2. Morning agenda
07.45 Arrival
08.00 Registration, breakfast and networking
08.20 Welcome: Paul Meades, Meades & Company
08.30 John Boss, De Montfort Professional Wealth Management
09.30 Q & A
09.45 Close and networking
10.00 Stadium tour with former Watford FC player Neil Price
8. Agenda
โข How to improve your personal wealth
โข Planning
โข The effect of costs and charges
โข The effect of tax
โข Beware of cash
โข Beware of Buy to lets
โข Reduce costs wherever possible
โข Minimise risk
โข Diversify your portfolio
โข Engage with your finances
9. The De Montfort Companies
De Montfort
De Montfort De Montfort De Montfort De Montfort
Professional Alternative Financial Tax
Wealth Investments Advisers Solutions
Management
11. Planning
โข Set out where you want to go
โข When you want to get there
โข What you want to do along the way
โข We cannot suggest any investments before we know what is required of
them!
โข Allow your adviser to get to know your circumstances and listen to what
you want, as opposed to what they want you to hear
12. Minimise costs and charges
โข Be aware of what the total costs and charges are
โข Transparent terms of engagement
โข Know your total expense ratios
โข Difficult to find with some providers
โข Independent Research Tools
โข Offered to all De Montfort clients
13. Minimise Costs and Charges
โข Typical situation
โข ยฃ100,000 investment Jupiter Merlin Balanced Portfolio Acc
โข Bid/Offer Spread 5.25%
โข Annual Management Charges 1.5%
โข Total Expense Ratio 2.44%
โข ยฃ100,000 investment Jupiter Merlin Balanced Portfolio Acc
โข Bid/Offer Spread 5.25%
โข Annual Management Charges 0.75%
โข Total Expense Ratio 1.69%
โข Physical cost saving per annum ยฃ750
โข Over 10 years ยฃ7,500
14. Minimise Costs and Charges
โข Other example
โข ยฃ100,000 investment Discretionary Fund Manager
โข Annual Management Charges 1.50%
โข ยฃ100,000 investment Discretionary Fund Manager
โข Annual Management Charges 0.35%
โข Physical cost saving per annum ยฃ1150
โข Over 10 years ยฃ11,500
15. The effect of Tax
Sorry George, our clients do not like paying tax
16. The effect of tax
โข Use all tax allowances and tax efficient investments available
โข ISAโs ยฃ10,850
โข Pensions ยฃ50,000 (ยฃ200,000 this tax year)
โข Onshore Bonds No Limit โ 5% tax deferred withdrawl facility
โข Offshore Bonds No Limit โ 5% tax deferred withdrawl facility, gross
roll up
โข Other Investments Use capital gains allowances each year ยฃ10,600
โข Offshore Savings Gross roll up
โข Enterprise Investment Schemes
โข Venture Capital Trusts
โข Property partnerships
17. Venture Capital Trusts
VCTs are investment companies listed on the London Stock Exchange
and were introduced by the UK government in 1995 to encourage individuals
to invest in smaller UK companies not listed on the main stock exchange.
VCTs invest in a portfolio of unlisted or AIM companies (or both) in order to
aid their development into a successful business and realise gains for investors.
They are designed to give private investors an opportunity to back young growth
companies while offering generous tax incentives.
Investment Limit ยฃ200,000 per annum
Income Tax Relief30%
Hold period 5 years
Other benefits tax-free dividends
tax-free gains
18. Enterprise Investment Schemes
An Enterprise Investment Scheme (EIS) is a government initiative designed to
encourage individuals to invest in Britain's smaller private companies. To
achieve this, the Government offers EIS investors a range of tax reliefs.
The tax advantages available from an EIS investment provide investors with a
significant head start in comparison to more traditional investment products.
Theyโre particularly suited to investors with income tax liabilities, or those with
capital gains to defer.
Investment Limit ยฃ500,000 per annum
Income Tax Relief30%
Inheritance Tax Relief 100% after 2 years
Hold period 3 years
Other benefits tax-free growth
19. Property Partnership
Example
Springfield UK Commercial Property Fund
The Springfield Commercial Fund expects to return in excess of 13% p.a. via
three reliable benefits of Focused Funds:
โข above-average rental income
โข above-average capital value increases, and
โข risk reduction through high quality management and meaningful diversification.
The Fundโs closed-ended structure enables investors to benefit from buying into
the commercial property market at this point in the market cycle and avoid
dilution from โherd investmentโ in later years.
The Fundโs management team is expert in commercial property and highly
experienced; it is committed to providing investors with above average returns
for below average risk.
20. Property Partnership
Example
Springfield UK Commercial Property Fund
Option 1 โ 50% Geared version
Minimum investment ยฃ20,000
Expected return 13% per annum, including 5% income during the term
Expected capital allowances of between 30% and 40% (not guaranteed)
Option 2 โ 75% Geared version
Minimum investment ยฃ125,000
Expected return between 18% and 20% per annum, no income paid during the
term.
