Category: Wealth Management

will
Family OfficesWealth Management

Disputing A Will: Key Considerations

will

Disputing A Will: Key Considerations

By Monika Byrska, Partner at Thomson Snell & Passmore

As a jurisdiction England and Wales is proud of its testamentary freedom.   Anyone can make a Will and in their Will leave whatever they own to whomever they want.   Not far away from us geographically, in the Channel Island of Jersey, testators can truly freely dispose of only a third of their estate.  Two thirds of their estate will be distributed to their closest family, whether they like it or not.   Similar “forced heirship” provisions exist in most continental jurisdictions.  We are not so restricted in England and Wales.  We can leave all we have to our favourite child, the “cats’ home”, or a neighbour.  However, are we as unfettered in our freedom as we think? 

Research published by Direct Line Life Insurance in 2018 suggested that over 12.6 million Brits would be prepared to go to Court to dispute a Will of a family member if they disagreed with the division of their estate.   Apparently, inhabitants of Southampton are most likely to dispute their loved one’s Will (31% of those surveyed).   They are closely followed by Londoners (29%) and Brighton residents (26%).   When it comes to contesting a partner’s Will, Brighton tops the tables – 16% of those surveyed would contest their partner’s Will if they were disappointed by it.   If the law gives us testamentary freedom, how and why can people argue over the provisions of our Will? 

Looking at my own practice, it seems to me that one of the most common reasons for people to have concerns over Wills is an allegation of undue influence.  Though in practice, evidentially, it is one of the most difficult grounds on the basis of which one can pursue a Will challenge, the concern that a Will was signed only because of the influence of the evil sibling, greedy carer or child, are stories I hear most often.   These cases are difficult, as how do you gather evidence of coercion that forms the basis of undue influence? By its very nature, coercion is always carried out in private, shielded from the prying eye of others, even those closest to the victim.  At the same time, because undue influence will often be tainted by a history of mental or sometimes physical abuse of the victim, when discovered, it is very difficult to just let it pass.  Undue influence challenges are often not cases only about the money, but about justice, which those close to the deceased wish to achieve. 

The second most common ground for Wills being challenged is an allegation of lack of capacity, i.e. a situation where the person making the Will was not of sound mind.   Does mental illness or neglect mean we cannot make a Will?  It need not do. However, for those disappointed by a Will, an insinuation that the deceased could not have possibly known what they were doing, because they were elderly, showing signs of dementia, will be enough to spark up a Will dispute. That is why it is so important that Wills, especially those which are likely to come as a disappointment for friends and relatives, and those prepared for the elderly or vulnerable, ought to be prepared professionally.    

In addition to the two most common grounds, Wills may be challenged on the basis of lack of knowledge and approval or lack of proper formalities (i.e. being wrongly signed or witnessed). Estates may also be challenged under the Inheritance (Provisions for Family and Dependants) Act 1975 by closest family: spouses, partners, children and dependants for whom “sufficient provision” in a Will has not been made.    

Despite the testamentary freedom we like to boast about, there are therefore legal routes allowing us to try and change the provisions of the Will of our loved one, after their death.  The trend is only upwards.  Looking at official court statistics the increase in the number of probate cases issued in the Business and Property Court of England and Wales was 24 % in 2017 (when compared to 2016), 30% in 2018 and 18% when comparing the first three quarters of 2019 with the same period in 2018. 

Millions of pounds are being spent on such disputes.  The financial and emotional burden that they bring on those bereaved may be reduced only if you involve a specialist early on; someone who will have the required experience, but who will also be ready to provide you with their honest, emotionally detached from the family feud, opinion. Law does create possibilities to impact how wealth will be distributed post-death.  However, those possibilities are limited and the courts will defend the English principle of testamentary freedom.  There are no better words to summarise the position than those of Deputy Master Arkush in one of his judgments (Rea v Rea [2019] EWHC 2434 Ch):

 “On one level it is understandable that the defendants feel disappointed, upset and resentful that they have not benefited from their mother’s will. In my judgment they have allowed these emotions to override a more considered reflection (…)[It] is not my task to decide whether the 2015 Will was justified or fair. I am only required to decide if it is valid…”

tax claim
TaxWealth Management

R&D Tax Credit Claims Could Pay 178k UK Salaries For A Year

tax claim

R&D Tax Credit Claims Could Pay 178k UK Salaries For A Year

While growth in R&D tax relief claims has increased by 35% annually since inception in 2001 to over £4bn last year the scheme is yet to be fully utilised by UK business according to R&D specialists RIFT Research and Development Ltd. 

However, even with many remaining unaware that the work they are doing could qualify, the number of claims made does demonstrate the huge amount of innovative work taking place across the UK.

To highlight this great work and put the sums claimed into perspective, RIFT has looked at how many people this sum could employ based on the average annual net salary and which region is top when it comes to R&D Tax Credit claims.

The research shows that there has been a huge £4.3bn claimed across all R&D tax credit schemes to date and with the average net salary currently sitting at £24,365, that’s enough to pay the wages of 177,711 for a whole year!

As you might expect, London is home to the largest number of claims with £1.2bn submitted and even with the higher annual salary of £31,567, the R&D work going on throughout the capital could employ 39,281 for a year.

R&D claims in the South East and East of England have accumulated enough to pay the annual wage for 30,109 and 21,863 people respectively. 

The West Midlands, North West and South West have also seen R&D claims total enough to pay the wage of over 10,000 people for a year. 

Northern Ireland and the North East have seen the lowest amount claimed, but with a similar average wage and claims totalling £75m and £85m, the great work going on in these areas could still pay the average annual salary for between 3,5000 and 4,000 people.

Location / Region

Amount claimed – All Schemes (2017-18)

Average NET annual salary (2019)

Number of people R&D credit claims could employ at average salary

London

£1,240,000,000

£31,567

39,281

South East

£810,000,000

£26,902

30,109

East of England

£555,000,000

£25,385

21,863

West Midlands

£395,000,000

£22,622

17,461

North West

£275,000,000

£22,510

12,217

South West

£225,000,000

£22,293

10,093

Yorkshire and The Humber

£175,000,000

£21,862

8,005

East Midlands

£180,000,000

£22,509

7,997

Scotland

£175,000,000

£23,207

7,541

Wales

£95,000,000

£21,399

4,439

North East

£85,000,000

£21,484

3,957

Northern Ireland

£75,000,000

£21,468

3,494

    

UK overall

£4,330,000,000

£24,365

177,711

Director of RIFT Research and Development Ltd, Sarah Collins, commented:

“R&D tax credits are a great way of paying back those companies that are committing to some outstanding work in their respective fields and regardless of how small the developments being made, they are all contributing to the future of their sectors and UK business as a whole.

While many of us are very aware of this, we wanted to put into context just how much the claims being submitted equate to when you consider an everyday part of life like the average wage. 

However, there is still so much great work that isn’t being recognised in terms of its qualification for R&D tax credits and while it’s staggering to think R&D claims could fund 178,000 peoples wages for a year, we also wanted to highlight this huge Government cash pot to those that aren’t currently claiming but should be.” 

Sources: Gov.uk and ONS.

Sweden
Cash ManagementWealth Management

Sweden Set For Dramatic Growth In Digital Wealth Management

Sweden

Sweden Set For Dramatic Growth In Digital Wealth Management

Nucoro, the London based fintech company providing bespoke investment and savings technology focused on delivering digital investment solutions to third parties, believes Sweden is set to see huge growth in its digital wealth management sector.

It believes there are three key factors driving this – a rapidly growing population of mass affluent and high net worth individuals; the fact that a significant percentage of Sweden’s workforce are employed in the technology and the telecommunications sectors, and the country’s huge and growing focus on fintech.

Growing population of mass affluent and high net worth individuals

Analysis of industry data by Nucoro reveals that 7% of people in work in Sweden earn over $90,000 a year or 906,000 Swedish Krona (SEK).(1) It’s analysis also reveals a growing pool of wealthy people in Sweden, many of whom Nucoro believes are increasingly open to using digital wealth management services.(2) There were around 200,500 millionaires in Sweden in 2018, and this is set to rise to 245,000 (an increase of 22%) by 2023. In terms of those Swedes worth $30 million or more, there were around 3,820 with this level of wealth in 2018, and this is expected to rise to 4,700 – an increase of some 25% – by 2023.

 

HNWs and the technology and telecommunications sector

Nucoro’s analysis of industry data reveals that around 16% of Sweden’s wealth is derived from the technology and telecommunications sectors.(3) This is one of the highest percentages of any country, and it means that many Swedes are comfortable using digital wealth management services. 

 

Strong focus on fintech

Sweden was one of the earliest adopters of technology in financial services, and this is reflected in its fintech sector, which attracted a record investment last year. Sweden’s fintech sector saw investment of €778 million in 2019, the seventh largest amount of any country in the world, and in Europe only the UK and Germany received more.(4)

Stockholm has one of the most thriving fintech scenes in Europe. It has 114 banks and nearly 400 fintech companies. Some 18% of the Swedish capital’s citizens are employed in the tech sector, and the most common job in Stockholm is a programmer. (5)

Nikolai Hack, COO Nucoro said: “Sweden is an incredibly attractive market for the digital wealth management sector. Over the next few years, we expect to see a rapidly increasing number of services in this area being launched to cater for a growing pool of people who are comfortable using digital platforms to manage their investments and wealth.

“We are keen to work with both traditional and non-traditional financial services companies in Sweden to help them develop propositions in this area.”

From client onboarding to portfolio construction through to billing, Nucoro combines all the tools required to build the next generation of savings and investment propositions. To help financial services companies move forward, Nucoro offers a new technology-based foundation built without legacies – a complete overhaul to the models of client service and accessibility. It offers a radically different approach to the relationship between technology providers and the organisations adopting their solutions.

Nucoro offers a fully automated, AI-powered wealth management platform to UK retail investors called Exo Investing.  Within the first year of operation, Exo won two industry awards (Best digital wealth manager OTY + Industry Innovator OTY at the AltFi awards 2018), was named as a finalist in three more and selected to two disruptive company annual indexes (Wealthtech 100 and Disruption50’s 100 most disruptive UK companies).

Nucoro is making this technology available for financial services companies based in Sweden that have the ambition to truly innovate and future-proof their businesses – and are struggling to realise their digital ambitions.

(1) https://www.averagesalarysurvey.com/sweden
(2) Nucoro analysis of Knight Frank Wealth Report 2019
(3) Global Data: ‘Wealth in Sweden: HNW Investors 2018’
(4) Innovate Finance: January 2020
(5) Invest Stockholm: Stockholm Fintech Guide

credit score hotspots
BankingWealth Management

MoneySuperMarket Reveals The UK’s Credit Score Hotspots

People living in the Eastern Central London postcode (EC) have the highest average credit scores in the UK, according to the UK’s leading price comparison site MoneySuperMarket.

Analysis of over 200,000 credit reports from MoneySuperMarket’s Credit Monitor1 reveals that those in the EC area have the highest average credit score at 583 out of a possible 710 points – 21 points higher than the UK average.

According to MoneySuperMarket data, the Surrey town of Guildford has the second highest average score across the UK – 13 points higher than the average score in London (565).

 

Postcodes with the highest credit scores:

Location

Average Credit Score

EC – Eastern Central London

583

GU – Guildford

578

KT – Kingston upon Thames

577

RG – Reading

W – Western London

576

E – East London

RH – Redhill

575

 

By contrast, residents in the north of England and parts of Scotland have some of the lowest credit scores in the country. Sunderland (548), Wolverhampton (549) and Kilmarnock (550) are the three lowest scoring postcodes. 

 

Postcodes with the lowest credit scores:

Postcode

Average Credit Score

SR – Sunderland

548

WV – Wolverhampton

549

KA – Kilmarnock

550

DN – Doncaster

550

HU – Hull

551

 

Sally Francis-Miles, money spokesperson at MoneySuperMarket, commented: “Although your credit score isn’t directly impacted by where you live, our research shows those with an EC postcode are the top credit scorers in the UK and are therefore likely to be most highly rated by lenders.

“What will strengthen your credit score is making sure you are registered on the electoral roll – it’s easy to do too. Using a credit card can also help. It doesn’t automatically improve your credit rating, but if you repay the balance in full every month, it shows lenders that you are reliable and credit worthy.

“Additionally, free-to-use monitoring services, such as MoneySuperMarket’s Credit Monitor, offer personalised tips to help increase your credit rating.”

 

MoneySuperMarket’s top tips for improving your credit rating include:

-Debt repayments – keep on top of repayments for loans, mortgages and credit cards
Avoid multiple credit cards – having credit cards that are no longer used can have a negative impact on your credit score
-Ensure a sensible use of credit – try not to use a high proportion of the available limit to avoid appearing over-reliant on credit

For more tips and information, visit MoneySuperMarket to see if your area falls into a credit score capital of the UK.

water cost
Wealth Management

The Money-Saving Tip That 97% of Businesses are Missing Out On

Since April 2017, around 1.2 million non-domestic English water customers have been able to choose their own water suppliers. This is referred to as ‘market deregulation’. Now, businesses can choose to buy their retail water services from any licenced company, regardless of how much water they use a year.

In Ofwat’s ‘State of the Market Report 2018-19’, the water regulator found that:

• Just over half (53%) of all customers are aware of the possibility to choose their retailer (48% last year).
• Around 13% of customers have been active since market opening, in that they have switched, renegotiated or considered doing so (10% last year).
• Switching rates of 3% largely unchanged in the second year of the market.

Despite the low switching rates, Ofwat estimates that customers were able to save around £10 million in bills in the second year of the market.

 

Switch and save to get ahead – here’s how:

When it comes to changing your business water supplier, there are a few important things to consider. For example, you need to think about the main differences between your existing and potential new water supplier to ensure you’re getting a beneficial switch.

So if you’re a small business thinking of making a change, follow our useful guide below to help you through the process.  

 
What are the benefits of an open water market?

Increased competition in the industry will encourage water suppliers to offer more enticing benefits to customers. Therefore, small business owners expect some of the following incentives:

• Reduced costs
• Improved service levels
• Lower management overheads
• Easier to meet regulatory compliance
• New solutions to water management challenges
• Improved corporate, social and environmental responsibility
• A greater understanding of water consumption habits

If your business hasn’t switched water suppliers yet, you may be missing out on significant savings. That’s why in this article, we outline everything you need to know about changing your business water supplier.

water

Here are our simple steps to switching water suppliers

Step 1: Understand your water consumption habits

Take a look at your previous water bills (ideally from the last three years). Look at how much you’re using and how much it’s costing you. If you operate over multiple sites, be sure to audit your business total, as well as the numbers from each individual site.

 
Key questions to consider for each site:

1. How much water do you use?
2. How much wastewater do you produce?
3. How much are you spending on water and/or wastewater – the average per month and per year?
4. How much trade effluent do you produce and what is the cost?

 
Step 2: Find the right water supplier for your business

Finding the right supplier is the most important step in the process. You need to spend time considering your options, as well as thinking about what the supplier can offer you.

 

Questions to consider:

• Is your supplier transparent and helpful in the quoting process?
• Do you want a transactional supplier?
• Would you prefer to work with a company that offers a higher level of customer service?
• Do they offer a wide range of value-added services?
• Do they offer a deal that suits your consumption habits?

 
Step 3: Collect and compare quotes

Once you’ve narrowed down your list of suppliers, the next step is to collect and compare quotes from them. Some suppliers quote their services differently, so make sure that you’re comparing ‘apples with apples’.
What you’ll need to get a quote:
• Your organisation’s name, address and postcode
• Annual consumption figures
• Supply pipe ID (a unique reference number on your meter and on your water bills)
• Your business’ point of contact for water-related services

 

Top tip for a QUICK WIN when it comes to your business water

If finding a supplier and comparing quotes sounds like a lot of work, that’s because it is! That’s why many businesses choose to partner with a business water broker who can do all the hard work for you. With their bulk-buying power, a broker may be able to get you cheaper rates than if you were to go straight to a supplier.

When you choose to switch using a broker’s services, you just need to sign an agreement and they will take it from there. They will contact your existing supplier to let them know you’re moving and get you set up on the new supplier’s systems. They’ll also deal with any queries and requests you have regarding your water services and can offer a full water management service.

 

Step 4: Enjoy the benefits

Switching suppliers can bring a multitude of benefits:

• Increased competition in the market can mean better prices and better service.
• If your business has several sites, you can consolidate your water to one single supplier, with one bill covering all your locations.
• When you use a water consultant, you can bundle your water and energy to streamline your business services even further.
• You’ll have access to billing and consumption data that can help you optimise your operations.

Stop flushing money down the drain – secure cheaper rates for your business water for a better bottom line.

Cash Isa
Private BankingPrivate ClientWealth Management

Death Of The Cash ISA – Big Banks Are Struggling To Cope With The Mass Cash ISAodus

Cash Isa

Death Of The Cash ISA – Big Banks Are Struggling To Cope With The Mass Cash ISAodus

The latest market insight and research from peer to peer lending platform, Sourced Capital of the Sourced.co Group, has revealed that a mass exodus of Cash ISA investors submitting transfer out requests from their Cash ISAs is causing a backlog with the big bank lenders.

