CV Summit at the Theater Casino in Zug starts with opening remarks by the newly instated Mayor of the City of Zug, Karl Kobelt. The Mayor won’t be the only political representative at the summit: later in the day, the Swiss President Ueli Maurer will provide some updates on “Blockchain Nation Switzerland”. As the head of the Federal Department of Finance, Ueli Maurer is responsible for the new blockchain regulations expected in the next weeks.
Throughout the day, experienced industry leaders, innovators and entrepreneurs will be sharing their insights and views on how to #BUIDL towards the crypto spring. Notable speakers include Jorge Sebastiao (CTO Ecosystem, Huawei Technologies), Nathan Kaiser (Chairperson, Cardano Foundation) and Niklas Nikolajsen (Co-CEO and Chairman, Bitcoin Suisse), with more to be announced soon. Companies represented at the summit include Alethena, Bitcoin Suisse, Cardano, Coreledger, Forctis.io, Bank Frick, Generali, IOHK, inacta, Kucoin, Lamassu, Lykke, Mt. Pelerin, PwC & strategy&, Swiss Economics, SwissRe Sygnum, ZBX and others.

“Over the last two years, the CV Summit has become an integral part of the Crypto Valley community and the international blockchain scene. Themed #BUIDL towards Crypto Spring, this year’s edition shows how the industry is focusing on the further development of blockchain technology after the market correction in the so-called ‘Crypto Winter’”, says Mathias Ruch, Founder & CEO of CV VC and the CV Summit.

Glossary: #BUIDL
Crypto slang for “to build” – meaning do develop the technology and the ecosystems. Derived from the term “to HODL”, which is slang in the cryptocurrency community for holding a cryptocurrency rather than selling it. It originated in 2013 in a post on a Bitcoin forum message board, when an apparently inebriated user wrote “I am hodling” (sic) instead of “holding”.

Press releases

Innovation Leadership Forum

The Innovation Leadership Forum (ILF) is a visionary and original Think & Do Tank dedicated to helping organisations understand and improve their innovation performance. It does so through a number of different avenues such as a series of MasterClasses, Advisory & Coaching Services, Workshops, Presentations, Public Speaking, and the Innovation Wave®, a tool for the facilitated assessment of innovation capabilities. 

The ILF was set up by Dr Bettina von Stamm in 2004, allowing her to pursue her longstanding passion for understanding and enabling innovation, a field in which she has worked independently since 1992. In addition to the ILF activities she enjoys teaching and writing. Her three books to date are, ‘The Innovation Wave’ which is an introduction to a holistic approach to innovation (Wiley, 2002), her textbook ‘Managing Innovation Design & Creativity’ (2nd edition 2008), and, most recently, ‘The Future of Innovation’, an inspirational compendium of over 220 views from 57 countries, knitted together through commentaries by Bettina and her friend and colleague Dr Anna Trifilova (Gower 2009).

 

For more information visit: http://www.innovationleadershipforum.org/

digital tax
FinanceFundsTaxTransactional and Investment Banking

The importance of Making Tax Digital to the UK mid-market

The importance of Making Tax Digital to the UK mid-market

Written by Steve Lane, CTO at Access Group

With UK Government’s Making Tax Digital (MTD) deadline less than two months away, the race is on for UK organisations to understand the impact of MTD on their business. MTD could mean a significant shift in operations for some organisations, which means they need to act now in order to get themselves in order for the impending deadline.  


What MTD requires

The Making Tax Digital programme will require UK businesses with annual turnovers above the VAT threshold of £85,000 to keep digital records for VAT and submit their returns digitally. The points-based penalty system means business taxpayers gather points with each late submission of an MTD report, those with multiple businesses must submit tax reports for each of their businesses. To ease the transition process, HMRC is allowing the use of ‘bridging software’ to support the digitised submission and account information retrieval from spreadsheets. However, those without it in place risk not being able to carry out their business as usual.

While all respondents in Access Group’s survey use some type of electronic system for financial management, 96 percent of mid-market businesses still process a portion of their tax returns manually, for example performing off-system calculations, which could be problematic come 1st April if businesses fail to use bridging software to support the digital submission of their VAT returns. Which begs the question, why do some organisations still rely heavily on manually calculating? A large proportion of the finance professionals surveyed explained that they haven’t transitioned to 100 percent digital processes due to a lack of knowledge and training (26 percent) while others said it’s the fact that multiple legal entities are involved in VAT registration (23 percent).


Putting off MTD is no longer an option

Manually entering VAT is inefficient and opens businesses up to human error. Under the new regulations, mid-market businesses could stand to lose not only money in fines, but credibility within their field. Putting off making the necessary technical changes to your business is no longer an option.  

There are certain things that businesses simply cannot afford to ignore, for instance:  


Transformation

Deploying new business software isn’t always an easy decision. Especially when there are multiple ways to ensure your organisation remains compliant with government regulations. Considerations need to be made for either full business software transformation or a single solution update i.e. bridging software, to support. Given the impending deadline, businesses must act now, to ensure they’ve put in place measures that abide by the regulations.


Accreditations

When deciding to begin a digital transformation project, particularly with digitising financial systems, choosing a partner that has the proper government accreditations is vital. Acronyms like ISO or IL are ones to look out for.


Productivity

Digitising financial systems offers the business not only a more efficient, and free of human error way of working, but a more productive way as well. Entrusting admin-heavy tasks to intelligent software can free up time elsewhere to focus on innovation, business development and growth ambitions.

Whilst it’s important that businesses’ financial systems are all set for the 1st of April deadline, to think about Making Tax Digital solely in terms of tax compliance would be to miss the point. It’s the perfect opportunity for UK business’ senior management teams to take a broader perspective – one that turns this regulatory burden to the business’ advantage. The organisations who act now are the ones who will see greater efficiency and productivity, driving both business growth and profitability. It’s good practice to update your operational processes at any moment in time, the MTD deadline provides a good excuse for companies to do just that. Given the pressures coming from Government organisations to digitise and the complexities that go into technology investment, mid-market businesses need to ensure their finance teams’ house is in order to remain compliant and avoid fines in the new era of digital tax.

Issues

Q1 2019

Welcome to the first issue of Wealth & Finance International Magazine for 2019. As always, we are dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes. Though the New Year typically heralds in a new start and fresh beginnings, the wealth and finance industries look towards strengthening their position for the challenges that lie ahead. Continuing economic uncertainty partnered with Brexit’s looming presence are, in all likelihood, going to bring renewed volatility to the world’s stock markets.

Yet, it’s not all bad news – not by any means. This issue covers inclusions from some of the most promising asset managers: those who are rallying despite this volatility and using their hard-earned knowledge and experience to protect their client’s investments. Firms like Mori Capital Management Ltd and Delta Asset Management.

We spoke with Mori Capital Management’s Director and Portfolio Manager, Aziz Unan, to find out more about the firm’s extraordinary flagship Mori Eastern European Fund. Remarkably, the fund has delivered a net return of 732.1% (in euro terms) since its inception, significantly outperforming peers.

Further in the issue, Stanislas de La Gastine, a Credit Analyst at Delta Asset Management, offered insight into their unique position as the only French alternative investment firm working in the Special Situations market. Their ESSF fund was recognised in Wealth & Finance’s annual Fund Awards as the Best Event Driven Open-End 5 Year Fund.

Here at Wealth & Finance we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Laura Brookes | Editor

[email protected]

+44 (0) 20 3970 0082

Issues

Issue 12 2018

Welcome to the twelfth issue of Wealth & Finance International Magazine, which is dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes. This month we take a look and investment and wealth managers who have, simply, done things differently than their peers and competitors. In this challenging economic environment, doing things differently is certainly a risk – avoiding the well-worn path in favour of new pastures. Yet, for the firms included in this month’s issue, these risks have yielded strong results for their clients and company alike.

First up is RPG Wealth, a firm that understands the important of independent, and personalised financial planning advice. Not content to sit still or rest on their laurels, RPG Wealth’s ethos lies in continual improvement and client-centric services. We spoke with John Sangster, RPG’s Head of Investment Research, to find out more about their work.

Also in the issue, Ann Spickett of Total Accounting Kent Ltd writes about how technology has helped spearhead her company’s growth. Equally, as accountancy experts, they are well-placed to make sure that their clients remain up-to-date on incoming regulation changes, as well as guiding businesses to a more secure financial future.

Finally, we spoke with Steve Dabbah, Principal of Bedrock Advisers LLC in New York. Named as the ‘Best Commodity Trading Adviser’ in Wealth & Finance International’s Alternative Investment programme, we were eager to find out more about their best in class investment management solutions.

Here at Wealth & Finance we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Laura Brookes | Editor

Issues

Issue 11 2018

Click the cover above to read this issue

Welcome to the eleventh issue of Wealth & Finance International Magazine, which is dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes.

This month we have a keen focus on wealth management firms from all corners of the globe. October proved a challenging and incredibly volatile month for stocks on the back of an otherwise stable third quarter, though markets have – for the most part – have since recovered. Regardless of what the rest of the month holds in store, we wanted to celebrate the work of wealth managers worldwide who have achieved exceptional results for their clients, despite difficulty and uncertainty.

First up is O’Connor Portfolio Management who have differentiated themselves through a focus on risk management and compound interest, avoiding mutual funds and annuities – the usual tools in a wealth manager’s arsenal. We spoke with Catherine O’Connor, an Accredited Portfolio Management Adviser, to find out more about her company’s unique approach to wealth and asset management.

Also in the issue, we spoke to Darren McMahon, Partner of DLM Wealth Management. Named the ‘Most Innovative Financial Advisory Firm in the United Kingdom’ in Wealth & Finance’s Winners Review programme, we were eager to see how they have adapted to the changing role of ‘The Client’ – who, over the last few years, have become active participants and partners of their investment choices.

At Wealth & Finance Magazine, we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

 

 

Laura Brookes | Editor

data quality
Banking

Tackling the Challenge of TRIM

Tackling the Challenge of TRIM – How Banks Can Make Sure their Data Quality Processes are up to Scratch

by Martijn Groot, VP of Product Management, Asset Control

The Targeted Review of Internal Models (TRIM) is underway and banks across the eurozone will already be feeling the effects. Supervised by the European Central Bank (ECB) and first launched in 2017, the initiative is designed to assess whether the internal risk assessment models used by banks meet regulatory requirements and whether their results are reliable and comparable.


What is TRIM?
As part of the programme, the ECB is reviewing the banks’ models, providing them with ‘homework’ to improve their processes, and then returning to inspect. In carrying out this process, however, the ECB understands that detailed discussions with banks about their risk assessment models will be of limited value if they can’t trust the data being fed into them.

