The SME

The SME (Small to Medium size Enterprise) business sector is often seen as the nursery for the larger businesses of tomorrow. There’s no doubt that the people who take on the challenge of running their own businesses are brave, they must believe in themselves, they must have a solid business plan and a method to make the plan work.

As a Financial Wealth Expert for over 35 years I have experienced seeing some clients make absolute fortunes from their little acorn becoming a mighty oak.  When they do our services can help them to reduce the tax liabilities that undoubtedly become associated with running a successful and profitable business. What I’ve also come to learn is that companies and their chief executives and key personnel are often so busy becoming successful that they fail to look at the basic needs of themselves and more importantly their families.

It is hard to argue against the fact that a managing director if pressed to replace themselves in their own company would seriously struggle to find a single person who would work the hours they do, accept the remuneration that they do, have the depth of knowledge about the business that they do, have the understanding relationship with their Bank and Creditors that they do. In fact they would probably have to employ two or three people to cover all the things that they take for granted is part of their workload. The other aspect of this is that behind most business entrepreneurs there’s a partner at home sometimes with children and a mortgage that needs paying every month, school costs, food and all the other normal costs of living.

In the unfortunate position of this entrepreneur loosing their life either due to accidents, terminal illnesses or indeed if they are prevented from working due to disability or long term illness, the business undoubtedly will suffer, but could it not also be argued that the partner and children and family of the entrepreneur will suffer a fate much worse.

It’s sad but true in many cases the simple act of placing some life insurance cover or some other critical or terminal illness, income replacement insurance or indeed a cocktail of all of these, is the last thing on the mind of the entrepreneurial business owner, after all were all invincible aren’t we???

If it were to be pointed out that a large number of you currently reading this article would be putting yourself, your partner or your family into a worse financial position than a Local Public Transport bus driver would that shock you??

The reason I point this out is that Bus drivers (in the majority of cases) get 3 times their salary death in service life insurance, they get paid leave if their ill, they get a pension scheme and they can also select to have private medical insurance added to their package of employee benefits.

So if you’re serious about your business, if you love your partner and your family don’t you think they at least deserve the security and peace of mind that is afforded to the families of a bus driver?

Call: 01902 422333Email: info@fscinvestments.co.uk

Frank S Cochran DipFA, MIFS – Managing Director, FSC Investment Services Ltd, 65 Waterloo Road, Wolverhampton, WV1 4QU.

The purpose of this article is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice. You are not certain to make money – you may suffer a loss. FSC Investment Services Limited is Authorised and Regulated by the Financial Conduct Authority.

As the people of Britain have voted to leave the European Union the burning questions (and there are many) are yet to be answered. One thing is for sure, this clearly represents a very significant decision for the UK, but I fear it has much bigger and far-reaching implications for the future of Europe and our on-going relationship with our soon to be divorced cousins.

The initial shock of the vote certainly caused a monumental earthquake in terms of the value of Stirling, surprisingly though the UK FTSE 100 and the wider stock markets in the UK reflected what I’ve been preaching for months, were doing fine over here thank you very much. The UK economy has been slowly pulling ahead of our European cousins. It may not be a popular observation but George Osborne has done a remarkable job of steering us out of the 2007-2010 recession, I accept there has been pain involved with the austerity measures he has taken but the UK is undoubtedly much stronger now for his efforts.

So what challenges do we face?

Uncertainty is the major one; stock markets, foreign exchange dealers, Banks, Business owners, Entrepreneurs and anyone with a financial interest in the markets hate uncertainty. The most interesting fact is that uncertainty causes volatility; in these markets an astute fund manager can be worth his/her weight in gold! Opportunities to buy great companies stocks at knock down prices, the opportunity to inject capital into an enterprise that will capitalise in times like these. The whole prospect of this actually excites me, we have had 9 years of low interest rates, an almost stagnant economy, we have been working the margins to death to make mediocre profits, the fact that the Banks have been offering such pathetic returns to investors has almost bludgeoned savers into accepting long term poor returns.