Sourced Capital was recently advised by HSBC that transfers were taking a while to process and were requesting no calls for updates due to the substantial backlog, yet further indication of the death of the Cash ISA as investors look for more lucrative options.  

This is a trend that has been apparent for some time due to record low-interest rates and one that will no doubt be exacerbated with the Bank of England’s decision to keep rates frozen yet again at 0.75%. 

In fact, since 2008 the number of accounts subscribed to a Cash ISA has declined every year except one, with the total number down -36.38% all in all, averaging an annual decline of -4.69%.  

Some of the biggest annual declines have come over the last year and the year prior to that, with the number of Cash ISA accounts dropping by a notable -8.22% and -16.19% respectively.

Prior to the economic crisis, available rates averaged at 5%, but in more recent times this return has diminished to around 1.45%.

It’s clear that the preference of investing in a Cash ISA is well and truly on the slide and those looking to make their money work harder are opting for alternative investment options like the Innovative Finance ISA. 

The IFISA is a category of ISA which was launched in April 2016 for UK taxpayers. Previously, there have been two main types of ISA: Cash ISAs and Stocks and Shares ISAs. Similar to these ISAs, the IFISA allows you to invest money without paying personal income tax. This enables you to invest your money into the growing peer to peer market. 

Like cash ISAs Each tax year, you get an allowance of up to £20,000 to put into IFISAs which you can distribute across your different ISAs should you wish to. In addition, you can transfer your previous year’s ISA investments into your IFISA and while your capital is of course, at risk, an IFISA can bring returns of as much as 10-12%.  

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“A prolonged period of extremely low-interest rates has been great for some and has helped stimulate borrowing and spending activity, most notably across the UK property and mortgage sectors. However, it hasn’t been great for those attempting to accumulate a sizable savings pot with the return on their hard-earned cash remaining really rather poor.  

It comes as no surprise then that the declining health of the Cash ISA seen in recent years has now progressed to an almost fatal level as more and more investors remove their cash and look elsewhere for a more favourable return. This exodus has been spurred by more innovative options providing a better return and has become so prevalent that even the biggest lenders are struggling to cope with the paperwork.”  

CASH ISA – Number of accounts subscribed in current year (thousands)

Period

Number of accounts subscribed in current year (thousands)

Change / growth (yearly)

2008-09

12,234

x

2009-10

11,426

-6.60%

2010-11

11,859

3.79%

2011-12

11,187

-5.67%

2012-13

11,682

4.42%

2013-14

10,481

-10.28%

2014-15

10,288

-1.84%

2015-16

10,118

-1.65%

2016-17

8,480

-16.19%

2017-18

7,783

-8.22%

Total Growth

-36.38%

Average Annual Growth

-4.69%

mediation
Family OfficesLegal

Keeping Divorce Out Of Court: Why Mediation Matters

mediation

Keeping Divorce Out Of Court: Why Mediation Matters

By Kirstie Law, at Thomson Snell & Passmore

People are increasingly looking to facilitate a smoother and faster divorce by keeping it out of court.  As such, former couples are turning to mediation as a way of resolving the issues arising from their separation (including financial and child arrangements).

Mediation can provide real benefits in appropriate cases. It reduces tension and hostility and helps couples make their own informed decisions about their futures. The process involves the couple working with normally one mediator, (but in some cases two mediators/co-mediators,) who encourages them to come to a solution that works for them both and their children.  The mediator is impartial, but will give the couple information as to the law and, for example, how in his or her experience the court might deal with a particular issue.

 

Children and mediation

With Children Act proceedings, if the case is being decided by a judge, he or she will want to know what is in the best interests of any children concerned.  This is often achieved by the court appointing a CAFCASS officer who normally visits any children with each parent before preparing a report, including recommendations for future child arrangements.

Some mediators are qualified to see children as part of the mediation process.  Having had an initial meeting with the parents, (who both have to agree to the mediator seeing any children) the mediator will then have a meeting with the child(ren) without the parents, although another adult will be present.  Having seen the child(ren), the mediator will report back to the parents any points that have been specifically agreed with the child(ren). If the child(ren) asks for some things not to be repeated to the parents the mediator MUST respect this.  The only exception to this confidentiality is if the child(ren) discloses he/she or another child is at risk of harm, in which case the appropriate referrals, e.g. to social services, is made.  This is explained to the child(ren) at the start of the process. 

The mediator will make an effort to ensure that the environment is relaxed, including providing appropriate child friendly refreshments. The child(ren) will also be given the opportunity to doodle or draw a picture.  Most mediators will also write to the child(ren) in advance of the session (in a way that is age appropriate) inviting them to attend. 

It is important to emphasise that the child(ren) is/are not being asked to decide what will happen, but told that mummy and daddy want to know what the child(ren) feel(s) about the current situation and any suggestions the child(ren) has with regard to arrangements going forward.

The feedback from both children and parents who have been involved in mediations where the children have had direct involvement and the opportunity to discuss issues with the mediator is extremely positive.  Mediation can be concluded very quickly enabling the whole family to move on and hopefully the parents to co-parent more successfully.

 

Finances and mediation

With financial proceedings, if the case is being decided by a judge, he or she will have quite a wide discretion as to what settlement is appropriate in any given case.  This can make it very difficult to predict the outcome with potentially thousands of pounds being spent obtaining an order that no one is happy with.  The mediation process can take into account the priorities of both (e.g. one wanting to keep the house, the other a pension) and consider whether a clean break settlement is the best solution.  It is arguably far easier to live with a settlement into which you have had input than one that has been imposed on you.

The mediator will want both to provide financial disclosure but the couple can decide when, and for what period, this is provided (the court process requires bank statements for a year but if the decision to separate is mutual and recent the couple can in mediation agree a shorter period).

It is normally possible to have a first mediation appointment within a week of the mediator speaking to both.  By contrast the first court hearing is normally three or four months after the court processes the application.

The mediation process is therefore normally significantly quicker and cheaper, and usually improves rather than damages the couple’s relationship, hopefully making future co-parenting easier.

 

Shuttle mediation

Shuttle mediation is a form of mediation where, instead of the former couple being in the same room as the mediator, they are in separate rooms and the mediator effectively shuttles in-between. 

Shuttle mediation can be used in cases where mediation is not appropriate because one or both of the former couple, for whatever reason, do not feel comfortable being in the same room.  This could for example be due to past coercive or controlling behaviour, or if one person is still finding it difficult to come to terms with the end of the relationship.

The potential disadvantage of shuttle mediation is that there is inevitably a duplication of costs because the mediator has to repeat what has been said by the other person.  There are also usually advantages to having the discussions directly, but in the presence of an independent mediator.  Witnessing these discussions directly can enable the mediator to assist with improving communication going forward particularly if, for example, there is a need for future co-parenting.

Ultimately the most important thing with regard to mediation is that both feel comfortable to discuss issues openly with the mediator and do not feel pressurised as a result of the other person’s presence. 

Shuttle mediation can be used for the whole of the mediation process or just to deal with a particular issue that the parties feel would be easier to discuss if they are not in the same room.

 

Final thoughts

The breakdown of a relationship can be a painful and difficult time for all involved. By opting for mediation, it is possible to help mitigate the stress of a divorce or separation, by making the process smoother and faster, and helping to ensure an outcome that works for everyone.

aspen
BankingFamily OfficesPrivate Banking

Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy Families

aspen

Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy Families

Thirty years ago, the family business started by Daniel’s grandfather and great uncle was sold. Daniel and his three siblings received nearly sixty million US dollars each, as did each of their cousins. In 2016, Daniel, who had created a successful real estate and development business and on the advice of his financial and tax advisors, transferred to his four adult children twenty-five million US dollars each. The age range for the adult children spanned nine years, and one daughter worked in Daniel’s business. From the day gifting was announced it has resulted in family disruption. The surface discord resulted from a perceived economic injustice concerning “the time value of money” since all siblings received an equal share rather than a share based on their age. But the deeper disharmony stemmed from an unresolved historical emotional impasse between the father and one of the adult children dating back to the child’s teenage years. 

As Aspen Consulting Team, (ACT) we help members in family businesses and legacy families address the psychological dynamics of love and money, the interplay between emotions and economics, in the family system. 

Love and money are symbiotic and immiscible. They are connected, but do not mix naturally. The wrong mixture results in entitlement, disruption, and conflict; the correct mixture results in gratitude, opportunity, and resilience. The wealth connection in a family business and/or legacy family requires
Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy FamiliesMar19081
adult children to stay integrated in their family of origin much longer than typical families. The financial interdependence provides great benefits and at the same time creates complexities. A basic operating principle in our work is that the deeper the economic interconnections the higher the potentiality for emotional conflicts.

Every family business and/or legacy family is a system, a combination of small subset systems (individuals) connected to mid-size systems (family units), nested within larger systems (extended and generational family units), and linked to much larger systems (business and wealth management). Everything is connected and influenced by everything else. Within this system transitioning wealth takes place at two levels where the highest goal is to provide an inheritance without creating entitlement. 

• The “external” work is wealth creation and management. The task of continuing the vision set by the founders, operating with the values that made the family successful in the first place, protecting assets, defining financial goals, policies, and strategies, adjusting to taxes and market changes, understanding investments and ROI, implementing shareholder agreements and distributions, creating foundations and estates, and increasing the financial portfolio. Legal and financial advisors help with this work.
• The “internal” work is relationship harmony and management. The task of connecting and inspiring family members, strengthening the family culture, adapting to generational values, maintaining agreements, managing interpersonal stress, working as a team, responding to special demands, and enjoying the process as members of each generation face opportunities and transitions. This is the space in which ACT works.

There are always two parallel objectives in our work. The first objective is to create guidelines to “prevent the emotional tail from wagging the economic dog.” The second objective is to “not cut off the emotional tail.” Emotions, when accessed correctly, are powerful guides and cannot be ignored without damaging relationship harmony and overlooking important decision-making data. There are more emotions in an economic experience than meets the mind’s eye.

Emotions are actions, many of them are public and visible to others as they are expressed in body language or are verbalized. Feelings, on the other hand, are always hidden, unseen and perhaps unrecognized, to anyone other than their rightful owner. Feelings are the most private property we own. Emotions precede feelings, much to the common mistaken view. “We have emotions first and feelings after because evolution came up with emotions first and feelings later.”2 We, and our emotional system, are designed to solve the basic problem of how to continue life by being either competitive or cooperative and on the economic survival level this involves money. 

A study conducted with children, ages 3 to 6 years, showed that they did not understand the economic value of money, but they comprehended its emotional value. The first group sorted coins and banknotes, while the second group sorted buttons and candy. The children who worked with money demonstrated an increase in egotistical behaviors, were less eager to help the researchers, corralled more awards for themselves, were less likely to share their rewards with the other children, but were more persistent in completing individual tasks. Handling money reduced feelings of helpfulness and generosity while increasing perseverance and effort. These results are very similar to the results of a comparable study that looked at adult behavior. According to Agata Gąsiorowska, economic psychologist and a coauthor of the study:3

“Money is such a strong symbol in the world based on economic exchange that even small children are influenced by its significance. Money causes people to switch from the view of the world that values close relationships to the world that values market exchange, where the notions of ‘me’ and ‘my gain’ are in the center.”

Emotions, often considered “gut feelings” or conscious experience, really involve many systems
within our brain. Emotions create a burst of activity devoted to one thing, survival. Emotions trump non-emotional events, like thought, reason, and decision-making, even in the most rational analyst and business leader, because they are older in the human developmental process than economics. Emotions kept our ancestors alive long enough to create and give us an inheritance. Emotions, even those in our memory system, trigger certain features, feelings, and stimuli that are designed for homeostasis. 

Homeostasis is a self-regulating process by which our biological and psychological systems try to maintain stability while adjusting to conditions that are optimal for survival and success. In love and war, as in family and business, when homeostasis is successful, individual and collective life continues and flourishes. There are “natural triggers” like the sight, sound, and smell of a predator and “learned triggers” like the sight, sound, and smell of money that aid us in the pursuit for homeostasis.4

About 10,000 years ago, when the first farmer created more than his or her family could consume, the economy of the marketplace began. Before the agricultural age, our ancestors were daily hunters and gatherers, collecting and consuming without the ability or surplus to “store up” resources. When farmers took their extra bags of gain to the marketplace they needed a symbol of exchange. In time, this symbol became money. 

From that time forward, there are few interactions or decisions in a legacy family that do not involve money and a drive for the family to flourish. The recent college admission scandal in the United States is a brazen example. 

Money is an emotional trigger in families and how we react to it may be either positive or negative. In order to have a positive environment, family leaders must work toward stability between two social systems that continuously change as individuals change. The two social systems are the homogeneous system of being similar, the drive for family unity, and the heterogeneous system of being dissimilar, the drive for personal autonomy. These systems create interpersonal tension and ambiguity, along with creativity and drive that must be anticipated and proactively managed in a legacy family and family business. Wishing that anxiety or conflict would depart the family system or that love and harmony would show up is usually not enough. 

The tension among family members is from four psychological positions; Fight, Flight, Freeze and Flow . Three positions, Fight, Flight, and Freeze , are an extension of our evolutionary survival system. The fourth area, Flow, is the way to happiness and success.5 It requires psychological awareness, behavioral adjustment, and positive action on the part of family members and leaders and is difficult to create and maintain as family members grow and change.

• Fight: When both personal confidence (autonomy) and relationship security (unity) are low, one’s psychological position is hostile-dependent. This shows itself in behaviors of “moving against” others in the family or family system. The feelings and behaviors expressed are often confusion, anger, resistance, and opposition.

• Freeze: When personal confidence (autonomy) is low and relationship security (unity) is high, one’s psychological position is co-dependent. This shows itself in behaviors of “moving in” with others in the family or family system. What we often see is enmeshment, clinginess, entanglement, low selfesteem, fear, and anxiety.

• Flight: When personal confidence (autonomy) is high and relationship security (unity) is low, one’s psychological position is counter-dependent. This shows itself in behaviors of “moving away” from others in the family and/or family system. This is seen in acts of isolation and detachment, which can look like independence, if it were not for the financial dependence. 

• Flow: When both personal confidence (autonomy) and relationship security (unity) are high, one’s psychological position is inter-dependent. This shows itself in behaviors of “moving with” others in the family and/or family system. This is experienced as cooperation, maturity, accountability, and resilience. This, of course, is the most optimal position for family members.

For economic success and relationship harmony within a legacy family or family business, family members must purposefully address emotional historical impasses, resolve sibling rivalries, find comparable values, and work toward mutual goals. The psychological tools for doing this work are what we have termed “thick trust” and “mature adult communication.” 

Long-term success in family and business life requires a willingness to trust one another. The question is how we measure the trust. Scientific research shows that most people’s accuracy in discerning if another person can be trusted is imprecise. Much of the time, we have weak or no guidelines other than a set of emotional clues we have used in the past. Trust is dynamic—not static. The more we have at risk, the greater the need for trust. It is helpful to think of trust in three levels.6

1. One-Way Trust. Only one person has trust on the line. If the other person cannot be trusted to follow through on promises or commitments the relationship ends, as do any potential gains or losses. 

2. Mutual Trust. This is a reciprocity style, often called quid pro quo and “tit for tat,” for regulating equilibrium in transactional relationships. It is the most familiar type of trust in business, worked out among and between the same parties over a long period of time. Both parties play the roles of giver, taker and matcher, and exchange these roles for mutual benefit. When trust is broken, the relationships and transactions end.
3. Thick Trust. This is the highest form of trust and is required for family members to work together for the long-term. Family business relationships are complex because they occur across different settings and include a diverse series of interactions, both personal and professional. Action at one level may have ramifications at other levels, and every action has the potential for benefit or harm. Trust at this level, like in a marriage, requires the strength, resilience, and skill of mature character to overcome and forgive mistakes. 

Trust and trustworthiness are forms of social and relationship capital. A subjective way to think about your trustworthiness or that of another person in a family business is the following formula. Personal Character plus Competency Skills divided by Self-Interest plus Psychological Awareness plus Behavioral Adjustment determines Thick Trust.  

TT=[(PC+CS)÷SI]+(PA+BA)

A solid foundation of trust allows communication to be clear, constructive, and proactive, what we call Mature Adult Communication (MAC). We suggest that family members have a formal agreement to use MAC when important economic and emotional decisions need to be made. The first step in MAC is to clearly define the issue. Much of what is called “failure to communicate” is not having a clear and collective understanding of the problem or issue. The second step is to explore all the psychological dynamics, emotions, and feelings around the issue. This is often the hardest step and may require outside consultation. The third step is to have full commitment by all family members involved in the issue to the decision-making process (who, how, and when a decision will be made) and to make a clear and firm decision, with an evaluation process if necessary.

