By Annie Charalambous, Content Manager at ETX Capital
The pandemic has drastically impacted our lives and our savings. Research shows that while lower-income households across the UK have had to dip into their savings to stay afloat, higher-income households have grown theirs.
It seems everyone is looking for new income streams and ways to get more bang for their buck – including navigating the often-complex world of savings and investments – and they’re turning to the internet for advice on where to start.
That’s why we’ve filtered through the noise to give you the nation’s top 10 most commonly asked questions around personal finance – and answer them too.
Which shares should I buy (49,500 monthly searches) and how? (9,900 monthly searches)
The shares you choose to invest in will depend on various factors, including the level of risk you’re willing to take, the overall market climate, and much more. Before you do buy (or short) any shares, you’ll want to do your homework on both the company and the industry at large.
For example, if you see ABC Manufacturers’ stock price is up this year, before buying in, you may want to look at how their performance stacks up against competitors like XYZ Manufacturers or view their most recent quarterly report.
There are always opportunities in the market to suit every budget and experience level, but much like picking the winning lottery numbers, there is no winning formula for what to invest in, or when.
Which companies are in the FTSE100? (40,500 monthly searches)
The FTSE100 is made up of the 100 largest (qualifying*) companies (by market cap – available shares multiplied by current share price) listed on the London Stock Exchange. The index acts as a major indicator of the UK stock market at large. Its 3 largest constituents are Unilever, AstraZeneca, and HSBC.
*To qualify, a company must meet requirements set out by the FTSE Group.
What is an ISA? (12,100 monthly searches)
An ISA, or ‘Individual Savings Account’, is a savings account available to anyone in the UK over 16, without taxing the interest earned on it. Considered a lower-risk investment, the drawbacks are that you can only hold one active ISA per year, and you are capped on how much you place in it (currently at £20,000).
There are two kinds of ISAs: a ‘cash ISA’, whereby you pay into it like you would a traditional savings account to earn interest, and a ‘shares ISA’, where your money is invested in stocks and bonds and neither the interest – nor any profit – is taxed. While the latter has more potential for greater returns, being tied to the stock market also means a greater risk of losing money.
What are bonds? (8,100 monthly searches)
A bond represents a loan, typically given to a body like a government or large company, by an investor. Governments may opt to issue bonds to raise money, and then agree to buy these bonds back at a later (agreed-upon) ‘maturity’ date. Bonds are considered a low-risk investment and can be a good way to diversify your portfolio with minimal exposure.
What is an ETF? (6,600 monthly searches)
ETFs, or ‘Exchange-Traded Funds’, are an asset type similar to index funds, in that they comprise of different stocks – usually representative of a particular sector – and are typically managed by larger companies (Vanguard, iShares, etc.). However, index funds are connected to exchanges and correlate more with that country’s economy and stock market.
What is a hedge fund? (5,400 monthly searches)
A hedge fund is an aggregated pool of money from different investors that is managed by an institution or individual. The hedge fund manager closely monitors the investment and is able to react and adjust accordingly (as per their strategy).
What is pension drawdown? (5,400 monthly searches)
Pension drawdown occurs when you continue to invest into a pension whilst simultaneously withdrawing money from it, essentially giving yourself a steady ‘income’ out of your own pension pot.
What are dividends? (4,400 monthly searches)
Dividends are a portion of a company’s profits that are distributed among its shareholders.
For example, if you buy 10 shares in ABC Manufacturing and they pay an annual dividend of £5 per share, you’ll be eligible for £50 back in your pocket that year – if you’re still holding those shares at the ex-dividend date.
What is cryptocurrency? (4,400 monthly searches)
Cryptocurrencies are digital-only currencies held on the blockchain. Unlike regular ‘cash’ currencies, cryptocurrencies aren’t tied to any central bank and are therefore unregulated, volatile, and considered a high-risk investment.
Those are coincidentally the same reasons for the relatively mass adoption over recent years – as more institutions accept and even integrate the likes of Bitcoin, XRP, Ethereum, and countless others, these assets risk becoming a part of the very world they were created to challenge.
By Lars Pedersen, CEO, Questionmark
Many financial services firms rely on the effectiveness of their salespeople to drive revenues and growth.
But many salespeople may not be maximizing their performance. As a result, they may be hindering the firm’s performance.
To unlock potential, financial services firms should assess the top behaviors and skills of their best-performing salespeople. They can then replicate these skills across the broader salesforce through relevant training and support.
What’s the problem?
Financial services firms depend on making sales. But half of financial services salespeople expect to miss their annual target.
Regardless of this, many salespeople believe that the targets they were set were reasonable.
So, while some salespeople may be performing well, many may be underperforming, despite the investment in training them.
Five key skills
The most successful salespeople have clear behaviors and skills that enable them to sell more than their peers.
By measuring the skills of the best performing workers with staff assessments, employers can get a good understanding of what works and what doesn’t. Firms can then train other salespeople in these skills.
There are often five key skills that firms look for in their salespeople.
First, digital marketing. Some 82% of customers look up salespeople or their companies on LinkedIn before responding to their communications. A strong digital presence will help with lead generation.
Second, first-class knowledge. Customers know they can get basic information online. During a conversation with salespeople, they want to go to the next level of detail.
Third, consultancy. A would-be customer expects a salesperson to understand their business and their challenge and identify products that are right for them. Customers want advice on how to use products effectively.
Fourth, qualifying leads accurately. Some salespeople waste too much time pursuing leads that are unlikely to convert. They should be able to spot a future opportunity early on and be ruthless in ignoring those that are unlikely to bear fruit.
Last, communication. Both speed and quality of communication are essential. Calls must be returned. Emails have to be answered quickly.
How assessments help
Assessments, which measure progress by testing skills, help employers to understand the skills that their people have. By measuring such progress, employers can help improve it.
Regular skills assessments give employers reliable and accurate information on the strengths and weaknesses of their salesforce.
They can then introduce training to address weaknesses, and to replicate the skills and behaviours of the best performers. They can also test the effect of training with further assessments.
That’s why one in six US Fortune 100 companies use Questionmark’s enterprise-grade assessment platform.
Providing a competitive advantage
When the financial services industry is changing as rapidly as it is, firms must know their people have the skills they need to maximize performance and their potential.
Getting a clearer picture of why some salespeople perform well, and others don’t, is crucial.
Greener initiatives are being utilised more and more across the globe, as Earth’s citizens try to safeguard the planet’s resources. We may have relied a lot on fossil fuels like gas and coal in the past, but due to these sources not being sustainable we’re now ambitious about developing practices which are more environmentally friendly.
The market for renewable energy now includes everything from wind turbines to wave power. Wind power is proving particularly popular, with the amount of energy generated across windfarms in just 2016 found to have exceeded the amount created via coal power plants in the UK for the first time ever. In fact, over 40 per cent of all the energy generated on Christmas Day 2016 was as a result of renewable sources and 75 per cent of that sum was from wind turbines.
As coal-fuelled electricity has dipped to its lowest output for 80 years, the future certainly looks bright for the renewables market and, in particular, the wind energy sector. Join joint integrity software experts HTL Group as they explore just how much potential this industry holds…
What we can expect in the near future
The wind energy sector had to reconsolidate record-breaking growth for the years between 2014 and 2016. In total, the global installed capacity at the end of 2016 was 486,790 MW — an impressive figure by anyone’s standards.
Growth is expected to pick-up once more in the years ahead though. In fact, there are predictions which expects the global installed capacity to rise to 546,100 MW. This year, this figure was anticipated to hit 607,000 MW before reaching 817,000 MW by 2021. Although the rate of growth is anticipated to slow, it’s clear that wind power will continue to occupy a large energy share on a global scale.
How is each area of the world performing? Asia, North America and Europe are expected to remain the dominant wind power markets. By 2021, it’s anticipated that Asia will create 357,100 GW of energy from wind turbines. Europe is expected to hit 234,800 GW, while North America is likely to generate 159,100 GW.
What’s more, emerging markets are predicted to continue their development. For example, Latin America will grow to 40,200 GW by 2021 — up from 15,300 GW in 2016 — while the Middle East and Africa will more than quadruple their output, growing from 3,900 GW in 2016 to 16,100 GW in 2021.
Investments to expect in the years ahead
Additional investments will obviously be required in order for the sector’s continued growth to be supported. In 2016, €43 billion was spent across Europe on constructing new wind farms, refinancing, fundraising and project acquisitions — an increase of €8 billion compared to 2015.
Offshore windfarms appear to be getting more attention than sites found onshore. Investments onshore dropped by 5%, while offshore reached a record-breaking €18.2 billion. Impressively, the UK is leading the way, raising €12.7 billion for new wind energy projects. This more than overshadows the country in second place, Germany, with €5.3 billion.
The total investment may be lower then. However, it’s clear that wind energy will remain vital to the global movement towards greener, more sustainable energy both now and in the future.
A new wave of global entrepreneurs are setting up their businesses with the aim of making a positive impact on society, according to a new report from HSBC Private Banking. The Essence of Enterprise report found that the younger generation of entrepreneurs are leading this trend, with 24% of entrepreneurs aged under 35 motivated by social impact compared to 11% of those aged over 55. The report, now in its third year, is one of the largest, in-depth studies into the motivations and ambitions of entrepreneurs, researching the views of over 3,700 successful entrepreneurs in eleven countries. The report also found that this new generation of entrepreneurs is embracing angel investing, viewing it as a way to connect and collaborate with their peers.
A socially minded brand of entrepreneurship
One in five entrepreneurs considers social responsibility, being active in the community, or environmental responsibility as their top priority as a business owner, rather than prioritising areas such as maximising shareholder value or economic prosperity. Those who prioritise social impact have a greater propensity to engage in angel investing, (55% of impact-focused entrepreneurs versus 44% of entrepreneurs who prioritise commercial factors), and report a stronger willingness to rely on mentors for advice and support (75% of impact-focused entrepreneurs versus 66%).
The report also suggests a strong relationship between an emphasis on social impact and entrepreneurial ambition. 33% of the entrepreneurs projecting high growth ambitions state that they started their ventures with the intention of creating positive social impact, compared to 28% of those projecting the lowest growth. This suggests social impact should be seen as an integral part of the recipe of entrepreneurial success, and not separate from it.
A new investment style
Almost half of respondents (47%) have invested in other private, non-listed businesses, funnelling both capital and expertise back to the entrepreneurial community. However, the research reveals that a new younger generation of entrepreneurs is investing at a much higher rate than their older peers, with 57% of entrepreneurs under 35 undertaking angel investing compared to 29% of entrepreneurs aged over 55.
