Wealth management of property

As leading mortgage brokers in Bishop’s Stortford Enables IFA’s have witnessed alongside the rest of the UK that investing directly in bricks and mortar can clearly lead to significant capital growth and has done for many in the UK over recent years. Property investment often starts with borrowing to buy a home and then paying down the mortgage.

And investors in property over the years have seen huge returns over the years investment in bricks and mortar has proved to be a reliable investment.  Property prices of course are influenced primarily by supply and demand and with supply short in the UK and problems with supply and credit, property has boomed but it can equally fall sharply.

Property tends to perform differently to other asset classes and as ever, the experienced wealth managers at Enable would always recommend diversification across asset classes when considering investing. Historically this is undoubtedly why property has been a corner stone of any portfolio or investment for many years.
 
Investing in property on an individual basis once you have secured your home, can be enormously beneficial but also very risky. In a downturn property can drop dramatically it can also be very slow and expensive to buy and sell. If you are wanting to make sure property is part of your portfolio, beyond your home,  a collective investment in the property sector may be a better bet. Why invest in just one property when you could invest in many. There are lots of diversified property or real estate funds available

Asset allocation in bricks and mortar

Liquidity may never be far from the mind of anyone investing in bricks and mortar but many investment portfolios tend to have a slice of property in them. For wealth management Enables IFA’s know that balanced portfolios include bricks and mortar and with signs of recovery in the UK economy the trend to encourage investment in property has returned. Rather than make individual and more time consuming individual property investments having them as an asset class in a portfolio makes sense.

Mike Deverell an investment manager said recently, “We have done a fair bit of research comparing the Investment Property Databank index with economic growth and we know property is highly correlated to the economy. “With the economy doing better over the last 18 months it made sense that property was a good place to put money. Property as an asset class has done fantastically well in the last 12 months and you still get a much better return on a rental yield from a property than from cash, a bond or anything else, by a long way.”

His research also indicated that rental income growth has still to come through in property while the number of vacant properties still remains high, but the eventual improvement in these two areas of the sector should only act as another boost for the asset class. Enable’s Independent Financial Advisors are here to talk you through a balanced portfolio approach to saving and investing so if you are planning to increase your exposure to property we are here to talk you through your options you may even want to look at how to boost liquidity and diversification through the addition of a property derivatives funds.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Any Investment starts with assessing risk.



If you are new to wealth management Enable’s experienced Independent Financial Advisors in Bishop’s Stortford will always begin with, discussing how much risk you are willing and able to accept with your money. This of course may be different for individual aspects of your portfolio, for example you may wish to have a higher level of risk on your long term pension fund, whilst preferring to be more cautious with your ISAs.



It is also important to agree investment objectives, to help you achieve your goals, it is important for us to understand why you are investing. Do you want to save for your Children's education? Do you want to retire early? Are you trying to achieve a certain standard of living in retirement? Do you need a minimum level of income now? Or it could be as simple as wanting to find the best home to grow your savings over the longer term. Understanding your goals and aspirations enables us to position your portfolio optimally for your needs.



Making sure your wealth has the most appropriate Tax Wrapper for you is also vital.  What we mean by tax wrapper, is the most appropriate mix of tax treatment, accessibility and complexity for the investments in question. Examples of the most widely used tax wrappers are Individual Savings Accounts (ISAs), Pensions, Onshore and Offshore Investment Bonds and Unit Trusts/OEICs. For the more sophisticated investors, Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs) can be beneficial in certain circumstances. We will of course be able to explain to you how each of these types of tax wrapper work, and recommend whether they deserve a place in your portfolio.



Whether you are a new investor or have been with us some time reviewing  and rebalancing is ongoing so Enable’s IFA’s can help to ensure your portfolio remains optimized for your requirements.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Increasing wealth tax, will it drive out the rich?

There has been much talk this week about the UK economy being hampered if the coalition insists in pushing up tax for the rich, although it could be argued that most rich are already contributing far more than other people to the country.

Hollande, France’s new socialist President has also taken the same tact, to increase tax on the rich, which has met fierce opposition. But the question remains, although we have offered to lay out the ‘red carpet’ to France’s super rich, are we as a country not driving out the rich too, but just in a lesser degree, as we have already seen several hedge funds moving abroad.