MAC eliminates what statistician and author Nassim Taleb calls narrative fallacy, “ a wrong ruler will not measure the height of a child. ”7 This is how we fool others and ourselves by a flaw in a story of the past, often emotional, which shape our decisions for the future. An accurate diagnosis of the problem sets the stage for the correct treatment. Decisions that address the wrong description of the situation can be made with a high level of determination, confidence, and authority, but will still be defective and require correction at a later time with greater expense. 

Creating, managing, and transitioning wealth within a family is a balancing act. It requires addressing the struggles not only among and between individual family members, but the tension created by money. The connections from our emotional system to our cognitive system are stronger than the connections from our cognitive systems to our emotional system. If this were not true, Daniel’s adult children would not have entered into the discord that has alienated and estranged family members.

aspen
Thomas Edward Pyles, MA & Edgell Franklin Pyles, PhD

Edgell and Tom, a father and son team, consult with family businesses on leadership strategies, particularly succession, and with legacy families on the complexities of mixing love and money. They are the co-authors of MAPS for Men: A Guide for Fathers and Sons and Family Businesses. Fourth generation business owner Charles S. Luck, IV, wrote, “MAPS for Men is one of the most comprehensive guides to families in business that I have ever seen.”

“Edgell and Tom weave a tapestry of insight for anyone seriously interested in building family relationship bridges that endure generational transitions.” Dennis Carruth, President, Carruth Properties Company. 

“I have clearly seen results. In all cases it is an inflection point to a fresh and positive perspective.” Chris Branscum, Family Office Advisor, JD, CPA.

“I have worked with Edgell for more than twenty-five years. He has provided counsel to our family, including our two adult sons, my business, and my YPO group.” James Light, Chairman, Chaffin Light Management Company. 

“Our family legacy is now in the fifth generation. I truly appreciated Edgell and Tom’s work. The lessons learned will bear fruit for many years and generations to come.” David Hardie, Founder and CEO, Hallador Management, LLC.

“The psychological and spiritual counsel offered by Edgell and Tom has proved very helpful to my family and business.” Jeff Wandell, Founder and CEO, Prairie Gardens and Jeffrey Alan’s. 

“Dr. Edgell came into my life in a time when I had failed and did not like myself in many ways. He helped me, at the age of 58, on a new journey of bliss.” M. Ray Thomasson, PhD, President, Thomasson Partner Associates, Past President, American Association of Petroleum Geologist, Past President, American Geological Institute.

“Edgell enriches lives of those he touches in a most profound way.” Paul Schorr, Past President, Chief Executives Organization.

Sources:

1. Erik Erickson, Identity, Youth, and Crisis.

2. Antonio Damasio, Looking for Spinoza: Joy, Sorrow and the Feeling Brain.

3. The study was conducted by an international research team, including: Agata Gąsiorowska, Tomasz Zaleśkiewicz, and Sandra Wygrab, SWPS University in Wrocław, Lan Nguyen Chaplin, University of Illinois, and Kathleen D. Vohs, University of Minnesota.

4. Joseph LeDoux, The Emotional Brain, The Mysterious Underpinnings of Emotional Life.

5. Mihaly Csikszentmihalyi, Flow, The Psychology of Optimal Experience.

6. Elinor Ostrom and James Walker, editors, Trust & Reciprocity, Interdisciplinary Lessons from Experimental Research.

7. Nassim Taleb, “A Map and Simple Heuristic to Detect Fragility, Antifragility, and Model Error.”

m bills
BankingWealth Management

Slovenian mBills Pioneering with the Next Step in Mobile ePayments

m bills

Slovenian mBills Pioneering with the Next Step in Mobile ePayments

Innovation in the Fintech space can come in many forms. Whilst the idea of seamless mobile payments is far from a novel one, with many firms around the world moving to capitalise on a growing demand for accessible financial services, mBills mobile wallet has swiftly differentiated itself in the Slovenian market. Eager to find out more, we spoke to CEO, Primož Zupan to find out more about their expertise and services.

Fintech, long associated with swift moving developments and a certain innovative spark, has been the great driver of change in a comparatively sluggish market. Where brick and mortar giants have been slow to adapt, leaner more proactive entities have seen exceptional success through an ability to cater – intrinsically – to ever-changing consumer behaviour. This is where mBills have secured their success.

Indeed since 2015, mBills has been providing cutting edge solutions in the e-payment space. Through utilising mobile smartphone technology, they have, essentially, put the consumer at the centre of every transaction – giving them back control of their finances. This is especially important when considering the market that mBills primarily operates in – Slovenia. As Primož discusses, the novelty of mBills services helped them to quickly forge an impressive reputation in the industry, “mBills was the first mobile app on Slovene market to introduce mobile wallet solutions to its users and has since than implemented and significantly expended variety of solutions, constantly keeping the user and the best possible user experience in the centre of development.

“The vision of mBills is to give the user a complete control and overview of finances, so that paying, purchasing or ordering financial products will be at the user’s fingertips in one app, regardless of the bank, communications provider or operating system.” This user-centric ethos has resulted in mBills experiencing a burgeoning client base of consumers eager to make use of the company’s ‘next-generation’ approach to financial services – as Primož continues. “Our user database is steadily growing, and we have received huge positive feedback from both users and thought leaders of the industry. The ultimate vision of mBills is to give the user a complete control and overview of finances, so that paying, purchasing or ordering financial products will be at the user’s fingertips in one app, regardless of the bank, communications provider or operating system.”

“mBills mobile wallet is available to everyone and at any time – whatever the bank, operating system and mobile operator.”

Through their ‘all in one’ app, users can make quick and easy point of sale payments, pay monthly invoices, and manage their e-wallet, ensuring that budgets are followed, and finances are maintained. Moreover, through their partnerships with cash programs such as mintPOS, VASCO and microGRAMM, mBills has ensured their longevity for the years to come.

“As a fintech start-up MBILLS is basically run by a team of enthusiastic individuals who put their heart and soul in the product. We all share the same vision and complement each other to reach it faster, therefore staying ahead of the competition.”

All in all, mBills is a firm with the future firmly in mind. Even among the competitively crowded ePayment landscape, they have distanced themselves from the competition by prioritising the user experience. It’s a mindset that has proved to be the key to the firm’s enduring success and looks set to secure their longevity in the years to come.

Specifically, for Primož, the future sits with development of the app’s integration and features: “We plan to expend the variety of features in the app that will further cater to the needs of our users – making mBills the only application you need on your phone for keeping a track on your finances, enabling savings, donations, ordering financial products, supporting different loyalty programs, purchasing etc. Ultimately, we aim to fulfil our promise to become a ‘digital solutions’ provider. These multiple in-app solutions will simplify user’s everyday life. The future of mBills looks very exciting .”

offshore banking
BankingOffshoreWealth Management

Offshore Banking: Breaking The Taboo

offshore banking

Offshore Banking: Breaking The Taboo

It’s not what you think. Offshore banking is often slandered, and most commonly associated with tax evasion. But this begs to question – what do people really know about offshore banking? James Turner, Director at York-based Turner Little tells us everything we need to know about offshore banking.

“Offshore banking, simply put, is banking done in a country other than the one you live in. That’s it. It doesn’t mean tax evasion, it doesn’t mean hiding money, it doesn’t mean fraud, it’s perfectly legal – and convenient.

“There are both financial and legal advantages to banking offshore. At Turner Little, we recommend clients consider the why, before they consider the where. Banks in certain countries tend to be less stable, whilst other offshore jurisdictions are incredibly stable and provide easy account set-up and access online.

“One clear benefit is having access to a multi-currency account. If you have international financial obligations, the ability to transfer money between currencies is a relatively fast and painless experience, with some offshore banks able to provide competitive rates in comparison to regular banking services.

“Depending on the bank you choose, offshore banks can act as a private banking facility, where lending and credit facilities can be more flexible and tailored specifically to your needs. A good offshore bank will also be able to provide you with a wide array of funds and investments that are appropriate to your risk profile and the outcomes you want to achieve.

“Offshore banking is also one way you can ensure your financial information is kept private. It’s also a way in which you can protect your assets against financial instability. Offshore banking works if you use it correctly, and if all the documentation is correct – this is where we come in. At Turner Little, we familiarise ourselves with the regulations necessary for compliance in a multitude of offshore jurisdictions – so you don’t have to. When the rules are followed, offshore banking is legal and gives you the means to better protect your assets, providing you with both financial strength and freedom.” 

Civil partnerships Exploring the financial benefits
ArticlesFinanceWealth Management

Civil partnerships: Exploring the financial benefits

Civil partnerships: Exploring the financial benefits

In October 2018, former Prime Minister Theresa May announced that the law would be changed to allow mixed-sex couples in England and Wales to enter civil partnerships. As of 2 December 2019, mixed-sex couples are now able to register their intent to enter a civil partnership, with the first ceremonies due to take place on 31 December 2019.

In recent years there has been a noticeable shift towards couples choosing to cohabit as opposed to entering into marriage. In fact, cohabiting couples continue to be the fastest-growing family type, with data from the
Office for National Statistics indicating that marriages between men and women recently hit the lowest rate on record. It remains to be seen whether the option to enter a civil partnership will influence the cohabiting trend. 

Those in mixed-sex civil partnerships will benefit from the same rights as married couples. The key difference is that a civil partnership is often free of any religious connotations and ideas of ownership and control – making it an attractive alternative for those who wish to legally recognise their relationship without aligning to a specific religion or tradition. 

Contrary to common belief, couples who live together are not entitled to the same protection or tax breaks as married couples and until now, couples who were opposed to marriage had no other option than to cohabit. Undoubtedly, the ability to legally recognise a loving and committed relationship between two people will always be the main motive for entering into a civil partnership.  Yet, there are several other reasons why couples may decide to legally formalise their union, one of which being the often-substantial financial perks which arise on the death of one of the civil partners.

From an income tax perspective, civil partners are entitled to the same income tax allowance as married couples. Often known as marriage tax allowance, if one lower earning partner is not utilising their entire personal allowance (£12,500 for 2019/20) they can transfer up to £1,250 of it to the higher earning partner, making a saving of £250 a year.

Similarly, from an inheritance tax perspective, civil partners will benefit from a complete exemption and the surviving partner will not need to pay any inheritance tax should they inherit the first to die’s estate. The surviving civil partner can also effectively double the amount that they can leave to family and friends on their death without having to pay inheritance tax, by transferring the first to die’s unused nil rate band. Should the first partner leave their entire estate to their surviving partner, it is possible to combine the nil rate bands – meaning that when the second partner dies an amount of £650,000 can be passed on tax-free. The same rules apply to the newer residence nil rate band and consequently, civil partners could ultimately benefit from a combined inheritance tax free allowance of up to £1million as of 6 April 2020 (subject to certain restrictions).

Civil partners can also inherit their partner’s tax-free ISA allowance, equal to the value or balance of any ISAs held by the first to die, by making use of the Additional Permitted Subscription (APS). This approach ensures that the tax-efficiency of the deceased’s ISA, which may well have been saved together by the couple, is not lost when transferred to the surviving partner.

Correspondingly, while the transfer of capital assets between cohabitees remains subject to capital gains tax on any gain in value they may have accrued, civil partners and spouses benefit from the fact that these transactions become tax neutral. This can present many benefits for civil partners, enabling them to manoeuvre funds and assets between them without the danger of generating an immediate charge to capital gains tax.

From a pension perspective, there are also tangible benefits to being in a civil partnership as both private and occupational pension schemes must offer the same rights to civil and married partners. Additionally, it may also be possible for a surviving partner to claim a higher state retirement pension, based on the deceased partner’s national insurance contributions. 

It is however important to remember that, just like marriage, there will be several administrative tasks to take care of when entering into a civil partnership. Any existing wills that may have been prepared before the partnership was recognised will be voided by the partnership itself and new wills should be drafted as soon as possible.

Equally, it is important to think about the assets that both parties will be bringing to the partnership and how they would be split in the event of the relationship breaking down. Those considering entering into a civil partnership should seek advice as to the suitability of preparing a prenuptial agreement to ensure that the intentions of both partners are recorded.

All couples, regardless of the legal status of their relationship, should consider their estate planning opportunities and how they can take advantage of sensible financial planning strategies to safeguard their estates for each other and their wider families. Ultimately, the extension of the law to allow mixed-sex couples to enter civil partnerships presents cohabiting couples with far greater flexibility and autonomy, while equally offering an opportunity to secure financial protection.

 

Matt Parr is an associate in the private client team at law firm, Shakespeare Martineau

 

divorce
Family OfficesHigh Net-worth IndividualsReal Estate

Divorce: Jurisdiction and Financial Relief Applications

divorce

Divorce: Jurisdiction and Financial Relief Applications

By Stephanie Kyriacou, associate in the family team at law firm, Shakespeare Martineau.

Many high-net-worth individuals (HNWI) lead truly international lifestyles, travelling the world, owning multiple residences and holding assets all across the globe. However, whilst this internationally-mobile way of living certainly has its benefits, for couples navigating the emotional process of divorce, dealing with multiple legal jurisdictions can often cause issues, particularly if one side of the divorcing party has been unfairly treated by the foreign courts.

Luckily, if an individual believes that they have suffered financial hardship as a result of a financial order in a foreign jurisdiction, there may be an avenue which they can pursue to balance the scales, provided by the English and Welsh courts. The UK’s legal system has long been considered one of the most fair and agreeable around the world in terms of settling financial matters upon divorce, and there is a reason why London itself is known as the ‘divorce capital of the world’.

Sadly, the foreign courts are often not as generous as their English and Welsh counterparts and the disparity between the sums awarded can often result in extreme financial hardship for spouses who get the raw end of the deal.

This access to financial relief in the UK revolves around Part III of the Matrimonial and Family Proceedings Act 1984 (MFPA 1984). This act allows spouses who have been divorced overseas, and who have a proven connection to the UK, to access financial remedy in the UK, if they have been treated unfairly by foreign courts and have exhausted all avenues to correct that unfairness in that overseas court.

However, whilst this piece of legislation can offer a lifeline to those individuals who have not received adequate financial provision in an overseas jurisdiction, there are a number of criteria which need to be met before an application can be made under Part III of the MFPA 1984. The application itself is a two-stage process and the applicant must first apply for permission (leave) to make the application. The factors the court will examine when determining whether to allow an application to proceed to the second stage can be found in sections 15-16 MFPA 1984. If the applicant is successful at the first stage, they will proceed onto the second stage, whereby they will go on to make the substantial application for financial remedy.

When determining whether to make an order, the court will base its decision on the connection that both parties to the marriage have with England and Wales, and with the foreign court, as well as any financial benefit which the applicant or a child of the family has or will receive as a consequence of the foreign divorce. Other factors which will be considered include any rights that the applicant has, or has had, to apply for financial relief from the other party under the foreign court – including reasons why they may not have done – as well as the availability of any property in England and Wales and the extent to which an English order will be enforceable, along with the elapsed time since the foreign divorce.

Whilst putting the wheels in motion as soon as possible after the foreign divorce has been granted is preferable, the case of Z v Z [2016] EWHC 911 is authority that even with a five-year delay, a court will still consider an application if the other criteria are met.

Whilst the requirements for making at Part III application may seem quite complex, at face value they centre on being able to evidence a strong link to the UK, either through residency or assets. The case of Agbaje v Agbaje [2010] UKSC 13 is the leading authority in this area and a provides a good illustration of how a Part III application for financial relief can be made, and what the courts will be considering when choosing whether to grant an application. In this case, the husband and wife were Nigerian and had been married for 38 years, with assets totaling circa £700,000, much of which were tied up in two London properties. All five of their children were born in London and the couple had spent large chunks of their life in England. Despite the wife living in London, the husband applied for a divorce in Nigeria and his wife was awarded £86,000 worth of property assets in Lagos, and £21,000 as lump sum maintenance payment. Not happy with this financial award, the wife issued proceedings under Part III of the MFPA 1984 and was awarded 39 percent of the couple’s total assets, allowing her to carry on her life in London.

This is a relatively common situation which is experienced by a large number of the spouses of HNWIs, but should give hope that in the event of hardship or mistreatment in divorce proceedings handled by a foreign court, there is a safety blanket offered by the MFPA 1984. Whilst many high-net-worth individuals will have factored pre-nuptial agreements into their marriages, which include clauses dictating where they would like their divorce heard in the event of a relationship breakdown, some will not, and it is those who the English and Welsh legal system supports through this channel.

Online banking
BankingCash ManagementPrivate BankingWealth Management

For UK Consumers the Front Door of a Bank is Now Its Mobile App, Not Its Physical Branch

Online banking

For UK Consumers the Front Door of a Bank is Now Its Mobile App, Not Its Physical Branch

 

72 percent of UK residents said they do the majority of their banking online and 77 percent consider switching to digital-only providers.

Marqeta, the first global modern card issuing platform, announced the results today of its new digital banking survey, which found that demand for physical bank branches continues to decline as digital banking platforms offer more seamless access to remote money management tools.