Differences also exist between the generations in how they perceive and approach angel investing. Over half of younger entrepreneurs (57%) view angel investing as a way to connect and collaborate with peers, staying up to date with industry progress and disrupters and to grow their knowledge and expertise. Entrepreneurs of an older generation view angel investing as a way to diversify and grow their investment portfolio, approaching angel investing in a more informal style, through their own network of personal contacts. 43% of those over 55 view friends as the best route to new business, while 44% of those under 35 turn instead to professional advisers to source new investment opportunities.
HSBC Private Banking Global Chief Investment Officer Stuart Parkinson said: ‘It’s clear younger entrepreneurs want to do good, and we would be wrong to dismiss this as youthful idealism that will act as a brake on financial success. They know that their business cannot have the impact they want without sustainable growth, and they are focussed on achieving both. They see a similar virtuous circle when it comes to angel investing; they are happy to invest in the wider business community, to contribute to each other’s successes and to learn from one another.”
Differing approaches across the globe
The report also brings to light the differences in the entrepreneurial mind-set in markets around the globe. Entrepreneurs in the Middle East (66%) are the most active angel investors, with the US (54%) and Mainland China (53%) next in line. By contrast, 45% of UK entrepreneurs are angel investors, along with 35% in Germany and 33% in Switzerland.
Regional traditions have paved the way for different approaches to angel investing between these markets. In the US, angel investing is highly professionalised; investors source new opportunities through formal channels, such as financial or professional advisors. In comparison, entrepreneurs in the Middle East source new opportunities informally, mainly through friends (Use financial advisors US 51%, Middle East 38%) (Use friends US 45%, Middle East 53%) They also perceive their role to be supportive, cultivating business development and leadership skills. In the US, entrepreneurs view their role as a challenger, optimising the performance of the management team by challenging their thinking and strategy.
In Europe, investors are more likely than those in other regions to perceive angel investing as a way to grow and diversify their portfolio, rather than as a way to build their network and share expertise.
In relation to social impact, entrepreneurs in the US and China show a greater emphasis on environmental concerns – 8.1/10 prioritise environmental issues in their business planning compared with 6.7/10 in the UK, Singapore, Switzerland and Australia. When asked about their desire to contribute to communities, entrepreneurs from the Saudi Arabia (64%) and UAE (62%) are most likely to reference being active in the community and civil society as important to their business operations compared to the global average of 44%.
Coupland Cardiff (CCAM) is a specialist Asian and Japanese fund management group, focused on managing capacity constrained, performance focussed funds within a risk controlled framework.
Richard Cardiff is CEO of the firm and he tells us more about its ongoing strategy. “We follow a bottom-up, fundamentally driven research process, focusing our time on detailed company visits and proprietary analysis. We believe that over time this will achieve superior results.
“In order to further enhance returns for our investors, we believe that all funds should be capacity constrained, concentrated and freed from any benchmark constraints. This allows us to express our best ideas.
“The stability of the firm over the last 12 years and the quality of portfolio managers and analysts we have in place enables us to continue to deliver exceptional returns for investors over the coming years in the fastest growing markets in the world. These are markets that have not only grown rapidly over this time but also have excellent prospects for the longer term. We’re confident that we will continue to deliver superior returns and service our clients around the world to the highest quality.”
In December 2015 CCAM launched the CC Japan Income & Growth Trust plc, the first Japanese Investment Trust for 20 years. It was also the first income orientated Japanese investment trust to be launched. Managed by Richard Aston, who also runs a similar open-ended strategy and despite difficult market conditions, it now has nearly £100m in net assets. In addition, last year the trust met its stated dividend of 3p per ordinary share. The share price has also increased by 22.4%.
As CEO, Richard is tasked with overseeing the management of the firm, sales and marketing activities, as well as overseeing the management of all operational aspects involved in delivering excellence to clients, however he is quick to praise his dedicated team.
“Being a boutique asset manager, our staff are everything to CCAM and the quality of our staff is, we believe, second to none. All play a significant role in the success of the firm from front to back office. CCAM is wholly owned by members of the team and as such is not distracted by external factors or required to make compromises to our main objectives, which are to achieve excellence in three key areas: investment performance, operations and client service. Testament to this is the fact that staff turnover has been very low.
“Our fund management team have spent their careers investing across Asia and Japan and have strong track records. All 7 portfolio managers are specialists in their investment field and between them they undertake around 2000 company visits a year. We believe that the combination of scrutinising data as well as analysing companies at a face-toface level allows us to truly understand a stock, interpret markets with greater clarity and deliver superior performance.”
Indeed, the feedback received from CCAM’s clients is very encouraging. “The key feedback we get is that they very much like the concentrated portfolios and our commitment to capacity constrained products. Also that we specialise in investing in Asia and Japan instead of trying to be a ‘jack of all trades.’ The fact we are single area specialists and are prepared to be frank about the prospects of regions, whether good or bad, sets us apart from more generalist investors and is of great appeal to our clients.”
With regards to the future, Richard sees both opportunities and challenges ahead, for 2017 and beyond. Not least the fact that more investors are moving away from the crowded and unproductive centre-ground offered by more generalist funds into both the EFT and the highly active fund specialist market. “As a specialist, we are perfectly placed to benefit from this trend,” he comments.
“The challenges we’ll face are similar to many other asset management firms and will be based around regulatory changes and any potential challenges that might materialise as we move closer toward Brexit. It’s also important for us to continue to ensure we have the highest quality of staff to service our clients around the world.”
“Speaking of the wider industry, again, it’s the continuing deluge of new regulation coupled with how we will have to operate as a business in the new post-Brexit world – when we discover what Brexit means for the industry. No-one knows what that will look like yet so our strategy in Europe will undoubtedly adapt to any potential new model.”
Company: Coupland Cardiff Asset Management Name: Richard Cardiff Email: [email protected] Web Address: www.couplandcardiff.com Address: 31-32 St. James’s Street, London, SW1A 1HD Telephone: 44 207 321 3470
Erik van Eeten started his career at IBM as a Business consultant and transferred to the Investment and Banking Industry. Realty Africa has a lot of expertise in the local markets with one co-founder born and raised in Zimbabwe as well as through the benefit of local teams which we establish in each country. Erik van Eeten imparts his expertise about Realty Africa and the opportunities of investing in Sub-Saharan Real Estate projects via their platform.
Can you give a brief overview of what your company does as a property crowdfunding platform?
If I am asked to describe Realty Africa, I have to distinguish between two groups. We not only see the investors as our customers but also have a very strong focus on the developers.
From the start, we took the concept of investing in Africa very seriously and wanted to develop a new approach towards fiduciary responsibility and investor security in the crowdfunding space. It took longer to setup than we anticipated, but for investors, we can offer great investment opportunities in Real Estate which are fully securitized and well suited for retail, professional as well as institutional investors. We thoroughly vet all investments with the help of our service provider Deloitte and we stay involved to manage and monitor the investor interests until the end. We perform site visits and use drip financing to protect the investors. Large investors are welcome to perform their due diligence as well, even before the project lands on the platform.
At the same time, we want to really empower the local landowners, developers and architects in Sub-Saharan Africa. We developed a total service portfolio which we will launch in stages. These will support the local professionals and enable their businesses. Qualified projects have access to international funding on our crowdfunding platform. We are also soon launching our RA Connect platform where the landowner can meet developers and architects to achieve common interests and create joint ventures and more services will follow.
How does crowdfunding fit in the local tradition and how can the local community benefit?
We believe in the future of the African Real Estate markets. From an investment perspective and more importantly from the Impact that these developments have on the local community. We have a large variety of projects in the pipeline which includes Social Housing, Student Housing, Eco Lodges but also middle-income housing and luxury apartments. Africa has a long history with crowdfunding. Whole communities would pull funds for creating a building. For instance, the University of Botswana was largely “crowdfunded”. This process of financing not only facilitates the funding but also creates a feeling of mutual ownership and care for the longer term. We are enabling the African community to take this concept to the next level to get access to the international retail and professional investment community. With our additional services, we support the local developers already in the pre-finance stage. These services will also deepen our knowledge of the local markets, which is to the benefit of all our customers.
With crowdfunding growing in a variety of sectors, to what extent do you feel that businesses and investors are now starting to a pay attention to projects using this investment method?
It is a misconception that crowdfunding is only for small amounts and non-professional investors. Crowdfunding is a way of democratising investments. In our view it is ideal for investors who would like to have more control. You can select the project that you like instead of a mandate to a fund manager. At the same time, investing in real estate in Sub-Saharan Africa is also an ideal way for professional investors to spread risk in an investment class with higher yield and which is maybe outside of your expertise. Investors who prefer Impact investments can participate in Social Housing or Ecolodge projects. So property crowdfunding in Sub-Saharan Africa offers many opportunities to all kind of investors. When the pipeline grows, we are looking for partners to establish a managed fund or REIT of African Real Estate.
How can your Company’s expertise benefit our readers?
With our local teams and with the help of our service providers, we have a lot of knowledge of the local African markets where we are active. Many investors regard investing in Africa as very risky and scary. With our ECO System we are able to open up this market and to offer access to opportunities which were otherwise not available before to most investors. The additional services are vital in creating a stable company base and to support the core business of empowering the local people and of finding interesting, trustworthy and transparent investment opportunities.
Another interesting service we offer lies with a select group being the Diaspora Community, those living abroad outside their country of origin. With our network, we can not only provide investment opportunities in their home country, but we can also support an ambition to build a house back home. With the same structure we use to check on development projects for our investors, we can check on the quality of your build and make sure that only money is paid when the work is performed. We call this Diaspora Construction.
What can you tell about the reputation of your firm?
Realty Africa is a new company and the first projects will be online in the next couple of months. As a new business, we have to take good care of our reputation. Reputation is very important in Africa and therefore, we can’t rush the due diligence process and asked one of the Big Four to be our service provider. Also, we are actively expanding our local teams to gain even more knowledge. In parallel, we are also actively seeking for large investors or institutions that love Africa and that want to work together with us to open up this market and possibly underwrite some of the projects. The opportunities are endless and the double-digit returns provide an excellent opportunity compared to the current savings rates in Western Europe or the USA.
How can investors and developers sign up to access the services on your website?
Everybody can visit www.realtyafrica.com and signup or read the information that is available. After signup, we are legally required to perform a KYC on our investors. Professional and Institutional Investors can contact us on our Institutional Contact Page for more information.
The report, The Rise of Bionic Wealth: A Hybrid Model of Cutting-Edge Technology and Advisor Expertise Heralds the Future for Wealth Managers, explores how Generations X and Y now move ‘effortlessly across both the analogue world of face-to-face meetings and the virtual world of digital platforms that enable the fast and accurate service they expect’.
