This latest newsletter comes to you as we approach the end of our sixth week in lock-down.
It has been a remarkable and challenging few weeks in lots of ways.
Prime Minister Boris Johnson knows this more than most – having experienced the extreme low of being an intensive care patient struck down by this deadly virus to returning to Downing Street and celebrating the birth of a new baby son.
In some ways, the markets have been almost as resilient as Mr Johnson.
The markets initially dropped by over 30% but have since bounced back, while, in contrast, overall portfolios from February until now have seen an average drop of 12%.
While not underplaying the turbulence of recent weeks, conversations with almost all clients have concentrated on providing reassurance that their longer term, diversified plans will be more than capable of withstanding the impact of Coronavirus.
This is likely to include further financial shocks over the next couple of years, particularly if, as has been widely mooted, the UK experiences further waves of the disease as we slowly start to move to a new normal.
As businesses start to emerge from this crisis, many, such as those in the commercial property sector, are likely to have to deal with even bigger holes on their balance sheets than they imagined. Some, including the big food retailers and pharma giants, will be among a smaller section of the economy to buck the trend.
Our job as your financial adviser is not to try and call the markets and recommend short-term tactical opportunities. Instead, we focus on partnering with our clients to provide a carefully mapped out and personalised plan over the right timescale.
The pandemic highlights, more than ever, the importance of having a broad, diversified range of investments which will deliver as part of a long-term financial plan.
With clients ranging in age from their 30s through to 80s, no two plans are the same.
Good plans are about anticipating that there will almost certainly be bumps in the road.
In the case of this current crisis, I have been advising a client who has been made redundant a few years ahead of when he was planning to retire. While not ideal, his long-term plan is, however, able to absorb this set-back.
We have made a point of calling round clients since the Coronavirus crisis first took hold and it has been heartening to receive so much feedback that people are confident – in a time of so much uncertainty – that their financial planning is in good hands.
While we are always pleased to hear that you are happy with what we are doing on your behalf, it is very much a partnership – working together to help you meet or exceed your financial goals.
We want to hear from you
Like so many businesses, we had to quickly adapt our way of working almost overnight.
Thankfully, we have always been a business that embraces technology and I have been delighted with how well the team has adjusted to our new remote working ways.
Remote does not, however, mean that we don’t want to hear from our clients. While we cannot currently carry out face-to-face meetings in our Neston office, we are still busy speaking to clients by phone or on the myriad of online conferencing facilities that have so quickly become part of our everyday language.
Earlier this week, we even onboarded a new client using Zoom, running through all the necessary paperwork by sharing my screen. It was almost as if we were sitting opposite each other in our meeting room.
Meeting Up
/0 Comments/in News /by EdwardLambI would also like to re-emphasise that it is very much normal service.
Although our team continue to work remotely, they are available for phone calls and virtual calls. We have even held pre-arranged face-to-face meetings with a couple of clients at our offices in Neston.
Flexibility is our watchword. We will always do our best to ‘meet’ with you in the way that works best for our clients.
For now, the intention is for our team to continue working remotely, but we keep this under regular review and will let you know when we intend to relocate back to the office on a regular basis.
Encrypted Emails
/0 Comments/in News /by EdwardLambWe have had a small number of enquiries from clients asking about the encrypted emails they have received.
This is something we introduced a few months ago and is part of our responsibility to you to keep your data as secure as possible.
The process should be straightforward, but please do contact us should you have any questions about the encryption service we provide.
Review of portfolios
/0 Comments/in News /by EdwardLambThe team has been working hard on reviewing client portfolios, something that is less straightforward than is normally the case due to the impact of the pandemic.
We are looking closely at the balance between different assets, what should stay the same and what should change.
The broad message is that portfolios have held up well, demonstrating more than ever the value of diversification.
We will be in touch with all our clients over the next few weeks.
Markets showing resilience in face of global pandemic
/0 Comments/in News /by EdwardLambThe markets have held up reasonably well in the face of the worst crisis the world has seen since World War II.
They are demonstrating decent levels of confidence, not back to pre-coronavirus levels but not as bad as some of the commentators were predicting a few weeks ago.
There is still volatility, much more than you would see in more normal times, between 2-2.5% most days.
The US and most of the developed economies have begun to bounce back from the shockwaves of March and April.
Even some of the recent global unrest has failed to have an impact on the fragile confidence we are seeing return.
There is a US Presidential Election in November and the polls are currently suggesting Donald Trump may struggle to gain re-election. Big business and the markets have generally liked Trump, but even if his Democrat rival Joe Biden wins, I doubt there will be any seismic shifts in the overall confidence of the US economy.
In the UK, there is a lot of talk of Chancellor Rishi Sunak holding an emergency Budget at some point in July, with the intention of setting out the direction of travel now that we are beginning to emerge from lockdown.