The research, conducted by Propeller Insights on behalf of Marqeta and surveying 800 UK and 1200 US consumers, found that 74 percent of consumers expect to use their mobile app regularly in the next three months, in comparison with just 22 percent who expect to visit a physical branch. The majority of respondents (77 percent) said that they will consider digital-only platforms when they next switch banks.

Most UK consumers (72 percent) also confirmed that they now complete almost all of their banking online, with the younger generation leading the way. Almost two-thirds (65 percent) of UK respondents aged 18-34 say they use a digital bank as either a primary or secondary banking option. Of those that use a digital bank in tandem with a traditional option, 56 percent of them said that they were more satisfied with the service provided by their digital bank. 

Trends in digital banking have also seen UK consumers make the switch to digital faster than their US counterparts. The survey found that:

• Only 21 percent of UK respondents, expect to visit a physical bank branch in the next three months, compared to 30 percent of US respondents.

• 72 percent of UK respondents said they do the majority of their banking online, while 62 percent of US respondents said the same. 

This confidence in utilising digital banking platforms is driving new expectations for innovation in the banking and fintech sector, as the vast majority of UK respondents (86 percent) say they want to see new technology from their bank in the future.

Marqeta’s survey also show that given how new digital banks are, consumers see the risk factor around digital banking as somewhat of an unknown. 51 percent of UK consumers said they felt like a digital bank was a riskier place to store their money, while 41 percent said they would limit how much money they deposited in a digital bank. 78 percent of UK respondents said they considered a bank’s security and reputation before giving them their business, with 30 percent saying that a lack of market track record was holding them back from making the move to a digital-only bank.

“This research demonstrates that UK consumers are ready to go digital with their finances, but digital banks still must work hard to innovate as we become an increasingly cashless, mobile-first society,” said Ian Johnson, Head of Europe at Marqeta. “Apps and payments cards account for an overwhelming majority of spending and money-management actions, and the rapid rise of new wave challenger banks is a major drive of this of this. At Marqeta we see the modern card issuing market being worth as much as $80 trillion globally by 2030, which is going to continue to create unprecedented demand for innovation and new offerings in banking.”

ecommerce
FundsWealth Management

Five Ways To Compete With Bigger ECommerce Stores

ecommerce

Five Ways To Compete With Bigger ECommerce Stores

 

The eCommerce industry is fiercely competitive which can make it difficult to succeed. It is hard to compete with the bigger brands in your industry because they will have the reputation and visibility online to attract new customers, but there are a few key strategies that you can use which will help you to compete at a higher level and both attract and retain customers.

Once you are able to do this, your reputation should skyrocket which only makes it easier to get new customers and become one of the key players in your field.

Here are a few ways that you can compete with the bigger ecommerce stores:

1. Digital Marketing

The first and most important step to take is to increase your marketing efforts. As it is so competitive, this needs to be an area of investment so that you can benefit from greater results. Using SEO and PPC can deliver both long-term and short-term results so that you can immediately increase your visibility and garner more visitors to your store.

2. Improve Customer Service

Even in an online industry, consumers need to feel important and valued but even this is an area that the bigger brands can struggle with. Make sure that you are looking after your customers, responding to queries and complaints swiftly and thanking them for their custom. Additionally, it should be easy for them to contact you whether this is with live chat, on social media, via email or phone.

3. Analyse The Competition

A smart business owner will always keep a close eye on their competitors and learn from them. Identify the strengths and weaknesses of your competitors and find ways to use this information to your advantage to compete at a higher level. You can use reverse image search on your own products to find other stores selling the same item. This will help you to discover who your competitors are and enable you to carry out research.

4. Write Unique Product Descriptions

One area where larger ecommerce stores struggle is with product descriptions, as they often have so many products that they end up using the default description from the manufacturer. Creating unique, detailed descriptions can be effective for converting customers and increasing your visibility online. In addition to unique product descriptions, you could also use augmented reality apps, customer reviews and product videos to give visitors a much better sense of the product.

5. Adjust Pricing

Most consumers will compare products at a few different places before settling on an eCommerce store. Adjusting your pricing could help you to lure customers away from the competition and to your business, and a slight reduction should balance out with the increase in sales. Additionally, you also need to make sure that shipping is affordable as this is the primary reason for abandoned carts.

Hopefully, these tips will help your ecommerce store to start competing at a higher level and attract customers away from the bigger stores. It is fiercely competitive online but if you are intelligent and strategise, then it is possible to find success and challenge the bigger brands.

van driver
ArticlesInsuranceWealth Management

Insurance Premiums Continue to Slow For Van Drivers

van driver

Insurance Premiums Continue to Slow For Van Drivers

 

Van drivers across the country are benefiting from a continued reduction to their insurance premiums, contradicting the industry’s prediction of premium increases in the wake of the Ogden rate change, new analysis from data analytics company Consumer Intelligence shows.

Its Van Insurance Index shows average premiums have fallen to £1,781 in the three months to September.

Since Consumer Intelligence started tracking insurance premiums five years ago, van insurance premiums have increased across the market by 34.4%, primarily driven by increased claims costs. The value of claims are increasing as more technologically advanced vehicles require higher repair costs, exacerbated amid Brexit uncertainty by the need to import parts for vehicles manufactured overseas.

Under 25s experienced a premium drop of 9.3% in the past year, yet average prices remain the highest at £4,673. Meanwhile, in the same 12-month period, a 2.4% price rise for the over-50s saw their average premiums increase to £581 annually. This compares to £843 for van drivers aged 25-49, who noticed their premiums nudge up by just 0.3% in the last 12 months.

Drivers operating their vans as a car substitute are benefiting from falling insurance premiums. A typical ‘social, domestic and pleasure’ policy today costs £1,691 – down 3.1% in the last 12 months.

Meanwhile, drivers using their vans for business have seen premiums rise 0.3% over the same period. An average ‘carriage of own goods cover’ now stands at £1,805.

John Blevins, Consumer Intelligence’s pricing expert, said: “Whilst claims costs continue to be one of the main drivers for premium changes in this market over the long-term, we are seeing premiums trending down over the last 12 months.

“It appears that the Ogden rate reset hasn’t had quite the impact some in the industry predicted. The price reductions over the last quarter have actually confounded many forecasts.”  

Wealth and Finance
Cash ManagementPensionsPrivate BankingReal EstateWealth Management

The Mosaic of Modern Wealth: Wealth Advisers Must Keep Pace with Globally Mobile Clients

Wealth and Finance

The Mosaic of Modern Wealth: Wealth Advisers Must Keep Pace with Globally Mobile Clients

 

By Axel Hörger, CEO Europe at Lombard International Assurance

The world’s wealthiest people are on the move. According to this year’s Knight Frank Wealth Report, 26% of ultra-high-net-worth individuals (UHNWIs) are planning on emigrating in the next year. An astounding 36% already hold a second passport. For many, the ability to move their lives, families and assets freely around the world is the new norm.

This trend has been growing for well over a decade, fuelled by increased competition between countries seeking to attract the world’s wealthiest and drive investment. From France to Thailand, countries are seeing the benefit of adopting competitive tax regimes, investment-based visa schemes, and fast-tracked citizenship programmes. Since 2000, 20 EU member states have implemented these types of policies, resulting in approximately $28 billion in foreign direct investment.

For countries like Malta and Cyprus, this has led to a much-needed economic boost as thousands of wealthy individuals have invested in their local economies in return for residency or citizenship. In Portugal, attractive tax rates have in part led to a remarkable economic rebound, with GDP growth set to be one of the highest in Europe, while Lisbon and Porto consistently top the list of most attractive places to live in the world. As countries look to replicate this type of success story, global mobility is only set to increase.

But as global mobility increases so too does the complexity of managing wealth. Globally mobile clients will look to their advisers to be able to seamlessly manage their cross-border wealth, regardless of where they look to base themselves. And as many of the residency by investment programmes have a time limit, moving to a third or fourth country over a ten-year period is becoming increasingly normal. Wealth solutions for truly globally mobile clients need to be able to facilitate this unprecedented level of cross-border movement.

Advisers will also have to be aware that the globally mobile HNW and UHNW client base they are serving is expanding. In 2018, $8.7 trillion of personal financial wealth was held cross-borders – roughly 4.2% of the global total. The fabric of modern-day wealth is evolving as the sources and destinations of this wealth are set to change significantly over the coming years. For example, Boston Consulting Group predicts that by 2023, the value of Asia’s cross-border wealth will have grown by 150%.

Wealth advisers will need to keep pace with this dramatic shift and cater for the changing needs of this growing client base. Driven by continuing economic and political uncertainty in the region, HNWIs and UHNWIs from emerging markets will increasingly seek asset safety, protecting against currency depreciation, and the desire to gain stable returns through international diversification. What these clients need are wealth structuring solutions that can manage cross border wealth spread across multiple developed markets. They will also need advisers who are able to navigate effectively around any regulatory or cultural differences between markets.

The mosaic that makes up the lives of modern wealthy people is constantly shifting and being redesigned as wealth is distributed across a more diverse range of ages, genders and nationalities than ever before. What drives wealthy people around the world has never been so complex. For wealth advisers, this means greater difficulties and greater opportunities. The wealth management industry needs to understand the changing landscape that faces HNWIs and UHNWIs and offer solutions that can help them to navigate the uncertainty and complexity.

When I speak to clients, what they are looking for is comfort that their adviser has expertise across multiple markets and jurisdictions. What they want is a feeling of control over their wealth and life’s legacy wherever they are, wherever they want to be, and regardless of what lies ahead.

For more information about Lombard International Assurance, visit our website.

gdp
FundsRegulationTaxWealth Management

Boom or bust? Brexit’s impact on innovation and R&D

gdp

Boom or bust? Brexit’s impact on innovation and R&D

 

Brexit will undoubtedly affect life in the UK in several ways. The nature and extent of its impact, however, is anyone’s guess. Regarding research and innovation, on the surface not much should change. The R&D Tax Credit Scheme is a government initiative and while it is subject to European Union rules, ultimately the money is provided by HMRC, so the amount of funding available for creative pursuits should not be affected.

But Brexit will likely alter the entire business landscape for UK companies and these wider changes may indirectly affect the state of play for those looking to innovate.

Here innovation funding specialist MPA, which is exhibiting at Advanced Engineering 2019, looks at the implications of Brexit on innovation and R&D in the UK, and whether the current political uncertainty will actually give way to a more prosperous environment for businesses.

Funding freedom

According to the latest figures from the Office for National Statistics, UK spending on R&D rose by £1.6 billion in 2017 to £34.8 billion, placing it 11th in the EU for R&D expenditure as a percentage of GDP.

While such figures are impressive, with an average of £527 spent for each person in the UK, the spending is somewhat restricted by EU regulations. R&D tax credits are classed as ‘state aid’ by the EU and as such there are currently limits on how much the government can hand out to companies.

Once the UK leaves the union, this cap is removed, opening the door to higher value handouts and less strict qualification criteria. Such a move would be welcomed by SMEs across the country and would signal to the world that the UK is strongly encouraging innovation. Plans to increase funding are already in place, with the government’s long term industrial strategy aiming to raise R&D investment to 2.4% of GDP by 2027.

There’s widespread anxiety about the impact of Brexit on British industry and the government faces significant pressure to provide a boost for the economy. Investment in innovation would be a clear statement that the country is still thriving despite the political overhaul.

With the government potentially looking to reallocate some of the money they currently send across to Brussels, there could be funds available for such action.

Regardless of the nature of the UK’s trading relationship with the EU post-Brexit, innovation is always going to be vital for businesses to stand out and thrive in competitive industry landscapes. If trade deals put UK companies at a disadvantage on the world stage, the need to be creative and forward-thinking increases tremendously.

International collaboration

While international funding for UK research has fallen in recent years,from £5.6 billion in 2014 to £5 billion in 2017, it still comprises 14% of all investment in innovation. But it’s not just the financial connection to Europe that UK companies will have to cope without after Brexit, but the level of continental collaboration currently in operation at universities and research centres across the country.

UK industry and innovation is revered across the globe, with our institutions producing world-leading work in every sector. Such breakthroughs are only possible by bringing together the best people from across both Europe and further afield. In fact, in the decade prior to the 2016 referendum, 50% of all UK research publicationsinvolved a co-author from overseas. Moving forward, Brexit may make it more difficult for businesses to recruit staff from overseas and make cross-country projects rather impractical, if not impossible. There is talk of plans to only allow immigrants who earn over £30,000 to stay in the country and this could make it difficult for bodies to continue hiring skilled international research assistants and graduates as salaries for these jobs are generally below the threshold.

Britain’s booming tech industry has given the country potential to dominate and grow in IT and many other sectors. Mark Sewell, CIO of Microsoft recruitment partner Curo Talent, explains that for the many industries developing IT infrastructure, such as in financial services, there is concern that there may not be enough IT talent available to match increased demand. The average age of the IT workforce is increasing, and Britain’s education system is not producing an adequate number of skilled workers to replace these employees once they retire. This is exacerbated by Brexit and its restriction on access to talented EU-workers. To continue this development, businesses need IT workers with the skills to deploy the latest technology, unfortunately this talent pool may become limited.

Such barriers may force businesses to seek ventures elsewhere. Even British companies might start to launch their innovative operations overseas, targeting countries which have both good R&D incentives and simpler immigration policies, allowing multi-national teams to work without obstacles. Asian nations might be among those that benefit, with China and South Korea as potential suitors. In recent years, South Korea has been one of the world’s biggest investors in R&D and UK businesses could cash in on the country’s commitment to progress.

Uncertain fortunes

As with most aspects of Brexit, no-one really knows how the UK leaving the EU will impact on homegrown innovation. While some relevant policies will remain unchanged, such as the general R&D claim process, there are wider-reaching implications which could affect British researchers.

The UK has an excellent reputation for innovation and this could prove significant. If our economy suffers as a result of Brexit, the value of the pound against other currencies will fall. As such, global businesses may see British companies as attractive investments, as their quality services and projects will suddenly be available for smaller sums. This could potentially fill the void left by current EU funding.

R&D tax credits and Patent Box relief will play a crucial role in establishing the UK as a creative force post-Brexit. Once EU funding for projects is removed, the importance of the domestic HMRC initiative will amplify tremendously, potentially causing a rapid increase in applications.

Continuing and improving the financial incentives for businesses to spend time on R&D will ensure that the country continues to be at the forefront of innovation. MPA’s guidance on the R&D Tax Credit Scheme and Patent Box relief will help you see whether your company qualifies for the initiative.

MPA is exhibiting at Advanced Engineering 2019 and can be found at stand C14 in the Automotive Engineering section.

R&D
ArticlesCapital Markets (stocks and bonds)Corporate Finance and M&A/DealsTaxWealth Management

Meet the company recouping hundreds of thousands for UK business in R&D tax relief

R&D

Meet the company recouping hundreds of thousands for UK business in R&D tax relief

 

While growth in R&D tax relief claims has increased by 35% annually since inception in 2001 to over £4bn last year, and has already returned £26bn in total tax relief to businesses across the nation, the scheme is yet to be fully utilised by UK business according to R&D tax credit specialists RIFT Research and Development Ltd.

RIFT secures each client an average of more than £60,000 in tax relief due to R&D across sectors such as construction, manufacturing, agri-foods, ICT, advanced engineering, business and finance, mining and even education, but believe many are still failing to take advantage of the financial benefits. 

Introduced by the Government, the scheme is almost two decades old and encourages scientific and technological innovation across a plethora of UK business sectors. 

 

What is it?

It’s essentially Corporation Tax relief that when utilised, could reduce your company’s tax bill and in some cases, it can even result in you receiving payable tax credits.  

A company can qualify for R&D relief when they carry out research and development within their respective sector with the intention of advancing the overall knowledge or capabilities of science and technology within that field.  

 

R&D tax relief schemes

There are currently two R&D tax relief schemes in operation although the most beneficial is that aimed at SMEs which considers companies with a headcount of less than 500, a turnover of £86.3m or a balance sheet total below £74.3m – learn more.

If you want to see if your company qualifies and the types of costs you can reclaim, RIFT can also help you – learn more.

 

R&D sector success stories

RIFT has worked with countless companies who weren’t just unaware of R&D tax relief but had been incorrectly told by their accountants that they didn’t qualify.   

Here are some of the highest value claims.

Automotive: RIFT worked with an automotive industry tool manufacturer and identified £900,000 worth of qualifying costs, of which, the company was able to recoup £180,000 worth of previous costs.

Construction: RIFT worked with a leading construction company and identified £2m worth of qualifying costs for ongoing innovation across the entire business. Their accountant had identified just £50,000 worth of qualifying costs relating only to some new software they had developed and failed to recognise the gravity of the work they were doing within the sector. 

Architecture: Working with a private limited company practice within the architecture space, RIFT identified £1,000,000 worth of qualifying costs per year, after their accountant had told them their activities didn’t qualify as R&D.