The research suggests that success, even survival, for wealth managers will depend on giving rising client segments what they need in terms of service and financial performance. An increasingly complex set of customer demands will mean that firms must modernise their technology approach without alienating older clients, still the bedrock of their business.
Pierre Bouquieaux, Product Director, Wealth Management at Temenos, said:
“With this generational transfer of wealth underway, firms must be alert to the challenges presented by a more complex set of customer needs – as well as growing cyber risks. Yet, this is a fantastic opportunity. These findings highlight that increasingly intelligent technology will help wealth managers redefine processes, find new efficiencies and build better relationships with their clients.”
Temenos, in partnership with Forbes Insights, surveyed more than 60 wealth managers and 35 High-Net-Worth (HNW) clients about the evolving banking experience—how they communicate, their needs and the importance of technology. The report includes commentary from executives at leading investment and private banks. Key findings include:
• Over 40% of wealth managers believe that a mix of digital and offline ways of communicating is ideal;
• Over a third (34%) of HNW clients now demand some form of digital communication from their wealth manager;
• Almost two thirds (62%) of HNW clients are now in favour of ‘the digitisation of wealth management services’ – but still want to meet often with an advisor;
• Just under a fifth (17%) of HNW clients say technology is now essential;
• Around half (48%) of HNW clients rate cyber risk and hacking as a top concern related to the use of technology.
The findings showed that small firms predict demand for alternative finance will increase by an average of 28% over the next two years. This represents an increase of 2% from last year’s survey2 where 26% forecasted growth. In 2015 the combined market activity for the UK online alternative finance industry grew to £3.2 billion, representing an 84% increase compared to the £1.74 billion in 20143.
More than half (51%) of small and medium sized enterprise (SME) owners said they have used or considered using alternative finance, up from 42% in last year’s survey. The most popular option, considered by 47% of respondents, was again crowdsourcing finance, including peer-to-peer lending and crowdfunding. This was followed by cash flow / invoice finance (32%), property finance such as bridging loans and commercial mortgages (29%) and asset finance (24%), which covers areas such as plant and machinery and business equipment.
On a regional basis, more than two thirds (69%) of small business owners in the North West predict a rise in demand for alternative finance over the next two years, the largest portion in the UK. Business owners in the East Midlands and West Midlands were second and third with 67% and 62% respectively. Just over half (52%) of small business owners in London predicted a rise in demand for alternative finance. SME owners in the North East were the least enthusiastic about alternative finance with 29% anticipating an increase.
The research also revealed the specific areas that SME owners are targeting for investment over the next 12 months. Two in five (39%) SME owners will look to invest in IT equipment, and nearly one five (18%) in cars, spending on average £14,496 and £5,290 respectively. 13% of SME owners said they would invest in telecoms equipment (£5,368) and 12% in plant and machinery (£7,426). One in ten (11%) plan to buy commercial vehicles, spending on average £11,163.
John Jenkins, CEO of Amicus commented: “This research shows that the business finance landscape continues to change. Demand for alternative finance is set to go from strength to strength over the coming years as mainstream lenders struggle to evolve to adequately support a thriving small business community.
“Small businesses are increasingly turning to specialist lenders who have the skills to understand their specific needs. Having built a strong business base from our property lending expertise we have significantly broadened our proposition into other areas of specialist lending. Our relationship-based approach resonates well in specialist lending markets that are poorly served by mainstream lenders.”
A poll of almost 9,000 over 50s shows that 12% still have a mortgage. However this figure rises to 20% for ‘second-lifers’ – people over 50 who have children with a new partner following a previous marriage or long term relationship.
Furthermore ‘second lifers’ have a bigger mortgage than people their own age without a new family. On average, these people estimate that they have more than £80,000 left to pay on their mortgage, whereas those without a new family have to find around £60,000 before they own their home outright.
As well as having a bigger mortgage to pay off, second-lifers are also more likely to have non-mortgage debts, such as loans. Around 18% of those with a second family have almost £12,000 of outstanding debts on average, compared to 12% of traditional families who have to find around £10,000 before they’re back in the black.
Analysis of Saga Equity Release Advice Service data shows that some of these may be turning to the value in their property to help clear some of this debt, with around one in five people releasing equity from their home to pay off their mortgage, while one in three used the service to clear debt.
The Populus survey also shows that it has become more common to have children in later life, whether that is because people are concentrating on their career and having children later on or starting a family with a new partner. On average, one in five people in their 50s had their last child between the ages of 32 and 34 and a further 20% had a child between 35 and 40 years old.
However, 1 in 17 said they were 41 years or older when their youngest child was born, presumably leaving many people in their 60s paying for teenage children’s driving lessons and university fees. Those having children in later life would be wise to take out a life insurance policy so that their family is financially protected.
Jeff Bromage, Chief Operating Officer at Saga Personal Finance, commented:
“Having children in later life keeps people on their toes and feeling young at heart. However, the cost of raising a child is continually increasing and these days people need to keep a close eye on their finances and make sure that they are getting the best deals, whether that’s when you’re borrowing money or investing it in the stock market.”
Dispute Services Department where I deal mainly with investigating economic crimes and financial fraud and reporting as an Expert Witness on economic related issues.
I am an experienced Forensic Accountant helping companies react when there is a suspicion or evidence that either an insider or outsider is committing fraud or any misconduct against the company’s own interest. Fraud comprises mainly assets appropriation, accounting manipulation, corruption and conflict of interests.
I am deeply honoured and humbled to have been selected for the Fraud Investigator 2015 award and I would like to express my sincere appreciation to Wealth and Finance International Magazine.
Fraud and corruption
While companies might be good at developing their core business, they do not necessarily know how to react to fraud and corruption. Experience shows that when there is uncertainty, companies might make mistakes that might jeopardize future legal procedures. That is the reason why it is essential for the company to contact its legal advisors
and forensic accountants to help them keep information and evidence safe and take action right from the very beginning of the investigation. On discovering fraud, the media effect on listed and big companies is usually more devastating than the fraud itself. So it is paramount that the Executive Board of the company reacts rapidly and carefully and gathers as much information as they can so that fraud can be controlled to a full extent. This is absolutely necessary to take control on the information that might be leaked and save the company’s reputation from being ruined.
Investigating suspected fraud
The Deloitte Forensic Department is an integrated team of economic, financial and technology professionals work with state of the art IT investigating tools (Analytics, eDiscovery, etc.) to help companies in all sectors and situations in the face of regulatory concerns and actions or investigations into fraud or corporate or personal corruption.
The Deloitte Forensic team has a wealth of experience across all industries and have worked on many fraud investigations for many years right from the earliest stage of the investigation up to assisting as an expert witness in a Court to defend a report resulting from the above said investigation. Technical knowledge and wide experience are essential to find a path to a successful resolution.
Name: Oscar Hernandez
Email: [email protected]
Web Address: www.deloitte.es
Address: Plaza Pablo Ruiz Picasso 1 (Torre Picasso) 28020 Madrid (Spain)
Telephone: +34 600567487
Among the key findings was that most respondents currently have either 5-10% (33%) or 1-5% (29%) of their equity allocation in emerging markets. Only 26% of respondents allocate more than 10% of their equity to emerging markets.
Furthermore, 49% say their current allocation is about the same as 12 months ago, while 37% say it is lower.
47% of respondents have a neutral outlook on EM equities, with the remaining evenly split between a negative and positive outlook.
“The survey confirms that most investors allocate to emerging markets for growth and diversification,” said Marc Zeitoun, Chief Product and Marketing Officer at Emerging Global Advisors. “Interestingly, although a third of the respondents indicated a likelihood of increasing their emerging markets allocation in 2016, many remain underweight the global opportunity emerging markets represent.” According to the IMF and the World Bank, EM represents 40% of global gross domestic product (GDP)1 and 25% of global gross market capitalisation.
Our knowledge, skills, training, and experience can reduce the impact of fraud, or as necessary, determine the extent of fraud and provide the client with the options they may consider necessary or appropriate in resolving the matter.
As a dedicated fraud investigator, it was a great honor to accept Wealth and Finance Magazine’s award as the 2015 Leading Fraud Investigator USA, which is recognized worldwide. We bring the talent needed to accomplish the scope of our work. Our team of former IRS Criminal Investigators, Certified Public Accountants, and former FBI investigators, are fully committed to doing the best job for our clients and providing results that reflect the truth. We prepare a plan of action and proceed to access the records that allow us to quickly analyze financial matters in a variety of cases. Our cases have ranged from $500,000 to millions of dollars in revenue. Our expertise has developed over 40 years in the area of fraudulent schemes (Ponzi schemes, vendor fraud, and sophisticated theft schemes) that once the money is traced, the extent of the scheme comes into focus.
The investigations include securities in the form of foreign currency exchange, oil and gas limited partnerships, and real estate deeds of trust and promissory notes.
At Sage Investigations, our team has a clear mission in mind. Our investigations firm is:
• Dedicated to serving our clients nationally, to help them navigate the difficulties of dealing with the IRS, and other complex (forensic) financial fraud investigations both civil and criminal;
• Precise in our focus, narrowing in on our primary strengths of following the money, we steer our knowledge, skills, and experience to financial issues;
• Committed to helping our clients propel their case forward by assisting in the review, acquisition, and organization of financial records, interviewing witnesses, evaluating the elements of their case, and helping to create winning strategies;
• Consistently integrating technology to the advantage of our client with the use of advanced proprietary financial investigative technology to analyze complex financial data quickly, easily, and efficiently, saving our clients’ time and money.
Sage Investigation’s Values are Second to None
Sage handles all cases with altruism, professionalism, honesty, integrity, passion, and respect. When you hire Sage, you hire a team of professionals with skill, knowledge, and experience that ensures you have effective solutions. We are innovative with our “DIO” cutting edge technology, and perform every investigation in an orderly and organized manner to develop a clear investigative roadmap and deliver a qualityand accountability.
Our experienced team of investigators understands that confidentiality and discretion are essential to your businesses’ investigation. Businesses must ensure matters are properly handled to avoid impacting someone unjustly by making an accusation that is unfounded or inaccurate. In addition, most business entities do not want to be exposed to negative publicity so losses that are found must be handled to protect the name of the company. Generally, all of these actions are done in concert with the corporate counsel.
We provide support for businesses suspecting fraud by creating an action plan, conducting an investigation, interviewing witnesses and reviewing records, offering surveillance services, following the money trail and determining
weaknesses in internal controls. This agreed upon plan and subsequent services allows the business leader to know what took place so that they can make informed decisions and implement better internal controls to prevent the reoccurrence of fraud within their business environment.