TRIM builds on the results of the Basel Committee for Banking Supervision’s BCBS 239 document, published in 2013. While BCBS 239 laid out 14 risk data aggregation principles for banks to abide by, it was quite generic. TRIM is more specific – especially around data quality aspects and measurements.

In fact, TRIM provides a range of governance principles for developing a data quality framework that covers relevant data quality dimensions including timeliness, completeness, accuracy, consistency and traceability. 


The Principles of TRIM
In order to comply with TRIM, banks need to demonstrate they can trace the price they have used historically for a model or for a financial instrument valuation through the data supply chain back to original sources. They also need to know what processes have been carried out on the data, including checks that have been conducted, what the sources are, what were the original parameters and data quality rules, and have they been changed over time? Traceability is the term used to describe this in the TRIM document but data lineage, effectively the data lifecycle that includes the data’s origins and where it moves over time, is the broader term more widely employed in data management.

TRIM also contains important reporting guidelines –  including that banks will need to report on how often they have proxied their market data inputs or risk calculations. 

Doing this also defines a process for how the bank has derived and validated this proxy. Is it really a comparable instrument? Does it behave similarly to the original instrument?

In other words, in line with the focus on data quality in TRIM, it is important that banks are regularly validating their proxies. Finally, to ensure they have a better grasp of the quality of the market data they use in risk calculations, they also need to ensure they have a handle on how much data is stale per asset class.

Typically, today most banks would struggle to comply with many of the data quality guidelines TRIM lays down. Most have no data quality or control frameworks in place or, at best, assess quality in different isolated silos. As such, they don’t have the ability to report daily on key data and metrics. They may have implemented checks and controls but generally they have little real insight into data across the whole chain.  Very few have a full audit trail in place that describes how data flows from sources through quality checks and workflows into the financial models, and that does not just track data values but also the rules and the rule parameters acted on it.


Achieving TRIM Compliance
So how can banks meet the TRIM guidelines? Banks first need to get the basic processes right. That means putting a robust data governance and data quality framework in place. To do that, they need to document their data management principles and policies. They also need to agree on a common data dictionary and understand more clearly exactly what they are measuring, including how they define financial products across the group and the control model for the whole lifecycle. 

The next stage will see banks putting the technology that enables them to achieve this in place. Organisations first need a data management system that has the end-to-end capability to gather, integrate and master key data, derive risk factors and publish them to different groups. That should provide banks with a single funnel and consistent set of data and data quality metrics that support TRIM compliance.

For banks that are able to achieve all this, TRIM compliance is just one of the benefits they can expect to see. In fact, some of the remediation they will have to do to comply will also be required for key regulations, including the Fundamental Review of the Trading Book. However, for many, TRIM is their current focus and with the programme expected to run until 2020, banks know there is still work to do to meet its guidelines.

Bond Investment
Transactional and Investment Banking

Bonds remain firm fixture in portfolios moving into 2019

Bonds remain firm fixture in portfolios moving into 2019

  • Nearly three quarters of advisers are either looking to write more bond business in the next year 
  • The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients
  • Financial advisers are recognising the benefits of writing bonds, with three in five (61%) stating they are more useful than most advisers believe

Nearly three quarters (73%) of financial advisers said they were either considering or planning to increase the amount of bonds they write for clients in the next year, with exactly a quarter (25%) stating they would definitely increase the amount they write, according to new research from Canada Life.

 

Richard Priestley, Executive Director of Canada Life UK, commented: “Despite the complex, rapidly evolving landscape, the popularity of bonds with advisers shows no signs of slowing. Bonds continue to remain a firm fixture in portfolios, with many advisers recognising the importance and usefulness they hold as a defensive investment option for their clients.

 

“It is unsurprising that more financial advisers are recognising the benefits of bonds, such as top slicing relief, compared to a year ago. However, with 2019 on the horizon, advisers who have yet to consider writing more bond business for their clients in the next twelve months would be wise to consider this option.”

 

The majority of financial advisers (55%) believe onshore bonds play an important role in the advice they give to clients. While three fifths (61%) say bonds are more useful than most advisers believe, a slight increase from 2017 (60%). The number of advisers recommending international bonds to their clients has also risen slightly year-on-year, up from 17% in 2017 to 18% in 2018.

 

Financial advisers are also increasingly recognising the benefits and value of bonds, compared to twelve months ago.

 

Over two thirds (67%) of financial advisers cite tax deferral options as an advantage of using bonds, up significantly from just under half (49%) last year. Meanwhile, over three in five advisers (62%) say top slicing relief is one of the main advantages of writing bonds, a substantial increase from 48% in 2017.

 

Of those planning to write more bonds in the next twelve months, two in five (40%) advisers plan to write a mixture of both onshore and offshore, while over two fifths (42%) intend to only write more onshore bonds.

 

Finance

Scrutiny on the Data Supply Chain

Scrutiny on the Data Supply Chain

by Martijn Groot, VP of Product Management, Asset Control

The idea of a ‘supply chain’ is most commonly associated with the manufacturing process, however, the concept is now increasingly being applied to the way that financial services firms manage data. While businesses across the financial services space deal with growing volumes of raw data, rather than raw materials, the parallels are striking.

As with any supply chain, being able to trace materials or data across the whole process is very important. In the data supply chain, financial services companies need to understand and to audit what happens to the data across the process, who has looked at it, how it has been verified and they also need to keep a full record of any decisions that are made. Ultimately, they need to ensure traceability, that they can track the journey of any piece of data across the supply chain and see both where it has been and where it finally ends up.   

The benefit for financial services firms who reach the end of this data supply chain is that the result of this process supports informed opinion that in turn drives risk, trading and business decisions. 

Bringing the data together in this way is important for many financial services firms. After all, the reality is that these businesses, today even more than pre-crisis, typically have many functional silos of data in place, a problem made still worse by the preponderance of mergers and acquisitions taking place across the sector in recent times. Typically today, market risk may have its own database, so too credit risk, finance stress testing and product control. In fact, every business line may have its own data set. Moreover, all these different groups will all also have their own take on data quality. 

More and more financial services appreciate that this situation is no longer sustainable. The end to end process outlined above should help to counteract this but why is it happening right now? 

Regulation is certainly a key driver. In recent years, we have seen the advent of the Targeted Review of Internal Models (TRIM) and the Fundamental Review of the Trading Book (FRTB) both of which demand that a consistent data set is in place. It seems likely that the costs and the regulatory repercussions of failing to comply with this will go up over time.

Second, it is becoming increasingly costly to keep all these different silos alive to support it. A lot of these silos are internally developed systems. The staff who originally developed them are often no longer with the business or have a completely different set of priorities, so it makes for a very costly infrastructure. Finally, there is a growing consensus that if a standard data dictionary and vocabulary of terms and conditions are used within the business, and there is common access to the same data set, that will inevitably help to drive a better and more informed decision-making process across the business.


Finding a Way Forward

To address these issues and find a way of overcoming the data challenges outlined above, organisations can begin by ensuring that they have a 360˚ view of all the data that is coming into the organisation. They need to make sure they know exactly what data assets there are in the firm – what they already have on the shelf, what they are buying and what they are collecting or creating internally. In other words, they need to have a comprehensive view of exactly what data enters the organisation, how and when it does and in what shape and form.

Firms need to, therefore, be clearer not only about what data they are collecting internally but also what they are buying. If they have a better understanding of this, they can make more conscious decisions about what they need and what is redundant and prevent a lot of ‘unnecessary noise’ when it comes to improving their data supply chain.

They also need to be able to verify the quality of the data of course – and that effectively means putting in place a data quality framework that encompasses a range of dimensions from completeness to timeliness, accuracy, consistency and traceability.

To deal with all these data supply chain issues, of course, businesses need to have the right governance structure and organisational model in place. Consultants can help here in advising on processes and procedures and ensure for example that the number of individual departments independently sourcing data is reduced and there is a clear view in place of what is fit for purpose data.

The Role of Technology

Technology can play a key role, of course, in helping organisations to get a better handle on their data supply chains. For most businesses, a primary requirement is to have good data sourcing and integration capability in place. This means systems that understand financial data products but also the different data models and schemas that are in place to identify instruments, issuers, taxonomies and financial product categorisations.

The chosen solutions should also be able to quickly and easily move between one set of identifiers and classification schemes to another. Organisations also need the capability to support the workflow process and workflow integration to effectively manage a process whereby users can easily interact with the data either to include their own data in the integration or to check the result of various screening rules that affect the quality of the data.

Businesses also need a data reporting capability. Technology chosen to fulfil this role must be capable of providing metrics on the impact of all the different data sources the organisation has bought, what benefits it has achieved from those sources; what kind of quality are they and what gaps are there in the data, and where is the organisation in providing this data to business users for ad-hoc usage.

Beyond understanding and monitoring their supply chains and ensuring that an auditing and traceability element is in place, financial services businesses must also guarantee that data governance and data quality checking is fully implemented. After all, to get the most from their data supply chains they must make the data itself readily available to users to browse, analyse and support decision-making processes that ultimately contribute to driving business advantage and competitive edge.

Issues

Issue 10 2018

Click the image to read this issue

Welcome to the tenth issue of Wealth & Finance International Magazine, which is dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes.

This month’s issue looks towards the future, as we explore the ways that technology will shape the investment and finance landscapes. In many ways, the investment industry has undergone a schism, dividing the market in two: on one side, the traditionalists, who advocate for human-driven expertise and management. On the other, the futurists, who believe that the future of finance lies in AI, algorithms and machine learning.

On the side of the traditionalists, Compass Invest trust in their experienced asset managers to forge investment strategies that fulfil their client’s long-term wealth management goals. They believe that the human element that drives their success acts to differentiate themselves from a sector that has become reliant on technology. We spoke to the firm’s Chief Investment Officer, Dragomir Velikov, and Executive Director, Ivaylo Angarski, to find out more.

On the other side of the spectrum, A&C Legal are a pioneering law firm working tirelessly to set a new standard for legal practices around the world to follow. Adriana Posada, A&C Legal’s Founder, Partner and Director, takes some time out of her busy schedule to talk to Wealth & Finance about her work towards the empowerment of women, corporate responsibility and the incorporation of green practices.

At Wealth & Finance Magazine, we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

By Laura Brookes | Editor

TravelPerk
Finance

TravelPerk announces 39m GBP Series C investment

TravelPerk announces 39m GBP Series C investment led by Kinnevik to transform 1 trillion GBP business travel market

TravelPerk, the Barcelona-based startup which has become the fastest growing ‘Software as a Service’ company in Europe, has secured 39 million GBP in Series C funding from some of the world’s most successful technology investors including Kinnevik, Yuri Milner and Tom Stafford. This new funding will enable the firm to expand into new markets and accelerate its dramatic growth towards its ambition to become the world’s leading corporate travel management platform.

