Opinion and Comment


The future of mass travel in a world of climate crisis

The British public take more than 70 million flights per year1, both for work and pleasure, but often gloss over the associated carbon emissions. Instead we perceive ourselves as ‘green’ depending on whether we cycle to the shops or avoid plastics. In truth, for an individual, carbon emissions from flying dramatically eclipse that from domestic output2: Instead of flying from London to New York and back, you could heat the average house for an entire year3.

Lessons from Bulls

Holden & Partners Quarterly Investment Views: Q3 2019 Outlook

by Amelia Sexton

As the current bull market reaches its 10th year, it provides an opportune moment for investors to reflect on the environment they have experienced over the last decade. Since 2008, almost all asset classes, except commodities, have delivered handsome returns. So attractive, in fact, that it is tempting to look back on the market’s rise as trouble-free. The theory of economic cycles and the inevitability of recession, alongside the significant asset price declines that accompany it, are easily overlooked when analysing the period as a whole, and investors could be forgiven for possessing unrealistic expectations of future returns.

Scheme Pays

What are my options if too much has been contributed to my pension?

by Neil Sargeant, Financial Planner

Reforms to pensions in recent years have increased their attractiveness in terms of the death benefits and the flexibility of how income is drawn in retirement. However, to balance the books, the government have also reduced the Lifetime Allowance (value of pension fund that can be drawn without suffering a tax charge) and limited the amount you can contribute annually to pensions.

What exactly is Ethical, Sustainable and Thematic Investing? Decoding the Jargon!

by Reece Biggadike, Financial Planner

Many of us are now making more responsible choices as consumers. Accordingly, we are increasingly interested in generating a positive impact with our savings and investments. Holden & Partners has been pioneering this approach since its inception in 2003 and can confirm that investing in this way continues to gain momentum. However, the financial industry tends to involve a lot of jargon, so it is useful to break down some of the common terms before deciding which approach may suit you best:

Big pharma

We swallow their pills but lots of us love to hate the pharmaceutical industry. Are we right?

Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients was published in 2012 and quickly became a bestseller. Author Ben Goldacre explained how the pharmaceutical industry chose unrepresentative individuals for drugs trials, withheld unfavourable results, hiked prices and wrote academic papers without disclosure of interest.

Ill people can be vulnerable, and there was something morally suspect about these corporations who seemingly cared only about the bottom line, rather than higher concepts such as saving lives. It was easy to hate big pharma.

The Association of the British Pharmaceutical Industry (ABPI) retaliated at the time, stating that the research was out of date, with examples that were “long documented and historical, and the companies concerned have long addressed these issues.”1

A recent survey by PR firm Edelman for their 2018 Trust Barometer2, found that the healthcare sector as a whole, incorporating pharma, biotech and hospitals, has seen a small reduction in global trust, with 63% of global respondents trusting the sector to ‘do what is right’ compared to 65% the year before.

Trust is of course a subjective measure, and it takes a while to turn bad faith good. Let’s look at the case for and against today’s pharmaceutical industry…

The value of advice

At Holden and Partners, we believe financial planning is about so much more than investment returns. It’s about using your wealth to achieve your goals and aspirations while giving you peace of mind and confidence.

A financial plan is about you, not just your money. However, defining the true value of financial planning can be tricky as many of its benefits are intangible. Firstly, though, let’s address those which are more tangible.

The financial return

In 2017, The International Longevity Centre, the UK’s specialist think tank on the impact of longevity in society, conducted long term and in-depth research into the value of financial advice. The study compared people who received advice between 2001 and 2007 with those that didn’t. The same two groups were then reviewed again between 2012 and 2014.

The results make for powerful reading:

  • By the end of the study, those who took advice accumulated on average £41,099 more in pensions and investments.
  • Those who took advice were more likely to save and invest.
  • Nine out of ten people were satisfied with the advice they received.

Further research from Vanguard confirms the financial benefit from taking advice. They introduce the concept of an ‘Adviser’s Alpha’ as the difference between the return investors may achieve with an adviser and those achieved without.

It then defines seven key areas where planners add value, before estimating financial values for each.

The seven areas are:

  1. Suitable asset allocation using broadly diversified funds
  2. Portfolio rebalancing
  3. Cost-effective implementation of recommendations
  4. Behavioural coaching by encouraging discipline at times of heightened uncertainty.
  5. Ensuring effective use of tax allowances and asset location
  6. Developing spending strategies
  7. Total-return versus income investing

This arrives at a total ‘Adviser Alpha’ of approximately 3% per year spread between tangible (for example, the effective use of tax allowances) and intangible benefits (for example, behavioural coaching).

