Client trends March 2022:
Portfolio protection worries prompt a deluge of enquiries

The end of this financial year has seen an influx of enquiries from worried investors who don’t know which way to turn to protect their portfolios from global destabilisation, along with the usual ones focused on financial planning.

War chaos creates a new layer of worry for investors

The end of the fiscal year is usually marked by a slew of investors tackling an urgent to-do list around tax and financial planning. This year, of course, is a different matter as investors ponder (if not panic) about how the conflict raging in Ukraine will affect their finances. We’ve also been having conversations about effective charitable giving techniques too, which is lovely to see.

It really is too early to call the war in Ukraine, which many predict will rumble on in some form for months if not years, destabilising the global order and potentially shaking the financial system to its core. What is obvious, however, is that wise investors had better be reviewing their portfolios and other holdings to see where vulnerabilities might lie.

The investors we are speaking to have been searching for guidance in the media in many cases, and typically not finding much that is solid to work with there. This is no surprise and is in fact as it should be: generalist tips are likely to be of little use in such a volatile and multi-dimensional situation

The investors we are speaking to have been searching for guidance in the media in many cases, and typically not finding much that is solid to work with there. This is no surprise and is in fact as it should be: generalist tips are likely to be of little use in such a volatile and multi-dimensional situation. This is exactly the kind of time where professional advice comes into its own, since wealth managers will have analysts working around the clock to understand the conflict’s implications from an investment perspective. The world may be in for an extremely torrid time and there is no sin in spending a little time thinking about our own financial futures as we extend our sympathy and support to those affected. Indeed, a desire to be able to help to the fullest of their financial ability going forward is what is driving many of our users.

Marriage and money is a hot topic amid the introduction of “no fault” divorce

Marital woes may pale into insignificance against this current backdrop, but the reality is personal problems don’t stop in such times.

It may not be hugely romantic but, along with wealth management professionals, we spend a lot of time trying to get the message across that getting married, entering a civil partnership and potentially starting a family are among the biggest financial decisions one can make. We’ve therefore been delighted to see that our recent content on managing wealth after divorce has prompted users at various life stages to make enquiries about getting an adviser with these issues in mind.

Marital woes may pale into insignificance against this current backdrop, but the reality is personal problems don’t stop in such times

There are of course lots of financial benefits to formalising relationships (not to mention all the rest), but the fact is that people are often woefully underprepared to deal with money matters and marriage – and in particular the ramifications if things go wrong, which today sadly they all too often do.

And the rate at which people do split could be about to get even higher as April 2022 will see the introduction of “no fault” divorces, which will make it easier, quicker and even less stigmatising to seek a dissolution of a marriage or civil partnership as no apportionment of blame will be required.

It may not be hugely romantic but, along with wealth management professionals, we spend a lot of time trying to get the message across that getting married, entering a civil partnership and potentially starting a family are among the biggest financial decisions one can make

There are a host of reasons why people should seek wealth advice before, during and after marriage which looks at their finances specifically through the marital lens, and that applies equally whether they are the financially weaker or stronger partner. Not only are wealth managers adept at helping clients navigate this tricky territory, they are also able to plug into a broad professional network, including lawyers, who can help look after your interests. Our webinar, “Managing the Risks Around Divorce”, is a highly useful resource showcasing this kind of expertise.

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Top Tip

War times focus the mind on what’s important more than perhaps anything else and it is heartening to see the UK raising such large amounts of charitable donations to help the poor people of Ukraine. However, it is only natural that Britons are also worried for what the future holds for them and their finances.

For many, the uncertainty raging has been the final push they have needed to seek some professional advice on wealth protection. Why join them and have some no-obligation discussions to see what leading firms can do to help safeguard your financial future?

Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

Investment trusts are attracting attention

Since the start of the year, we’ve noticed users have been very much more interested in talking about the different types of investment they could pursue to defend their wealth from inflation and accomplish financial goals like securing better dividends to sustain retirement income.

We’ve had lots of conversations about AIM (junior UK market) investing and tax-efficient vehicles like the Enterprise Investment Scheme, and now investment trusts are increasingly coming up due to positive press about the handsome returns and dividends many were able to keep delivering throughout the pandemic.

Since the start of the year, we’ve noticed users have been very much more interested in talking about the different types of investment they could pursue to defend their wealth from inflation and accomplish financial goals like securing better dividends to sustain retirement income

Investment trusts are investment vehicles run as public companies which are closed-ended, in that they issue a fixed number of shares when the fund launches unlike unit trusts which issue more when there is demand. Due to their longer-term view and ability to leverage up (i.e., borrow), investment trusts can aggressively pursue returns and lots have in the UK in recent years: according to the Association of Investment Companies, 36 such vehicles have been able to beat inflation on a dividends and share price returns basis over the past five years.

There are a wide range of investment trusts to choose from spanning different styles and sectors, so it may well be worth looking beyond unit funds. However, there are specific risks to be aware of, particularly around the use of gearing, which warrant taking advice first.

Be proactive about protection

Usually around this time of year we would be encouraging anyone concerned about theabout the health of their wealth to harness what you might think of as “spring cleaning energy” for their long-term benefit. This year, sadly, the emphasis is on protecting finances from the ravages of war.

Although it is only human to feel that one perhaps shouldn’t be thinking of these things at such a time, the reality is that people have families to think of and financial obligations to meet. Moreover, worrying intensely about the state of our finances as well as the state of the world won’t do anyone any good.

Nobody has a crystal ball, but wealth managers excel at scenario planning and implementing defensive strategies for their clients. Making proactive plans is what the smart money is doing currently, so why not join those who are probing their portfolios for weaknesses with the experts and benefiting from some of the best research capabilities around?

Important information

The investment strategy and financial planning explanations of this piece are for informational purposes only, may represent only one view, and are not intended in any way as financial or investment advice. Any comment on specific securities should not be interpreted as investment research or advice, solicitation or recommendations to buy or sell a particular security.

We always advise consultation with a professional before making any investment and financial planning decisions.

Always remember that investing involves risk and the value of investments may fall as well as rise. Past performance should not be seen as a guarantee of future returns.

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