According to the Global Business Travel Association, 50% of business travel happens outside of company policy often because existing platforms are outdated, can’t offer the choice or prices of consumer sites, and require travel managers and finance teams to endure multiple platforms, emails and calls back and forth to manage a single trip – costing companies valuable time and money, while frustrating employees and preventing growth.

TravelPerk is solving this problem by simplifying the process for hundreds of thousands of travelers from some of the world’s most influential companies including Uber and Transferwise – cutting the time needed to manage a trip from 3 or 4 hours to just 10 minutes. By streamlining the process, TravelPerk is saving companies more than 20% in annual travel costs.

The company’s unique platform hosts the world’s largest bookable travel inventory, and brings all the necessary tools and resources to manage trips from booking to accounting into one simple, smart, consumer-standard interface. The platform allows travelers to quickly and seamlessly compare, book and invoice cars, trains, flights and hotels from a wide range of major providers including Booking.com, Expedia and Airbnb – with 24/7 support.

TravelPerk CEO Avi Meir said: “We believe business travel should be as simple as personal travel – if not easier. As businesses grow beyond borders, organising trips is one of the most painful and unnecessary obstacles they face to expanding.

“TravelPerk is breaking new ground to propel business travel into the 21st century, disrupting a mammoth and outdated 1.3 trillion USD market – ensuring distance is never a barrier to future growth.”

“We are proud to have the backing of investors with a unique track record of supporting other market disruptors that have transformed entire industries.”

In this latest round, the company is also being supported by existing investors such as Felix Capital, Target Global, Spark Capital, LocalGlobe, Sunstone and Amplo, who back market-changing unicorns including Slack, Trello, Farfetch, Deliveroo and Delivery Hero.

Since being founded in 2015 by CEO Avi Meir and CPO Javier Suarez, TravelPerk has increased revenues by 700% growth year on year, and has now raised nearly 75m USD in total funding.

This new injection of funding will equip TravelPerk to expand into new markets, enlarge its client base by working more with small enterprises and augment its technology offering including integrating travel and expenses management into the platform.

Having tripled the size of its team in the past year, TravelPerk is opening its first office in the UK, and is soon also to build bases in Berlin, Amsterdam and Paris. The UK business travel market was worth 50 billion USD in 2017, and this initial investment will allow TravelPerk to simplify travel for customers such as Aesop, Bowers & Wilkins, Adyen and Farfetch.

Chris Bischoff, Senior Investment Director at Kinnevik, said: “We are excited to invest in TravelPerk, a company that fits perfectly into our investment thesis of using technology to offer customers more and much better choice. Booking corporate travel is unnecessarily time-consuming, expensive and burdensome compared to leisure travel. Avi and team have capitalised on this opportunity to build the leading European challenger by focusing on a product-led solution, and we look forward to supporting their future growth.”

Pay in the legal sector
Articles

Pay in the legal sector: men vs women

April 2018 was the deadline by which large UK firms (those with more than 250 people in their employ) had to publish their pay data. The government deadline was set in order to explore whether the gender pay gap was still a prevailing issue, and if it was, how badly skewed the pay rates were between men and women.
Law firms were among the first to respond, according to The Law Society Gazette. To investigate the data further, we’re joined by accident at work solicitor firm, True Solicitor:

The April deadline

The British government requested pay data to be published by 4th April 2018. The results can be accessed here. Though it came as no surprise that the pay gap was still prevalent, the sheer scale of difference between men and women’s pay across businesses was quite alarming. The Independent reported on Ryanair’s revelation that women are paid 67% less in their company for example.

Law firm pay

Comparatively, law firms didn’t reflect too badly in their pay data, but there is indeed still a gap. A law firm in South Yorkshire reported that the women in their workplace earned a 15.9% less median hourly rate compared to their male counterparts. However, a London-based law firm saw their women’s median hourly rate at 37.4% lower than men’s.

2018 saw the largest international survey of women in law, with The Law Society receiving responses from 7,781 people. The study found that while 60% were aware of a pay gap problem in their workplace, only 16% reported seeing anything being actively done about it. 74% of men said there was progress regarding the difference in pay between the genders, but only 48% of women agreed with that statement.

Why is there a gap in gender pay?

What factor, or factors, are contributing to the gender pay gap? Is it a difference in bonuses, or are higher job positions less readily available for women?

Women received a median bonus pay that was 20% lower than their male co-workers, according to data published by the previously referenced South Yorkshire law firm. The London-based firm noted a 40% lower median bonus pay for women compared to men. It clear that bonuses are also suffering from the same gender discrimination as standard wages. Furthermore, in terms of job roles, The Law Society’s survey showed 49% of law workers believe that an unacceptable work/life balance is needed to reach senior roles and is to blame for the gender pay gap, so it is feasible that starting a family is deemed a disadvantage for women.

There’s a difference in view between men and women starting a family, says The Balance Careers, with men being regarded favourably when starting a family. But for a woman, having children brings an unfair stigma of unreliability, that they may put their family first. This can cause discrimination when aiming for higher roles within the firm, such as partner positions.

Women in higher roles

Sadly, for women who attain the status of partner in a law firm, the pay gap remains. In fact, according to The Financial Times, female partners in London-based law firms earn on average 24% less compensation than men. 34% of women earn less than £250,000, where 15% of men earn less than £250,000.

Dealing with the pay gap

The BBC published many ideas for how to resolve the gender pay gap. These suggestions include:

• Better, balanced paternity leave — allowing fathers to take paternity leave, or having a shared parental leave, would allow mothers to return to work earlier.
• Childcare support — childcare is expensive! Support for childcare expenses would help both men and women in the workplace.
• Allowing parents to work from home — the ability to work from home while raising a family would open up additional opportunities for women to balance both a career and a family.
• A pay raise for female workers — a simple solution, but a pay raise for women can quickly equalise the pay rate between men and women.

Issues

Issue 9 2018

Click the image to read this issue

Welcome to the ninth issue of Wealth & Finance International Magazine, which is dedicated to providing fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment landscapes.

Disruption and innovation define the modern investment landscape, as firms look to step away from the tried and tested waters of the traditional and onto new lands. Global institutions are adopting the latest technological advancements to give them an edge over their peers and competitors or adapting strategies to thrive despite market volatility. The Tycuda Group, one of Canada’s leading investment establishments, very much fits this mould, believing that unpredictable market conditions can be overcome with flexibility and experience. We spoke with the firm’s Portfolio Manager, Miles Clyne, to find out more.

As part of the cover story for this month’s issue, we spoke to CEO Mahmoud ElSaeed. His company, The YBN Group, are the pioneers behind the world’s first “Virtual Global Citizenship”, which aims to reimagine and reinvigorate investment advisory services to allow his clients to attain true financial freedom. We interviewed the man behind the business to find out how his leadership style helps drive the company’s lofty goals.

Finally, Wealth & Finance International was offered the opportunity to experience one of Stratajet’s flights first-hand as we interviewed the firm’s CEO, Jonny Nicol. Stratajet is the world’s first real-time online private jet booking platform, helping to revive an industry that has traditionally struggled to attract new audiences. Nicol offers a remarkable insight into how he challenges the conventions of this exclusive market.

At Wealth & Finance Magazine, we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Laura Brookes | Editor

Inheritance Tax
Family OfficesIndirect TaxInheritance TaxReal Estate

Number Of Retail Investors Seeking IHT Advice Set To Rise

Advisers highlight expected increased use of flexible IHT solutions for clients

More than three out of four (78%) financial advisers expect the number of retail investors seeking help for IHT planning to increase over the next three years, according to new research from TIME Investments, which specialises in tax efficient investment solutions.  The findings come as IHT receipts hit a record £5.2 billion in 2017-18 despite the introduction of an additional nil-rate band.

Six out of ten (63%) advisers also predict an increase in the number of IHT products and investment solutions to be launched in the UK.  However, whilst this will offer more choice to investors, it also comes with a health warning – 88% of advisers questioned are concerned that new products will be launched by firms that don’t have the appropriate track record and/or expertise.

Two thirds of advisers predict an increase in the use of Business Relief (formerly known as Business Property Relief) over the next three years to help people reduce their IHT liabilities.  To encourage investors to support UK businesses, the Government allows shares held in qualifying companies that are not listed on any stock exchange and some of those listed on AIM to qualify for Business Relief. This means that once owned for two years, the shares no longer count towards the taxable part of an inheritable estate and are free from inheritance tax at point of death.

The accessibility of Business Relief investments and the range of investment opportunities available help to provide flexibility in IHT planning.  Three quarters of advisers felt that the increasing use of Power of Attorney due to rising dementia rates would contribute to the growth in the use of these flexible IHT solutions.

Henny Dovland, TIME Investments’ IHT expert comments: “The number of families in the UK being caught in the IHT net is increasing.  This represents a significant opportunity for advisers specialising in IHT and intergenerational planning and is reflected in our findings that reveal more specialist products are set to be launched in this market. However, care needs to be taken to ensure any new solutions are fit for purpose.  Our specialist team has a track record of over 22 years in this complex area.”

For further information on TIME Investments and its range of products, please visit www.time-investments.com

pros assist
AccountancyArticles

Not Just Your Accountants, But an Extension to Your Business!

Not Just Your Accountants, But an Extension to Your Business!

Pros Assist consists of a gifted team of qualified practicing members of the Institute of Financial Accountants, notably headed by the Director and Senior Financial Accountant, Alom Rouf. We profiled the firm and Alom to discover more about the innovative services that they provide to their clients.

With over 15 years of experience in private practice, advising sole traders and partnership clients alike, Alom leads the Pros Assist team in offering clients expert advice on a diverse range of business support, including guidance on business planning and funding, advising on project viability, as well as all matters relating to taxation and profit.

With such a diverse team, it enables Pros Assist to provide their clients with selection of specialist services which include; SME business advice, personal & corporate tax planning, financial analysis, company incorporation, bookkeeping & accounting and company secretarial & treasury to name just a few.

Throughout the years, Alom has gained a vast amount of experience in evaluating sole trader and partnership clients, to assess whether they would be better off incorporating. In addition to this, he advises clients on how to extract profits in the most tax efficient way. Also, Alom provides clients with a diverse range of business support, advising on project viability, business planning and funding. As the face of Pros Assist, Alom is a very professional, friendly, and approachable accountant.

