Good morning and welcome to your Morning Briefing for Friday 7 June 2024. To get this in your inbox every morning click here.
Is private equity worth it?
Private markets are traditionally illiquid, harder to access and less transparent than public markets.
But despite these characteristics, private equity as an asset class has experienced significant growth over the past 30 years, becoming a £8trn juggernaut.
The early 1990s saw investors in US listed equities spoilt for choice, with over 8,000 companies available. Today this number has dwindled to nearly 4,500. Similarly, in the UK, the number of listed companies has fallen by roughly 40% since 2007.
Cashflow modelling: How to stay on the right side of the regulator
Around 80% of firms use cashflow modelling tools, according to the Financial Conduct Authority’s retirement income review.
Used properly, cashflow planning plays an important role in the advice process, helping clients visualise their current and future finances.
From whether they can afford to invest more, buy a house or send a child to university, to their likelihood of living comfortably in retirement, a clear, graphical cashflow analysis can make a considerable difference to a client’s understanding of their finances and what they need to do to achieve their goals.
Quote Of The Day
Don’t cry victory too soon! [Christine] Lagarde doesn’t want to pre-commit further cuts. She is taking a gradual and cautious approach like the other central banks and will reassess the situation meeting by meeting. The speed and the timing will depend on inflation data.
– Nicolas Forest, chief investment officer at Candriam, comments on the latest European Central Bank interest rate decision.
Stat Attack
A fifth (20%) of IFAs do not have protective measures against fraud and scams in place, leaving them at risk of an incident or attack, new research from global research and insights agency Opinium reveals.
35%
Just over one in three IFAs (35%) report being subjected to scam and fraud threats, with slightly fewer than a third
31%
having experienced an increase in attempts to compromise their businesses in the past year. Despite this, one in three respondents
35%
do not currently train their staff in how to spot potential threats and protect themselves and the business.
Despite this, the research also revealed that IFAs report feeling more concerned about scam and fraud attacks (25%) than they are about their organisation’s future strategy (21%) and the quality of their service (13%)
56%
Just over half of advisers (56%) claim that innovations within the tech industry would be one of the top ways to help battle the increase of online scams and fraud attacks towards their businesses. Furthermore, when asked to select the three biggest priorities,
53%
Over half (53%) believe having access to more sophisticated technology would help combat attacks.
21%
Whereas, only a fifth (21%) believe that the best approach would be to train their staff to be more resilient towards attacks.
Source: Opinium
In Other News
MacDonald Partnership has announced that a new independent financial adviser has joined its Inverness team. Bradley Cross will be working alongside Ross MacDonald in Inverness to help business owners, individuals and their families navigate the complexities of financial planning, alongside its wider team of IFAs in Scotland.
Building on over five years of industry experience, Cross has acquired valuable insights and skills across different investment strategies, retirement planning and wealth management to help clients achieve their financial objectives. He will continue to develop his expertise alongside Ross MacDonald in this role.
Commenting on his appointment, Bradley Cross said: “I am delighted to be joining MacDonald Partnership, an independent financial advice firm which has held a strong presence in Inverness since 1978. Being part of a business that has clients at the forefront of everything they do was a key deciding factor in accepting the role, and I very much look forward to start helping clients achieve their overall goals and objectives.”
Integrity365 chief executive, Matt Goy, added: “We are thrilled to welcome Bradley Cross to our Inverness team in an eventful time of growth and development for MacDonald Partnership and Integrity365. This new addition is a testament to our commitment to providing exceptional advice and service to our clients. As we continue to grow and evolve, we are excited to see the impact and skills Bradley will bring to the team.”
From Elsewhere
Incoming ministers ‘will face UK public services on brink of collapse’ (The Guardian)
Former Autonomy chief Mike Lynch acquitted in US fraud trial (Financial Times)
How US private equity is swallowing Britain’s High Street (Bloomberg)
Did You See?
Loan trusts are one of the most flexible trusts when it comes to inheritance tax (IHT) planning. The settlor can retain access to their capital while allowing investment growth to build up outside their estate for intended beneficiaries, writes Neil Macleod, senior technical manager at M&G Wealth.
Loan trusts can be useful for those reluctant to make significant gifts of capital, but also for large estates looking to cap or slow down the rate at which their estate value is increasing.
However, problems can arise once the settlor of the trust has passed away and the trustees and adviser begin to think about how the trust fund should be distributed.
Read the full article here.
N.B. Loan Trusts and partly paid shares = very powerful tool for IHT planning…
Loan trusts are also a great way to not really address an IHT liability