Expected capital allowances of between 60% and 80% (not guaranteed)
Early investment incentives of up to 8%
21. Pensions
Make your existing pension monies work harder.
Funds over ยฃ50,000 consider Self-Invested Pension Scheme
A SIPP is a personal pension wrapper that offers individuals more
freedom of choice than conventional personal pensions. They allow
investors to choose their own investments or appoint an investment
manager to look after the portfolio on their behalf.
Individuals have to appoint a trustee to oversee the operation of
the SIPP, but having done that the individual can effectively run
the pension fund on his or her own.
A fully fledged SIPP can accommodate a wide range of investments under its
umbrella, including shares, bonds, cash, commercial property, hedge funds and
private equity.
Donโt forget Protected Rights monies.
22. Beware of Cash
Example
3.5% Fixed 1 Year Bond, minimum investment ยฃ1,000
2.8% approximate yield after tax at basic rate of 20% (2.1% net for 40%
taxpayer, 1.75% net for 50% taxpayer)
5.3% Current Retails Prices Index (as at 5th May 2011)
-2.5% net return after basic rate tax
However CASH CAN BE KING!
23. Beware of Cash
Alternative
6.25% fixed income with prospect of 0.5% bonus, 5 year term, full capital
protection as long as the FTSE has not fallen by more than 50% during the term
Coming soon
5 counterparty structure with up to ยฃ425,000 full protected by the Investor
Compensation Scheme. Only available through De Montfort
24. Beware of Buy to lets
โข What are you intending for this type of investment to do?
โข Income?
โข Growth?
โข Property Spreadsheet
25. Beware of Buy to lets
โข Prospects for Growth?
โข Average House Prices Jan 1991 to Jan 2011
โข Jan 1991 ยฃ53,052 to Jan 1996 ยฃ50,521 -4.77%
โข Jan 1996 ยฃ50,521 to Jan 2001 ยฃ83,450 +65.18%
โข Jan 2001 ยฃ83,450 to Jan 2006 ยฃ158478 +89.91%
โข Jan 2006 ยฃ158,478 to Jan 2011 ยฃ161,211 +1.72%
โข Next 5 years?
26. Beware of Buy to lets
โข QNUPS โ Qualifying Non-UK Pension Schemes
โข What Are The Benefits?
โข Tax-free growth โno CGT or Income tax
โข Tax efficiency on income โminimal UK income tax
โข No limits on annual or lifetime limits*
โข Investment flexibility โe.g. property
โข Cash or in-specie assets
โข Immediate IHT mitigation
โข Corporate contributions
โข Portable
27. Reduce Costs Wherever Possible
Insurance Premiums โ Life Cover, Shareholder Protection,
Key Man, Income Protection, Private Medical, General
Insurances
Bills โ Company utility bills
Borrowing โ Corporate debt, personal debt, mortgages
29. Minimise Risk
Risk Targets
Profiler Succession Volatility % Return % pa Maximum
Portfolio Loss
1 1 2 to 4.75 3 to 4.5 -3 to -5
2 2 4 to 7 4.5 to 6 -2 to -8
3 3 5 to 9 5.2 to 7.5 -5 to -12
4 4 8 to 13 6 to 8 -7 to -15
5 5 10 to 16 7 to 10 -12 to -18
31. Diversify your portfolio
Use investments that are uncorrelated to the equity
markets
Try to seek some solutions that do not work on a
benchmark basis
Know your maximum downside
Words of caution
If returns offered are very high, then the risk is usually high
32. Diversify your portfolio
Examples:
The Protected Capital Currency Fund
5 Year investment term
100% capital protection via a zero coupon bond
Target returns 12% per annum
Life Settlements
Asset backed investment
Long established market
Number of different providers
Returns around 9% per annum
Vineyard Investment
3 Year investment term
Asset backed investment
Fixed returns between 30% and 39%
33. Engage with your finances
Take the time to review and monitor investments on a
regular basis
Keep in touch with the latest financial news
Use effective technology
Apps
Online website
Wrap
34. Client Website
โข Access 24hrs a day 365 days a year
โข Real time valuations
โข Secure communication
โข Security Equivalent to Banks
โข Personal document storage
โข Client / Adviser interaction
35. WRAP
ISAโs
PEPโs
UNIT TRUSTS CASH CLIENT BANK
ACCOUNT ACCOUNT
ONSHORE
BONDS
OFFSHORE
BONDS
SIPP
DeMontfort Professional Wealth Management
36. Why WRAP?
โข INDEPENDENCE
โข FULL SUITE OF TAX WRAPPERS
โข MODEL PORTFOLIOS (VESTRA, EVERCORE, QUILTERS)
โข โWHOLE OF MARKETโ INVESTMENT PROPOSITION
โข TRANSPARENT CHARGING STRUCTURE
โข HIGHLY COMPETITIVE TERMS WITH FUND MANAGERS
โข SECURITY OF CASH โ SPREAD ACROSS 8 BANKS
37. De Montfort Professional Wealth Management is authorised and regulated by the Financial
Services Authority