The team pride themselves in being dedicated to their clients, ensuring all professional needs are taken care of to the highest standard. All members of staff are highly qualified with up-to-date training, as well as regulated by the Institute of Financial Accountants; to ensure that clients can be rest assured that they are in good hands.

One of the USPs at Pros Assist, is the proactive approach which they take in making themselves available at the client’s convenience. The team understand that SME business owners often work round the clock, so they make themselves available with ease of communication via, emails,
texts, and even social media. The teams mobile contact details are made available to the clients ensuring the highest level of care 24/7.

As for the firm’s three core strengths, these are:

• Flexibility: We make ourselves available when you are available 

• Reliability: All our staff are qualified and professionally trained with several years of experience. 

• Affordability: We work on a Fixed Fee basis, so what we quote you in the beginning is exactly what we charge you in the end.

Pros Assist specialise in business start-ups and looking after owner managed businesses. The firm offers all levels of financial assistance – whether you are looking to form your own company and don’t know where to begin, or you have some experience and want to make some changes, or if you simply require an all-round accountant to deal with all your business affairs.

Looking ahead to what the future holds for the firm, Alom and the team at Pros Assist will continue to provide their award-winning excellent advice and guidance to their clients, helping them to get their business off the ground and established in the industry.

 

Contact: Alom Rouf

Company: Pros Assist Highstone House, 165 High Street Hertfordshire, Barnet, EN5 5SU, UK

Telephone: 020 3697 0878

Web Address: www.prosassist.com

The Next Generation of Traders
Capital Markets (stocks and bonds)Stock Markets

The Next Generation of Traders

This new generation of traders is smart. Find out how traders have evolved with technology

James Mathews, CEO of Learn to Trade

The reality of trading taking place on the floor of the stock exchange, with traders shouting down telephones and punching in orders is long gone. As are the days of having to call your stockbroker and place an order. This perception might continue on TV, but the reality is that the modern trader is equipped with a mobile phone.

This new generation of traders is smart. Empowered by hyper-connectivity’s offer of unprecedented volumes of knowledge and 24/7 access to the market, they are tearing down societal constructs and preconceptions. This generation wants to be its own boss. Social media has become a platform to learn from, emulate and showcase success. Wealth creation has gone mainstream. With the millennial and Gen Z traders being some of the most enterprising members of our society, it’s little surprise that an entirely new generation of traders is now emerging. Characteristically, they are entrepreneurial and in many cases self-starters ready to follow their own paths. But, how has technology made trading and finance more mainstream to these generations?

Crypto as catalyst
The appeal of trading has in recent years been catalysed by the public’s fixation on cryptocurrency. With the allure of quick money, Bitcoin epitomised this fascination. Sage traders sceptically watched as this strange decentralised network of digital tokens became mainstream, while novices made their millions. Yet what goes up must come down, and once its value was done exploding, it started spectacularly falling. But with media hype and fabled success stories, the concept of crypto began to tempt casual observers. The ensuing rush to develop user friendly trading apps made the concept even more accessible to the everyday person.

Contributing to this has been the residual sour attitude toward the financial crisis. People have become more suspicious of and disillusioned with the “so called experts” entrusted with handling their hard-earned money. ‘They’ had nearly brought the global economy to its knees. Further backlash was also brought about from charging a lot of money to trade, whether it be pension funds or otherwise. This combination of discontent and new accessibility drove this new wave of do it yourself trading. 

Celebrity of social
Trading is complex. There’s jargon, complicated explanations, and understanding the thinking that went into a certain trading position can be almost impossible at times. Social media has changed all this too. Now there is an active, always online, accessible community of people to simplify, explain and advise. It’s easy to find out what’s going on in the market in seconds. And what’s more there is the celebrity, a new wave of Twitter traders, amateur and professional alike, who have established themselves as trading gurus to be followed, mimicked and aspired to.

The concept of “piggy backing” on other people’s trading is age old, but never before has it been so prolific. It’s proved to be extremely popular, both as a way of profiting from others’ expertise and as a way of learning. But new traders need to remember that sometimes you might be following a loser, and that making correct trades doesn’t always mean you’re being profitable overall.

Good bye 9 to 5
Trading’s popularity has risen along with the ‘side-hustle’, freelance, and sharing economy. Technology has without question been an enabling force behind all of these, as people strive for more reward and flexibility in their working lives. Indeed, there has been a concerted effort to break away from the traditional construct of 9 to 5. How trading maps to this is clear but it is not without risks. It can be seen to promise a lot, with some traders claiming to live off of one trade a day. However the reality the modern trader is facing is that it is just like any other employment in that it takes persistence, patience and grit. What it does offer though is autonomy and flexibility.

With the ever-increasing interest in the viability of pursuing a career in trading for the millennial and Z generations, an onus of responsibility has formed. We expect that in the next few years we will start to see the wider education focus shift, to start to cover money management and investment too. For far too many who missed out on this knowledge it seems like too little too late. Baby boomers now coming into retirement are left considering whether they have enough to see them through, or how they can manage their own account without having to pay people to do it for them. Increasingly, there will be more of a push from all demographics to have an entry point to the market. But with enough knowledge, experience and foresight to understand market volatility and risk anyone can trade with the technology out there and available to them.

private banking
Banking

How the changing world of financial services is affecting private banking

How deeper and broader relationships can help private banking to thrive in the changing world of financial services

Alex Cheatle, Ten Lifestyle Group, CEO

Private banking in the modern financial services world must continue to engage with its customers by giving them a unique, human experience. But in the information age what does that look like? How do banks make sure they don’t become commoditised in the eyes of their clients? How do they build human relationships as powerful as those created by the great private bankers of the past?

First of all, recognising that customers are not a collection of product buying decisions; not just the person who buys credit cards, invests in the stock market and has a mortgage is crucial. They are individuals that do not relate to their financial services on a product by product basis, nor do they relate to their bank on a product by product basis, unless the relationship is already commoditised. Rather, the uniqueness of each customer means that banks can take a holistic approach, wider than financial services alone, as to how they view and how they treat their clients and their propositions.

Building trust in the information age

In the debate around the state of private banking in the modern world of financial services, some seem to be foreseeing the decline of personalised private banking as we know it. However, in reality, the modern era provides excellent opportunities for private banking that it often shied away from in the past. When many private banks’ unique selling point was secrecy their ability to be wide-ranging about helping their clients was a practical impossibility, given that this made the client relationship with the bank more public and porous. Now, that this has changed, and secrecy is less central to the proposition for most banks, financial organisations are able to offer a wider range of services to their customers that they would have in the past.

One of the main advantages private banks enjoyed was the consistent and immediate human connection, created when the traditional private banker would engage with the client and their family on a personal basis. This created a recognisable connection for clients to their bank and the brand as individuals. Today, when information about banking and investment products and transactional services are just a tap away, people can end up talking to their private banker less and less. The challenge for banks is to find a way to maintain the personalised touch that was previously provided by regular and direct interaction. This can be done in ways that keeps the client interested, and that creates a new way for them to talk to and about their bank, and for their bank to build a trusted relationship with them.

As CEO of the leading lifestyle concierge service that works with HSBC, Coutts and several other leading private banks around the world, I have seen the extraordinary impact that offering non-financial services, both digitally and high-touch, can have on the commercials of private banks and wealth managers.

Being able to be more than just a bank and adding value to client’s lives in the moments that matter most to them creates a deeper emotional engagement that builds the advocacy and the trust that drives the most important commercial metrics from assets under management to client acquisition and retention – and even helps manage difficult ’next generation’ challenges. 

How do you take banking out of the bank and into a social, non-financial setting?

As humans we don’t tend to talk a great deal about our financial services. Most of us can’t remember when anyone they know asked about mortgages or wanted to discuss who their investment advisor was – it’s just not what we do. What we do talk about are our social events with family and friends.  This is where private banking can make headway and create vital personal relationships and advocacy.

Put simply, if I take my friends out for dinner at a restaurant for their birthday and it is a restaurant notoriously difficult to get a table at, my friends will ask me how I got it. Or, if I am able to get tickets for my daughter and her friends to see a concert, and the tickets are being sold at astronomical prices, but I can get them at face value, their parents will ask how I did it. In response, I will say it was thanks to the service offered to me by my bank.  This creates advocacy amongst my peers, friends and family. 

By creating a relationship where the bank knows me well enough to give me this kind of benefit, these services give me invaluable personal and social credit. As a client, I feel happy that I have been listened to by my bank, my trust in them grows because they have been able to get me exactly what I was asking for and I feel proud for being able to provide and share these experiences with my family, friends and colleagues. So, subconsciously I will be advocating for and creating a deeper bond with my bank.

In this way the bank is able to create a trusting relationship with its clients and the client is happy to advocate for the quality of the bank. It has also been shown that a bank that is able to organise a client’s private and social life becomes more trusted in the financial realm too. This leads to growth in assets under management, higher advocacy for the bank and an increase in client retention for the bank, even through the generations.

Forging emotional bonds through to the next generation

 A well-known challenge for private banking in the modern world of financial services is the next generation wealth transfer. This is obviously not a new phenomenon. The next generation have often seen the previous private banker or wealth manager as traditionally Mum or Dad’s bank. Typically, a relationship will pass on to the next generation who have never felt the individual advisor was their banker, there was no emotional connection to them or to the bank and they felt under invested personally in the relationship. By using the information that has been collected about lifestyle services and non-financial benefits provided to the next generations in the family, banks are able to understand the next generation better. The next generation can also be invited to use the banks lifestyle service before they become the main financial decision maker. This builds an emotional connection to the brand, which leads to the next generation being much more likely to stay with the bank.

Though the modern world of financial services is changing for private banking the opportunities are there to be taken advantage of. By using a holistic approach banks can maintain the human and emotional relationship that has always been vital. And, with the modern era of personalised banking and information sharing there is even more opportunity to find out about the next generation and build the brand through them.

For further information about Ten Lifestyle Group Plc, please go to: https://www.tengroup.com/.

financial terms
Finance

Learning the lingo

Learning the lingo: understanding financial terms

A study by the Organisation for Economic Cooperation and Development (OECD), has revealed that only 38% of adults understand know what is meant by the term ‘inflation’. This has led to True Potential Investor creating this useful jargon buster to help us get to grips with the key terms and improve our financial understanding:

Capital
Simply put, capital is another word used for any initial funds that are invested.

Bonds
Companies who need to raise funds to meet a set goal can choose to issue corporate bonds that investors can then buy. The money raised from the investment is held for an agreed number of years. At the end — also known as bond maturity — the investor receives the money they invested plus their guaranteed interest which was agreed at the start.
The government also offers government bonds or ‘gilts’ which work in a similar way to corporate bonds and are used to fund borrowing.