Throughout these times we strongly urge investors to look through this period of uncertainty and focus on the medium to longer term, in my view the future might well be much better than some people are currently concerned about.

Now is a time for careful planning not frantic panicking.

A Post Brexit World

In a post Brexit world we need to be prepared to plan for our futures and above all lets be sensible, why panic there’s really no need!!!

Despite all the negativity and may I say, appalling rhetoric being spouted by politicians who either were In or Out, the facts seemed to be buried for the sake of political point scoring and one-upmanship.

So at the risk of being sensible lets look at some of the facts.

For nearly 10 years the Bank of England Base rate has been at an all time low of 0.5% per annum. There’s no point in harping on about “oh I remember when I could get 6% per annum from my building society accounts- (that was a generation ago!!). We now live in 2016 and things are not the way they used to be.

Unemployment is at the lowest its been for nearly 6 years, Inflation is at a very low point., mortgage interest payment rates are at all time lows.

Theirs a reason for this, the economy of the UK specifically, and the rest of the World generally, is totally neutral and balanced and there is a high degree of economic stagnation going on. This decision by the UK to exit the European Economic Community has dropped an absolute bomb into the pond. Quite honestly its probably the catalyst that’s been needed to “get things going’.

If we draw some historical facts out of the fire, then its worth mentioning that the reason for this flat lining of the economies was due to the complete miss management of the lending books of the American, British and certain European Banks, they were all greedy for market share, they wanted to play ‘I’ve got more customers than you have’, they lent money out for mortgages irresponsibly, they saw Bricks and Mortar as the only asset class that was worthy of lending money against. They under invested in businesses and entrepreneurs, where historically they made more money than they ever did from mortgages!!

In 2012/13 the Banks pretty well realised they were incapable of running compliant and trustworthy Financial Services divisions and there was a near total capitulation of Bank Assurers. (thank god for that !!, leave it to the professional IFA’s thank you very much!!!).

It is now the time to look at how you have structured your finances. Look outside of the Banks Cash ISA’s or Building Societies. I’d even go as far as to say National Savings and Income NS&I are not too clever an investment either.

Professional Wealth Management via an Independent IFA is going to give you a proper appraisal of what is available to you, your IFA should monitor developments and position your money into the most appropriate places as and when the market conditions dictate they should. You get peace of mind; lower taxation and you should make more money. What have you got to lose???

Frank S Cochran – Managing Director & Independent Financial Adviser, FSC Investment Services Limited.

The purpose of this article is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice. You are not certain to make money – you may suffer a loss. FSC Investment Services Limited is Authorised and Regulated by the Financial Conduct Authority. The views expressed are those of the author and not necessarily those of FSC Investment Services Limited.

How much does Independent Financial Advice cost?

This is a thorny subject as Independent Financial Advice (IFA) firms all over the UK are at liberty to set their own charging structure. Some charge an initial set fee for preparing a report, then they charge an hourly or percentage fee based on the time spent preparing and completing the advice. Others charge a flat percentage of how much you invest others charge a pure hourly based fee. All appear to work, but as you may appreciate some may suit you better than others. 

Transparency in what exactly you pay I fear is a bigger issue than what the IFA tells you on their terms and conditions of business letter.

Let me explain.

There appears to be a common thread throughout the industry that I personally don’t like. This trend is relating to how the company actually manage your money.

Once the IFA has determined which financial product is best suited to your own needs or aspirations the next step is to perform a detailed (well ours is detailed I can’t speak for anyone else’s) risk and capacity for potential loss assessment. The results of the risk profiling exercise is that the IFA will then determine what level of risk, volatility and appetite for movement in the value of your capital that you want to take. After this the IFA needs to determine the spread and mix of investment funds that are going to be needed to achieve your desired results, and this is where the problem lies. Many companies are now ‘outsourcing’ this to a platform or Discretionary third party manager.