Minimizing Damaging Allegations
Generally, when fraud is found in a business, the fraud has existed for a long period (months or years) and like an iceberg, we need to look below the surface to determine the extent of the fraud and if there is collusion in the organization. Understanding the flow of money through records, we can quickly identify the pattern and extent of the fraud. Once the fraud has been identified, the perpetrators can be prosecuted or sued civilly and the lost assets can potentially be recovered.
We also offer business valuation services for litigation and tax purposes to allow our client to better understand the loss incurred by the misappropriation or theft of funds. We provide expertise for the client in the handling of the income tax consequences of a theft or fraud and as necessary, the filing or amending of income tax returns. Our staff is prepared to testify as an expert witness to either the misappropriation or theft and to the extent of damages caused by the misappropriation or theft.
Company: Sage Investigations, LLC
Name: Edmond J. Martin
Email: [email protected]
Web Address: www.sageinvestigations.com
Address: 4103 Westbank Drive Austin, TX 78746
To achieve India’s target of meeting its Intended Nationally Determined Contributions (INDCs), YES BANK aims to mobilize USD 5 billion from 2015 to 2020 for climate action through lending, investing and raising capital towards mitigation, adaptation and resilience.
Mr. Rana Kapoor, Managing Director & CEO, YES BANK, while taking this commitment highlighted: “COP21 is demonstrating the potential to strengthen partnerships amongst governments and business, establishing new pathways to achieve business and financial innovations to address climate change. This was triggered by businesses fulfilling their commitments made in September 2014 at the UN Climate Summit. YES BANK had committed to target funding 5000 MW clean energy annually which it has overachieved. Proactive corporate intervention is critical to achieving the climate goals and financial institutions have a larger role in driving climate action. YES BANK is fully committed to play the role of a catalyst and would work towards unlocking innovative financial mechanisms towards achieving India’s ambitious target of combating climate change in the near and long term.”
Through these commitments YES BANK pledges to strengthen overall environment sustainability. The two weeks COP21 Climate Summit, attended by over 150 Heads of States and Governments and more than 40,000 delegates will aim to limit the rise in global temperatures to less than 2 degree Celsius through a common agreement.
India’s fifth largest private sector Bank with a pan India presence across all 29 states and 7 Union Territories of India, headquartered in the Lower Parel Innovation District (LPID) of Mumbai, is the outcome of the professional & entrepreneurial commitment of its Founder Rana Kapoor and Top Management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the future businesses of India. YES BANK is evolving as the Professionals’ Bank of India with the mission of “Building the Finest Quality Large Bank of the World in India” by 2020.
Abundance, one of the UK’s leading P2P investment providers, has just made its latest cash payment – of £312,000 – to 1,700 investors in 6 of the 15 renewable energy projects funded through the platform to date. This latest cash payment, which happens just before Christmas each year, takes the total Abundance has paid out to investors to over £1.2mn, on a total invested so far of more than £14mn.
These numbers reflect the very strong performance of the project’s funded by Abundance investors since the platform launched three years ago, with all projects solid and a number providing higher returns than planned for investors.
These payments also highlight one of the key and distinct advantages to investing through Abundance: from outset, twice a year throughout the term of your investment, investors receive a cash payment made up of a return of a portion of their original capital, and an additional amount as their investment return. On the projects offered to date, these returns are equivalent to a rate of return of between 6% and 9% IRR, depending on the project.
Therefore, although the typical term of an Abundance investment to ,date has been 20 years, investors enjoy returns early on and throughout the term. By the end of the term, all of their capital will have been returned along with their share of the profits made by the project as the years have rolled on. Added to this, Abundance investors wishing to cash-in early can do so by selling on their investments to others (made possible because they are tradable Debentures) free of charge via the Abundance website.
Bruce Davis, cofounder and joint MD of Abundance said, “The fact that capital is repaid along with investment returns throughout the term of the Debenture is a big attraction to our investors. These half yearly cash payments can either top-up the investor’s income at the time or be re-invested, which produces surprisingly bigger returns given the compounding effect.”
In addition to the cash payouts of more than £1.2mn, Abundance has also confirmed today that the renewable energy projects its investors have funded have so far produced an impressive 9.5 million kWh of electricity. That is more than enough to meet the electricity needs of every one of Abundance’s more than 2,000 investor’s homes over the last year.
Davis continued, “For many of our investors, the renewable energy their money is helping to produce is another important part of the return they are seeking. As each week millions more is withdrawn from investment in fossil fuels across the UK and beyond, our investors enjoy knowing their money is making a positive difference for the future – for them and their children. The fact that our investors enjoy such good returns AND see their money have a positive impact on the world is why we call our approach ‘Win Win’ investing.”
A majority of business leaders say that a long term agreement at the UN climate summit (COP21) in Paris is critical to supporting private sector investment in low carbon solutions, according to a global study by the United Nations Global Compact and Accenture. The report also reveals that executives see action on climate change as an opportunity for growth and innovation that will be essential to securing competitive advantage in their industries.
The UN Global Compact-Accenture CEO Study report, Special Edition: A Call to Climate Action, is based on a survey of 750 business leaders from UN Global Compact participant companies. The research, undertaken by Accenture Strategy, reveals that 70 percent of executives representing companies with annual revenues of more than $1bn see climate change presenting opportunities for growth and innovation for their company within the next five years. Sixty-seven percent already see a clear business case for action on climate change.
In the broader sample of business leaders across 121 countries, more than half (54%) of all respondents say that climate change will create opportunities for their company within the next five years. Forty eight percent believe that there is already a clear business case for action.
“The international community has a unique opportunity in Paris to advance action on climate change through a bold, ambitious and universal agreement,” said Lise Kingo, Executive Director of the United Nations Global Compact. “Our research clearly shows that business leaders are committed to leading the way, and we believe that business can play a central role in galvanizing momentum to meet the first test of our collective ability to deliver collaborative action on the Sustainable Development Goals.”
Priority policy actions
Business leaders are clear that government action is critical to supporting further progress. Seventy four percent of executives at companies with more than US$1 billion in annual revenues, and 61 percent of all respondents, see a long-term agreement in Paris as critical to unlocking private-sector investment in climate solutions.
The concern about policy action comes as two thirds (66%) of business leaders say that the private sector is not doing enough to tackle climate change. Ninety-one percent believe that action is an urgent priority for business, but just one-third (34%) see progress on track to restrict global warming to less than the 2°C limit.
The study identified five key policy measures that can unlock further private sector investment in climate solutions:
1. Legislative and fiscal mechanisms to increase investment in climate solutions;
2. Financial instruments to stimulate R&D and innovation in low-carbon solutions;
3. Performance standards to reduce greenhouse gas emissions and enhance climate resilience;
4. Global, robust and predictable carbon pricing mechanisms;
5. The removal or phasing out of fossil fuel subsidies.
To explore preferred policies to support private sector action, the study surveyed 75 CEOs of corporate signatories to Caring for Climate, the initiative to advance the role of business in addressing climate change launched in 2007 by the UN Global Compact, UN Environment Programme and the secretariat of the UN Framework Convention on Climate Change. Three-quarters of these CEOs believe that carbon pricing is an essential tool in accelerating action on climate change. Eighty-two percent say that business needs a clear roadmap and timeline from governments on policies related to future carbon pricing mechanisms. Eighty-four percent believe that carbon markets, enabled by a robust carbon price, can drive low-carbon innovation and investments in clean energy and efficiency.
Reflecting on the road ahead and the ability of their companies to plan effectively for the future, 38 percent call for more stringent and consistent performance standards that can reduce emissions and enhance climate resilience; and 31 percent see the removal or phasing out of fossil fuel subsidies as key to further progress.
“For perhaps the first time, we are beginning to see a united front of business leaders and policymakers setting their course toward a bold deal that can begin to close the gap between ambition and execution on climate,” said Peter Lacy, managing director, Accenture Strategy. “It is clear from our research that business leaders increasingly see climate change through the lens of fundamental disruption in their industries, and that leading companies are approaching climate change as an opportunity for growth, innovation and competitive advantage.”
Actions for businesses
The study also identifies five key leadership behaviors that will be essential for companies to adopt in their efforts to play a leading role in addressing the climate challenge:
1. Providing proactive, constructive input for governments to create effective climate policies;
2. Collaborating with industry peers to foster leadership, innovation and scaling of climate solutions;
3. Investing in low-carbon technologies and solutions to drive energy efficiency, grow the supply of renewable energy, leverage low-carbon innovations and build climate resilience;
4. Taking concrete measures to increase climate resilience in operations and communities;
5. Setting emissions reductions targets in line with science and the 2°C limit.
The report includes open letters to business leaders and policy makers, written by the CEOs of some of the leading proponents and practitioners of climate change action.
However, the rise of ‘impact investing’ has gained significant momentum in recent years spurred on by an increase in investment managers with dedicated sustainable portfolios. Viable options are now available for all investors, regardless of affluence. Damien Lardoux, Portfolio Manager of five risk-adjusted impact investing model portfolios for EQ Investors (EQ), takes a closer look at this growing global phenomenon.
What is impact investing?
We all know that there are huge challenges facing the world; climate change, natural resource shortages and aging populations to name just a few. Investment is urgently needed to develop, scale up and market solutions that address these pressing global challenges.
Investing in companies that create social, environmental and economic value is a trend that has been increasing worldwide. This investment approach is commonly called impact investing and last year, JPMorgan estimated that the market was worth $60bn globally – and growing.
Socially responsible investing is not a recent phenomenon. Early initiatives were based on the exclusion of controversial sectors such as tobacco or armaments, rather than on investing in businesses which have the influence to do good. That’s what impact investing is seeking to achieve and it has begun to take off.
The Global Impact Investing Network (GIIN) is an organisation dedicated to increasing the scale and effectiveness of impact investing. Currently there are more than 340 investment products listed in the GIIN ImpactBase database. Each investment opportunity has to quantify its social and/or environmental performance in addition to the anticipated financial returns. There are several funds available that do not meet this criterion, but will still allow investors to potentially receive a financial return whilst also investing to have a positive impact on society and/or the environment.
Investments are evaluated using the following processes:
• Positive screening – aims to seek out and include companies or industries that are actively involved in creating/generating solutions to social and environmental issues. Examples include:
o Clean fuels
o Renewable energy
o Sustainable agriculture
• Negative screening – aims to exclude harmful companies or industries, thereby avoiding certain social or environmental issues such as gambling or resource depletion. Examples include:
o Animal testing
o Ozone depleting chemicals
Analysis also takes into account environmental social and governance (ESG) matters relevant to a company’s strategy and operations.