Capital gains tax
This is the tax that is paid on profit that is made on certain types of investment — your ‘capital gain’. You may not need to pay capital gains tax — it depends on the amount of profit you make and whether you use the profit to buy new shares. More information can be found on the GOV.UK website.

Diversification
The process of investing across multiple areas and not just focusing on one is called diversification. For example, you can diversify your investment across a range of investment types — such as shares or bonds, for example — as well as between industries, currencies and countries.
Diversification of your investments could help you to manage the risk and reduces the impact of market uncertainty.

FTSE
The Financial Times Stock Exchange (FTSE) is used to monitor how companies or indices trading on the London Stock Exchange are performing. A number of lists are available, with each showing the fluctuations in share prices over time.

ISA
Individual Savings Accounts — or ISAs — offer a tax-free or tax-efficient option in which to save. There are two main types of ISAs: cash ISAs and stocks and shares ISAs.
• Cash ISAs — like a typical savings account, cash ISAs do not require you to pay tax on any interest that is generated.
• Stocks & shares ISAs — with a stocks and shares ISA, the money is invested with the aim of growing the fund over time. You do not pay tax on dividends.

Inflation
This term describes the amount of money in which goods and services increases over a timeframe. It is measured as an annual percentage change and can impact interest rates and share prices.

Pensions
Pensions are set up to help you put money aside for your latter years. The money you place in the pension fund is invested with the aim of growing it by the time you retire.

There are three main types of pensions:

• Workplace pensions — this type of pension is arranged through your employer. Usually, you’ll contribute an amount each month, with your employer also contributing and the government contributing tax relief too.

Personal pensions — a pension you arrange yourself, which you can contribute to whenever you want.

• State pensions — a state pension is the amount you receive from the government once you reach State Pension age. Details on how much this is and eligibility can be found at the GOV.UK website.

Stocks & shares
Investors can buy stocks in a company. However, these stocks can be broken down into a number of shares, which can also be purchased by investors. Because of this similarity, the two terms are often interchangeable.

The aim with stocks and shares is to sell them on for a greater price than you originally paid. Usually, stock and shareholders receive a proportion of the company’s profits on an annual or bi-annual basis in the form of dividends.

Yield
This term describes the performance of your investment both now and in the future. For example, if you received £5 in interest from £100 placed in a Cash ISA, your total yield would be 5% which is equal to £5.

Cryptocurrency
Finance

Why Cryptocurrency Will Define How We Do Business

3 reasons cryptocurrency is likely to be ‘the future of commerce’

I would rather see the SEC make a methodical decision, with thoughtful guidelines, to approve a cryptocurrency ETF than a rash decision to reject one. And though the agency may not reach a final decision until next year on the proposed SolidX Bitcoin Shares ETF, I think the agency will eventually approve it. The proposal (requiring a minimum investment of 25 bitcoins, or $165,000, assuming a BTC price of $6,500) seems to meet the SEC’s criteria — on valuation, liquidity, fraud protection/custody, and potential manipulation.

Cryptocurrency’s Challenges and Potential
Since 2010, when it emerged as the first legitimate cryptocurrency, bitcoin has been declared “dead” by pundits over 300 times. Critics have cited the cryptocurrency’s hair-raising price volatility, it’s scalability challenges, or the improbability of a central bank ceding monetary control to a piece of pre-set software code. Yet since 2009, bitcoin has facilitated over 300 million consumer payment transactions, while hundreds of other cryptocurrencies have emerged, promising to disrupt a host of industries. Granted, no more than 3.5% of households worldwide have adopted cryptocurrency as a payment method. But I think cryptocurrency will transform how the world does business as developers, regulators, and demographics resolve the following key issues:

1. Approval of a Bitcoin ETF
I think the US investment community will not rest until they satisfy SEC criteria for a bitcoin ETF. Approval would represent another milestone in the validation of cryptocurrencies. This bodes well for the global financial system, because cryptocurrency promises to create financial savings and societal benefits — by streamlining how the world transacts for goods and services, updates mutual ledgers, executes contracts, and accesses records.

2. Comprehensive U.S. Regulation Can Improve Protection, Innovation, and Investment
Demand is mounting for a larger, more comprehensive U.S. and global regulatory framework that protects consumers and nurtures innovation. Those institutional investors who are assessing the cryptocurrency risk/reward proposition are also awaiting regulatory guidance and protections to honor their fiduciary duties. How, if at all, for example, will exchanges be required to implement systems and procedures to prevent hacks and protect or compensate investors from them?

Effective cryptocurrency regulation requires a nuanced set of rules, a sophisticated arsenal of policing tools, sound protocols, and well-trained professionals. I think U.S. regulators will eventually get it right. And if institutions become more confident that regulations can help them meet fiduciary duties, even small cryptocurrency allocations from reputable organizations could unleash a new wave of investment.

3. Bringing the Technology to Scale
Bitcoin and other cryptocurrencies cannot yet process tens of thousands of transactions per second. I think developers working on technology — such as Plasma, built on Ethereum, and the Lightning Network, for bitcoin and other cryptocurrencies — will sooner or later bring leading cryptocurrencies to scale. This could unleash an explosion of new applications, allowing cryptocurrency to integrate with debit and credit payment systems, developing new efficiencies in commerce — whether B2B, B2C, or B2G — in ways we can’t fully anticipate.

4. Developing World Incentives and Demographics
Cryptocurrency adoption as a payment method could grow fastest in emerging markets. Many consumers and entrepreneurs in such regions have a strong incentive to transact in cryptocurrency — either because their country’s current banking payment system is inefficient and unreliable, and/or they are one of the world’s 1.7 billion “unbanked.” Two-thirds of the unbanked own a mobile phone, which could help them use cryptocurrency to transact, and access other blockchain-based financial services.

Data underscores the receptiveness of Developing World consumers to cryptocurrency. The Asia Pacific region has the highest proportion of global users of cryptocurrency as a transaction medium (38%), followed by Europe (27%), North America (17%), Latin America (14%), and Africa/The Middle East (4%), according to a University of Cambridge estimate. Although the study’s authors caution that their figures may underestimate North American cryptocurrency usage, they cite additional data suggesting that cryptocurrency transaction volume is growing disproportionately in developing regions, especially in:
● Asia (China, India, Malaysia, Thailand)
● Latin America (Brazil, Chile, Colombia, Mexico, Venezuela),
● Africa/The Middle East (Kenya, Saudi Arabia, Tanzania, Turkey)
● Eastern Europe (Russia, Ukraine).

Demographics will also likely drive cryptocurrency adoption in the Developing World, home to 90% of the global population under age 30.

Remember The Internet – Investment Bubbles and Bursts Will Identify The Winners
High volatility is inherent in the investment value of this nascent technology, due to factors including technological setbacks and breakthroughs, the impact of pundits, the uneven pace of adoption, and regulatory uncertainty. Bitcoin, for example, generated a four-year annualized return as of January 31st 2018 up 393.8%, a one-year 2017 performance up 1,318% — and year-to-date, a return of down over 50%. Bitcoin has previously experienced even larger percentage drops before resuming an upward trajectory.

In my view, bitcoin and other cryptocurrencies will experience many more bubbles and bursts, in part, fueled by speculators. But the bursting of an investment bubble may signal both a crash and the dawn of a new era. While irrational investments in internet technology in the 1990’s fueled the dotcom bust, some well-run companies survived and led the next phase of the internet revolution. Similarly, I believe a small group of cryptocurrencies and other blockchain applications, including bitcoin, will become integrated into our daily lives, both behind the scenes and in daily commerce.

Although “irrational exuberance” will continue to impact the price of cryptocurrencies, this disruptive technology represents not only the future of money, but of how the world will do business.

policy makers
Transactional and Investment Banking

Developed World Policymakers Place Their Bets

By, Graham Bishop, Investment Director at Heartwood Investment Management

In a busy period for monetary policy news, three of the world’s major central banks held their formal committee meetings this month. What did this mean for investment markets? Graham Bishop, Investment Director at Heartwood Investment Management, the asset management arm of Handelsbanken in the UK, talks us through it. 

Bank of England: A surprise reaction to unsurprising news

The announcement that the Bank of England (BoE) would raise its base interest rate from 0.5 to 0.75% came as little surprise to investment markets, which had almost fully priced in the move. The Bank’s committee members voted unanimously for the UK’s second rate rise since the financial crisis. The committee also agreed to maintain its current levels of corporate and government bond issuances at (£10bn and £435bn respectively), contrary to some earlier media speculation over the potential for quantitative tightening.  

Given that the BoE did exactly as anticipated, and that Carney’s tone at the ensuing press conference was mildly hawkish, the only slight surprise has been the immediate market reaction – a fall in sterling and gilt yields.  While the precise reasons for this response are as yet unclear, it seems that investors were given fresh insight into the BoE’s thought process, with Governor Carney referencing 2-3% as the bank’s estimated neutral rate (i.e. the rate neither accommodative nor restrictive to economic growth). The market’s reaction suggests that it may not entirely agree with these figures. 

Perhaps this is unsurprising, given the lack of visibility ahead for the UK economy. The BoE has also just released its quarterly Inflation Report, in which it claims that CPI inflation is projected to decline towards its 2% target over the next three years. And while a downward trend is a point of general commonality across the BoE’s range of projections, the wide range of potential outcomes put forward means that there is little scope for certainty.

US: Business as usual for the Fed, but fiscal deficits are growing

In another rather predictable announcement, the US Federal Reserve (Fed) held rates steady at its committee meeting earlier this month, while sending a clear message that more rate hikes would be on the way. Amid a rising inflationary environment, in the wake of seven previous hikes, and with presidential tax cuts adding fuel to the fire, the Fed had little to do this time around. Nonetheless, another two rate hikes are expected in 2018.  At only the midpoint of the Fed’s expected rate rise path (according to the committee’s own predictions), the Fed is already close to its neutral policy rate.  

This month also saw the announcement of the US Treasury Department’s debt issuance for the second half of the year, which came in above previous estimates (and with the largest jump since the financial crisis). The Treasury is financing a widening fiscal budget gap on the heels of tax cuts and spending increases, as the government’s deficit blows out towards as possible $1 trillion by 2020. At the same time, the Fed has begun the process of reducing its balance sheet, adding more supply to the Treasury market; while its pace so far has been very gradual, this is expected to pick up. 

US monetary policy on the brink of entering restrictive territory and a rapidly expanding fiscal deficit give us pause for thought should growth falter ahead. For now, the situation is encouraging, but as things evolve we need to think carefully about US equities and related high beta plays.