In simple terms you pay for a third party to make the decisions on which funds your money is going to be invested into. So you end up paying for your IFA’s fee, Your Product Providers plan fee, the Discretionary Fund Managers fee and finally the fee to the management team who actually run the fund. Now as you can imagine this amounts to quite a number of mouths to feed before you get anything like a net return on your investment. Where FSC Investment Services Limited differ is that we have chosen to employ our own internal Research and fund advisory team who are responsible for selecting and managing your funds directly. This cuts out the extra cost of the third party managers, we also in many cases negotiate discounts with the product providers and direct fund management houses which will result in lower costs and greater potential for you to make money if two identical portfolios are matched head to head.

We are immensely proud of the fact that due to our way of doing things each and every client has a bespoke portfolio which has been hand selected for them and them alone, this ensures a perfect match initially to the clients risk analysis profile, which is regularly reviewed. The Discretionary or platform method often results in the client being ‘pigeon holed’ into a fund that ‘closely reflects the clients attitude to risk and reward’. We are also able to demonstrate that our custom built portfolios out perform the Association of British Insurers (ABI) averages for each sector and fund group. We only choose and select our portfolio funds after intensive research and analysis and benchmarking against the best in sector funds. Our aim is that all our clients have portfolios built using best of breed funds, and these are then managed and swapped as and when market conditions change (with the clients approval).

We are so confident that our system is more economically superior to any other model currently on offer that we are willing to offer a “Price Match Guarantee’.

We will match or beat the charges on any portfolio that you may be offered by any other Qualified firm of IFA’s. All we ask is you provide us with the report from the IFA showing the full costs (ie The IFA Fee, Product Costs, and fund management charges and all other related costs), we will then provide you with our detailed report using our custom built portfolio and the costs appropriate to that investment, we will then guarantee to match or beat the charges on the other IFA’s quotation.

To test our ‘Price Match Guarantee’ please contact us on 01902 422333 or email info@fscinvestments.co.uk

Frank Cochran – Managing Director & Independent Financial Adviser

FSC Investment Services Limited.

The purpose of this article is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice. You are not certain to make money – you may suffer a loss. FSC Investment Services Limited is Authorised and Regulated by the Financial Conduct Authority.

Why seek Independent Financial Advice

In this article I want to explore why some people don’t seek Independent Financial Advice.

  • “ I don’t need it” 

Have you really got the time, knowledge and expertise to research the thousands of investment products on the market, to find the best deal for you? If you work with an Independent Financial Adviser they will do this for you, carefully monitoring your investments in line with the agreed criteria. At FSC we aim to do this in an honest and trustworthy way, on a regular basis.

  • “Can I afford it?” 

Expense may be a reason as to why some people have yet to seek Independent Financial Advice. Why not come in for an initial consultation at our expense, you might be pleasantly surprised at the costs involved. With our knowledge, experience and expertise it is likely that we can handle your savings and investments more efficiently than you can. Our charging structure is competitive and for the level of bespoke service you will receive we believe it will make it worth your while. We like to see our clients twice a year, more if we agree this is necessary for clients that have signed up for our ongoing service. We want to make our clients money, make them happy and build a good relationship with them.

  • “Can I trust an Independent Financial Adviser?” 

When working with an Independent Financial Adviser trust is very important. The financial services industry is heavily regulated and our regulator, the Financial Conduct Authority (FCA), keeps a very careful eye on what we all do and takes action where necessary. After 35 years in the industry I always aim to keep your money in the right place, at the right time, all the time.

My fellow Advisers and I at FSC believe we give good, honest, common sense advice and many of our clients have trusted us with their investments for up to 35 years. Don’t just take my word for it, please take a look at the testimonials from some of our clients on our website.

  • “I don’t want to risk losing my money” 

Some people think that in order to make reasonable and sensible returns you need to take high risk. Our clients range from high risk takers to low risk takers. We will carefully assess your attitude to risk versus reward and recommend the most appropriate investments for you. Our clients use us because they trust us and we are their eyes and ears on the lower risk end of the market. When general market interest rates are low, we hunt out and aim to find products that give smoother but better returns than you can get on the High Street.