Challenges associated with impact investing
The rapid growth of impact investing has been countered by concerns about simultaneously achieving social impact and market-rate returns. A recent report published by Cambridge Associates found that impact investing can capitalise on long-term social or environmental trends to compete with, and at times outperform, traditional asset class strategies.
Socially responsible investing can actually be traced back several centuries. However, with sustainability firmly on the map for an increasing number of global companies, the opportunity of impact investing is now receiving well-deserved attention and scrutiny. Research studies are proliferating as the market seeks to understand the phenomenon, strengthening the market building process currently underway and further demonstrating the business case for investors.
The specialist investment managers, WHEB, have calculated that companies that fit their social investment themes (their investment ‘universe’) have a greater five year historical sales growth (to March 2015) and one year forecasted sales growth when compared to the MSCI World Index as detailed in the charts below. This shows that you can have a positive impact without compromising on the return or income received.
Is impact investing for everyone?
Impact investing can be a great way to add diversification to a standard portfolio. The positive impact approach leads to selecting companies that are generating solutions and run their business in a sustainable manner. Such companies avoid fines and other penalties; they have stronger relationships with their customers, suppliers and staff. Furthermore, they tend to operate in sectors with high growth potential.
In a survey undertaken by Tridos Bank in September 2014 it was found that 73% of investors with a net wealth of between £50,000 and £100,000 expressed an interest in social investments. In 2013 $36 billion was committed to impact Investing and this is expected to increase to $1 trillion by 2020.
Potential tax advantages of impact investing
In 2014, the UK Government became the first in the world to incentivise social investment through the personal tax system. Social Investment Tax Relief (SITR) allows individuals to deduct 30% of the sum invested from their income tax liability for the current or previous tax years. However, the investment must be held for a minimum of three years for the relief to be retained.
If investing any gains, the tax liability can be deferred until the investment is sold. The investment is also exempt from Capital Gains Tax (CGT), though income tax is still applicable on any dividends or interest payments received.
SITR-qualifying investments have been restricted by the current £290,000 limit on the amount that organisations can raise. The Government has applied to the European Union to increase the amount with a decision expected imminently.
How to become an impact investor?
Impact Investing is becoming more and more accessible to UK retail investors with close to 90 ethical and sustainable investment funds managing more than £13.5 billion of assets currently available.
At EQ Investors, as well as avoiding harmful industries and types of business our Positive Impact Portfolios continually seek to find funds which aim to make a positive contribution, alongside an attractive financial return. These are accessible online through investment platforms such as Novia with further additions due shortly. The Positive Impact Portfolios will also be available via ‘Simply EQ’, our soon to be launched simplified advice solution.
The next step
Analysis of past performance of the EQ Positive Performance Portfolios suggest that there is no correlation between impact and financial return – the adverse impact of negative screening seems to be compensated by the benefits of the positive impact investments. On that basis there is no reason to expect a positive impact approach to have an adverse reaction on performance. Impact investing is not only about selecting investments that do good, it is just as much about selecting good investments.
The average Lego set has increased in value by 12% each year since 2000, which highlights a better return than mainstream investments, such as shares or gold. Modern sets are performing even more strongly, with those released last year already selling on eBay for 36% more than their original price. Some Lego sets that once sold for less than £100 now fetch thousands on the secondary market.
Savers who invested in gold received a 9.6% annual gain over the past decade and a half, while those who went with a savings account or Isa generated 2.8% according to investment company Hargreaves Lansdown.
Many of the highest prices are for old sets based around films such as Star Wars or landmarks or brands such as the Taj Mahal in India or the Volkswagen Beetle. But data from investing website BrickPicker.com showed even sets based on everyday scenes such as police stations and town roads are soaring in value.
The largest percentage rise in price for any Lego set has been on “Cafe Corner”, a model of a hotel which went on sale in 2007. The set, which has 2,056 pieces, originally sold for £89.99 but the price has risen to £2,096 since it went out of production – a return for investors of 2,230 per cent.
Ed Maciorowski, founder of BrickPicker.com, said the top price would be fetched only if the Lego had been kept in its box, in perfect condition. Used Lego is less valuable, but can still be worth hundreds of pounds more than its original price.
“That means anyone with a set at home – large or small, it doesn’t matter – could have quite an investment on their hands if it’s in good condition, as this stuff appreciates very well in value.”
The Ultimate Collector’s Millennium Falcon is the most expensive, having gone from a retail price of £342.49 in 2007 to £2,712 today. Two slightly earlier models, the Death Star II and Imperial Star Destroyer, which were released in 2005 and 2002 respectively, also fetch more than £1,000.
Laith Khalaf, an analyst at Hargreaves Lansdown, said: “The returns from Lego look pretty awesome, but investors need to beware that the value of collectables can be vulnerable to fads. There’s absolutely no harm in buying some pieces as a hobby, and you may well make some money, but as a main building clock for your retirement I would suggest sticking to more traditional shares and bonds.”
This is the view of Duane Gilbert, head of manager research at Sygnia Asset Management, as individuals in their 20s have the advantage of time when embarking on investments.
Being in your 20’s would typically mean that you have a good 40 year investment time horizon, as you have recently graduated or a new entrant in the job market. However, many young people do not realise that this is an opportune time for financial planning and investing to be prioritised.
The problem here lies on the fact that the lifestyles of young people are being upgraded too fast especially if they are earning money for the first time. This inevitably means that they are spending too much money on a car, clothes and technology, which inevitably gets funded by debt. As a result individuals in this group find themselves without any savings and over time develop bad financial habits.
“The issue is that most individuals in their 20s are not knowledgeable about investing.” Gilbert says “It is such a shame, because how you manage your finances, especially in those first 20 years of working are very crucial,” he says.
Another problem is that there is an overreliance on advice from investment professions who sometimes make investments too complicated to understand. Young people need to take ownership of their money and start to think about long term investments. When individuals see the potential growth of investments, it might make them reconsider investing.
Before embarking on any investment, Gilbert says that individuals need to get out of consumption-led debt first, given the high-interest rate that is already being paid. Most importantly is getting out of your car debt, as “it is a consumption item and not an investment.”
Other basic starting points include creating a budget, in that way, allocations towards savings can be determined. Gilbert says it’s a good rule of thumb to have three to six months’ worth of emergency savings.
Investing in property is a good idea, as this is a long term investment. “Ideally, this is the only debt you want in your life. Rentals are a waste of money. Property is an investment and values increase over a long time.”
As with any investment, the longer you invest the better. “It’s not about beating the market. It’s about being in the market for a long time,” Gilbert stresses.
‘At a cross-roads: understanding the future likelihood of low incomes in old age’ outlines the think-tank’s requirements for a new strategy which would help ensure elderly people are not left impoverished in later life.
The International Longevity Centre UK has stated that they believe without any long term political plans for later life funding ‘recent successes in poverty reduction at older ages could be reduced to a footnote in history’.
The Westminster based, independent think-tank, uses the paper to offer the Government points which they feel are vital to a new later life funding strategy, which include: policies to secure effective funding for adult social care, support of policies which will extend working lives and innovation in the equity release market.
The report, which is the first publication by The Centre for Later Life Funding, which is a new subsidiary body of the ILC UK, also argues for the implementation of the Dilnot adult social care funding reforms, named after Andrew Dilnot, the economist who created the reforms. Dilnot proposes a series of reforms to the current state of funding for adult care,
which would increase the cost of care in England by £1.7 million and include capping lifetime individual contributions to care at £35,000 and creating a national system of assessment and eligibility.
Chief Executive of the ILC UK, Baroness Sally Greengross used her statement on the paper to project the idea that the
situation is very precarious. ‘We are at a cross roads. There has been undoubted progress in reducing pensioner poverty, particularly at older ages, but we must guard against complacency. Continuing reductions to social care
budgets could lead to ever rising levels of unmet need and thereby greater deprivation amongst the oldest old. Not all babyboomers are wealthy and the pension freedoms alongside an over reliance on housing wealth poses risks to
future retirement incomes. For tomorrow’s pensioners, there is a huge question about whether they will be able to depend on the state to provide adequate levels of support given the rising fiscal pressures of supporting an ageing
Chris Williams, CEO, of Wealth Horizon, has today issued a warning following the launch of Hargreaves Lansdown’s new advice platform for the elderly, which was debuted earlier this week.
Williams stated that although he acknowledged that customers often could not afford to take financial advice, he did not believe that advice platforms helped with this problem. ‘It is now widely accepted that there are a number of consumers who can no longer afford traditional financial advice yet opening up watered-down ‘advice’ platforms is not the solution, it is only adding to the confusion around what does and does not constitute advice.’
‘A recent paper from the FCA identified that information overload is something that needs addressing. Now is the time that consumers need clear and robust advice, overloading clients with information for them to action themselves will only serve to confuse thousands of investors. Simply providing information, no matter how good, is not a substitute for actual advice and can cause more harm than good to investors who increasingly don’t know where to turn.’
He finished by stating that ‘Investors need to be able to trust the advice industry and have the option of tailoring advice to their own needs’. However, Williams, who is the CEO of Wealth Horizon, a firm dedicated to providing financial advice, failed to offer a further solution to the issue of investors being inhibited by price from taking financial advice.
Williams’ comments come following the launch of the HL Retirement Planning Service, which charges a flat fee of £395 plus VAT, earlier this week. The platform aims to offer advice to new retirees who want advice on how to manage their finances without paying the full standard fees, which are estimated to be around £1000. Hargreaves Lansdown, a British financial services and advice firm, have indicated that the service will not offer specific financial advice, but rather will give customers more information on what services are available to them.
The boss of one of the world’s largest independent financial advisory organisations warned in a new report that the geopolitical and economic fallouts from a Greek exit from the Euro would be catastrophic.
Nigel Green, CEO of deVere Group, stated that ‘History will teach us that Greece, and therefore the rest of the Eurozone, would have been better off had it not joined the Euro. Hindsight is a wonderful thing. But there’s no point looking back. A solution must be found. It is time to get creative because the geopolitical and economic consequences of not finding a solution will be the real Greek tragedy.’
He continued: ‘A Grexit would mean that joining the Euro doesn’t necessarily have to be permanent and for governments and European authorities to suggest otherwise would not be credible. This would set an alarming and wholly destabilising precedent across the Eurozone in the longer-term. China and/or Russia could also move to ally with Greece, offering them their considerable influence and resources. This would inevitably cause concern amongst
many western governments and it would highlight further the flaws within the concept of a European Union.’