Bank of Japan: The rebel without a change

The Bank of Japan (BoJ) opted to effectively maintain its current policy on Tuesday, in that it left its benchmark interest rate unchanged. But the BoJ also announced changes to the allocation of its ETF purchases (now favouring the market cap weighted Topix index rather than the price-weighted Nikkei index) as well as slight adjustments allowing greater movement around the 10-year bond yield (20bps either side of zero, as opposed to 10bp). In the latter, markets may have witnessed a small act of monetary tightening by another name. 

The yield on Japan’s 10-year government bonds initially fell following the announcement, but markets changed their mind overnight and yields leapt up to 12bps on Wednesday – their largest jump since August 2016. Equally haphazard was the market reaction to banking stocks – initially negative but with a swift change of heart, as investors seemingly realised the benefits of a move away from a lower yield environment. Further Japanese currency weakness against the dollar was also positive for both Topix and Nikkei indices. This is good news for our portfolios, which slightly favour Japanese equities.

 
Javed Khattak
Finance

A Harbinger of Global Financial Change

A Harbinger of Global Financial Change

Javed Khattak is, among many roles, the Chief Financial Officer for Humaniq, a fintech firm that aims to be the herald of the next generation of financial services. In July, Javed was named as the CFO of the Year for 2018 by Wealth & Finance International Magazine. Following this, we spoke with Javed to find out how he achieved the extraordinary success he celebrates today.

Block Chain

Javed Khattak is a qualified actuary, as a Fellow of the Institute of Actuaries in the UK, and an expert in finance, strategy, risk, investments, technology and start-ups. As a FTSE100 advisor, he is a recognised expert and a strong proponent of blockchain technologies, seeing them as the inevitable next step in the corporate and professional landscapes.

It is, however, his role as CFO of Humaniq that brought him to Wealth & Finance’s attention. Javed starts the interview by outlining the importance of the work he is doing at the firm, “Amongst other roles, I am the CFO of Humaniq, this role has been my primary focus over the last year. Humaniq is a financial inclusion project that, through use of technology in namely blockchain and biometric ID, aims to bring financial services to the unbanked population of the world and has successfully launched in several African countries.”

Perhaps a crucial element to Javed’s work is his advocacy for blockchain technologies, believing them to be the ‘next big thing’; a revolutionary development for innumerable sectors and fields. “Humaniq, and many other innovative ventures, are able to come into existence thanks to this technology. This is in two ways; blockchain first made the initial funding for these companies possible through ICO’s, and alongside blockchain also provides these ventures with the tools and technology to execute their novel ideas and make them a reality.” Through effective utilisation of the technology, Javed sees limitless possibilities with most sectors benefitting from it, including technology, financial services and real estate industries, alongside transforming supply chains and empowering end users (e.g. through control of their personal data).

However, Javed admits that blockchain is becoming stigmatised due to false parties adopting the name to make money quickly; this is a frequent occurrence with an exciting emerging technology but seems to be amplified in the case of blockchain and cryptocurrency. “Blockchain has become a buzz-word which is also attracting the wrong players who are using the opportunity to create outright scams and frauds. We have all seen the various non-blockchain businesses changing their trading names to add the magic word and see their stock prices rise. I believe this will all fade away once the regulators catch up and alongside the non-sophisticated ICO investors or contributors get burnt. Though amongst the noise, there are genuine players of course.”

“Fundamentally, I see blockchain as an enabler. It is still early in the technology’s lifecycle, but once the technology matures, it can and will revolutionise lives. I hope that the blockchain will do what the internet did for information and prove to be the empowering tool that helps decentralise the world’s wealth and resources.”

Javed’s work at Humaniq is only one part of his current workload; he is also the Co-founder and Chief Executive Officer of two companies, Zisk Properties and JKCoach. Javed takes a moment to talk us through his history with them, “I founded Zisk Properties in 2014. Zisk is an innovative property investment business, focusing on providing investment options to people with insufficient savings or a lack of financial understanding to have a more secure future and even get on the property ladder through small steps. It already has a lot of traction, with hundreds of customers and managed to significantly outperform property markets with a weighted average return of just under 20% p.a. since its inception. Having successfully received our UK FCA registration recently, we are in the process of launching in the UK and are already in discussions to launch in UAE by end of 2018.”

“JKCoach was founded several years ago, and is an educational institute that provides coaching, tuitions and diplomas to Pakistani students with the aim to raise the education standards. By end of 2018, we will have over 500 students, with an ambition to expand into the rest of Pakistan and to be able to offer free but quality education to children from families below the poverty line in 2019.”

As you can imagine, being on the executive team of three companies results in a hectic work schedule. For Javed, this is just par for the course, “Busy probably would be an understatement. I am involved in most aspects of the ventures I am leading. Fortunately, having a great team that I can rely on helps a lot. For me, there is no average workday, as each one is very different to the previous one – the only thing that is constant is the number of hours that I am working each day!”

“What I do on any particular day depends on the ongoing projects and work-streams. Example; the past month I have been travelling significantly to speak at or be a panellist at conferences, lead a fundraising round, interviewing and hiring for new roles and spending time with our dev guys for launch of Zisk’s new web platform.”

Javed continues, bringing the interview to an optimistic close; “I am a firm believer in giving back to society – this is why I was initially attracted to Humaniq and precisely why I started Zisk Properties and JKCoach.

“In addition to this, I love technology because either a smartphone or a tablet has become a companion as information is instantly available. Financial services, like money transfers, are more accessible and cheaper. Medical advancements mean a better quality of life and improved longevity for those affected with disease or involved in accidents, and so on. As such, let us all work together to leave a part of us behind through our creativity, fostering new technologies, and not being afraid of challenges – all the while remembering to share happiness, be kind and forgiving to humanity as well as all that is around us.”

Company Details 

Name: Javed Khattak

Web Address: www.linkedin.com/in/javedkhattak

Roles:

CFO of Humaniq

Co-founder & CEO of Zisk Properties

Co-founder & CEO of JKCoach

Investment Director at Stratamis

SteelEye MiFID II
Global Compliance

Reflecting on six months of MiFID II

Reflecting on six months of MiFID II

By Matt Smith, SteelEye

The financial services industry is in the throes of a new era. In January, the biggest overhaul of its operations in the past decade was implemented – the second Markets in Financial Instruments Directive, or MiFID II for short. MiFID II had those in the industry working overtime last Christmas as they scrambled to become compliant for deadline day, but major Exchanges failing to implement the regulation on time, postponement of dark pool caps and reigning confusion meant that, for many, January 3 failed to have the impact that was expected.

In the six or so months that followed, the industry has continued to adapt to this shifting landscape and new elements of the regulation have trickled in. Below, Matt Smith, CEO of compliance tech and data analytics firm SteelEye, explains what’s been happening on the ground since ‘the day of the MiFID’ and what we can expect to see in the future.

 

Best execution

Firms’ best execution requirements under MiFID II are far from over. Regulators have consistently cited execution quality as fundamental to the integrity of the market and, accordingly, MiFID II’s best execution requirements are extensive.

The first of these, RTS28, was implemented on April 30 and required firms to publicly disclose their order routing practices for clients across all asset classes in human and machine-readable reports. This was followed soon after by RTS27, which hit firms on June 30 and requires quarterly best execution reports detailing the ‘sufficient steps’ that have been taken to achieve the best possible results for clients when executing orders. This required the capturing of a remarkable amount of data, a process aimed at increasing transparency and accountability in the industry.

But experts believe it will still be a while longer before the data generated under these reports is sufficiently detailed and consistent enough to have a significant impact on trading behaviour. There have also been problems among firms unsure of what exactly to include in the reports, with many calling for regulators to issue more detailed guidance. Perhaps the next quarterly disclosures under RTS27, due in September, will make bigger waves.

 

Research unbundling

MiFID II’s unbundling rules have, so far, been the most controversial. Under these new rules, firms need to make explicit payments for investment research in order to prove that they are not being induced to trade – meaning free research is no more.

This created a number of hurdles for buy and sell-side firms, which set about creating frameworks to evaluate the materials they produce, distribute and consume in order to understand whether or not it now needs to be paid for under MiFID II. Currently the impact on the market is unclear, but there has been early evidence of an increase in M&A activity as providers tie up their services to expand sector coverage, and the more frequent use of tech to maximise existing research platforms.

The FCA has already announced a review into the application of these new unbundling rules. This is somewhat unsurprising, given that firms were issued with no guidance on how they should negotiate and price their research under MiFID II.

 

Dark pool transparency

One of the major focuses of MiFID II was to force equity trading back onto public stock markets by reducing the use of dark pools in favour of lit book trading venues. Early evidence suggests that the share of trading on lit exchanges hasn’t risen since January, still comprising around 50% of all trades.

But, price swings have fallen, as have trading volumes in dark pools. Additionally, the LSE’s total lit order book ADV rose to £6.2bn in the first quarter of 2018 – the exchange’s highest quarterly performance in a decade. This indicates that MiFID II’s impact on transparency has been mixed. While the overall proportion of trades executed in the dark versus lit venues hasn’t changed significantly, the proportion of LIS trades is higher.

It’s also necessary to factor in the delayed implementation of these new dark pool caps, which were postponed from January to March – meaning their full impact may not yet have been shown, and Q1 summaries will not necessarily illustrate what is currently happening on the ground. We may have to wait longer still to see whether the industry has seen the light, or will continue to operate in the dark.

 

Systematic internalisers

Despite the January rush, systematic internalisers (SIs) haven’t yet been fully implemented under MiFID II. This was due to come in September, by which point any firm labelled as an SI would have to comply with their new obligations, but ESMA announced in July a further delay to the new rules.

Now, derivatives have until March to comply with the requirements and ESMA will not publish its calculations for derivatives until February due to ongoing issues with incomplete and inadequate data. This isn’t a let-off for the entire industry, though; instead of publishing all the rules, ESMA is focusing on completeness for a select number of asset classes and delaying others. Equity, equity-like and bond instruments will still have to be compliant by September 1.

 

Going forward

If MiFID II has proven anything, it’s that compliance is, more than ever, an evolving process not a one-off event. In the coming weeks, months and years MiFID II will remain an ongoing challenge for firms and strategic and operational flexibility will be needed if they are to flourish.

MiFID II absolutely has the potential to have a significant and positive impact on the industry. But collaborative partnerships, innovation and further guidance from regulators are critical to this impact being realised. In July a formal complaint was lodged against the FCA for its silence on MiFID II, and undoubtedly for those firms making the right efforts to comply with the new rules this lack of clarity is frustrating.