It is highly unlikely we will see any tax rises or targeting of the pension tax relief. This would send out the wrong signals. More likely, if media reports are right, is that VAT may be reduced to provide a boost to business and encourage consumers to spend.
Expect a further economic stimulus package as the Chancellor tries to avoid vast job losses as the furlough scheme starts to wind down. This is likely to fast-track infrastructure spending, skills training and largescale investment in green technologies.
The great unknown is whether we will witness a second spike of coronavirus in the coming months. The one reassuring thing is that at least the world will be much better prepared second time around.
Can you help Anne Merriman?
/0 Comments/in News /by EdwardLambRegular readers of our newsletters will have heard of the remarkable Dr Anne Merriman MBE.
Anne is the founder of Hospice Africa, a Liverpool-based charity. Only last year she appeared on BBC’s North West Tonight talking about her work. You can watch the film here.
Anne is dependent on the generous donations the charity receives from businesses and members of the public. The current crisis has, inevitably, led to a dramatic fall in donations, not least caused by having to close her charity shops in Liverpool and France.
So, following in the mighty footsteps of the remarkable Captain Tom Moore (now an Honorary Colonel), Anne has been walking to raise money.
She is doing a sponsored walk on her balcony at her home in Kampala, Uganda, with 20 laps per day, for 25 days, finishing on her 85th birthday on May 13.
Anne has set up a donation page for anyone who feels able to support her at this time – each donation, however small,allows Anne to carry on supporting cancer patients in Africa.
She initially set herself a target of £10,000 but within hours this had been smashed – it currently stands at almost £30,000 but Anne has pledged to continue walking until her birthday!
Anne said: “Africa has millions of cancer patients who do not receive any form of treatment for their cancers. They suffer terribly, suffering that we, in the developed world, never see.
“Since 1993, palliative care has moved in Africa, from 3 countries in 1993 to 35 countries. In Uganda, Hospice Africa has looked after 33,000 patients with cancer and/or HIV. Palliative care is available in nearly all districts and 90% of districts have a palliative care leader who can prescribe oral morphine for the severest pains of cancer.”
Anne’s Virgin Money Giving page is here.
Long-term planning key to combating Coronavirus shockwaves
/0 Comments/in News /by EdwardLambThis latest newsletter comes to you as we approach the end of our sixth week in lock-down.
It has been a remarkable and challenging few weeks in lots of ways.
Prime Minister Boris Johnson knows this more than most – having experienced the extreme low of being an intensive care patient struck down by this deadly virus to returning to Downing Street and celebrating the birth of a new baby son.
In some ways, the markets have been almost as resilient as Mr Johnson.
The markets initially dropped by over 30% but have since bounced back, while, in contrast, overall portfolios from February until now have seen an average drop of 12%.
While not underplaying the turbulence of recent weeks, conversations with almost all clients have concentrated on providing reassurance that their longer term, diversified plans will be more than capable of withstanding the impact of Coronavirus.
This is likely to include further financial shocks over the next couple of years, particularly if, as has been widely mooted, the UK experiences further waves of the disease as we slowly start to move to a new normal.
As businesses start to emerge from this crisis, many, such as those in the commercial property sector, are likely to have to deal with even bigger holes on their balance sheets than they imagined. Some, including the big food retailers and pharma giants, will be among a smaller section of the economy to buck the trend.
Our job as your financial adviser is not to try and call the markets and recommend short-term tactical opportunities. Instead, we focus on partnering with our clients to provide a carefully mapped out and personalised plan over the right timescale.
The pandemic highlights, more than ever, the importance of having a broad, diversified range of investments which will deliver as part of a long-term financial plan.
With clients ranging in age from their 30s through to 80s, no two plans are the same.
Good plans are about anticipating that there will almost certainly be bumps in the road.
In the case of this current crisis, I have been advising a client who has been made redundant a few years ahead of when he was planning to retire. While not ideal, his long-term plan is, however, able to absorb this set-back.
We have made a point of calling round clients since the Coronavirus crisis first took hold and it has been heartening to receive so much feedback that people are confident – in a time of so much uncertainty – that their financial planning is in good hands.
While we are always pleased to hear that you are happy with what we are doing on your behalf, it is very much a partnership – working together to help you meet or exceed your financial goals.
We want to hear from you
Like so many businesses, we had to quickly adapt our way of working almost overnight.
Thankfully, we have always been a business that embraces technology and I have been delighted with how well the team has adjusted to our new remote working ways.
Remote does not, however, mean that we don’t want to hear from our clients. While we cannot currently carry out face-to-face meetings in our Neston office, we are still busy speaking to clients by phone or on the myriad of online conferencing facilities that have so quickly become part of our everyday language.
Earlier this week, we even onboarded a new client using Zoom, running through all the necessary paperwork by sharing my screen. It was almost as if we were sitting opposite each other in our meeting room.