Software: Thanks to RIFT, a client developing software was able to claim back a huge £750,000 from HMRC after £2.3m in qualifying costs were identified.

 
Head of RIFT Research and Development Limited, Sarah Collins commented:  

“Across the UK we have such a wealth of great businesses driving their respective sectors forward through research and development and it’s only right that they should be recognised in one form or another for doing so.  

However, time and time again, we see companies who are really leading the charge but are failing to maximise the return on their efforts by neglecting R&D tax relief. Some aren’t aware of the scheme full stop, while some are, but just didn’t realise that the innovative work they’re carrying out qualifies.  

Particularly now, while many SMEs are struggling with the potential implications of leaving the EU and the reductions in funding this might bring, R&D tax relief provides a very real, Brexit proof opportunity to maximise financial viability.”

Employee spending
FundsWealth Management

Friday 10am is peak time for employees splashing the company cash

Employee spending

Friday 10am is peak time for employees splashing the company cash

 

  • Company cards are most used at supermarkets and service stations

  • Fast food is bought more often than train tickets

  • Workers are most reliant on caffeine on Wednesdays, with West Midlands the coffee capital

Business owners and finance bosses may want to look away on Friday mornings as this is the most popular time for spending on company cards, according to new research. 

 

The data from business card provider, Capital on Tap, reveals that businesses spend more money on its company cards at 10am on Fridays than any other time during the working week, with the following hour also among the costliest periods. 

 

The top five times of the week for spending on company credit cards: 

1.       Friday 10am: users spend 225% more than they would usually  

2.       Tuesday 10am: users spend 223% more than they would usually 

3.       Monday 11am: users spend 214% more than they would usually 

4.       Friday 11am: users spend 213% more than they would usually 

5.       Wednesday 11am: users spend 208% more than they would usually 

 

Supermarkets and service stations are the most frequented locations for company credit cards, with the highest number of weekly transactions (16.7% and 15% of all weekly purchases respectively). 

 

There are also more purchases made on company cards in fast food establishments (4.9%) than for more traditional business activities such as rail travel (2.8%) and overnight accommodation (3.3%). In fact, Saturday lunchtime is the most popular time for fast food spending, with KFC (£11.67 spent per visit) proving more popular with workers than Burger King (£11.25) and McDonalds (£8.12). 

 

Out of hours spending at the pub is also a popular business expense, with end-of-week celebrations the peak time for spend in drinking establishments – 21% of this taking place between 8pm-9pm on a Friday. 

 

Gone are the days of the Monday morning ‘pick me up’, with only 19.2% of the week’s coffee purchases taking place at the beginning of the traditional working week. Instead, workers are looking for a midweek caffeine boost, with 21.4% of coffees being bought on a Wednesday. 

 

West Midlanders are the most reliant on coffee to fuel their working week, spending £9.22 in coffee shops on an average visit, while those in Wales are least dependent on the beverage (£6.56). 

 

Coffee spend per region: 

1.       West Midlands: £9.22 

2.       Northern Ireland: £8.79 

3.       North East: £8.79 

4.       Scotland: £8.70 

5.       Yorkshire and the Humber: £8.48 

6.       East: £8.41 

7.       North West: £8.30 

8.       South West: £7.80 

9.       London: £7.62 

10.   South East: £7.40 

11.   East Midlands: £7.22 

12.   Wales: £6.56 

 

David Luck, CEO of Capital on Tap, said: “It is interesting to find when workers are spending most on their work credit cards and spot patterns in how businesses are evolving. Finding that Friday evenings are popular for pub spending and Saturdays are peak times for fast food shows that business expenditure is not as traditional as we might have thought. 

 

“A refreshing diversity of spend was seen on Capital on Tap cards. Given our ability to service those that traditional banks opt-out of, it’s no surprise to see service station costs, lumber yards and parking lots as part of the funding use – retailers that are traditionally popular outside of the bigger cities.”  

santander
ArticlesBankingCash ManagementFinanceTransactional and Investment Banking

Santander Consumer Finance is expanding its online loan application platform across the UK

santander

Santander Consumer Finance is expanding its online loan application platform across the UK delivering an end-to-end digital solution

 

Santander Consumer Finance (SCF) is expanding its online loan application platform across the UK delivering an end-to-end digital solution for dealers further strengthening its commitment to growing the market.

The national launch of Apply Online which offers e-sign capability means customers can calculate the finance they need, receive immediate approvals and sign documentation at home or in showrooms ensuring that dealers remain in control.

Delivery of the end-to-end digital process has taken nine months since the launch of SCF’s online calculator in December and involved substantial financial and resource investments at SCF.

The calculator has proved popular – customers have generated more than 4.1 million quotes and 51 dealers have signed up for the calculator. Apply Online, which was successfully tested over the past month, is now available to all dealers using the calculator.

SCF’s digital solution is integrated into dealers’ websites and installation takes minutes for dealers who already have the calculator. SCF is providing additional support to help dealers make the most effective use of the digital proposition.

The system is designed to provide a simple, fair and personal experience for car buyers and builds on the success of SCF’s partnership with Volvo Car UK launched in April.

Stewart Grant, Santander Consumer Finance Commercial Director said: “We’ve worked hard to design a market leading end-to-end digital solution which ensures   dealers retain control of customer relationships while benefiting from our brand power.

“The financial investment and the time spent by our team in developing and delivering the digital transformation emphasises how committed we are to support our dealer network in maximising sales and profitability within the growing digital market.”

Dealers interested in using the calculator or wishing to register interest in the Online Application platform should contact their Business Development Manager or visit: www.santanderconsumer.co.uk/dealer

R&D tax relief
FundsTransactional and Investment BankingWealth Management

Capital on Tap Celebrates the Milestone of Lending Over One Billion Pounds to Small Businesses

R&D tax relief

Capital on Tap Celebrates the Milestone of Lending Over One Billion Pounds to Small Businesses

 

In seven years from creation, the fintech company Capital on Tap, celebrates a major milestone of lending over 1 billion pounds to more than 65,000 small and medium enterprise businesses across the UK. 

By 2018, Capital on Tap had lent £500m to small businesses, and in the short timeframe that followed to September 2019, has now doubled this number to hit the milestone of £1bn. The quick, two-minute online application has drawn-in customers from various industries who praise the lending service for its ease of use. 

The one billionth pound customer Elaine Speirs, founder of Speirs Consultancy Ltd in biopharmaceuticals, said: “It was very easy, very fast. I don’t remember having to have a conversation with anyone, and I got my credit card within a couple of days.”   

“The app is really easy to use on my phone, and there’s a website where I can track all payments; it’s just very simple, I don’t really have to think about it.” Elaine continued that “my own bank turned me down as I was a new business, and without even applying for a loan – that was after 25 years of banking history with them, which I was quite taken aback by.” 

The Capital on Tap ‘soft searching’ function is ideal for new business owners as it allows customers to find out if they’re eligible for a loan without impacting their credit score. This method challenges typical lenders and empowers customers, particularly benefiting those in rural parts of the UK who could suffer approval delays of up to three weeks. In addition, once the Capital on Tap fund is agreed; the money is available online in a matter of minutes, streamlining the lending function and supporting those who may struggle with traditional lending platforms. 

Support given by Capital on Tap has been commonly found to facilitate travel, allowing customers to work internationally without charging any extras. Sean Swart, founder of PICS Consultancy Ltd, highlights that “I am often required to move around as part of my job and the Capital on Tap card removes stress around cash flow created by expenses, mainly those from travel expenditure which is created as a by-product of my job.” 

David Luck, CEO at Capital on Tap, commented: “We started Capital on Tap in 2012, with a mission of making it faster and easier for small and medium enterprises to obtain working capital. Since lending money to our first customer back in 2013, I never thought we would have lent over £1bn to more than 65,000 small businesses in just seven years.” 

“We have worked to develop a lending platform that not only makes funding easier for small businesses, but also provides a service for traditional banks. Not only do we pride ourselves in supporting small businesses in the main cities, we provide a unique service for those in provincial areas, where traditional banks fall short.” 

For more information, visit the Capital on Tap website: https://capitalontap.com/

Colin Price
BankingHigh Net-worth Individuals

Colin Price appointed Group Chief Operating Officer at KBL epb

Colin Price

Colin Price appointed Group Chief Operating Officer at KBL epb

 

KBL European Private Bankers (KBL epb), which operates in 50 cities across Europe, announced today the appointment of Colin Price as Group Chief Operating Officer and member of the Authorized Management Committee, subject to regulatory approval.

Price – who has a 35-year track record of successfully advising leading companies worldwide on how to unlock their full potential – will oversee a wide range of support functions, including IT, Operations, HR, Marketing and Real Estate. He will personally participate in the group’s long-term success through a significant co-investment.

A former Partner at PwC and McKinsey who set up his own boutique consultancy in 2014, Price earlier served as CEO of Heidrick Consulting, a division of Heidrick & Struggles. He has also served as a Visiting Professor at Imperial College London and an Associate Fellow at Saïd Oxford, the business school of Oxford University.

Price, a British national, holds degrees in economics, industrial relations and psychology, and organizational behavior. He is the co-author of a number of books, including most recently Accelerating Performance: How Companies Can Mobilize, Execute and Transform with Agility.

In his new role, he will work alongside Eric Mansuy, who assumed the Group COO role last fall and has been named Group Chief Information Technology & Operations Officer, reflecting his areas of core expertise and reporting to Price.

Mansuy, who joined KBL epb in 2014 as Group Chief Information Officer, previously served as Chief Information Officer at RBC Investor Services. A French national who studied at the University of Lorraine and IMD Business School, he earlier held a number of senior roles in the IT department at Banque Internationale à Luxembourg, rising to the position of Head of IT Services.

“I have known Colin for many years, benefiting from his strategic insight as a trusted advisor,” said Jürg Zeltner, Group CEO and member of the Board of Directors of KBL epb, where he has taken a significant ownership stake.“I am delighted that he has joined our group’s leadership team as a full partner in this journey.

“Together with Colin and Eric – who has demonstrated his ability to tackle the most complex technological and operational challenges – we will move forward rapidly and with purpose, cutting through complexity to deliver even greater value to every client we have the opportunity to serve.”

“After spending a lifetime studying why companies succeed and advising countless firms on how to perform better, I’m grateful for the opportunity to all put my insight and experience to work for KBL epb,” said Price. “At this transformative moment for the group, we’re focused on effecting rapid, positive change that will make this an even better bank for our clients and our people.”

“I’m very pleased to be able focus more sharply on shaping IT and Operations strategy, working closely with Colin and team leaders across our footprint,” concluded Mansuy, who has successfully overseen the group’s migration to an enhanced IT platform, among other major projects.

gender equality
Wealth Management

In wealth management, better gender representation is better business

gender equality

In wealth management, better gender representation is better business

 

By Sofija Djapic, Business Development Manager, InvestCloud

Last year, more than half a million people took part in a survey conducted by the University of Cambridge that explored psychological differences between the genders. One of the long-standing psychological theories that it proved is the Empathising-Systemising theory of gender differences. Essentially: on average, women score higher on tests of empathy, and men score higher on tests of systemising, also known as the inclination to analyse.

No matter the gender, a good financial adviser is one who can empathise with their clients. Advisers who take the time to listen, understand long-term goals, and tailor advice to clients’ individual needs are those who will build strong relationships with clients and have a high retention rate. As we well know, women make excellent financial advisers, just look at Forbes Top Women Wealth Advisors 2019.

Yet while women make excellent financial advisors, women’s financial risk is increasing. The Chartered Insurance Institute (CII) also recently examined the rising levels of financial risk facing women in the UK. The conclusions are dismal. Women today are “less likely to accumulate wealth over the course of their lifetime than previous generations.”

It states that while women live longer than men, they are saving less. This is due to pay inequality and career breaks to care for families, children, and parents. Women in the UK face a significant pension deficit compared to men. By the age of 65, the average woman’s peak pension wealth is £35,700, one fifth of an average man. Longer life expectancy means the average cost for women entering a care home at age 65 is £132,000. Again, this is nearly double the same cost for a man.

These two issues create one difficult question for the wealth management industry: is it at risk of failing women?

 

Where does the problem originate from?

This issue is not unique to wealth management. The entire financial industry faces this same issue.

Representation is a huge factor in the entire financial industry – both from a client and an advisor perspective. Only seven percent of investment funds in the UK have a woman as the named manager or co-manager. This issue goes to the heart of a wealth management practice – down to the bottom line. A study by Ernst & Young found that 73 percent of female wealth management clients in the UK felt wealth managers misunderstood their goals and could not empathise with them. This has serious repercussions for client retention and acquisition.

Why? Because the number of financially powerful women is rising rapidly. There are many more to come from younger generations – especially with the coming wealth transfer.

This is a demographic that wealth management firms need to think seriously about. Currently, wealth managers are ostracising half their future potential client base. To attract these investors, wealth managers must change how they are perceived.

 

True representation, real empathy

If we aren’t seeing proper representation within the industry, how can we expect that services will be tailored to address the unique needs and circumstances of women? And how can we expect firms to appear welcoming and inclusive to potential clients?

Firms must make a concerted effort to hire financial advisers that clients can relate to. This requires a diverse culture. This not only means hiring more women, but also hiring advisers who are younger and come from different backgrounds – culturally and economically. This must go beyond gender-washing or tokenisation to deliver real value; this way wealth management firms can change how they are currently perceived by women and how they understand the needs of their female clients.

Having female advisers in a firm helps to integrate a greater understanding of the unique needs women have in trying to maximise their wealth. Financial advisors are already experts at delivering personal engagement. By improving upon their knowledge of women’s unique priorities, advisers will develop deeper relationships and increase trust.

To tailor these services to women, they must be built on empathy. For an increasingly younger and more tech-savvy demographic, this must also manifest as digital empathy. If a firm can translate its ability to deliver truly personal services into a digital environment, they will see massive benefits when it comes to onboarding women. This is done, as the EY study discusses, by improving micro-segmentation capabilities that in turn create more tailored client experiences that acknowledge women’s formal and informal goals, as well as their “soft preferences.”

Firms can augment this by employing behavioural science functions to design individual client experiences. This is done by harnessing client data. This data is used to inform the digital experience and improve digital empathy. It is gathered at all points – from how many times a client logs in to the platform, to what they view and the information they offer up. Data needs to be used to map out the client’s journey, ensuring that the adviser can anticipate needs and effectively service the client.

Digitising services opens opportunities to create empathetic relationships with clients in more ways than just data collection and analysis. Advisers can free up valuable time through automation and spend this time building their clients’ portfolios. It also means they can scale up to service more clients, without negatively impacting quality of service.

Balancing this digital empathy with face-to-face empathy is a winning combination for the next generation of investors.

 

Future-proofing the bottom line with representation and digital empathy

Digital platforms allow advisers to help clients navigate through turbulent times early. This further establishes trust – achieved through pattern recognition and prescriptive analytics, along with enhanced early warning indicators through automated monitoring of client data and alerts.

Implementing these changes will benefit all clients but will have the most immediate and profound impact on a firm’s female clients. This is because women can feel seen, heard and represented when it comes to making some of the most important financial decisions in their lives. This feeling can then be augmented into the everyday interactions through digital services.

This is how the industry can turn around the female experience: empowering our female clients within businesses and within the client base. The positive effects this has on the bottom line will quickly become obvious.

houses
FundsPrivate BankingReal Estate

Two Thirds of Buyers are Struck With Anxiety Fighting the Challenges of Buying Their First Home

houses

Two Thirds of Buyers are Struck With Anxiety Fighting the Challenges of Buying Their First Home

 

This year, reports revealed that first-time buyers (FTBs) account for more than half (51%) of the nation’s buying market for the first time since 1995 and with the average deposit for a first-time home now sitting at £33,000, today new research has revealed that mortgages have as much impact mentally as they do financially on first-time buyers.

According to a survey of 2,000 FTBs currently in the market for a home, commissioned by online bank Atom bank, two thirds (64%) have admitted to feeling anxiety when tackling the challenges of getting a mortgage and purchasing their first home.

A lack of education around mortgages is playing a huge part in buyers’ anxiety. Of the 64% of buyers who have felt anxious whilst looking for a house, a massive three quarters (74%) attribute being unsatisfied with their knowledge of mortgages as a key factor.

The process has become so overwhelming for some, that over a third (37%) of buyers recently considering purchasing a new property have pulled out due to the stress of it all.

3 in 5 (58%) admit that a key contributing factor to their high stress levels is saving for a large enough deposit. Though the stress is not limited to those on a lower income, as almost half (47%) of households earning more than £80,000 a year have said they’re struggling to save for a deposit. This is in spite of the fact they’re earning nearly three times the national average wage (£29,009).

Mortgage Complexity and Mental Health

The research reveals the complexity of the current mortgage process is causing first-time buyers to doubt whether mortgage companies actually understand the challenges modern buyers face.

