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Institute of Directors
Strategic Planning for Company Exit
Wealth Management
Paul Cannons
Mike Lenhoff
28 May 2012
Introduction
Important information
•
The value of investments can fall and you may get back less than you invested.
•
Past performance is not a guide to future performance.
•
We or a connected person may have positions in or options on the securities mentioned
herein or may buy, sell or offer to make a purchase or sale of such securities from time to
time. In addition we reserve the right to act as principal or agent with regard to the sale or
purchase of any security mentioned in this document. For further information, please refer to
our conflicts policy which is available on request or can be accessed via our website at
www.brewin.co.uk
•
The opinions expressed in this article are not necessarily the views held throughout Brewin
Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability
for any direct or consequential loss arising from the use of this document or its contents.
•
The information contained in this presentation is believed to be reliable and accurate, but
without further investigation cannot be warranted as to accuracy or completeness.
Potential investment opportunities
•
Wanting to receive a real rate of return after tax and inflation
•
Interested in the preservation of the capital
•
Looking to simplify your affairs
•
Supporting yourself in retirement
•
Inheritance Tax planning
•
Transition in circumstances
•
Looking to diversify your assets
How discretionary managers can help
• Guiding you through the increasingly complex world of
investments
• Regular monitoring of portfolios is necessary
• Tax efficiency
• Personalised service
• Pro-active management
• Holistic approach to your finances
Alternatives
Who else offers these types of service?
• Independent Financial Advisers (IFAs)
• ‘Wealth Managers’
• Investment arms of large banks
Charging Structures
• Fee
• Commission
• Combination
Example Structure
Annual Management Fees
Dealing Commission
– First £1 million
0.75%
– On First £12,500
– Next £1 million
0.6%
– Next £12,500
1%
– Balance
0.375%
– Balance
0.5%
– Minimum Charge
£50
1.25%
- Fees include nominee service, quarterly valuations, accountant reports
- VAT is chargeable on management fees but not on commission
- Stamp Duty of 0.5% is applicable on purchase of UK equities
- PTM levy may be applicable
Investments
The danger of inflation on cash lump sums
• We use cash as a short term home and for ‘easy access’
capital but…
Real Value of £100,000 and ‘Capital Erosion’ (utilising the
current 3.5% Bank of England Inflation Rate) on deposit
for;
• 1 Year
• 5 Years
£96,500
£83,682
-£3,500
-£16,318
If this rate was to persist in the longer term
• 10 Years
• 25 Years
£70,028
£41,037
-£29,972
-£58,963
Source: This is Money ‘Inflation Danger Calculator’
For illustrative purposes only.
Asset types
The above information is for illustrative purposes only and is not intended as investment advice.
Different asset classes have different levels of risk
Futures & options
Commodities
International equities
UK equities
Corporate Bonds
The above information is for illustrative purposes only and is not intended as investment advice.
A sovereign debt crisis in the eurozone has put at risk the stability of the
global economy and encouraged a flight to safety in quality bond markets.
%
14
yields on
sovereign bonds
12
UK
10
8
US
6
Germany
4
2
Japan
0
83
85
87
89
91
93
95
97
99
01
03
05
07
09
11
Past performance is not an indication on future performance, Any investment mentioned is for illustrative
purposes only and is not intended as investment advice. The value of investments and any income from them
can fall and you may get back less than you invested.
Source: DATASTREAM
Seldom is the global economy without hardship yet equities have delivered better
real returns over time (inclusive of income) than a number of other asset classes.
real returns for alternative asset classes
1400
1200
1000
UK equities
800
600
gilts
400
build soc
200
UK residential
property
gold
30
78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
10
12
Past performance is not an indication on future performance, Any investment mentioned is for illustrative
purposes only and is not intended as investment advice. The value of investments and any income from them
can fall and you may get back less than you invested.
Source: DATASTREAM
An investment philosophy and process can offer discipline in helping to cope
with difficult as well as comparatively easier times.
140%
BD Balanced Asset Allocation
120%
100%
80%
60%
40%
APCIMS Balanced
20%
0%
03
04
05
06
07
08
09
10
11
12
-
20%
Past performance is not an indication on future performance. The value of investments and any income from
them can fall and you may get back less than you invested.
Source: Brewin Dolphin and DATASTREAM
Key strengths to look for in an Investment
Manager…
• Bespoke portfolios designed to meet your individual
requirements
• Strength of research capability
• Quality of service
• Independent investment advice
• Clear and consistent investment process; no surprises
• Holistic approach