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NEWSLETTER | 20 Nov 2020  
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Navigating the 'new normal'

In a guest feature this week, Stuart Parkinson, Group CEO, Lombard International, examines some of the issues facing HNW families when considering wealth and succession planning in these uncertain times. 

The pandemic may have temporarily limited freedom of travel, but even in the 'new normal', HNWIs remain 'world citizens', says Parkinson. As a result, they require their wealth managers to help identify asset management and investment strategies that are both fully compliant across multiple jurisdictions, and provide security and accessibility.

"Wealth advisers have an important role to play – they are the confidants, the solution finders, and the match makers, ensuring the wealth of today continues to help fund innovation, entrepreneurship, philanthropy, employment and the communities of tomorrow," writes Parkinson.

Two different studies out this week look at how the coronavirus crisis has brought about changes to the way financial advisers work as they look to adapt to the 'new normal'.

New research by wealth manager Charles Stanley reveals that more than half (52 per cent) of independent financial advisers have seen a marked increase in out of hours contact with clients, while almost half (47 per cent) say that clients are requesting higher levels of detail on their investments and the performance of their portfolios.

The sixth biennial FlexShares study of the adoption of external investment management services by financial advisers meanwhile, suggests that while the overall percentage of who outsource investment management has remained consistent over the past decade, since the start of the pandemic, the way that advisers leverage external services is changing.

"We’ve seen a clear shift in the perceived benefits of third-party outsourcing – whether that’s utilising external investment managers or other non-investment related service providers – as Advisers’ expected role continues to evolve from investment manager to holistic financial planner,” says Laura Hanichak Gregg, Director of Practice Management and Advisor Research at FlexShares.

Investors too, have changed tactics during the pandemic with new research by Oxford Risk revealing that stock market volatility in the early days of the Covid-19 crisis prompted 1.38 million UK retail investors to sell GBP10,000 or more of their investments, while 531,900 people sold GBP100,000 or more of their holdings. Stock markets have since recovered, much of their losses, but the research also highlights that of those investors who cashed in some of their investments, 29 per cent have not reinvested any of this money back into the markets.

“Those investors who pulled money out of the markets in March will already have lost much more… they lost when the markets dropped, and many have missed out on the rebound since," says Greg B Davies, Head of Behavioural Finance at Oxford Risk.

And another section of the population – those wealthier individuals who have managed to save more money than usual during the pandemic – also have additional  cash to invest to according to Quilter Cheviot, whose latest study has found that 18 per cent of those with GBP250k or more in investable assets are holding between 40-60 per cent in cash, which equates to a minimum of GBP100,000.

“Historically, cash has not been a good store of value for individuals due to the corrosive nature of inflation eating into its purchasing power over time," says Jonathan Raymond, Investment Manager at Quilter Cheviot. "Individuals with excess cash balances should strongly consider investing to help protect and grow their capital."

Wealth Adviser


The international portability of wealth will be crucial in navigating the complex world of tomorrow
Thu | 26 Nov 2020, 15:23
By Stuart Parkinson (pictured), Group CEO, Lombard International – As we head towards the end of an infamously volatile year, we continue to live in rapidly changing and uncertain times, be it geopolitics, the global economy, or evolving international regulations. While there is no silver bullet to navigate uncertainty, the value in foresight with regards to wealth and succession planning, is ever more important and significant.
Advisers work around the clock as 2020 uncertainty shifts the conversation for good, says new research
Thu | 26 Nov 2020, 15:23
More than half (52 per cent) of IFAs have seen a marked increase in out of hours contact with clients as attitudes towards personal finances have shifted in the wake of Covid-19, according to new research from wealth manager Charles Stanley. 
Advisers more likely to consider outsourcing due to Covid-19, says FlexShares survey
Thu | 26 Nov 2020, 15:23
The share of financial advisers using external managers today (41 per cent) is virtually unchanged from 2010 (42 per cent), however the pandemic has encouraged firms that do not currently outsource to reassess their approach. 
New research reveals extent UK retail investors sold investments during Covid-19 stock market falls
Thu | 26 Nov 2020, 15:23
New research from behavioural finance experts Oxford Risk, reveals that during the early stages of the Covid-19 crisis when stock markets fell sharply, 8 per cent of people with savings and investments either sold some of their investments or took their money out of the stocks markets. 
Nearly one-in-five wealthier Brits have at least GBP100k in cash
Thu | 26 Nov 2020, 15:23
During the pandemic some parts of the population have managed to put away more money than ever before. For those who already had substantial amounts of money in cash, including those with GBP250k in investable assets, it is vital they invest the money.
Trade and transaction reporting: Perfect storm or opportunity knocking?
Thu | 26 Nov 2020, 15:23
By Matthew Chapman (pictured), Director, ACA Compliance Group – Geopolitical change and uncertainty, regulatory sabre-rattling and industry shake-ups have combined to create a perfect storm for many financial services firms when it comes to their trade and transaction reporting obligations under MiFIR, EMIR and SFTR.
Global ETF launches 12-19.11.20
Thu | 26 Nov 2020, 15:23
A quiet week for new ETFs saw the arrival of a new issuer, Leatherback Asset Management, which launched its first fund, the Leatherback Long/Short Alternative Yield ETF, in partnership with Tidal ETF Services. Elsewhere, Changebridge Capital debuted two actively-managed ESG funds, and LGIM launched a new clean energy ETF.
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Three cheers for the innovators of Switzerland & three lashes for the UK’s Financial Services gatekeepers

By Allan Lane, Algo-Chain – If you are a Discretionary Fund Manager running Model Portfolios on financial adviser platforms, you will often find that ETFs available on one platform are not available on another, which invariably forces the manager to oversee multiple incarnations of what is meant to be the same portfolio.


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