More than 7 in 10 people (72%) who are anxious about the challenges of purchasing a home don’t think that mortgage companies fully comprehend the challenges buyers face. The consensus is heightened by the fact that more than three quarters (78%) of the nation believe the mortgage process is too complex and needs to be more consumer-friendly. More than a third (37%) of buyers – from builders to barristers – with a postgraduate degree feel dissatisfied with the mortgage process and with 7 in 10 (70%) of Brits looking to move in to their new home this year still feeling anxious about the prospect, the mortgage process proves to be daunting from start to finish.

The challenge is too much for one person’s shoulders, as a fifth (21%) of buyers going through the mortgage process by themselves have had to pull out due to stress, compared to only 6% of those going through it with at least one other person. This still takes its toll on those in a relationship, as two thirds (65%) have claimed that although they haven’t pulled out of the market, the process has given them anxiety.

Spend or Save: Where does all the money go?

The turn of the 21st century has brought a new challenge for millennials trying to save for a deposit. The average person spends £1,740 a year on amenities such as streaming and on-demand services, phone bills and electronic devices. Modern technology has also made travelling much more accessible, with the average person spending £1,152 a year on trips. Combining the two means the average person spends £2,892 a year on both exploring and everyday tech, which is more than 1% of the average UK house price (£230,292).

In efforts to balance the books, nearly half (46%) of buyers would be willing to move back home with their parents to save money. Higher earners are the most likely to move back home, as nearly half (47%) of those earning over £34,000 would move home to save money for a deposit, compared to 2 in 5 (39%) people earning under £34,000.

However, those living by themselves (69%) and former university students (53%) are least likely to move home, despite 3 in 5 (60%) students claiming that saving for a deposit is their biggest obstacle, as well as paying off their university debt which is on average £50,800.

 But moving home is just the start for some, as 2 in 5 (38%) of buyers admit that their only way of saving a large enough deposit is through financial support from either a family member or partner. The reliance on family help grows with the buyer’s age; Generation X are twice (26%) as likely as millennials (13%) to ask for financial help when they’re trying to buy.

Despite a double income, two thirds (65%) of those in a relationship say that the biggest obstacle they face is saving for a deposit, compared to half (50%) of singletons. Having children stretches finances further, as 2 in 5 (38%) buyers rely on financial help from their family or partner, compared to 1 in 5 (22%) of those without children.

Stick or Twist: Flying the nest

Over a third (37%) of FTBs look to buy in the same area they grew up, with a quarter (25%) stating that they will look to buy somewhere that’s close to their friends. Traveling may give millennials the confidence to buy a new home in the unknown, as a quarter (25%) look to move away from the area they grew up in to experience some where new, while only 1 in 10 (10%) of generation X are willing to move away from their childhood area to try something new.

A key factor behind many buyers’ move is their job as a quarter (26%) look to buy a property closer to work. Many buyers looking to change jobs are caught in a predicament, as 2 in 5 (38%) look to buy somewhere that will give them better job opportunities, but nearly half (46%) are struggling to save the deposit they need to get in to those desired areas.

 

Education, Misconceptions and Help

Millennials believe knowledge is key, as 1 in 5 (19%) stated that a lack of education is the key reason behind the stress issues for first time buyers, whereas only 1 in 13 (8%) people from generation X believe a lack of education is to blame.

The process starts with confusion, as 43% of people found it complicated to choose a company or mortgage broker to get the ball rolling, while two thirds (63%) of buyers have stated that choosing a mortgage type is the most complicated part of the process.

Half (51%) of buyers who recently pulled out of the market explained that having their documents in order was the most stressful part of the process, with their little knowledge on key terms being a key issue.

The research has revealed the most common words in the mortgage process that buyers had either never heard of or didn’t understand are:

Highest percentage of words that were never heard of

Over half the nation (52%) wish they’d been taught more in school about the mortgage process. Worryingly, almost as many people would seek mortgage advice from a parent (55%) as they would a professional (57%), despite the abundant challenges new buyers face.

The lack of education on mortgages has left buyers unaware of multiple schemes that can help first-time buyers get on the property ladder. 4 out of 5 (83%) buyers with children have never heard of a ‘Family Offset Mortgage’, over a third (37%) have never heard of the ‘Right to Buy’ scheme and nearly 4 in 5 (78%) are unaware of the ‘Starter Home Initiative’.

Mark Mullen, CEO of Atom bank, said: “Today’s findings have showcased just how much impact the mortgage process can have on a first-time buyer, before they’ve even entered the market.

“Buying a home is commonly the largest investment most people will make in their life time, which is stressful enough without worrying about the mortgage process. This makes it vital that buyers feel at ease from as early on in the process as possible. The results show that there is a real disconnect between advisors and buyers, as many people are seeking advice from their parents, who may have not purchased a property in decades.”

wealth management
Corporate Finance and M&A/DealsHigh Net-worth IndividualsWealth Management

Report calls for major digitisation of the wealth management sector but warns 84% of projects could fail

wealth management

Report calls for major digitisation of the wealth management sector but warns 84% of projects could fail

Over £20 billion of high net worth individuals’ investable wealth could be passed on to their loved ones every year, but as many as 80% of wealth manager’s don’t have an existing relationship with these beneficiaries. Digitisation is key to addressing this challenge.

A new report from Nucoro, a B2B fintech providing Wealth Management as a Service solutions, says traditional wealth managers need to totally re-engineer their operations if they are to prosper in the future. However, it warns that on average around 84% of companies generally fail at digitisation projects. 

The report entitled ‘The Future Challenges for Wealth Management’, says wealth managers and financial services companies in general need to prioritise and redefine what can be expected and achieved from digitisation, and make increased use of partnerships with expert solution providers.  

Nucoro says the digitisation of the wealth management sector needs to go beyond simply moving physical into digital, and fundamentally rethink products from the conceptual to execution. It says this is being driven by the rise of automation facilitating scalable growth, and the transformation of customers where their expectations, needs, behaviours and demographics are changing.

To illustrate this point, Nucoro estimates that on average, for the next decade over £20 billion of high net worth individuals’ investible wealth will be passed on to their loved ones every year, but as many as 80% of wealth manager’s don’t have an existing relationship with these beneficiaries. Many of these beneficiaries will be millennials who make great use of technology in all aspects of their lives, including managing their finances.

Nikolai Hack, the COO and UK MD of Nucoro commented: “As with any investment in a financial business, a central motivation should be to ultimately produce outcomes that can benefit customers. Adopting bolt-on enhancements like digital customer experiences or automations for back office functions are the best routes to upgrading the services to existing and potential clients due to their accessibility, scalability and affordability.” 

“Wealth managers must embrace technology. The industry is heavily regulated, and it therefore faces a large administrative burden, but technology can minimise the time and resources spent on tasks that are very basic but high in volume.”

The report highlights several key trends that innovative wealth managers need to address if they are to be successful in the future:

The growth of digital wealth management:

The report says it is now realistic to consider direct to consumer robo-platforms as legitimate industry challengers. By the end of 2018, they were managing $257 billion, and this could grow to $1.26 trillion by 2023. 

The rise of fintech new entrants:

While tradition still reigns supreme in wealth management, there are major indications that the next decade will see technology driven services enjoy strong growth. Taking an example from another industry, looking at the banking and payments market in Europe – new entrants (including challenger banks, nonbank payment institutions and big tech companies) that entered the market after 2005 now amass up to one third of new revenue, despite only taking 7% of the overall revenue.

Growing advice gap:

The cost of financial advice is demonstrably pricing out large sections of potential clients. A report in 2018 found that more than 40% of financial advisers has been forced to review their charging structures in the first half of 2019. This is a huge threat and opportunity for wealth managers

Wealth passed on to millennials/changing client needs

Beginning around 2030, an estimated $4 trillion of wealth is going to be passed on to millennials in the UK and North America from their parents. However, only some 20% of UK advisers currently have an existing relationship with their current clients’ beneficiaries, many of whom are millennials. This means that digital and mobile first access will become more universal as the younger generations mature. Digital finance is a highly effective engagement tool for younger generations.

Nikolai Hack said: “An unprecedented transfer of wealth is expected to be served by a shrinking pool of advisers. They will be dealing with a client base that is likely to need them to become more flexible and deliver a more modern and personal service.”

“This could mean more agile tech-driven firms will need to fill the gap. Alternatively, the existing firms could push to streamline their operational functions and manage overheads – cost cutting essentially – while handling an influx of orphaned clients at the same time.”

“For the next generation, their needs and expectations are centred on interacting with their finances via digitally accessible platforms that link their money, their everyday lives and their goals to the future. Greater customisation of service levels will also be key here.”

The reach of regulation

The number of individual regulatory changes that regulated organisations must track on a global scale has more than tripled since 2011. Tech can play a key role in helping wealth managers with this area of their business.

Conclusion

Nikolai Hack said: “For wealth managers, technology and digitisation can be applied across all functions, from onboarding clients and portfolio management to operations and reporting. It also enables wealth managers to become much more agile and focused on the needs of clients. However, wealth managers need to find the right balance between digital and human services and the key to success will be how wealth managers combine these two in order to meet the challenges now and in the future.”

From client onboarding to portfolio construction through to billing automations, Nucoro combines all the tools required to build the next generation of wealth management propositions. To help the wealth management sector move forward, Nucoro offers a new technology-based foundation built without legacies – a complete overhaul to the models of client service and accessibility. Nucoro’s is a radically different approach to the relationship between technology providers and the organisations adopting their solutions – in short, they can provide the new engine to power the next generation of financial services.

Whilst Nucoro has recently launched to the public, the technology behind it powers the retail investment platform, Exo Investing – a fully automated, AI-powered wealth management platform. Within the first year of operation, Exo won two industry awards (Best digital wealth manager OTY + Industry Innovator OTY at the AltFi awards 2018), was named as a finalist in three more and selected to two disruptive company annual indexes (Wealthtech 100 and Disruption50’s 100 most disruptive UK companies).

Nucoro is making this technology available for businesses in the wealth management sector that have the ambition to truly innovate and future-proof their businesses – and are struggling to realise their digital ambitions alone.

PensionsWealth Management

What are the top ways to save on everyday spending?

We’re always on the lookout for ways to save money, especially after our bank balances have taken a hit over the festive period. Of course, there are the traditional ways of saving such as budgeting and setting aside a certain amount of funds each month. But, without overly restricting your leisure activities, what everyday changes can you make to spend less?

1.      Spend less on your energy bill

Make small everyday changes to lower the cost of your energy bill.

Did you know that 4% of your energy bill is attributed to cooking? Work on lowering this if you can. Your oven stays warm for a long time after you’ve switched it off. Try turning it off 10 minutes before you’re finished cooking to save on energy.

Instead of turning your thermostat up during the colder months, layer up instead to save on pennies! Switching down by just one degree Celsius can save you £85 per year — it all adds up. When it comes to showering, cutting your shower time down to 5 minutes instead of 15 minutes can save you £98 per year — less singing and faster washing!

2.      Storing food properly

When we’re packing food away in the fridge or freezer, we usually don’t think about how it’s stored. But, the way that you put away your goods can have an impact on your energy bill.

If you pack your freezer more tightly, this keeps more of the cold air in when you open the door. This means that the appliance doesn’t have to work as hard to lower the temperature again. The same applies for the refrigerator too — a full fridge requires less energy to stay cool than one that’s empty. If you’re struggling to pack your fridge or freezer full, filling it with newspaper can do the job.

3.      Save money booking holidays

Even when we’re trying to save money, we all deserve a holiday now and then! The good news is that you can save money by following a few top tips the next time you book a vacation.

Try and fly out on a Friday if you can, this can save you 18% on your airfare compared to if you flew out on a Sunday. Taking into consideration the average cost of a flight and the fact that the average Brit goes on holiday three times a year, you could save £85 annually by following this top tip.

Be calculative about when you book your holiday too. You can save £36 per year by booking your trip on a Monday as flights are 5% cheaper.

Consider packing more economically too. You can save £144 per year by only taking hand luggage on your flights. Squeeze more into your suitcase by rolling clothes and packing garments in your shoes.

4.      Meal prepping

Being prepared when it comes to grocery shopping and planning lunches for the week can help save on cash.

Even making a shopping list before you head to the supermarket can help. In fact, 60% of people who take a shopping list to the supermarket said it saves them money. It stops you buying things that you don’t necessarily need and helps you stick to your budget.

Create a meal plan for the week too. This means that you’re only buying what you need and don’t need to spend money on unexpected lunches out. Statistics have shown that you can save an impressive £1,300 per year by preparing lunch at home rather than eating out during the week.

5.      Eco-conscious coffee drinking

There are a few ways that you can be eco-conscious about your coffee drinking while saving money.

First of all, you can start by making your coffee at home when you can. You can save £507 per year by making your coffee at home instead of buying one each day from a retailer. If you prefer coffee from the store, why not take your own cup? This is helping the environment and you can save £150 per year as many high street retailers now offer 50p off coffee when you present your own cup.

 

Make the small changes above and watch your pennies turn into pounds this year! For more saving tips, check out True Potential Investor’s Life Hacks interactive.

Transactional and Investment BankingWealth Management

Promising Regional Start-up Gets Funding from Hungarian Companies

  • Enter Tomorrow Europe, a venture capital fund operated by Lead Ventures has gained share in Czech start-up Neuron Soundware, utilizing investments from MOL and Eximbank.
  • The Czech start-up analyses sounds and vibrations to detect when industrial machines need maintenance.
  • Apart from the Hungarian companies, the EUR 5,7 million investment is also supported by two Czech capital funds, Inven Capital and J&T Ventures.

Lead Ventures continues to expand its portfolio with the help of MOL, Eximbank, together with Czech capital funds. Together, the business partners invested EUR 5,75 million in Czech company Neuron Soundware. The start-up is one of the first companies in the region to implement sound-based diagnostics of industrial machinery, which greatly helps factories using such equipment.

Enter Tomorrow Europe, a capital fund operated by Lead Ventures, supported by MOL and Eximbank used funds from Hungary for its latest /5000 venture capital investment. Together with Inven Capital, a member of ČEZ Group, Lead Ventures gained share in the Czech Neuron Soundware company.

Neuron Soundware was founded as a start-up in Prague in February, 2016. Currently, they employ 20 experts and last year, they had revenue of almost half a million Euros. The company provides AI-based solutions for several industries, including the energy industry. Their software analyses the sounds made by industrial machines, and can detect even the smallest of changes or unusual noises, indicating that the equipment is faulty or in need of maintenance. Their technology is already used by several global corporations, including Daimler, BMW, Innogy, E.ON, Airbus and LG.

“We know exactly how pumps, gearboxes, cylinders, electromotors, or compressors should sound. The sounds of all regular components of a machine are stored in a database. But that is not enough, our artificial intelligence software is able to distinguish problem noises from regular process hum and surrounding sounds, giving the customer the certainty that the machine will not pull off any unpleasant surprises,” says Pavel Konečný, founder and CEO of Neuron soundware.

“Predictive maintenance is a part of Industry 4.0. Neuron’s exciting technology has the potential to create a real break-through in this area. We trust that, with our newest regional investment, this innovative solution can improve the efficiency of several industries,” added Ábel Galácz, CEO of Lead Ventures.

“Start-ups from Central Europe, which have already been tested, have great potential to break through in global markets. As part of our strategy, we are looking for innovative solutions that can increase effectivity of technical processes in industrial services. Like our recent entry into Slovak GA Drilling, our entry into Czech Neuron Soundware is an example of a successful connection of small start-ups with a strong international company for further growth,” said Oszkár Világi, MOL Group Chief Innovation Officer.

The full value of the investment is EUR 5.75. Almost half of that sum is provided by Lead Ventures ETE, using funds from MOL and Eximbank. The rest of the price is covert by Inven Capital and Neuron’s previous investor, J&T Ventures.

Managing over EUR 100 million, Lead Ventures aims to support start-ups with innovative ideas all over the CEE region, assisting them to take their products or services to the global market. MOL has been supportive of the goals of the investment fund before. In March, for example, Lead Ventures signed a EUR 4,2 financing deal with the Slovakian GA Drilling company. GA Drilling focuses on developing a revolutionary electronic plasma technology, creating plasma drills capable of penetrating deeper layers of the ground at a reduced energy cost, making geothermic energy more accessible. As part of the deal, experimental drill heads are now being tested at MOL’s own hydrocarbon facilities.

EquityFunds of FundsInfrastructurePrivate Client

Fairjungle raises €1.8m to accelerate is growth in the European business travel market

The Paris-based start-up, founded by former McKinsey mangers and Apple engineers, has recently raised close to €2m to accelerate the deployment of its modern business travel management solution in France, the rest of Europe, and beyond.

Fairjungle shifts into second gear. After making a name for itself in 2018 in the world of business travel, the start-up intends to accelerate its growth in 2019 with this raise of €1.8m. This round is highlighted by a complementary group of investors such as entrepreneurs Thibaud Elzière (Fotolia, eFounders; PayFit investor) and Eduardo Ronzano (Keldoc; Meero investor), business travel expert Bertrand Mabille (former Europe MD of Carlson Wagonlit Travel), and Whitestones Ventures, an investment fund led by Goldman Sachs alumnus Youssef Kabbaj.