Mr Green also expressed his fears that an exit by Greece from the Euro would lead to an ‘effective halt’ of any economic progress made by other countries in the Euro and this could lead to ‘untried and untested tools’ to reinvigorate economic growth being deployed by ever desperate governments.
The comments were made in light of fraught negotiations between Greece and its creditors, the chief of whom are the
European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). A meeting on Wednesday 24th June was ended abruptly after decisions were not reached and the parties failed to communicate
effectively, with the future of Greek’s involvement in the Euro remaining precarious.
Productivity will not therefore grow significantly without greater levels of demand in the economy. We need government and firms to invest in growth to allow a fair recovery where substantial wage rises are shared by all, says the TUC.
The report shows how government spending cuts have led to lower economic growth. Weak growth in productivity since the crisis is therefore largely a reflection of how the labour market has responded to this.
When the government’s austerity programme was implemented, the economy absorbed the shock of austerity primarily through a decline in the real value of wages, rather than higher unemployment.
As a consequence of reduced wages, the employment rate was more resilient to austerity than was GDP, which has been subdued across the parliament. And as productivity is defined as GDP over employment, the result has been slower productivity growth.
If the government had made a priority of protecting and expanding demand from 2010 onwards, there would have been greater potential for employment growth, real wage growth and productivity growth.
The analysis in the report shows that if the next government invests in growth, productivity should improve with considerable benefits for the economy. But a new round of austerity and ongoing public sector pay restraint, as currently proposed by the Chancellor, should be expected to cause further weakness in productivity and further damage to the potential for sustainable pay growth.
The TUC recognises that supply-side weaknesses should be addressed to ensure the UK has economy has the innovation, skills and access to finance that are needed for long-term gains in productivity. And urgent action is also needed on fair pay to ensure that when productivity gains are realised they are fairly shared across the workforce.
But these measures will only have a real impact in the context of policies that protect and expand demand. This means that where firms are already doing well they need to invest in their staff and in future growth and that the next government urgently needs to rethink austerity economics.
TUC General Secretary Frances O’Grady said: “The so-called ‘productivity puzzle’ is a red herring and we need to directly confront the real cause of economic failure over the past five years. Austerity has done tremendous damage to the economy, with workers absorbing the shock through the longest decline in living standards since Queen Victoria was on the throne.
“Reforms on skills, banking and corporate governance are of course important to long-term progress on UK productivity. But to reverse the productivity shortfall we have suffered since the recession, we must be careful not to put the cart before the horse – it is immediate investment and stronger demand that is needed for both wages and productivity to recover strongly.
“The most important lesson for the next parliament is to avoid more of the self-harming austerity that has done so much damage to workers’ wages and Britain’s productivity in the last five years. The government must use the low cost of borrowing to make demand-boosting investments in infrastructure and decent public services.”
The week-long event will encourage people to think about their money in new ways and take steps to improve their overall financial fitness.
Throughout this week, unbiased.co.uk will be hosting live online Q&A sessions between consumers and financial advisers. Participants will be able to raise questions on issues such as pensions, mortgages and other financial matters and discuss them with experts free of charge. Anyone taking part can also follow other conversations, share tips and experience the benefit of professional financial expertise perhaps for the first time.
Research from unbiased.co.uk and MetLife’s Value of Advice report found that many consumers are prioritising non-vital areas of their finances, and that over half of adults in the UK (58 per cent) have never sought any kind of financial advice.*
On average, advisers say that people with investable assets of around £32,000 see the most value from professional advice, but 29 per cent say that advice can still provide a real benefit to those with investable assets of £10,000 or less**.
Karen Barrett, Chief Executive of unbiased.co.uk, comments: ‘The recent pension changes have encouraged people to think about their retirement income, but with MoneyFit Week we want to go further and raise awareness of how much more can be done to boost your financial fitness. Small changes to the way you manage your money can have a tangible positive impact on your lifestyle over time, so it’s well worth taking advantage of the free information and opportunities on offer this week.
‘Of course, these sessions are not intended to be a substitute for tailored professional advice, which is absolutely something that is worth paying for. However, our research shows that people often don’t even consider advice as an option. We hope that MoneyFit Week will be a valuable introduction that gives people a chance to see what value advisers can provide.’
Simon Massey, Wealth Management Director at MetLife, comments: ‘Pension freedom has opened up a wealth of opportunities for savers but the risk is the opportunity to spend their funds could be just too tempting. Advice will be crucial in helping people to avoid running out of money in retirement.
‘Flexibility needs to be balanced against certainty over income in retirement. MoneyFit Week can help savers to understand the benefits of planning long-term and ensuring a guaranteed retirement income for life.’
Happy Tax was born out of frustration with unreliable, under-qualified tax preparers with no licensing or certification and as little as five days tax training. Happy Tax is designed to bridge the gap between the high quality, pampered and convenient customer service that consumers want, and accurate, reliable and professional tax returns prepared by CPAs with a minimum of 5 years of training and experience.
Using Happy Tax’s patent-pending technology and processes, franchisees offering the service will give customers a fresh new experience with none of the hassles traditionally associated with preparing their taxes, meeting them anytime, anywhere including house calls. The franchisees then securely transmit the client’s tax data to their team of highly qualified U.S. based CPAs to professionally prepare the tax returns.
Happy Tax’s services come with an affordable and transparent price. Customers are offered 3 payment options of $200, $300 and $500 —depending on the complexity of the return — without any hidden charges.
“With Happy Tax we wanted to rid the market of cowboy tax ‘professionals’ who are costing hard-working Americans millions of dollars each year in IRS penalties and interest. Our franchisees are left to focus on what they do best, providing amazing customer service, while our experienced CPAs prepare and sign off on the tax returns. I’m so excited and happy to introduce this service to the world. We’ve already been called the Uber of tax preparation but I feel we are much more than that. With a franchise program that will enable average Americans to earn more money and a customer experience that truly revolutionizes the way taxes are done, it’s time we can finally say: Smile, It’s Time to File! ®” said Mario Costanz, CEO and Founder of Happy Tax.
Tax fraud and improper payments by the IRS have topped more than $20 billion each year. To compound this figure, tax preparer suitability in the U.S. is alarmingly low with only 41% of those preparing taxes “professionally” having any licensed credentials whatsoever. “With Happy Tax, the customer experience will be transformed from the typical unpleasant experience of tax preparation to now becoming an enjoyable and happy experience,” said Kermit Uregar, COO and Founder of Happy Tax.
Additionally, 40% of Americans still choose to prepare their own tax return even though they don’t have any previous experience. “With the tax code coming in at 73,000 pages (equivalent to 4 million words or War and Peace 8 times over), preparing their return themselves risks thousands of dollars in penalties and interest or lost refunds due to missed deductions, credits and errors,” said Joseph Sparacio, Vice President of Company Stores and Founder of Happy Tax.
It’s that time of year again. The Canada Revenue Agency (CRA) is expecting you to mail in your annual income by April 30, 2015. From there, they will assess your tax return which will then qualify you as income tax receivable, or income tax payable. Being up to date on your taxes is something Money Mentors wants to educate Albertans on. Its value and importance is something we should all take the necessary time to become literate in.
The CRA website now hosts many new updates, including ways to better your return. Some do not begin until 2015 season, but for now, anyone filing a 2014 tax return should ensure they know everything there is to know. Here are some ways to increase your chances of a return:
RRSP’s and TFSA’s
There are more than a few reasons to invest in these two savings funds. Did you know the amount of money invested into these accounts yearly can end up giving you a nice tax break? RRSP’s will reduce your tax payable amount and as for TFSA’s, you will not have to pay taxes on earnings within this account.
Along with submitting all T4 slips, charitable donations are another great way to save money when filing your taxes. These donations will be more beneficial if the amount donated is over $200.00. A way to see an even larger return on investment would be to compile receipts, (they can be saved up to 5 years) and returning all at the same time. Be sure these donations are going to legitimate establishments and that you have a proper receipt.
Medical Expenses (Includes more than you think!)
Although it may not save huge bucks, every penny counts on a tax return. Many people don’t realize that depending on allergies, you can even save money on food costs. For instance, someone who is gluten free and has been prescribed to avoid certain foods could have a tax break. The government has a list of all medical expenses that are eligible. Check out the list here.
You might not enjoy taking public transit every day, but I bet you’ll love that you can keep these receipts and get some return on your investment. Keep in mind that the transit passes must be for unlimited travel use, which means 10-day passes or single rides do not count.
Child’s Art/Fitness Amount
How many of us have kids that are involved on a sports team or are taking guitar lessons? We often pay an arm and a leg, which is why it is important to keep the receipts for these extra-curricular activities on hand. This fitness and art tax credit is for any child under the age of 16 and allows for up to a claim of $1000.00 per year.
Do you work full time and send your children to a daycare? This is one more area that the government wants to consider during tax season. As an eligible expense, submitting these receipts can save you money on your 2014 taxes. Added bonus: these claims will increase by $1000 for each age group starting on your 2015 taxes.
If you are currently looking for a new job, there can be tax breaks in this area of your life as well. Although a little more frugal, keep your receipt costs for travel to interviews, printing of resumes, and any other costs needed. Three things to note: the new career you are looking for must be in the same field as your current employment, you cannot do this after a substantial break between jobs, and new grads do not opt for this.
As a new homebuyer, you can save a large amount of money on your taxes. For first time buyers, there will be a nonrefundable tax credit, usually of $5,000, that may be claimed in the tax year of the purchase.
The findings from the ICAEW/Grant Thornton Business Confidence Monitor come as a new guide from ICAEW and UK Export Finance aims to help businesses compete in the global race with advice on export finance.
Exports currently account for a third of UK GDP with primary markets being the US, Germany, Netherlands and France. The rebalancing of the economy has yet to happen and the UK still exports more to the Netherlands than to China, India and Russia combined.*
Exporting companies are more productive than non-exporters and SMEs are particularly ambitious about the next twelve months.
Clive Lewis, ICAEW Head of Enterprise, said: ‘For many new or prospective exporters, the cost of researching and exploring overseas markets is burdensome. SMEs may not recoup the benefits of such investments in the short term and will therefore be deterred from trading internationally. This guide will help them but we also want to see an export incentive from Government in the future.’
Over two-thirds of SMEs who do export (64%) did experience significant barriers when entering new overseas markets. Finance is a particular issue and Competing in the Global Race: A Guide to Trade Finance and Credit Insurance explains a number of subjects including letters of credit, project finance and most importantly making sure businesses get paid.