In an age of low interest rates and relatively low inflation, 3% is a significant benefit and is far greater than the annual cost of financial planning.

The intangible benefits

Intangible benefits fall into three key areas:

1. Peace of mind

In our increasingly stressful and chaotic lives, knowing that your finances are being carefully managed by a team of dedicated professionals can really help reduce the burden; especially in this time of political and economic uncertainty.

This allows you to live in the present, appreciating and enjoying your life without the fear of running out of money. By engaging us, we can build a fulfilling plan, offering guidance and reassurance along the way, exploiting opportunities as they arise.

We can help you understand how to protect your wealth and your family from risks, such as your premature death, or inability to work due to ill-health, as well as helping to mitigate largely preventable Inheritance Tax.

2. Clarity

Financial planning goes beyond simply telling you which product to use, or which investment portfolio is most appropriate. We can help coach you to make better financial decisions, improve your confidence and challenge your thinking.

Emotional bias naturally occurs when we make decisions, including those relating to your money. We’ll help you see when this is happening and explain why such behaviour is occurring, allowing you to make decisions based on rational logic, not your emotions.

As financial planners, it’s our job to look at the bigger picture and help you consider your long-term aspirations. Some questions we can help you answer include:

  • What do you want to achieve, both financially and personally?
  • Can your current provisions provide your desired income?
  • What action do you need to take, in order to achieve your desired lifestyle now and in retirement?
  • What would be the impact to your family should you be unable to work, or worse die prematurely?
  • How can you maximise the tax efficiency of your investments both now and in the future?
  • Can you afford to make lifetime gifts to your children, without compromising your current and future lifestyle?

By asking the right questions we can help you build a clear strategy to achieve your aspirations, both financially and personally.

Once we have defined your goals, we can build a plan to achieve them. We can now use lifetime cashflow analysis to help you visualise your wealth and indicate how best to improve your overall position both now and in the future.

Cashflow analysis gives a graphical representation of your wealth over time, demonstrating the effect of income, expenditure, investment growth, inflation and taxation. We can also plan for big life events, which are expected or not, such as early retirement, gifting during your lifetime, or receiving an inheritance. It can, and often does, offer valuable insight into how we can help improve your financial security. We believe that having a clear, defined plan with measurable targets and outcomes is invaluable in the effort to achieve your aims and aspirations.

3. Expertise

To an extent, qualifications can be demonstrated by certificates and experience, but there’s no substitute for the trust gained when you speak to an expert in their field.

We are a firm of Chartered Financial Planners; the gold standard of financial planning. In addition, several of our advisers are affiliates of the Society of Tax and Estate Practitioners (STEP), a globally recognised professional organisation specialising in family inheritance and succession planning. This provides our clients, as well as the solicitors we work with, with confidence that we can competently deal with complex inheritance tax and estate planning, alongside their lawyers.

As well as being highly qualified, we have an in-house investment management team who are also specialists in ethical, thematic and sustainable investments. The concept is simple: investing in a way that acknowledges future threats and opportunities, whilst considering a wider range of issues than past performance to assess potential returns. We use our expertise in this area to to identify forthcoming trends and industries of the future. Examples of this approach include our long-term focus on renewable energy, efficiency technologies, sustainable forestry and the opportunities around water as a commodity.

What’s important to you?

We work with individuals and families to help them understand exactly what they want and how to achieve it. The value of financial planning is much more than the money. The many emotional benefits, the clarity a detailed action plan gives and the wealth of expertise on offer means we can help secure your future.

If you’d like to discuss how we can help you, please get in touch.

The changing UK energy mix – looking ahead

Could 2019 be the year that climate change finally receives the political and public backing necessary for real action? So far, we have seen school children on strike, listened to Greta Thunberg’s compelling words1, watched a BBC documentary, and experienced the protests of a dedicated group of activists, Extinction Rebellion2.

UK Commercial Property

Holden & Partners Quarterly Investment Views: Q2 2019 Outlook

We remain positive on the outlook for UK and European commercial property for the following reasons:

Absolute Return

Holden & Partners Quarterly Investment Views: Q2 2019 Outlook

It is worth highlighting that ‘absolute return’ as a sector is a somewhat disparate collection of strategies, not all of which are directly comparable. In its simplest form, funds with an ‘absolute return’ mandate aim to achieve positive investment returns irrespective of the prevailing market conditions, typically whilst targeting lower levels of volatility than traditional risk assets.