Corporate travel in the technology age
Launched at the end of 2017 by former managers and engineers from McKinsey and Apple, the start-up has developed a solid reputation as an innovative challenger in the world of business travel.

Today, Fairjungle allows business travellers to book all their trips on a single platform in just a few simple clicks, while saving their companies 20-25% on their travel budgets.

Using proprietary algorithms based on the latest machine learning technologies, Fairjungle helps customers reduce the average booking time from 25 minutes to 60 seconds.

Voted 2018 Start-up of the Year at the IFTM Tourism Fair, Fairjungle’s platform today boasts more than 400 airlines and over a million accommodation options, all available at the best prices on the market.

For CEO Saad Berrada “everything started from our experience as consultants at McKinsey. We spent a fortune travelling but had to do so via a user experience dating back to the 1980s. With the technological tools we have today it was mindboggling that there was such a large gap between leisure and business travel. Thus, we set ourselves the goal of providing business travellers with an experience closer to that of Amazon than that of the La Redoute phone catalogue. We worked with a team of former Apple engineers and designers to rethink everything from the ground up; that’s how Fairjungle was born!”

For Youssef Kabbaj, managing partner of Whitestones Ventures (www.whitestones.vc) “FairJungle is a one stop shop solution for lean organizations who want more efficient business travel while improving massively the user experience and streamlining the booking process. The market is enormous and the team is amazing. We are very proud at Whitestones Ventures to be part of this adventure as investors and as (very satisfied) clients.”

Fairjungle redesigned the typical booking process of a business traveller to save time and money for all stakeholders involved. Thus, the platform now allows users to book and prepay their next trip (flight and hotel) in less than one minute (vs. an average 25 minutes with traditional tools). On the employer side, travel management is facilitated through automated travel policy functionality, a travel budget approval module, and an accounting reconciliation support tool.

The start-up has also innovated by offering a gamification module allowing businesses to save nearly 30% on their business travel expenses, while improving employee satisfaction. How? By directly influencing the purchasing behaviour of employees and rewarding them for choosing cheaper travel options. Think of it as an “inverted” loyalty program that promotes savings, realigning the financial interests of the company (the payer) and the travelling employee (the trip consumer).

A barely disrupted €260 billion market
With this raise of nearly €2 million, Fairjungle intends to shake up the European business travel market, estimated at more than €260 billion. Although the market is still largely in the hands of traditional, poorly-digitised agencies, new players are developing abroad. TripActions, a California start-up, is positioned in the same segment in the US and is now valued at more than €1 billion. Fairjungle’s formula for success is to focus on technology and the user experience for both the traveller and employer.

Fairjungle Co-Founder & CTO, Bertrand Guiheneuf, trained at Apple and was long-time right-hand man of Jean-Marie Hullot, CTO of Apple. For him “the opportunity is, above all else, a technological one. The journey, and especially the business trip, has been inadequately disrupted by digital technology: the technical culture dates back to the 1980s and 90s. Much of business travel today is still done manually. This limits the possibilities of existing solutions but also opens up a world of exciting possibilities for a team trained in the development of consumer applications, like Fairjungle.”

Fairjungle shifts into second gear
By leveraging the latest technologies (e.g., artificial intelligence, NDC), Fairjungle is primarily targeting modern companies that are looking for a tool to help them manage their journeys easily and with better costs, whether or not they currently use a travel agency.

Having seen the power of Fairjungle’s platform, a large number of start-ups and SMEs, as well as some larger companies such as OVH, are onboard. With additional success abroad, especially in London and Dubai, the company sees big things ahead beyond France.

Private BankingPrivate ClientStock MarketsWealth Management

Ashfords LLP Launch Digital Legacy Service

The death of a loved one is a traumatic and difficult time. Dealing with an estate can often result in unnecessary cost, time and upset when trying to trace assets and meet the wishes of the deceased. Assets can be misplaced, forgotten about or even diminished in value before you get the chance to deal with them. Law firm, Ashfords LLP, has developed and launched a new and innovative digital legacy platform for private individuals to make executor’s lives easier.

Digital legacy enables users to keep a secure record of their accounts and assets (whether it is a bank account, shares or even the existence of social media accounts), leave messages for loved ones, set out funeral plans and wishes and help ensure that the process of dealing with their estate following their death is as easy and as cost effective as possible.

On the death of the individual the system is unlocked for executors in a read-only format to ensure that a clear audit trail between the wishes of an individual and the administration of the estate is maintained. The primary purpose of the system is to facilitate executors to know what exists so they can ensure all assets are accounted for and all accounts are closed.

Executors also have the option to open up a memorial book where friends and family can send in memories of the individual which can then be used at the funeral, executors can also send details of funeral plans through the Digital Legacy system if they wish to.

Michael Alden, Head of Private Wealth at Ashfords said: “We want to help individuals keep track of their estate and in turn help ensure that following a bereavement, families are able to close down any online accounts quickly and efficiently making the process less stressful, and potentially reducing the cost of administering estates. We are excited to launch our Digital Legacy service and hope this will be a real benefit to its users and their families.”

Garry Mackay, CEO of Ashfords commented: “Digital legacy is a further example of the firm adapting to the ever-changing needs of our clients. As lawyers, we have a responsibility to constantly look at innovative ways in which we can make things easier and more cost effective for our clients whilst continuing to provide the highest level of advice. Digital legacy is just one of a number of products we have in development for our private and business clients.”

Global ComplianceWealth Management

Sparta Global announces appointment of Andy King as Managing Director

Sparta Global, a leading provider of technology and business services, today announces the appointment of Andy King as its new Managing Director. Andy joins Sparta Global following the opening of its new Head Office at 125 London Wall and £4m equity investment from Private equity house Key Capital Partners (KCP) to support its continued growth and expansion.

With his new position as Managing Director at Sparta Global taking full effect from 10th April 2019, Andy will assist with the attraction, training and deployment of highly skilled graduates in blue chip organisations – reporting to David Rai, Co-Founder and Chief Executive Officer of Sparta Global.

As former UK & Ireland Managing Director of FDM Group PLC, Andy and his team were responsible for a total revenue of £106.7m (circa 52% of total group revenue) and more than 1800 consultants deployed with clients across the UK. Additionally, he was responsible for overseeing and implementing new academies across the UK. Before his 10-year tenure at FDM Group PLC, Andy was the Global Head of Testing at Barclays Wealth for 5 years.

David Rai, Co-Founder and Chief Executive of Sparta Global, says; “Attracting someone of Andy’s calibre, track record and growth potential to Sparta Global is incredibly exciting. Andy is a highly motivated individual with extensive experience managing and leading global teams across sectors such as investment banking and the public sector. His proven track record in sales, graduate recruitment, training, mentoring and programme delivery – combined with a positive attitude and passion to drive a successful team – makes him an ideal fit for Sparta Global.”

Of his appointment, Andy King says; “I am hugely excited to be joining Sparta Global at such a key stage in its growth and development. Sparta Global has built a strong platform in the UK with Academies in London, the Midlands and North of England, fulfilling the growing UK-wide demand for diverse, highly skilled and dynamic technology professionals. I look forward to working with the exceptional team at Sparta Global and giving our clients the tools to power technology projects across a diverse range of industries”.

Foreign Direct InvestmentHigh Net-worth Individuals

Puzzel receives growth investment from Marlin Equity Partners

Puzzel, a leading European omni-channel cloud contact centre software provider, today announced the completion of a majority recapitalisation and growth investment from Marlin Equity Partners (“Marlin”), a global investment firm with over $6.7 billion of capital under management. Puzzel’s best-in-class, multi-tenant cloud contact centre as a service (“CCaaS”) platform allows clients worldwide to manage and optimise their customer interactions across voice, email, chat and social media platforms.

“Puzzel’s leading position in the market, knowledgeable employees and pioneering technology platform positions us well to successfully scale our business,” said Børge Astrup, CEO of Puzzel. “Marlin has a proven track record of supporting and partnering with high-growth software businesses and we look forward to working with them to execute our strategic plan to accelerate growth, bring new and added functionality to our customers and expand into new markets.”

“In Puzzel, we saw a business with a comprehensive omni-channel CCaaS solution that is both scalable and flexible, and designed to support contact centres of all sizes,” said Mike Wilkinson, vice president at Marlin. 

“The company has experienced tremendous growth across Europe that is being further fuelled by feedback and advocacy from market-leading customers. We are excited to partner with an exceptional management team to seek new partnerships, invest in new opportunities to enhance the product suite and expand the company’s geographic presence.”

About Puzzel
Puzzel is a leading cloud-based contact centre software provider and one of the first pioneers to develop a cloud-based contact centre offering. Today, Puzzel combines its omni-channel technology with artificial intelligence capabilities to provide comprehensive, end-to-end customer interaction solutions in an age of digitisation. Puzzel was named a Challenger in the 2018 Gartner Magic Quadrant for Contact Centre as a Service, Western Europe, Report 2018 for the fourth consecutive year for its strong growth, functional capabilities, strengths in standards and compliance, customer service and support. The company is headquartered in Oslo, Norway, with offices in six European markets including the U.K. For more information, please visit Puzzel.

About Marlin Equity Partners
Marlin Equity Partners is a global investment firm with over $6.7 billion of capital under management. The firm is focused on providing corporate parents, shareholders and other stakeholders with tailored solutions that meet their business and liquidity needs. Marlin invests in businesses across multiple industries where its capital base, industry relationships and extensive network of operational resources significantly strengthen a company’s outlook and enhance value. Since its inception, Marlin, through its group of funds and related companies, has successfully completed over 140 acquisitions. The firm is headquartered in Los Angeles, California with an additional office in London. For more information, please visit Marlin Equity

OffshoreWealth Management

How to choose the right country for opening a company

How to choose the right country for opening a company 

The world we live in today has made it quite easy for most of us to start our own company. The Internet has created a lot of new business opportunities and ideas which can be successfully put to use and to the benefit of others. With so many options, choosing the country to set up a business in is one of the most important challenges.

Selecting the country to open a company depends on the money one is willing to invest, the industry or the profession of the business person and, of course, the legislation in that particular country. Plus, one also needs to consider the many frauds which have developed along with the appearance of the Internet. One must always consider asking for legal advice from a criminal defence lawyer, if confronted with a possible fraud.

Let’s see what one should consider in terms of country of choice when deciding to start a business.

Taxation is essential when opening a business

Most business persons consider taxation as one of the most important aspects when choosing a country to start a business in. There are onshore and offshore destinations, if we are to categorize countries from a taxation point of view; however, there are also countries which provide for low taxes just as offshore states. For example, large companies can decide to set up subsidiaries in Labuan, one of the most important offshore jurisdictions in Malaysia, while benefiting from a very good taxation system.

Offshore jurisdictions are still preferred by many investors

Offshore countries remain among the preferences of many foreign entrepreneurs who consider they can reduce their taxes and ensure a higher degree of confidentiality if they decide for such a jurisdiction. Let’s take Seychelles, for instance: setting up an offshore company in Seychelles will definitely offer a good protection when it comes to the assets of the owner, if one chooses this business form. Investors can also decide to open onshore companies and complete activities just like in any other onshore jurisdiction.

Going for traditional country

There are also entrepreneurs who decide to go the old-fashioned way and settle their companies in traditional countries with well-established regulations. These are usually European countries, such as Germany, France, Spain and Italy which have evolved a lot in the last few years, especially in accommodating the needs of the new generation of investors which rely on new technologies. Those who decide to operate in Italy, for example, are advised to use the services of a local law firm in order to integrate their businesses under the legal requirements of the authorities here.

No matter the country one decides for setting up a business, what matters in the end is for that country to answer the needs of entrepreneur, while his or her products or services answer the needs of the clients in that country.

Wealth Management

Which liquidation option is best for my business?

If you reach the crossroads of having to close down your insolvent business or solvent business, you may explore liquidation to settle your financial affairs and repay creditors. Depending on the financial state of your business, including the strength of your cash flow and balance sheet, this will determine your next step which will either be a Creditors’ Voluntary Liquidation (CVL) or Members’ Voluntary Liquidation (MVL).

If you are deep in the process and you are unable to respond to creditor demands or come to an agreement, the creditor may apply for a petition to wind up your company. If granted by the court, your business could be forced into liquidation, writes Keith Tully of Real Business Rescue. Following the appointment of a licensed insolvency practitioner, here are the two liquidation options you can explore.

Creditors’ Voluntary Liquidation: As indicated in the name, a Creditors’ Voluntary Liquidation is voluntary action against an insolvent business as it can no longer keep up with payments. In order to safeguard the business from legal action and to protect the best interests of creditors, a CVL may be the most financially suitable option for your struggling business.

What happens in a Creditors’ Voluntary Liquidation?

In order to successfully initiate a Creditors’ Voluntary Liquidation, you will be required to appoint a licensed insolvency practitioner. As the action is voluntary and not forced upon, the shareholders will be in control of appointing an insolvency practitioner.

A Creditors’ Voluntary Liquidation will result in assets to be realised in order to repay outstanding debts to creditors. Before doing so, all shareholders will have to be in mutual agreement that the business is insolvent and that a CVL is the most appropriate form of action. You will be required to contact creditors to inform them of the company’s financial position and share an estimation of the assets held by the business. Each asset will require an individual valuation and should not be undervalued. If a director is interested in purchasing assets belonging to the business, this can only be conducted through an insolvency practitioner and should be sold at market value.

As the insolvency practitioner will be in control of the business, they will also be responsible for handling employee claims. An investigation will take place to ensure that the company director acted fairly and dutifully. If the director neglected directorial responsibilities, they could face disqualification and even be held personally liable for the debts of the business.  

Members’ Voluntary Liquidation: A Members’ Voluntary Liquidation (MVL) is a suitable closure option for a solvent business which will allow you to shut the business down in a cost-efficient manner. This is an effective exit planning tool for a profitable company which has reached the end of its lifetime, such as in the event of director retirement.

This option is only suitable for a solvent business which is able to settle liabilities within 12 months. An MVL is appropriate for businesses with retained profits of £25,000 pounds or more. If the business holds less, it may not be financially viable to opt for a Members’ Voluntary Liquidation as there are costs involved which may set your business back. This includes payment for an insolvency practitioner, costs for legal notices such as a Gazette notice and financial protection for company funds typically determined by asset value.

Prior to an MVL, all financial obligations should be settled, including debtors chased and funds collected. All HMRC liabilities should be paid, including the submission of HMRC accounts and documents. After carrying out due diligence, your intention to close the company will be advertised on the Gazette, making it public knowledge which is when outstanding creditors will be invited to submit any claims. After clearance from HMRC, company funds will be distributed amongst shareholders and the company will be dissolved which refers to the removal of the company record from Companies House.

Compulsory Liquidation: This process will begin after a creditor brings forward a winding up petition for your business if standard methods of recovering money have failed. Compulsory liquidation essentially forces the company to liquidate assets so they can be sold and proceeds distributed to creditors. If you are in debt of £750 or over, the court will be able to force your business into liquidation.

  • Statutory Demand: A statutory demand is a formal request for outstanding payments to be made. If you have been issued with a statutory demand and the 12 day repayment period has passed, your business could be forced into liquidation
  • County Court Judgment: An unpaid County Court Judgment (CCJ) can also result in compulsory liquidation. A CCJ is a court order granted against you if you fail to respond to court action. This is a serious form of action as if a CCJ is issued; this will remain on your record for six years, hindering your chances of qualifying for finance, including a mortgage

Following the liquidation of the business, the company will be struck off the Companies House register, resulting in the dissolution of the business. This option is not voluntary as it will be forced upon by the court following a formal request from creditors.

The key difference between a CVL and MVL is that a CVL is a tool for an insolvent business and an MVL is a tool for a solvent business. If you are in the process of making this decision, it is important to move forward in a fast and efficient manner as you may be prone to being hit with legal action from creditors during this time period. As such, liquidation can give you sufficient breathing time to get your affairs into order. If you are in the position where you are considering the liquidation of your business, it is best to seek advice from a licensed insolvency practitioner to ensure you close your business in a tax efficient and legal manner.

This advice column was written by Keith Tully, a specialist in business turnaround and recovery at Real Business Rescue.

High Net-worth Individuals

Netflix expands global customer care with Teleopti’s flexible, cloud-based Workforce Management solution

Teleopti today announced that Netflix, the world’s leading provider of online entertainment and streaming services, has selected the company’s strategic, cloud Workforce Management (WFM) suite to increase the flexibility of staff planning and support complex, global customer service operations.

With 139 million memberships in over 190 countries, California-based internet entertainment service Netflix has embarked on a new journey toward customer service planning in the cloud. Netflix will use Teleopti’s dynamic WFM solution to support, schedule and empower more than 5,700 customer representatives at contact centers across the globe. As Netflix continues to expand its worldwide footprint, with customer support spanning multiple time zones and numerous languages, the need arose to revolutionize its workforce scheduling and management processes.