Clive Lewis added: ‘Exporting companies are more productive than non-exporters, with 85% of current exporters saying that exporting led to a ‘level of growth not otherwise possible’. Such businesses achieve stronger growth and are more profitable. With tools such as this guide we hope that more will join companies of all sizes will join this elite group.’
Angela Potter, Head of Product & Digital, Commercial and Private Bank from RBS, added: ‘International trade offers exciting opportunities for UK businesses, but it can also bring challenges. This is where banks can play a crucial role. A UK-focused bank with an extensive international footprint will be able to provide a complete service for payment and cash needs. This will ensure that exporting goes smoothly and SMEs especially to grow.’
A copy of the guide can be found at icaew.com
There were 75 IPO transactions on London Stock Exchange’s (LSE) AIM last year worth a total of £2.5 billion, an increase in value of 134 per cent on 2013.
IPOs on AIM provide an opportunity for SMEs to seek growth funding, while the increased activity will also encourage business owners looking for an alternative to a sale.
Wholesale and Retail was the most active sector, contributing 41 per cent to the overall value of transactions, followed by Manufacturing (34 per cent) and the Information and Communication sector (24 per cent). Finance and Insurance services was the third most active sector on London’s junior market in 2013, contributing 30 per cent of the value, but only ranked in fifth place last year, accounting for 12 per cent of the total transaction value.
The volume and value of IPOs on the LSE’s main market also increased last year. The number of IPOs went up by 43 per cent from 40 to 57, while the total value rose to £12 billion, up 12 per cent on the £10.6 billion recorded in 2013. This was the highest level of volume and value recorded on London’s main market since 2007. Large IPOs worth more than £100 million dominated the main market, and private equity investors were involved in 20 of the large transactions, accounting for £7 billion of the total.
Financial and Insurance services was the most active sector on the London Stock Exchange last year, raising £5.5 billion through 39 deals, followed by the Wholesale and Retail sector, which completed 32 transactions worth £5.5 billion combined, while the Information and Communication sector completed 27 transactions worth £3.3 billion.
Wendy Driver, Business Development Manager at Experian UK&I, said: “The growing number of IPOs on the AIM suggests smaller businesses are increasingly considering listing as an option to secure the funding they need to take their company to the next level. Business owners may be curious about what their company could be floated for and should look back at IPOs of companies similar in size and sector in previous years to decide whether it’s an option they wish to explore further.”
When asked what risks they most associated with cloud computing, the FSB members questioned listed the following top five concerns: data theft or loss (61%), reliable access to online services (55%), concerns over who would have access to the data (53%), liability issues (41%) and over dependence on cloud computing services (33%).
The results build on previous work by the FSB into the benefits of using technology for businesses, and the barriers to take-up of productivity-enhancing new ways of working.These barriers must be addressed to allow more firms to reap the benefits of cloud computing. A 2012 European Commission report found that as a result of the adoption of cloud computing, 80 per cent of organisations could potentially reduce their costs by around 10 – 20 per cent. There are also significant potential green benefits as well, with one study indicating that the energy footprint of small firms can be reduced by up to 90 per cent by moving tasks online.
Commenting on the findings John Allan, FSB National Chairman, said:
“Many small businesses are recognising the advantages of cloud computing services, but there remains a great deal of concern that sensitive data may not be secure or the service not reliable. Businesses don’t want to transition to cloud based systems without knowing who will be liable if something goes wrong. As our previous research has shown, there are significant gains to be made from using this technology so it is imperative more is done to address firm’s understandable reservations and remove barriers to take-up.”
Out of all the businesses questioned, just under half (45%) said they were already greatly or fairly reliant on cloud computing services. The most common services currently used by the small businesses who use cloud computing included: storing files online (74%), web based email and calendars (67%), file sharing services (64%), web based office software (38%) and accounting and invoicing services (37%).
When asked what changes would help persuade small firms to use cloud computing services, half of all respondents wanted plain English terms and conditions (48%) and nearly as many wanted simpler and more transparent pricing (46%).
In conclusion John Allan said:
“The fact that so many businesses are already heavily reliant on web based services raises some pointed questions over the resilience of the wider UK economy if we can’t find answers to questions like global data security and legal jurisdiction over data held in other countries.
“Clearly there is more for the industry and regulators to do to reassure businesses that their data is safe and secure. But equally apparent is the message from small businesses that pricing and terms and conditions need to be much more transparent.”
The landmark decision taken today by the EIB Board of Governors will allow for the pre-financing of SME projects linked to the Investment Plan for Europe before the summer.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness and steering the Investment Plan´s implementation, participated in the EIB Board of Governors meeting and welcomed the decision: “This is a great day for European small businesses. This news from the EIB means that by the summer, cash-starved SMEs and innovative mid-caps across Europe could be benefitting from an injection of badly-needed capital. We have said that we want to help get Europe investing again – and today we are doing exactly that.”
The money can be made available to SMEs by the European Investment Fund (EIF), part of the EIB-Group, which will cover the risk of transactions with intermediaries providing additional finance to SMEs and small mid-caps until the main EFSI is in place. The EFSI – at the heart of the Investment Plan – should be up and running by September 2015 at the latest. Infrastructure projects may also benefit from similar pre-financing arrangements before EFSI is fully set up, but later than SMEs.
Key measures in implementing the Investment Plan are as follows:
-With strong political will from all EU institutions, the aim is to adopt the draft EFSI regulation by July 2015 – at the latest so that the EFSI can be established no later than September 2015 and funds can start flowing into, for example, infrastructure investments in transport, digital, telecoms as well as hospitals and schools by the autumn.
Work on the other parts of the Investment Plan, including the establishment of a transparent project pipeline of European investment opportunities and a European Investment Advisory Hub (EIAH), is being fast-tracked to ensure that these are ready by the time the EFSI is active.
-The Commission’s 2015 Work Programme has set an ambitious agenda to remove regulatory barriers to investment and to strengthen the Single Market. As a first important step in the context of removing barriers and increasing access to finance, notably for SMEs, the Commission plans to adopt shortly a Green Paper on the Capital Markets Union, launching a public consultation of all stakeholders.
The EIB Board of Governors is composed of Ministers designated by each of the 28 Member States, usually Ministers of Finance.
Due to the economic and financial crisis, the level of investment in the EU has dropped by about 15% since its peak in 2007. Financial liquidity exists in the corporate sector. However, uncertainty as regards the economic outlook and high public and private debt in parts of the EU hold back investments.
That’s why President Juncker made the Investment Plan for Europe his first priority, presenting it after just over three weeks in office on 26 November 2014. The Plan will mobilise at least €315 billion in private and public investment across the European Union. This will especially support strategic investments, such as in broadband and energy networks, as well as smaller companies with fewer than 3000 employees.
CBI Deputy Director-General Katja Hall said:
“Addressing productivity is right. It holds the key to raising living standards and making growth work for everyone. Low productivity has been one of the main reasons for low pay growth in recent years.
“Raising skills and improving management boost productivity and enable individuals to move into higher paid work. But productivity is different in every sector and the approach to each needs to be tailored if it is to work.
“We need to learn from the industrial strategy but be clear that it won’t be right for every sector. For example, manufacturing is focussed on exports and international competitiveness in a way that retail isn’t.
“Boosting productivity is a job for business not for government but government can help us better understand the causes of low productivity. And government also needs to listen to and work with business to address barriers to improving productivity, such as the planning system holding back investment.”
Job creation continues apace and wage growth is finally picking up. Coupled with low inflation, this will give a boost to real household incomes, going some way to improving living standards. Lower energy prices are also feeding through to lower operating costs for companies, leaving more space for investment.
The brighter picture for growth this year of 2.7% (from 2.5% expected in November) also reflects the likelihood that the MPC won’t raise interest rates until early next year, helping to support growth of 2.6% in 2016.
But political volatility, both domestic and foreign, continues as the UK general election approaches, Greece’s fiscal position remains in the spotlight and instability continues in Ukraine. As a result, exporters are finding it harder to secure orders and net trade is unlikely to provide much of a boost to growth over the next two years.
Katja Hall, CBI Deputy Director-General, said:
“UK growth continues to outshine its counterparts in Europe and progress is ‘steady as she goes’.
“While lower oil prices are keeping costs down for businesses and consumers, the North Sea oil companies are suffering, harming jobs and investment in the industry.
“Now is not the time for complacency, but falling unemployment coupled with improving wage growth and rock bottom inflation should mean that people see more money in their pockets.
“But businesses are looking on anxiously as insecurity continues to troll the Eurozone and instability remains elsewhere.”
GDP growth is expected to remain steady throughout this year, rising by 0.7% each quarter. GDP is then forecast to grow strongly in 2016, by 2.6% over the year as a whole. This translates into growth of 0.6% a quarter.
The price of oil is expected to remain below $65 per barrel by the end of 2016. On the back of lower oil prices, consumer price inflation is expected to stay below 1% throughout most of 2015.
While the risk of deflation is growing, the CBI does not see a sustained period of widespread falling prices as likely, with the downward pressure from the oil price effect unwinding over time.
Alongside household spending, business investment is expected to continue providing sturdy support to GDP growth, rising by 5.8% this year and by 6.5% in 2016 as the UK’s expansion becomes further embedded.
In contrast, the UK’s export performance has remained disappointing. The CBI expects some improvement ahead, with growth increasing from 2.9% this year to 5.5% in 2016. But with import growth set to rise firmly due to strong domestic demand, the net trade contribution to GDP growth will be small at best.
A weak export backdrop is likely to weigh on the outlook for manufacturing output. While growth is expected to improve slowly, from 1.5% in Q1 2015 to 1.8% by the end of 2016, it will remain underwhelming.
More positively, the UK unemployment rate is expected to continue its downward trend in 2015 and into next year, levelling off at 5.2%, while wage growth is expected to reach 3.0% by Q4 2016.
Rain Newton-Smith, CBI Director for Economics, said:
“The UK is in good shape compared with other economies, with both investment and household spending underpinning economic growth. But there are still risks to exports from a shaky Eurozone.
“With finance ministers from across the bloc meeting today, it is vital that they reach a new deal on the bailout programme for Greece to give businesses the certainty they crave around prospects in the Eurozone.
“Sterling’s recent high against the Euro also adds to the challenges for manufacturing securing further export orders.”
The research, independently commissioned by Barclays’ Technology, Media and Telecoms team revealed that on average, businesses surveyed predicted that they will grow by 11% over the course of the year – over four times faster than the UK’s GDP forecast for 2015 (2.6%). The research showed that over half (58%) are expecting their business to grow by up to 10%. Furthermore, 18% are expecting between 10% and 20%, while 9% predicted significant growth of over 20%.