 

There is hope in the industry that, once clarification is provided and regulation requirements are gradually met, focus will shift from merely complying, to embracing the opportunities provided by MiFID II’s new framework. As the dust settles and uncertainty fades, a more transparent, competitive and trustworthy industry should, hopefully, emerge. 

marketing roi
Finance

ROI from marketing across various sectors

How ROI Can Vary Across Different Sectors

£115.9 million went towards direct mail marketing and online platforms in the UK automotive industry in 2016. That’s according to figures from Google’s Car Purchasing UK Report from April 2017. Of course, the car industry has a massive budget at their disposal when it comes to marketing, one that not all industries can match. Plus, with so many people vying for a digital presence, the cost of online marketing is rising. Is it really worth the cost? Audi servicing plan providers, Vindis, explores the matter across many sectors.

Automotive industry
Car shoppers are heading more and more to the online world than ever before, according to Google’s Drive To Decide Report. Over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% use smartphones, and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.

The report also showed that 90% of car shoppers researched online before buying. 51% of buyers start their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.

In fact, 11% of the total UK Digital Ad Spending Growth in 2017 was from the car industry, according to eMarketer, which puts the industry second only to retail. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

But is online really impacted a buyer’s choices? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working. But traditional methods of TV and radio still remain the most invested forms of marketing for the automotive sector. However, in the last past five years, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.

Fashion industry
Fashion retailers need to keep an eye on online investments, as the online world is strong for the fashion industry – ecommerce accounted for £16.2 billion in sales for the sector in 2017. This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?

The British Retail Consortium stated that ecommerce made up nearly 75% of all purchases for December 2017. Online brands such as ASOS and Boohoo continue to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.

Brands like John Lewis, Next, and Marks and Spencer have set aside millions towards their online presence, in order to make the most of the rise of online shopping. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

People don’t enjoy the idea of wandering the high street anymore. Instead they like the idea of being able to conveniently shop from the comfort of their home, or via their smartphone devices whilst on the move.

Influencers are becoming a big thing for fashion marketing too; PMYB Influencer Marketing Agency noted that 59% of marketers for the fashion world ramped up their spend for influencers last year. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy. More than a third of marketers believe influencer marketing to be more successful than traditional methods of advertising in 2017 – as 22% of customers are said to be acquired through influencer marketing.

Utilities industry
Comparison websites are an important part of picking utilities suppliers for customers, so gaining and retaining customers falls on those websites. With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.

Compare the Market, MoneySupermarket, Confused.com, and Go Compare make up the largest comparison sites as well as being in the top 100 highest advertising spenders in the UK. Comparison sites can be the difference between a high rate of customer retention for one supplier and a high rate of customer acquisition for another. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

One of the Big Six energy suppliers, British Gas, has changed its main focus from new customer to retaining customers. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.

This priority change is reflected in British Gas’s decision to invest £100 million into their customer loyalty scheme, to reward those who stay with them. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.

Google’s Public Utilities Report in December 2017 showed how the utilities sector has strengthened online, with 40% of all searches occurring on mobile, and 45% of ad impressions delivered on mobile. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.

Healthcare industry
Marketing in the healthcare industry is a far cry from any other sector in terms of restrictions. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

Around 2.5 million people have email as their main communication method, and the number is rising. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.

With one in 20 Google searches being for health content, it’s definitely worth the investment of the healthcare industry to be online. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP. In relation to this, Pew Research Center data shows 77% of all health enquiries begin at a search engine – and 72% of total internet users say they’ve looked online for health information within the past year. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.

And that’s without considering social media marketing. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.

Should you invest?
Online marketing is clearly vital for many sectors, particularly for fashion and car sales. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.

There’s a lot more to consider, particularly for utilities. Whilst TV and digital appear to remain the main sales driving forces, its more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.

The average firm in 2018 is set to put an estimated 41% of their marketing budget towards online strategies, and this is expected to rise to 45% by 2020, says webstrategies.com. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.

How do you view the investment? If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.

Sources
https://pmyb.co.uk/global-fashion-company-influencer-marketing-budget/
https://www.prnewswire.com/news-releases/the-uk-clothing-market-2017-2022-300483862.html
http://uk.fashionnetwork.com/news/Online-is-key-focus-for-UK-fashion-retail-investment-in-2017,783787.html#.WrOjxOjFKUk
http://www.mobyaffiliates.com/blog/retail-accounts-for-14-2-of-digital-advertising-spending-in-the-uk-in-2017/
http://www.thisismoney.co.uk/money/bills/article-2933401/Energy-price-comparison-sites-spend-110m-annoying-adverts.html
http://www.thedrum.com/news/2017/03/28/british-gas-shifts-acquisition-retention-marketing-know-the-value-keeping-the-right
https://www.independent.co.uk/news/business/news/uk-companies-online-advertising-spend-10-billion-more-last-year-2016-pwc-a7678536.html
https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014
https://www.kunocreative.com/blog/healthcare-email-marketing
http://www.evariant.com/blog/10-campaign-best-practices-for-healthcare-marketers
https://getreferralmd.com/2015/02/7-medical-marketing-and-dental-media-strategies-that-really-work/

tax entitlements
Tax

Tax entitlements you could be missing out on

Discover 5 tax entitlements you could be missing out on!

By Tony Mills, Director, Online Tax Rebates​

Whether you’re a CIS or PAYE worker, you may be surprised at what expenses you can claim back and the money you can save in your pay packet each month.

Here’s a simple guide to what tax relief you could be missing out on and how to claim:

 

  • Professional memberships

Not only can signing up to a professional membership help you move quicker up the career ladder – and get paid more – you may also be due money back on any fees.

If you’re a member of a professional body like the Federation of Master Builders, The Chartered Institute of Building or National Federation of Builders for example and pay the subscription fees yourself, you can make a claim…worth 20 percent to a basic rate taxpayer.

If you have not claimed previously, you may be able to make a claim for the last four years. HMRC usually make any adjustments needed through your tax code for the current tax year. If a claim is made after the end of the tax year, this will be repaid by way of a payable order or bank transfer.

 

  • Capital allowances

 Many contractors are missing out on valuable tax relief due to their lack of knowledge around capital expenditure. This can have a significant impact on finances.

If you’re a builder working under CIS, for anything you purchase for business use – such as equipment, machinery and vehicles – you’re eligible to claim capital expenses.

You can claim an allowance of up to 100 percent in the year of purchase on certain items although cars are restricted to 18 percent per annum in most cases. Assets you owned before you started the business may also be claimed if you now use them for your business.

 

  • Tools & Equipment

 Your tools; where would you be without them? If you have to purchase your own tools, you may be due a tax refund on their cost, as well as money back on the costs of maintenance and replacement.

If you’re a PAYE worker, you can make a claim if the same or similar item is not available from your employer. Whereas if you’re a CIS worker, you can claim all tools as an expense.

 

  • Uniform

If you wear a compulsory branded uniform and/or protective clothing at work or on-site, you could be due a one-off rebate for the upkeep. This can be backdated to the last four tax years and received as a single payment, while any future claims will be paid in wages.

Limits on claims vary by industry but the standard flat rate expense allowance for uniform maintenance is £60 for this tax year, meaning basic-rate taxpayers can claim £12 back and higher-rate payers £24. It only takes a couple of minutes online to check using an online calculator.

 

  • Travel

By trade, you’re unlikely to be working from a fixed address every day. The cost of travelling between home and the site you’re assigned to may be claimed as an expense for tax purposes.

 

A workplace is considered temporary if your contract is below 24 months. If your contract length is uncertain, the workplace will be seen as a temporary workplace until you have been there for 24 months, it would then be considered permanent.

Be sure to keep any travel or fuel receipts to make an expense claim via your employer.

 

  • Finally, stay safe…

Don’t fall victim to fraudsters who are sending fake emails and text messages promising tax rebates.

Never hand out any personal or payment details to companies you haven’t approached personally before or to HMRC who will only ever contact you via post or your employer.

Issues

Issue 7 2018

Click the image below to read this months issue!

Wealth & Finance INTL Magazine is dedicated to providing fund managers, institutional and private investors from around the globe with the very latest industry news from across both traditional and alternative investment sectors.

Firstly, we cast a light to Allied Wallet who graces the front cover of this edition. Taking time out of hectic schedule, Dr. Andy Khawaja of Allied Wallet provides us with an insight into the company’s award-winning global online services following his recent success in Wealth & Finance’s Leaders in Finance Awards in which he was rightly awarded the title E-Commerce CEO of the Year.

In this issue, we take a closer look at Pros Assist, a gifted team consisting of qualified practicing members of the Institute of Financial Accountants, notably headed by the Director and Senior Financial Accountant, Alom Rouf. Recently, we profiled both the firm and Alom to discover more about the innovative services that they provide to their clients.

Also in this edition, we discover more about Eze Castle Integration who, for more than two decades, have been the premier provider of technology solutions to the financial and investment management industry. Recently, we profiled the firm and spoke to Dean Hill as we looked to discover more about their innovative ways, especially following their recent success in Wealth & Finance’s Global Excellence Awards where they were awarded title Best in Hedge Fund Technology Services.

At Wealth & Finance Magazine, we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Why Direct Lending is so Attractive to Investors
Transactional and Investment Banking

Why Direct Lending is so Attractive to Investors

At a time when investment and wealth preservation is as challenging as ever, direct lending offers an alternative for asset managers looking to invest.

There is a growing trend for non-bank lenders to loan money to companies, cutting out the middleman. Indeed, institutional investment is now the direct lending in the UK as it has been seen as a way to source alternative finance and funding for a variety of industries.

Direct lending started in the UK in 2005 with consumers borrowing from other consumers. Today, borrowers have increased and widened across many asset classes and the types of lenders have also expanded.

Direct lending is often now used to describe P2P lending and this reflects the growing number of diverse lenders keeping up with the high demand from borrowers.

Direct lending offers an attractive investment opportunity, gaining:

– Higher returns than a savings account could
– Lower volatility than stock markets

Likewise, borrowers are attracted by the lower rates and quick loan decisions.

Why direct lend?

Other investment options aren’t as reliable as they used to be so it has become prudent to invest elsewhere.

Stock markets remain volatile and therefore now difficult to find a safe-haven for money.

Add to this the decreasing yields on the usual ‘go to’ investment products and savings accounts that now offer little return.

Furthermore, Q4 2017 saw inflation rise to 3.0% – with the ever threat of increasing inflation. 

Direct lending is also attractive when compared to other credit-grade investment choices:

A gap in the market was seized

Traditional banks have cut back on business lending in recent times, especially to SMEs, as tighter regulations have changed the post-financial lending culture. These tighter regulations aim to reinforce bank capital requirements and reduce leverage.

This has created an opportunity for alternative lenders and this gap in the market is being seized by investors who are offering loans to mid-market companies as an answer to low-yield problems.