There should never be any barrier to getting good quality Independent Financial Advice, just keep an open mind, you’ve absolutely no reason to be afraid. We specialise in giving good honest advice that works, all at a sensible and reasonable cost. Why not give us a call and put us to the test?  What have you got to lose?

Call: 01902 422333
Email: info@fscinvestments.co.uk

Frank Cochran – Managing Director & Independent Financial Adviser

FSC Investment Services Ltd.

The purpose of this article is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice. You are not certain to make money – you may suffer a loss. FSC Investment Services Limited is Authorised and Regulated by the Financial Conduct Authority.

Current Market Volatility

In response to the current flurry of activity on World stock markets, I think it’s important to put a bit of perspective onto why this is happening and also to forecast what’s likely to be the outcomes.

One of our huge advantages at FSC Investment Services is that unlike most of our competitors we do not outsource the management of our research to third party organisations. We have our own internal team headed up by Anthony Coyle ( Anthony is hugely experienced having spent many years with Torquil Clarke before joining FSC three years ago). Anthony and his three assistants trawl the information highway, they talk to fund groups, we have regular meetings (beauty parades) with fund managers, the sole purpose of this is that we get the right knowledge first hand, we also have the opportunity to look them in the eyes and get to ask the awkward questions that he’ll us to sort the fact from the fiction.

It is this depth of research, the deep tissue examination that the team perform, allows us to closely examine the driving factors which are the catalysts for making the markets move.

For all the above reasons we are not panicking about the falls and volatility currently hurting the markets. What we are enduring isn’t a true ‘bear market’ in the truest sense of what a bear market is ( a bear market is one where stock values drop by over 20%, driven by sell offs caused by excessive market recession).

What we’re seeing is a fully fledged ‘ technical correction’ ( a technical correction is where a market sees shares sold as a by product of an action or a reaction to an event or specific situation).

In this respect we need to roll back the clocks 18-24 months. Vladimir Putin was hell bent on building his oil and gas line through the Ukraine, the purpose of the line was to provide Russia with a cheap way to get Russian gas and oil onto the World markets much more efficiently and obviously cheaper.

With the product of cheap Russian oil and gas flooding world markets, Mr Obama went to visit the OPEC heads of state, these are the people who determine the flow and ultimately the cost of oil and gas from the Middle East. The situation was discussed, the prospect of Putin flooding the World with cheep gas and oil for years to come, and the threat of military intervention perhaps being necessary to prevent him from building this pipe line was not so attractive proposition. The alternative was to open the valves and flood the markets with cheap gas and oil, make the price so low that Russia would have no commercial benefit in building the pipe line. And that’s exactly what they’ve done.

Now, for every action in life there’s a knock on effect. The effect of these oil prices dropping from July 2014 values of $118 a barrel to the current $27 a barrel is that Putin can’t sell his oil that cheaply so it’s cash strapped Russia immensely. Russia is being financially crippled by these low prices.

The knock on is that Russia ‘used’ to spend fortunes with the other communist super power in the World “CHINA”. So the next thing we see is China is becoming short on money, they have a massive multi Trillion Dollar infrastructure rebuilding program underway in China, new airports, new rail and road networks, telecommunications and Internet connectivity, it’s all going on in China!

Without Russia spending money in China the rate of expansion has had to slow down now to a current 6.9% per annum growth, this has prompted the Chinese government to tighten their fiscal policies, they have introduced a form of quant active easing so they are far from being in trouble. It’s a slow down in growth, not a recession.

So where does this leave us?

Right now, we’re seeing volatility in huge swings as the markets are scared of potential ‘bad news’, unfortunately they’re behaving like scared deer, the least rustle of the wind and they flee the scene. In reality the situation is quite different. The fact is that the FTSE 100 is heavily loaded with massive companies like Shell oil , BP, Eon, Scottish and Southern Electric, the big Gas and oil companies and the mineral and raw goods suppliers. So it should be no great surprise that these guys are getting hammered because of the low oil prices. The knock on is that all the rest of the market is doing very well!!!! Low transportation costs, lower heating and air conditioning costs, lower raw materials costs etc… They all help the smaller business in the long run.