Respondents were even more positive about the outlook for 2016, with the average firm expecting 15% growth on 2015, with 16% of firms predicting growth to top 20%.
Sean Duffy, Managing Director and Head of Barclays’ Technology, Media and Telecoms team, said: “These remarkable growth predictions reveal the optimism and drive of the UK’s world-leading tech sector. The fact that many firms are expecting further growth in 2016 shows that this trend isn’t transient and the UK is a real launch pad for innovative tech businesses. Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive Government policies and access to finance.”
The research quizzed firms which have seen growth in the last year of up to 10%, 10-20% and over 20%. The findings revealed that the fastest growing firms with the lowest turnover of those surveyed (£3-5m) have their own distinct characteristics, which differed to businesses with more modest growth.
The study, which interviewed over 250 Chief Information Officers (CIOs) from large organisations, found that 90% of respondents feel that data is transforming the way they do business, with some 92% suggesting that a Chief Data Officer (CDO) is best placed to define data strategy and be the guardian of data quality within an organisation.
61% wanted to see a CDO hired within the next 12 months and 47% cited the sheer volume of data as a key barrier to success, preventing them from using these data assets further, to improve their interactions with audiences.
Respondents also outlined the growing need for closer collaboration between Marketing and IT teams within the business. This is likely to also change the make-up of senior leadership teams in the future, with the CDO tipped to become a senior board level role by 2020.
The study suggests that 2015 is set to be the year where this new ‘data force’ takes the lead in overseeing the use of data within organisations. Alongside the Chief Information Officer (CIO) as the point-person for guiding the use of data within the business, the relatively new, senior role of the Chief Data Officer (CDO) will be expected to navigate an increasingly complex landscape, to deliver the best results for both brands and customers.
Boris Huard, Managing Director of Experian Data Quality said:
“The ‘data force’ will have a key role at the heart of businesses. We can add Chief Digital Officer, alongside CDOs and Director of Insights, as emerging new roles which have come about in response to the pressure and opportunity presented by big data.
“What is particularly encouraging is that companies are increasingly switching on to the value of data. They are realising that more emphasis needs to be placed on data management and strategy to ensure that they are able to satisfy burgeoning customer expectations, both now and in the future.
“This new breed of data professionals will have wide-ranging impact on the way that brands interact with customers. Regardless of what industry you are operating in, your marketers are only ever as good as the data that underpins their plans, ensuring data quality is one important element of getting your interactions with the consumer right.”
NIESR Director Jonathan Portes provides a general overview, and five articles, each by a recognised expert in the topic, focus on specific aspects of the government’s record:
-Simon Wren-Lewis, Professor of Economics at the University of Oxford, examines macroeconomic policy and performance
-Nicholas Crafts, Professor of Economics at the University of Warwick, looks at supply-side policies and the impact on growth
-Vicky Pryce, Chief Economic Advisor at the Centre of Economics and Business Research, on the productivity puzzle
Rebecca Allen, Reader in the Economics of Education at the UCL Institute for Education, on education policy
-Declan Gaffney, lartsocial.org, on welfare reform
The most prominent and controversial economic policy debate during this government has focused on the Coalition’s approach to fiscal policy, and Simon Wren-Lewis ([email protected]) has examined the macroeconomic record.
He draws a clear distinction between structural change and the conduct of macroeconomic policy. The former has clearly been a success, and he suggests possible further extensions of the OBR’s role; the latter largely a failure in economic and political terms, albeit mitigated by a partial change of course in 2012. Wren-Lewis argues that accelerated fiscal consolidation in 2010 was an unnecessary risk which has caused significant damage. He concludes:
“The delay in the UK recovery over the first part of the coalition government’s term is at least in part a result of the government’s fiscal decisions. I have argued that these decisions were a mistake… It will be many years before we can settle on a figure for the total cost of that mistake, but measured against the scale of how much governments can influence the welfare of its citizens in peace time, it is likely to be a large cost.”
Nick Crafts ([email protected]) attempts to explain the UK’s poor growth performance from a supply-side perspective. He argues that policy has not deviated significantly from the pre-crisis path. Sensible policies have largely been continued and in some places extended (as with competition and innovation policies). In some areas like land-use there have been much-needed improvements – although still not matching either the rhetoric or the scale of the problem. On the downside, Crafts argues infrastructure policy remains disappointing while immigration policy has become more restrictive. Overall, he concludes,
“changes in policy under the Coalition government are unlikely to have made a big difference to growth potential. On the one hand, this means opportunities for radical reform have been ignored; on the other hand, there has been no repeat of the 1930s’ debacle.”
If there has been no major structural break, what explains the unprecedented weakness in productivity since the onset of the crisis? Vicky Pryce ([email protected]) examines the potential explanations for the UK’s ‘productivity puzzle’ and concludes that while it remains just that – a puzzle – most of the explanations point to the demand side, and in particular an increase in risk aversion with businesses reluctant to invest and workers reluctant to seek higher pay or take the risk of moving jobs. This is a result of both the international environment (in particular the Eurozone problems) and domestic policy.
While Pryce is slightly more negative than Crafts about the government’s record, they broadly agree that the appropriate policy direction requires a call for a stable framework allowing an increase in growth-enhancing capital investment, and hence in productivity and real wages.
Rebecca Allen ([email protected]) notes that while education reform was very much seen as conceived and driven by one single individual – Michael Gove – there were nevertheless two important and still unresolved contradictions at its (and, implicitly, his) heart.
The first was that between a desire to pursue a “well-evidenced and moderate approach to reforming the education system” (in large part representing an intensification of the previous government’s approach) and an attitude to teachers and the broader education system which she describes as “publicly humiliating”.
The second was between a market-oriented approach to educational improvement (with competition, choice, exit and entry) and the centralising tendencies exemplified in a desire to impose a ‘traditional’ curriculum. She concludes that while the broad direction of structural reform is likely to continue, some elements of planning (in respect of school places and the teacher workforce) will have to be reintroduced or reinvented.
Declan Gaffney ([email protected]) examines another set of reforms that were also largely driven by one Secretary of State. Although Iain Duncan Smith’s programme is often perceived as a seamless whole, Gaffney distinguishes between three strands or objectives: continuity, retrenchment and reform.
He notes continuity in lone parent and disability benefits, where the key changes were either planned by the previous government or obvious developments of the existing policy direction. This strand has yielded two very contrasting outcomes. The extension of worksearch obligations to single parents with youngest children aged five has increased employment and lowered numbers on benefits, and therefore saved money. By contrast the reassessment of incapacity benefit claimants has been an unmitigated disaster for claimants and taxpayers.
Gaffney also sees retrenchment, largely driven by Treasury requirements for expenditure reductions. While aggregate spending has not fallen, there have been significant reductions in some areas. Further cuts will be harder.
The third strand is one of reform, in particular of Universal Credit which faced and failed to meet a formidable technical challenge. Most of its objectives could have been met with much less ambitious modifications to the existing system, resulting predictably into an unnecessary debacle.
From 1 March this year, businesses with fewer than 58 employees will start having to comply with the new auto enrolment pensions legislation and by 1 June, those with fewer than 30 staff will be captured by the legislation.
In total more than 46,000 companies will have to begin providing their employees with a workplace pension this year with, while next year, 512,000 will be affected.
What is auto enrolment?
Auto enrolment is the UK’s new workplace pensions initiative. Designed to get a larger proportion of the population saving for retirement, the policy makes it a legal requirement for all employers to automatically enrol any employee who meets the below requirements into a workplace pension and makes contributions to that pension:
– is between the age of 22 and State Pension Age (65)
– earns more than £10,000 a year*.
How much will it cost?
The minimum employer contributions are 1% of each employees’ qualifying earnings, increasing to 3% over time. Employees will also contribute with a minimum of 1% of their qualifying earnings, increasing to 5% over time. See table attached.
Morten Nilsson, CEO of NOW: Pensions said: “Last year, of the 4,279 companies that signed up with us, nearly one in five completed their application either very close to their staging date or after the deadline had passed. While we’re happy to accept companies that leave it late we strongly recommend that employers make their provider selection as early as possible to avoid unnecessary stress.
“Approaching auto enrolment can feel daunting and there are a lot of things to consider, particularly for firms that have never set up a pension scheme before. But a little planning can go a long way and taking a thorough approach will certainly pay dividends.”
Top five tips
1. A little planning goes a long way
For small businesses faced with the prospect of tackling auto enrolment, planning ahead shouldn’t be underestimated. The Pensions Regulator recommends firms begin their planning 18 months in advance of their staging date but it seems their pleas are largely falling on deaf ears.
Research NOW: Pensions conducted with 450 small and medium sized companies** revealed that 44% haven’t given any thought to how they’ll go about finding a provider for auto enrolment while over a fifth intend to rely on their existing provider.
Leaving auto enrolment to the last minute will inevitably result in more limited provider choice, increased administrative pressure and unnecessary stress. The simple truth is the longer businesses allow themselves to implement the changes, the easier the process will be.
2. Don’t make any assumptions
Companies planning to rely on their existing provider for auto enrolment should speak to them early on to ensure that the scheme qualifies for auto enrolment and to confirm that they are willing to extend it to all employees on the same terms.
3. Seek help
For small firms introducing a workplace pension for the first time, it would be worth seeking guidance from an adviser who can help identify a value for money scheme that is suited to the workforce.
While selecting an appropriate scheme is imperative, payroll providers also have a very important role to play. Companies with outsourced payroll arrangements should contact their payroll provider as soon as possible to find out what auto enrolment support they offer and which pension providers they work with. By selecting a pension provider that is already integrated with their payroll provider, firms can avoid unnecessary hassle and expense. So making enquiries early on is time well spent.
4. Cleanse your data
One of the biggest stumbling blocks in the auto enrolment process is inaccurate or incomplete payroll data. Taking the time to ensure that payroll data is complete and entirely up to date, will help avoid problems during the implementation process and beyond. Where possible, companies should try and obtain e-mail addresses for all staff as issuing communications about auto enrolment via email is often cheaper and more efficient than post.
5. Give thought to contributing more than the minimum
Nearly one in five small and medium sized companies we surveyed say they plan to contribute more than the legislative minimum when they introduce auto enrolment.
More than half of those planning to pay more in believe doing so will help with the recruitment and retention of employees. This approach makes sense as high levels of staff turnover can act as a hidden drain on an employer’s profitability.
Auto enrolment is a legal obligation and at the end of January, The Pensions Regulator issued 166 businesses with fixed penalties of £400 for non-compliance.