Fred Senerchia, Global Head of Workforce Management at Netflix remarked, “Teleopti provides a cloud solution that closely aligns with our business vision and goals for the future. As we continue to expand our CS footprint worldwide and grow our team of multi-skilled frontline representatives, it’s imperative that we have a workforce management software that solves for the increasing complexity of forecasting and scheduling agents across several different regions, time zones and languages. We believe Teleopti will meet those needs as we partner together on a global implementation of the software.”

Netflix has selected Teleopti’s cloud-based Advanced WFM package providing features to meet key areas of need, including real-time monitoring and adaptivity, intuitive employee engagement tools and the ability to quickly scale up operations to meet business growth. Alongside a fully-supported deployment and post-implementation training to ensure WFM success, Netflix will have access to a test environment to continue optimization within their own realm of data.

David Pahlman, President of Teleopti North America concluded, “Our WFM technology enables strong enterprises like Netflix to handle large-scale, complex operations while maintaining ease of use and adaptability. The goal of our cloud-based technology is to simplify business operations at a global level. We’re excited to welcome Netflix to our community of great customers.”

High Net-worth Individuals

Cloud Foundry 2019 North American Summit Begins in Philadelphia, Announces Project Eirini Ready for Early Adopters

 

Cloud Foundry Foundation, home to a family of interoperable open source projects for the enterprise, opened its North American Cloud Foundry Summit in Philadelphia, Pennsylvania today, with news from organizations including Engineer Better, IBM, Pivotal, Resilient Scale, SUSE, Stark & Wayne, Swisscom and many others. The 2019 North American Summit is taking place today through April 4 and is supported by Diamond sponsors Comcast and Pivotal, and Platinum sponsor IBM Cloud.

“We are excited to host Summit on the east coast again this year,” said Abby Kearns, Executive Director, Cloud Foundry Foundation. “This Summit will be focused on celebrating the momentum of our community, highlighting stories from open source contributors and Cloud Foundry users, as well as providers, integrators and service providers. This year’s Summit theme is ‘building the future’ which is exactly what our community is committed to doing.”

The Foundation announced findings from its most recent Global Perception Study in a report titled “Adaptation, Not Adoption, is the Key to Digital Transformation: Why IT Strategy Requires a Perpetual State of Change.” With more than half of companies surveyed putting mission-critical apps in the cloud, it’s clear that digital transformation is the new reality, and that companies must adapt to constant change to keep up.

The Foundation is pleased to announce Project Eirini is now passing the core functional tests that validate Cloud Foundry Application Runtime releases, with future work focused on production readiness and testing against hosted managed Kubernetes environments from various public cloud providers. Initially proposed by IBM, Eirini has full-time engineers from Google and Pivotal working on the project, in addition to continued contributions from IBM, SAP and SUSE. The software is now mature enough that early adopters have begun to deploy it into production environments. At the EU Summit in 2018, Cloud Foundry Foundation announced Project Eirini’s acceptance as an incubating project by the Application Runtime Project Management Committee, which oversees projects associated with the Cloud Foundry Application Runtime and their coordinated roadmaps. Eirini works to provide developers with the “cf push” experience that makes it easy to push an app to production on top of Kubernetes.

The Foundation is also pleased to announce its first two Certified Systems Integrators, following on the program’s launch in October at the European Summit. Each with at least ten Cloud Foundry Certified Developers on their teams, Accenture and HCL have demonstrated contributions to the Cloud Foundry community through contributing code, hosting meetups, Foundation membership and more. The Certification program is designed to help SIs, consultancies and professional services organizations highlight their expertise working with the Cloud Foundry family of technologies.

Foundation member news includes:

A collection of Foundation members, including Resilient Scale, Stark & Wayne and SuperOrbital, in addition to TechFlow, have joined together to form the Continuous Delivery Alliance. The Continuous Delivery Alliance aims to fix the DevSecOps challenges in government from contracting through implementation by bringing together a collective of professionals with deep expertise in technology and government contracting. The Alliance offers unparalleled expertise in technologies including Cloud Foundry, Kubernetes, AWS, Azure, GCP and practices like continuous integration/ delivery and DevSecOps.


Altoros has released new versions of the Pivotal Cloud Foundry (PCF) tiles for Jenkins, Elasticsearch, and Cassandra, upgrading BOSH stemcells and existing integrations. The updated Xenial stemcells help avoid exposure to security vulnerabilities, while integrations with new versions of products will enable enterprise users to enjoy the features of the latest stable releases. In April, migration to Xenial stemcells for the six PCF tiles created and maintained by Altoros, including an upcoming new release of the Heartbeat Cloud Foundry monitoring, will take place. PCF tiles are packaged tools that can be integrated into Pivotal Cloud Foundry, enabling developers to use third-party services.


Anynines announced the release of release of a9s Platform, a fully automated platform distribution comprising open source Cloud Foundry and the a9s Data Services, as well as on-demand Kubernetes. The platform allows users to leverage open source technologies to bootstrap fully automated production grade platform environments. Technical support and remote operation options are available. EngineerBetter announced that “Control Tower” is the new name for “Concourse-Up,” the company’s enterprise tool for deploying and operating Concourse CI in a single command. Concourse CI is used heavily throughout the Cloud Foundry ecosystem. With its new name, Control Tower will be available through new distribution channels and brings with it new features including Google Cloud Platform support and full support for Concourse 5.


Evoila announced new service brokers, which provide software systems such as databases, message queues or log aggregators with standardization to speed up software development. The service brokers make it possible to run two environments, such as Cloud Foundry and Kubernetes, next to each other and share their service instances. The Open Service Broker API 2.15 will soon provide a higher independence of special platforms and improve asynchronous ordering processes. By developing these new service brokers, evoila is further expanding its commitment to the standardization of complex processes. Grape Up announced its flagship product Cloudboostr can now be deployed on OpenStack. Integration with the new cloud infrastructure unlocks a broad range of opportunities for companies using on-prem OpenStack. Cloudboostr provides a complete enterprise-grade cloud stack ready in days, gives the freedom to choose the best suitable runtime for any needs, and reduces the risk of upgrade compatibility issues and the complexity of applying patches.


IBM announced the launch of an Eirini-based technology preview of its Cloud Foundry Enterprise Environment, available for self provisioning. IBM Cloud is working to simplify development and operations by bringing together Cloud Foundry, Kubernetes, and Functions under one management umbrella to enable development teams to spend their valuable time coding to solve business problems. A major step towards that goal is Project Eirini, where IBM is leading the effort alongside other Foundation members SUSE, SAP, Pivotal and Google, to bring native, pluggable Kubernetes application container scheduling to Cloud Foundry. IBM is supporting Project Eirini to bring coordinated operations of Cloud Foundry application containers and those created by other means to the same Kubernetes cluster. This allows for easy and more secure communications between Cloud Foundry and Kubernetes applications, and unlocks the vast ecosystem of Kubernetes tooling and capabilities to both the Cloud Foundry developer and administrator. 


Packet announced an Edge Access Program, providing commercial and open source users with free access to edge computing building blocks at a diverse range of venues and locations. Resources include API-driven x86 and Arm bare metal compute infrastructure; automated cloud interconnect to Azure, GCP and other public cloud ecosystems; and CBRS wireless through Federated Wireless. 


Pivotal announced the release of Pivotal Cloud Foundry 2.5, a collection of enhancements to its flagship application platform, including weighted routing, a new feature enabled by Istio and Envoy. 


Stark & Wayne announced the launch of their managed service cloud solution for Pivotal Cloud Foundry and other cloud native technologies. Benefits to managed service subscribers include lower operational costs, a greater focus on app development, faster time to market, and accelerated feedback loops, which leads to faster problem resolution and higher quality end products. Stark & Wayne also announced SHIELD v8.1, now in Tile form, for PCF Operations Manager customers. SHIELD is a flexible and secure data protection solution for cloud data systems. Built on AES-256 encryption with randomized keys, and leveraging native backup / restore mechanisms like Percona Xtrabackup and BBR, it allows operators to sleep well knowing their critical data is protected.


SUSE announced SUSE Cloud Application Platform 1.4, the first software distribution to introduce Cloud Foundry Application Runtime in an entirely Kubernetes-native architecture, will be available in April. SUSE Cloud Application Platform 1.4 includes a technology preview of Project Eirini that allows operators to take greater advantage of the widely adopted Kubernetes container scheduler. The new Kubernetes-native Eirini implementation deepens integration of Kubernetes and Cloud Foundry, further bringing the advanced Cloud Foundry developer experience to Kubernetes environments and giving users the ability to choose either Kubernetes or Diego as their container schedule. Whether customers choose Kubernetes or Diego, the developer experience is the same. SUSE Cloud Application Platform 1.4 furthers SUSE’s commitment to supporting customers’ multi-cloud environments by adding support for Google Kubernetes Engine (GKE), Google’s managed Kubernetes service, in addition to existing cloud support for Amazon EKS and Azure AKS, on-premises support with SUSE CaaS Platform, and multi-cloud support bridged by the Stratos UI.


Swisscom announced new features of the Swisscom Application Cloud: true security with encryption plan for S3 dynamic storage and auto-scaling of applications based on the Cloud Foundry Platform Application Cloud from Swisscom. Swisscom continues to enhance its cloud with upcoming new features are waiting to be announced, which will be developed and made available by the strong commitment of the community.
TIBCO its market-leading API management platform, TIBCO Cloud(TM) Mashery, is now cloud native. The platform can now be deployed anywhere, including certified support for PKS to make Kubernetes deployments easy, and integration with DevOps tooling even easier. TIBCO also released new capabilities to create cloud native integration apps via its API-led integration offering TIBCO Cloud(TM) Integration and BusinessWorks(TM) Container Edition for Cloud Foundry Container Runtime and Pivotal Cloud Foundry 2.x.

Enterprise developers, architects, engineers and executives from around the world are expected to attend the Philadelphia Summit. Attendees will learn about Cloud Foundry from those who build and use it every day. They will join other developers, end users and CIOs to gain first-hand access to Cloud Foundry roadmaps, training and tutorials, and to see how others are using Cloud Foundry to support continuous innovation and application portability.

Today the first-ever Contributors Summit takes place to foster community among open source project contributors and enable technical roadmap discussions. Tuesday’s Hackathon winners will be announced on-stage during Thursday morning keynotes.

On Thursday, Cloud Foundry Foundation will host its annual diversity luncheon at Summit, which will feature a diverse line-up of speakers and panelists discussing digital accessibility, advocacy and mentorship, gender equity and more. This event is co-sponsored by IBM Cloud and the Cloud Native Computing Foundation.

Find the full schedule here.

Cloud Foundry is an open source technology backed by the largest technology companies in the world, including Dell EMC, Google, IBM, Microsoft, Pivotal, SAP and SUSE, and is being used by leaders in manufacturing, telecommunications and financial services. Only Cloud Foundry delivers the velocity needed to continuously deliver apps at the speed of business. Cloud Foundry’s container-based architecture runs apps in any language on your choice of cloud — Amazon Web Services (AWS), Google Cloud Platform (GCP), IBM Cloud, Microsoft Azure, OpenStack, VMware vSphere, and more. With a robust services ecosystem and simple integration with existing technologies, Cloud Foundry is the modern standard for mission critical apps for global organizations.

 

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Can You Predict The Future Price of Bitcoin?

You can’t spend five minutes reading about cryptocurrencies without stumbling across at least one prediction for the future price of Bitcoin.

Across forums, social media, newsletters, blogs, news sites and every other corner of the internet — financial analysts, expert investors, bankers, tech icons, and new enthusiasts offer up their views.

Some cite careful analysis, some base it on past trends. While others are guessing or acting on their ‘intuition.’ Their predictions are varied, ranging from a plummet to zero, to millions.

With all this noise surrounding the Bitcoin price, you might be wondering whom to believe. Or if you should believe anyone at all. Is it possible to predict the future?

Investing begins with education, not buying. So it’s important to think about the information you base your buying decisions on.

How do people make price predictions?

There are two types of analysis used for predictions: fundamental and technical.

They’re used for everything from the stock market to Bitcoin. While other types of analysis do exist, these are the main ones.

Fundamental analysis

Fundamental analysis is all about intrinsic value. You look at the factors that give something value, then decide if it’s under or overvalued. Publicly traded companies release lots of information to help with this. So, for a stock you might look at a company’s:

  • Revenue (how much money it’s making)
  • Profit margins (how much of the revenue is profit)
  • Growth potential (how much money it could make in the future)
  • Management (how competent the people in charge are)

Some of these factors can be defined in numbers. Others come down to the judgement of the analyst.

For a cryptocurrency, you might look at its:

  • Price growth (how the price has grown over time)
  • Scalability (if it has the potential to keep growing)
  • Security (if the network is secure and safe from attacks

​Technical analysis

Technical analysis is different as it focuses on an asset’s price, not the asset itself. Maybe you’ve heard the phrase ‘past performance is not an indicator of future performance.’ But technical analysis bases future predictions on the past. This can be based on a short time frame (hours or even minutes) or long (months or years.)

To do this, you look for patterns and trends in price charts, such as:

  • The average price over a chosen time span
  • The price at which a lot of investors start buying
  • The price at which a lot of investors start selling
  • The overall price trend

Do fundamental and technical analyses work?

There’s no straightforward answer to that question. Both techniques can be useful, but they also have their limitations for cryptocurrencies.

Fundamental analysis works when investors base their decisions on fundamentals. This isn’t always the case for Bitcoin. Many investors base their decisions on the decisions they expect others to make.

Technical analysis assumes that a market follows rational rules and patterns. It’s less useful for cryptocurrencies because the market is still young. There isn’t as much past data to analyse. Cryptocurrencies also have less liquidity than something like stocks.

Self-defeating and self-fulfilling prophecies

When we talk about price predictions, we run into an important concept: self-defeating and self-fulfilling prophecies.

Making a prediction about the future can end up changing what actually happens.

The prediction about the future creates the future.

This isn’t the case when we talk about a system like the weather because we can’t change it.

But when you make predictions for a system involving people, it’s different.

Hearing predictions can cause people to change their behaviour.

Sometimes this happens in a way that prevents the prediction from coming true — a self-defeating prophecy — or it can cause the prediction to come true — a self-fulfilling prophecy.

Predictions about cryptocurrency prices have the power to influence how investors act. If it’s predicted the Bitcoin price will increase, this encourages more people to buy. This can drive up the price, and vice versa.

That brings us to incentives.

The issue of intentions

Incentives are what motivate people to do what they do. It’s an important concept in investing. Financial gain is a powerful driving force.

Most investors understandably want to do whatever will make them the most money. This can include making predictions that benefit them.

Let’s say you come across an article where the author claims Bitcoin will be worth $100,000 by December 1st 2019. Rather than taking that at face value, it’s important to ask: why are they saying this? If they know for certain, why don’t they put all their money into Bitcoin, and make a huge profit? Why are they sharing that information?

Likewise, if someone claims Bitcoin will drop, you might wonder why they’re saying that. If they know for certain, why don’t they keep quiet, short it, and make a big profit?

In both cases, we need to consider the underlying incentives.

If someone stands to profit from the Bitcoin price increasing, it’s natural they’ll predict it’s going to do that. They’re hoping this will turn into a self-fulfilling prophecy. If someone stands to benefit from it decreasing or to suffer if it increases, it’s not unexpected that they’ll predict it’s going to decrease.

Luck and probability

But if no one can predict the future, how come some people do make correct predictions?

Maybe you heard that your brother’s roommate’s cousin’s coworker’s uncle correctly predicted the price of Bitcoin. Or you’ve seen someone on Youtube who seems to always get it right.

The fact that no one can predict the future doesn’t mean no one can make correct predictions.

It comes down to luck, probabilities, and information asymmetries.

First, luck. Every day, thousands of people make predictions about Bitcoin prices. It’s inevitable that some of them will be correct by luck.

As they say, even a stopped clock is right twice a day. With so many people making predictions, it’s likely a percentage of them will be correct.

When professional forecasters make predictions, they usually base them on probabilities. What’s the most likely outcome? A weather forecaster might say it’s going to rain tomorrow because there’s a 62% probability. They don’t know it for sure. It’s just more likely than not.

Then there’s insider information. If you know something most investors don’t, you have a big advantage. For example, if you have insider information that Apple is about to release a new product, it’s reasonable to expect the stock will go up. But other investors buying Apple stock aren’t aware of that information, so they can’t predict it.

Insider information is less meaningful for cryptocurrencies. There’s a less direct link between fundamentals and prices. Events that seem like they should cause an increase or decrease can do the opposite or nothing.

Conclusion

The next time you look at a cryptocurrency price chart, imagine a crowd of people in a stadium, all moving at different times but appearing to create an organised rippling motion. Because that’s what you’re seeing: the combined actions of many people.

There’s no mystical, secret order to it. There’s just lots of people making decisions based on the information they receive.