Business Support
/0 Comments/in News /by EdwardLambThere has been a barrage of support for business launched by the Chancellor Rishi Sunak, starting with the Budget on March 10 and continuing throughout the month, with the latest piece of the jigsaw, support for the self- employed expected shortly.
Our sister company Phillip Bates & Co Chartered Accountants are quickly becoming expert on what is available and how to apply for grants, loans and other programmes that are becoming available.
We won’t duplicate this but thought we would give you a handy summary of some of the available resources you may or may not be aware of:
For the latest news on what is happening locally in Neston and the surrounding area, AboutMyArea CH64 is always a good resource.
Our Office Arrangements
/0 Comments/in News /by EdwardLambLike other businesses, we have been busy implementing the Covid-19 working arrangements.
This has meant decamping to our kitchens, dining rooms and bedrooms to set up temporary home offices.
The team all tell me they are working harder than ever, and, in all seriousness, we are committed to providing a level of service, support and delivery as good as or better than before the virus hit.
All calls from 0151 353 1066 are diverted to Stephanie. The only drawback is we only have one Stephanie so occasionally calls may not be answered as quickly as before. If you want a quick call back from any of the team then email mail@pbatesfs.co.uk .
You can also get direct to the team on the following email addresses:
All post is being picked up most days, but we would strongly suggest email will get a quicker response.
Some clients have suggested that they won’t call because we must be busy, but please call even if it doesn’t feel vital, we do love the interaction and want to answer any concerns and provide support at this important time.
And when this is all done there is going to be a party!
Life has changed
/0 Comments/in News /by EdwardLambOne of the privileges of our role is to get to know clients well and play a small part in their lives. We get to know their families, their hopes and fears and, importantly, how they are feeling. It follows then that occasionally, with sadness, we have the opportunity to pay our last respects.
One of our long-standing friends and client, Pauline, was laid to rest last Friday. Sadly, due to the virus, the service was restricted to immediate family.
She was a funny, feisty and challenging character who would seldom let you leave without expecting to share a sharp whisky.
She will be greatly missed by her family and all who knew her, but when the virus passes I think the celebration of her life will be more joyful and well attended than would have been possible last week.
On Friday, I instead hit the road to pick up daughter Lucy and son Billy from university. Talking to clients, making sure the wider family is safe is understandably our priority and while there will no doubt be challenging times ahead, taking care of those closest is what matters.
It is a time where our expertise can be used to help and support your broader family, we won’t know all the answers, but being tuned in to all things financial means we can generally point people in the direction of an answer.
If wider family need this sort of help, please do let us know how we can help.
Alan Mellor
How long will this last?
/0 Comments/in News /by EdwardLambHistory doesn’t repeat itself, but it often rhymes. We all remember Tony Blair saying this is not a time for soundbites and then launching into a soundbite. Can I apologise if I fail also to follow his advice?
History doesn’t repeat itself, but it often rhymes. We must understand what has happened before to inform our perception of what happens next and what decisions should be made to protect and enhance our financial plans.
The major financial events of the last century are chronicled on the wall of both our meeting rooms and I know many of you will have discussed how historical events have impacted investment returns.
It is useful to understand how markets work, while remembering all portfolios also have diversification into fixed interest, real assets and cash.
Stock markets are called markets because they are effectively a trading place for people to buy and sell their share of a company’s value. The price is established at the point where buyers and sellers are both content to trade. If there are more buyers than sellers then the price goes up to a point where an equilibrium is reached. Recently there have been more sellers than buyers and hence values go down.
It is understandable when there is worry and uncertainty buyers are scarce and hence falls in value continue until buyers see value, enough for them to trade. When worry reduces, buyers see value ahead and the price moves upwards to meet increased demand for shares.
For those who like analysis and charts there is a graph below which shows the market falls of the last 30 years and the recovery period. This shows the longest period for recovery is 30 months and averages are much lower. Now, I am not ready for predictions but the systemic damage through a clogging up of trade through the pandemic feels less permanent than the loss of confidence in the value of assets during the financial crisis of 2008.
The outcome is certain though to be a huge increase in Government debt in most economies, so get ready for tax rises when this is all over.
Most important is having income or cash to spend while any recovery happens. This is a massive part of having a robust financial plan and why these falls should not be a worry with a sensible long term plan. Missing out on the recovery when it happens is perhaps more damaging to clients.
We have compared our middle of the road investment approach to the FTSE All share to show how diversification helps dampen losses. This is not a fair comparison but is intended to demonstrate the benefits of not having all eggs in one basket.
We remain available to talk through these principles to clients as well as their friends and family if we can help understand the implications of today’s financial events.
So how long does it take?
Vanguard has produced the following chart which shows Bull and Bear market figures for the last 30 years.