I foresee that a recovery will not be too far away, but unlike in previous recoveries it’s not going to be led by the FTSE Giants. It’s going to be a floor up recovery, all these smaller companies the AIM 350 type firms are shortly going to be turning these lower running costs into profits, bigger profits than they have been used to for a long time.

The catalyst for the bigger overall markets to recover is unfortunately going to be oil supply and the value of oil in the open markets, we are drowning in surplus oil right now, a really cold hard winter would have helped use up these surpluses, but we’re having a mild winter, so the use of this surplus is taking longer than expected. But if OPEC and the USA and funnily enough Iran get their heads together and slow down current production then prices must rise. I for see a critical yield price ( the price where the oil sells for greater than its production cost) as being somewhere about $44-45 a barrel. It won’t be a case of waiting for the price to hit this level before the recovery begins, I think a few moderate rises in oil price which sends sentiment up on price rather than down is all that will be needed.

So what should you do.

If you have investments in the market and the values will almost certainly have dropped – do nothing, you don’t need to values normally recover in a reasonable amount of time.

If you are selling units in a fund to provide an income – if you can afford it, stop them or reduce them so you’re not selling lots of units at a low price to fund your income. It can always be restarted or in creased later.

If you have money in Banks or Building societies or ISA accounts, now really is an absolutely brilliant time to think about investing in a proper daily managed portfolio fund. You’re buying at a terrific discount. Don’t go mad, bleed your investment in using staged payments, so you can invest as the markets slowly improve.

You should undoubtedly have a superb opportunity to see this investment grow as markets recover.

Remember the adage ” buy low- sell high” and know when to stay where you are.

Not knowing what or how to buy is where our years of experience and expertise will pay huge dividends, we will assist you through the whole process. It’s not difficult and it’s not expensive, it’s value for money. We will put you in the right place at the right time all the time.

Hargreaves Lansdown have just announce that they have seen a 17% increase in new investments, we are seeing a similar trend. So folks are at last realising that investing in the ‘real’ markets with a bit of solid guidance is the way to go.

For help or just to chat through your thoughts please give us a call on 01902 422333

How are your Investments performing?

They say the definition of insanity is to do the same things tomorrow that you did yesterday and then expect a different result.

Well that can certainly be true when it comes to becoming financially safe and secure. We are now in the middle of the festive season and people do tend to spend too much money, but hey tomorrow never comes, right? Well the truth is what you spend now will either no longer be available in the future or you may be spending money you don’t already have by using finance or credit. Either is not good.

You may say that you always do this, well if you’re fed up of never having ‘real’ money of your own to spend its probably because your doing what you’ve always done and hoping for a different result. That won’t work.

The only way to improve your financial worth is to start doing things differently, save more and spend less, invest in areas where real interest is achieved, don’t keep relying on old deposit interest rates that are fed to you by your Banks and Building societies and moan about how little they pay, do something different. Try investing in real interest bearing stocks and shares ISA’s or tax efficient investment bonds. The choice is literally endless; the governing factor will be how much risk you’re willing to take.

Most people don’t realise that genuine higher interest rates are available from non standard high street savings. If you cant get a good deal from your Bank or Building Society then go somewhere else.

As Wealth Managers and Independent Financial Advisers, we don’t exist just to make money for ourselves, as I’m sure some of you may believe!!!  We have hundreds and hundreds of clients who are ‘savvy’ enough to understand that to get a good deal on your money you need to go to an expert who will ‘for a fee’ guide you through the maze of products, funds and services that are available. These folks wouldn’t invest with us nor would they stay as clients for years and years unless we delivered on our promises.

In a nutshell, you need to bury your fears, see an Independent Financial Adviser, tell them what your looking to achieve then work out a plan of action which is affordable to you, but one which will direct you to a new and more profitable New Year. If in 12 months time your still in debt, or you haven’t moved forwards financially, then it could be your own fault.

Why not book a free, no nonsense, common sense appointment with myself, Derek Baillie or Mark Mitchell – Call 01902 422333 or email robin@fscinvestments.co.uk