George Osborne, Chancellor expressed his concerns over the new plans during his visit to Sunderland, where he stated:  "I am clear that the wealthy should pay more, which is why in the recent budget I increased the tax on very expensive property transactions. But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

Nick Clegg has already agreed to cut the top tax rate from 50p to 45p and has since indicated that he intends to increase wealth tax, and we will see no more increase on income tax in the UK for the time being. The coalition sentiment is that by tax the richest in the country, with it’s proposed tax on homes of £2 million and over would help the country pay off it’s deficit and improve the economic situation for the long term. We will have to wait until September to find out what the new proposed changes are going to be at their party conference.  

Property investment.....what you need to know

In 2007, property investors had a roller-coaster ride.  As a result, many surviving investors gravitated towards the high-end, prime or luxury market, particularly in coveted areas with low supply such as central London. But remember real wealth management can be global and long term. Most financial portfolios will contain some property and at reputable wealth management providers like Enable our IFA’s can advise.

Another part of the world where property is at a premium is Hong Kong which remains the world’s most expensive place to buy a home, and prices have gained more than 78 per cent since early 2009 on record low mortgage rates and an under-supply of new units.

Closer to home – and in spite of the fact that properties worth more than £2m are now subject to 7 per cent stamp duty, a rise of 2 per cent from the Budget in March – the number of transactions in the UK remains largely unaffected. There were 1,518 property sales worth at least £2m in 2011, a rise of 5 per cent from 1,442 sales in 2010 and the highest number in this price bracket since records began in 1995. Purchases of properties topping the £2m mark were also 2 per cent higher in 2011 than at the peak of the housing market in 2007. In addition, the number of properties selling for more than £5m rose by 22 per cent from 128 in 2010 to 156 in 2011, providing further evidence of strength at the top end.

All assets absolute increase

All asset classes have shown an absolute increase in assets in the first quarter of 2012, according to data published recently by investment research firm Camradata.  The firm claims that the figures represent growing evidence of a “long-term recovery”. Our experienced Independent financial advisors at Enable of Bishop’s Stortford know real wealth management requires proper risk assessment, appropriate to the investor and time.  Keeping the bigger picture in mind is what IFA’s are expert at.

In its latest report, Camradata figures also show that most equity classes have given returns of 20 per cent or more over the last three years, with “more managers reducing risk against their benchmarks and active managers, in particular, delivering value”.

Their data continue to show an upward trend in the number of investment houses active in most sectors, with the number featured in European equity, for example, rising from 36 to 47, while in US high yield the total increased from 17 to 25. Steve Butler, managing director of Camradata, said: “Broadly, there has been a bounce up in values and returns over the last three years. “It’s hard to see who could be disappointed with that kind of performance. What we’re seeing is managers continuing to create wealth against the same kind of bleak, market backdrop.”

Whether you are an active or passive investor wanting to take risks or minimize your risk, Enables independent Financial Advisors can help you look at your options.

The Secret Of Long-Term Financial Success

As Independent Financial Advisors, Wealth Management is key to our activities at Enable. As with all other IFA’s we are always looking for the best way to make returns over the medium term.  At Enable we always advocate diversity and learning form others success and mistakes. One fund manager who also prefers not to put all her eggs in one basket is Margaret Lawson, co-fund manager of the SVM UK Growth Fund, a 12-year-old portfolio.

Lawson has seen the fund endure a difficult 2011, when it fell 8.2 per cent (A share class), falling behind  the FTSE All-Share Index of UK stocks by 4.7 per cent, but over the longer term, this is a strong fund. Since its launch in March 2000, the fund has delivered a cumulative performance of 74.8 per cent, beating the index by 44.6 per cent. (Lipper data at 29 February, 2012.)

One of the “unique selling points” of a fund like this is how its managers divide it into three categories: its “core” holdings, “tactical” holdings and “alpha kickers”. A “core” segment holds the low-risk, robust selection of stocks that are rotated infrequently; a “tactical” segment contains stocks that are chosen for their exposure to shorter-term trends, such as changes in the economic cycle, and “alpha kicker” segment, which gets its returns from firms undergoing significant change and where shares often trade at a discount and offer potentially large returns.

Enable can see the benefit of being able to adjust the share that these three segments have of the total fund so that performance can be maintained and losses curbed in different economic conditions: recession, strong growth or sluggish growth, our IFA’s are always available to discuss your Wealth Management strategies.