Ellis Bates Financial Advisers
We discuss The United Nations 17 Sustainable Development Goals and how we align our investment portfolios to one or more of these, whilst breaking these down into environmental issues, social issues and governance issues.
We are delighted to confirm that Ellis Bates Financial Advisers have been included within FT Adviser’s Top 100 Financial Advisers again.
The judging criteria is based on a number of factors including assets under management, gross inflows throughout the year, client retention and the number of Chartered or certified Financial Planners.
There are currently around 5,500 Adviser firms in the UK so to be in the Top 100 is a fantastic achievement and we’d like to thank everyone for their contribution towards this.
“These standards are a decent indication of a firm trying to do the right thing by its customers.
This year marks 10 years since the introduction of the Retail Distribution Review; seven years since pension freedoms came into force and six years since the Financial Advice Market Review highlighted serious issues that needed to be addressed.
And over that time, businesses have adapted to change, whether this be tax policy turning on a pin, dealing with the after-effects of the pandemic or embracing the digital transformation.
But finding the right balance between face-to-face advice and online services – as well as developing robust succession plans to future-proof the advice industry – could yet result in some significant changes to business models.”
– FT ADVISER, https://www.ftadviser.com/your-industry/2022/10/21/who-are-ftadviser-s-top-20-financial-advice-firms/
Will the new Prime Minister’s appointment help calm the turbulent investment markets?Read further on how we are balancing the short term volatility with delivering long term success
By Henry Geale, Portfolio Manager
As Rishi Sunak becomes the third UK Prime Minister in 8 weeks, once again the headlines are dominated by instability and turbulence on the economic and political front. The escalated frequency of these more extreme conditions, and the associated investment market volatility, have prompted questions as to how we deal with these types of events within our portfolios. There are a few points we think are noteworthy here.
Firstly, by remaining focused on the long-term opportunities, and not becoming too distracted with short-term events, we have a higher probability of capturing positive returns for clients throughout their investment term. That said, it is not a smooth ride and there will inevitably be periods of negative performance along the way. It is therefore a balancing act between managing the short-term risks we face and maintaining the long-term potential of the portfolios in order to deliver strong returns for clients. Investing is inherently a long-term activity (we recommend a minimum of five to ten years), and we are cognisant of letting shorter periods of market stress deviate a portfolio too much from where we feel the long-term opportunities are.
The above, however, does not mean we close our eyes and do nothing. Careful consideration is given to both long- and short-term factors, and which risks we do/do not want to take. We have commented as far back as 2019 around the potential for market volatility, and have gradually adjusted our portfolios accordingly. This, along with the desire to always have a globally diversified and balanced portfolio, means we do not have to panic in times of market stress. There are areas of protection built into the portfolios, such as high quality, shorter-dated bonds, which are less sensitive to rising interest rates and have provided some protection against the full extent of market moves this year. On the other hand, exposure to gilts (which have been one of the worst performing assets of 2022 despite their ‘safe haven’ status) is minimal in the portfolios, if held at all.
We also focus on what is happening within the companies we invest in, rather than factors outside our (or the fund managers’) control. A prime example is the state of UK politics; the impact of which can be mitigated by investing in a global, well-diversified portfolio. We engage with our fund managers to understand how they are dealing with the current economic climate and what they are hearing from their companies. The overwhelming feedback we receive is that the share price falls seen are more as a result of negative sentiment in markets (driven by ongoing geopolitical events), than they are reflective of the underlying operating performance of the businesses they invest in. A recent example from one of our fund managers is a company where the share price has fallen around 47% this year, to below pre-COVID levels. This is despite releasing strong results recently, where they delivered higher levels of sales, profits and cash flows. This sort of dislocation between share prices and business fundamentals is something we hear frequently when speaking to fund managers, and is why we do not overestimate the importance of being disciplined in times of market stress and avoiding the impulse to panic. We are acutely aware of the current extremes in the global economy and investment markets, and the likelihood that many of the previously accepted correlations and behaviours in markets would face some level of disconnect, amplified further by some of the current geopolitical situations. However, the focus is always on the quality of the underlying investments and their ability to withstand periods of market stress, while some less resilient businesses may not see through the current extremes. Market sentiment will be volatile for a more prolonged period, but the fundamentals of what you own and why become more important during these times, and should we feel that we need to make more radical changes to our portfolios (defensive or positive) then rest assured we will not hesitate to do so.
Lasting Powers of Attorney allow a friend or family member you trust to make decisions on your behalf if you are no longer able to do so yourself, or are incapacitated.
In these uncertain times, it’s more important than ever to make sure your finances are in order. We have 10 practical steps to ensure your money is working hard for you.
10 practical steps to ensure your money is working hard for youIn these uncertain times, it’s more important than ever to make sure your finances are in order. The Bank of England believes that a painful squeeze on our living standards, driven primarily by soaring energy prices, is set to intensify and will push the UK economy into recession later this year.[1]
Making your finances recession-proof is all about taking practical steps to ensure your money is working hard for you. It is vital to be completely honest with yourself about your financial situation.
By conducting a thorough audit of your finances and gaining a comprehensive understanding of all your incomes and outgoings, this will show you exactly where your cash is going and, most importantly, help you identify problematic spending behaviour.
This will help you keep track of your spending and ensure that you’re not overspending.
Try to put away as much money as you can into a savings account so that you have a cushion in case of tough times.
Take the time to learn new skills or improve upon existing ones. This will make you more valuable in the job market if you need to make a job or career change.
Look at your bank account and remove any pain-free direct debits. Consider if you’re currently paying for things you don’t really need, for example, subscriptions.
Look at energy tariffs, home insurance, car insurance, broadband, TV package, mobile tariff – now might be a good time to switch.
Make sure you’re making all of your payments on time and in full. This will help you avoid costly late fees and keep your credit in good shape.
Prioritise any high-interest debt, such as credit card debt, freeing up more money in your budget to cover other expenses if your income decreases.
This is a must in case you lose your job or have any unexpected expenses. Try to save up at least between three to six months’ worth of living expenses so that your expenditure is covered.
Don’t put all your eggs in one basket. Having multiple streams of income can really help. If one income source starts to dwindle – or gets eliminated completely – this will provide other sources to fall back on.
In addition to diversifying your income, it’s also important to diversify your investments. Review your investment portfolio and make sure your investments are spread across different industries and even different types of asset classes.
Following these tips will help you secure your financial future and protect yourself from the effects of rising inflation and the cost of living crisis. If you would like to find out more or to discuss your situation, please contact us.
Source data: [1] https://www.bankofengland.co.uk/monetarypolicy-report/2022/may-2022
With Policy changes, volatility and unpredictability the new norm it appears at times, a different approach is needed towards your finances and investment strategy.
Ellis Bates continue to emphasise the foundations for dealing with the current conditions lie in a well-diversified, global approach to assets that have long term potential to weather the immediate storms and deliver returns over the longer term.
For more information please visit our latest market insights “Growing Pains?”
Bank of England tries to rein in inflation, which has reached its highest value since 1981, almost five times the central bank’s target. (1)
The pound has fallen to a record low against the dollar as markets react to the UK’s biggest tax cuts in 50 years. (2)
It’s hard to find much good news in relation to Global Markets, with investors remaining worried about high inflation and low growth. (3)
Sources
[1] https://www.bloomberg.com/news/articles/2022-09-26/understanding-the-british-pound-s-sudden-crash-quicktake
[2] www.bbc.co.uk
[3] https://russellinvestments.com/uk/blog/inflation-recession-earnings-mwir