Direct lenders can work under more favourable circumstances, therefore taking on the companies with high leverage simply because they don’t have to adhere to capital requirement guidelines. This results in more attractive returns for the investor.

Direct lending isn’t a passing fad

Direct lending was relatively untapped until recently, but research by the Alternative Credit Council (ACC) has led them to predict that global lending is expected to break the US $1 trillion mark by 2020.

The UK direct lending market is substantial and has grown considerably in recent years – with plenty of room for direct lending to continue to grow further.

The UK direct lending market accounted for £4.5 billion of lending in 2017 – this is an increase of 21% in a year.

Europe is catching up

In 2017, European direct lending grew to around US $22bn, alongside the growth of mergers and acquisitions amongst SMEs. With SMEs seeking alternative ways to finance this growth the two are intrinsically linked.

Institutional lenders now account for more than half of the direct lending in the UK – yet the UK media still remain skeptical about the industry. One of the reasons for this is that direct lending is often mistakenly confused with equity crowdfunding in the media.

Direct lending is much more established in the US and Asia and Europe is set to follow. In fact, shrewd P2P investment is helping clients who may not be able to get finance from banks and this in turn is injecting sluggish economies.

The borrowers benefit from loans that are secured and have straightforward and open arrangement fees from the start.

In turn, investors have the potential for attractive yields, low volatility and low correlation compared to other asset classes:

European direct lenders are teaming up to chase bigger deals and more high-profile firms. For example Zenith Group Holdings Ltd and Non-Standard Finance Plc used direct lenders to meet their financial needs.

An increasing number of investors

Direct lending started with asset managers lending to mid-market companies and therefore filling in the gaps left by the banks. Now other types of companies such as P2P platforms are joining in and taking up the market for smaller loans, while the asset managers have the expertise for the larger loans – creating an even more prosperous and thriving investment climate.

In fact, in 2017 there were more than one hundred direct lending platforms facilitating more than £4.5 billion of lending.

In turn, fund managers can offer bigger loans as the money flows, making direct lending more attractive with potential for returning clients.

Untapped potential

There is plenty of untapped potential from retail gatekeepers who have yet to wholly embrace direct lending:

Are there any downsides to direct lending?

The extra leverage that makes direct loans more attractive to a borrower, is also a higher risk to take if the economy takes a dive.

The need for direct loans grew from the banks refusing businesses simply due to tightening of restrictions – these were safe and dependable businesses that were suddenly cut off when previously they wouldn’t have had a problem. However, due to a more competitive and growing direct lending market, a growing number of direct lenders seek out the higher-risk financing to companies in trouble.

What does the future hold?

The rate of growth in the direct lending market is slowing, but this is all for the greater good as a ‘flight to quality’ is predicted as better lending platforms outperform weaker or less scrupulous ones.

However – there is still plenty of room for growth long term as reflected in the forecasting statistics.

In 2018, there will likely be an increase in collaboration between direct lenders and traditional lenders – they will complement each other – with banks seeing direct lending as a source of capital.

Another factor will be the concept of open banking which is spreading with a ripple effect across the financial world. For example, the UK’s Open Banking Initiative promotes the use of open application programming interfaces (APIs) to provide access to bank customers’ transaction data. This is certainly something to watch in the future with regard to how direct lenders can use this valuable data.

Direct lending will certainly experience change as it evolves in the coming years, but it is here to stay as an alternative investment opportunity which offers good returns – and ultimately it is uncorrelated and relatively liquid in comparison to other classes.

Exo Investing
Transactional and Investment Banking

Recent launch of Exo Investing

  • Launch of Exo leap-frogs existing online retail wealth management services in landmark moment in the democratisation of investment technology
  •  Exo’s unique use of AI offers investors  a truly individualised, adjustable ETF portfolio, daily risk management and absolute transparency, for a low online fee

It was confirmed today that the investment backing the development and launch of the ground-breaking ‘Exo Investing’ retail digital wealth management platform included a private investment from Benjamin and Ariane de Rothschild.  

This investment was alongside that from the founders of Madrid-based ETS Asset Management Factory who supply Exo with its Quantitative investing technology and capabilities and the former heads of the La Compagnie Benjamin de Rothschild SA, Daniel Treves and Hugo Ferreira, who is also the Chairman of Exo Investing.   

The launch of Exo Investing earlier this year saw retail private investors gain access – for the very first time – to the same sophisticated AI-powered Quantitative investment and risk management technology developed over 30 years by quantitative investment manager ETS for institutional investors and the wealthy clients of Private Banks.

Acting as an expert ‘investment co-pilot’,  Exo’s use of AI sets  it apart from even the most sophisticated of the existing robo-advice platforms, introducing new standards of control, personalisation and risk management.

Moving away from the traditional model of static products and predefined portfolios, Exo instead builds each investor a personal, adjustable portfolio of ETFs based on their own investment preferences. Each portfolio is then monitored 24/7 and recalibrated as frequently as daily to both the individual’s risk appetite and changing market conditions, continually managing each client’s long term risk.

Lennart Asshoff, CEO of Exo Investing said“This investment paves the way for Exo to continue developing this ground-breaking solution for the retail market. Opening the door for thousands of private investors to the important benefits that Quantitative investment science offers is very satisfying having seen what a pivotal difference it can make to investment outcomes during my years working at ETS.

“This level of individually tailored portfolio and risk management has never been available to the retail investor before.  The wider public have never been more reliant on their personal investments for their future financial security and we want to open the door to a new category of investing for as many people as possible,  making truly personalised investing available at scale.”

Hugo Ferreira, Chairman of Exo Investing said“Exo Investing is an exciting example of how the latest advances in technology – from artificial intelligence to the growth in computing power available through the cloud – can be utilised to democratise access to the best services available. For years we have wanted to find a way to provide the huge financial advantage that ETS’s systems deliver to a much wider audience, and Exo is just that. The Fintech zone has a track record of democratising finance and we are proud of Exo as the latest and one of the more significant additions, this time in the increasingly crucial world of private investing.

“My long career managing risk for large organisations around the world has taught me that to successfully ride out market turmoil like the 1987 crash, the internet crises of 2001 and the sub-prime debacle of 2008, you need humility, discipline, transparency and risk control.  I found these in spades 20 years ago in the quantitative investing models developed by ETS.  Now Exo is utilising AI and recent  increases in computing power to offer the same portfolio management technologies to a far wider market and at a highly competitive price.  This is a watershed moment for the private investor.”      

With a potential market size of more than 3.2 million private investors in the UK,  and armed with an obviously superior yet competitively priced proposition,  Exo is set to shake up the existing online investing market significantly.  No existing platform, of whatever scale, offers the private investor so much for so little. As this fact becomes more widely known by the UK’s mass affluent market, Exo is set to  build enviable scale and accolades for transforming outcomes for the private investor.

FairFX
Banking

FairFX launches international business account

  • FairFX to build upon its banking capability with introduction of the Fair Everywhere business current account
  • Fair Everywhere removes the barriers to do business across borders with multi-currency wallets and foreign exchange fees that save businesses time and money
  • Secure Mastercard cards allow customers to streamline business spending around the world
  • Millions of SMEs will no longer have to be penalised by banks which charge extortionate fees

International multi-currency payments provider, FairFX is today announcing the launch of its new global business current account.

The Fair Everywhere business account brings together FairFX’s expertise in international payments with services designed to make global business banking easier, faster and cheaper for those who don’t want borders to limit their business ambitions.

The new Fair Everywhere account allows you to:

  • Manage all your day-to-day business banking and international money transfers in one current account with balances in Sterling, Euro and US Dollar.
  • Open your doors to the world with foreign exchange rates that are game changing for business’ bottom lines.
  • Bank with a business that works as hard as you do – customers have unlimited access to a UK-based customer support team Monday to Saturday.
  • Spend in over 210 countries worldwide with a chip & PIN secure Mastercard debit card
  • Fit your banking around you with the Fair Everywhere mobile app.
  • Get 3.5% cashback rewards from over 50 UK high street retailers simply for doing business as usual.
  • Automate your bill payments through direct debits or standing orders directly from your account.

The account is initially only available to 1,000 customers with existing FairFX Business customers offered priority access. Other businesses can sign up to join the waiting list. 

Ian Strafford-Taylor, CEO of FairFX said: “The Fair Everywhere account is for businesses that don’t see barriers in borders. We’ve brought together the best of both our banking and currency platforms and kept it simple with a straight forward, all inclusive price of £50 per month for an all singing, all dancing account that works as hard as you do.

“We know that most SMEs are not limited by their ambitions and as such they should not be limited by working with banks that penalise them with extortionate fees, complex pricing structures and poor service.”

“We will be launching additional subscription tiers for businesses turning over different amounts and introducing a pay-as you-go pricing option very quickly, to ensure we provide a flexible service that helps our customers be more effective.”

“With Fair Everywhere, we have taken our winning formula of combining market leading value with unmatched service standards and applied it to the underserved SME banking market. This international business account makes it easy for SMEs to manage their day-to-day finances as well as their international payments at exchange rates that are what we believe to be the fairest around and all from a single account.”

“The Fair Everywhere cards will also be issued by the FairFX Group after the Group became a principal member of Mastercard in 2017, which gives us even more control over our supply chain to enhance the product and customer experience.” 

“This launch is a big step for FairFX towards building out our banking and payments offering, and we’re excited about growing with our customers.”

Visit Fair Everywhere to find out more about the international business account.

Issues

Issue 6 2018

Click the image below to read this months issue!

Wealth & Finance INTL Magazine is devoted to providing fund managers, institutional and private investors across the globe with the latest industry news across both traditional and alternative investment sectors.

In this issue, we take a closer look at Caye International Bank. The firm provides stability, confidentiality and higher returns for their customers and clients. Recently, we spoke with Caye’s Senior Vice President, Luigi Wewege about the Bank, its services and his aspirations moving forward.

Elsewhere in this edition, on the 27th July, Brown Brothers Harriman & Co. (BBH) launched the BBH Income Fund (the Fund). The open end mutual Fund will be co-managed by Andrew Hofer and Neil Hohmann. We discover how BBH Income Fund seeks to provide maximum total return with an emphasis on current income, consistent with the preservation of capital and prudent investment management.

Also in this issue, Prophet Equity is a private equity firm that makes control investments in strategically viable, asset-intensive, underperforming companies. We profile the dynamic firm, as we reflect on how over the last nineteen years, Prophet Equity’s Principals have invested in and managed entities with over $6 billion in revenue.

The team here at Wealth & Finance Magazine hope you enjoy reading this month’s insightful edition, and we look forward to hearing from you!