Investors in the leading banks have endured a hair-raising year. At times, Lloyds, NatWest, Barclays and HSBC have seen their share prices dwindle to under half what they were 12 months ago. But are they now turning a corner?
Banks were this month given the green light to restart paying dividends – a huge relief to shareholders who rely on their holdings for an income. In March the industry regulator, the Prudential Regulation Authority, had asked banks to freeze dividends to private investors and pension funds. Instead, banks were told to use the payments to build up a cash pile as a buffer against potential loan losses.
The go-ahead to resume dividends is a sign the banks now have sufficiently strong balance sheets to withstand any potential shocks from bad loans. While share prices have risen tentatively on the news, several banks could still be undervalued.
The FCA has warned that customers holding on to too much of their wealth in cash are missing out on potentially higher returns as they don’t receive proper financial advice.
In a new document, the FCA says that many customers are still holding large amounts of cash, however, too many don’t get the advice they need to help make informed investment decisions and access better returns.
Bowmore Wealth Group, says there needs to be a greater effort from the financial advisory industry and the FCA to educate customers who hold far too much of their wealth in cash that ultimately delivers negative real returns.
Junior ISAs have grown steadily in popularity since the launch of the earlier iteration, Child Trust Funds.
Nowadays, parents and guardians can set up a JISA for their children under the age of 18, to which anyone can contribute (including grandparents, other relatives and friends) up to a total maximum payment of £9,000 each tax year, per child. Of course, with Junior ISAs being part of the ISA family, they are tax-free in every respect.
While cash JISAs, just like cash ISAs exist, greater potential long term value is more likely to be achieved via a risk-based JISA, which can invest in funds just like those that you may hold in your investment or pension.
Tell us about how you became an investment manager?
When I joined Bowmore I was given a great opportunity to be an integral part of a rapidly growing wealth management business. Within that role I worked closely with our Chief Investment Officer, took industry-recognised exams and gained valuable experience to move into an Investment Manager role over a number of years.
What is your investment philosophy?
My investment philosophy centres around understanding risk and individual clients’ needs. There is no one size fits all. I’m also a great believer in keeping it simple. Building a portfolio does not need to be overly complex to be effective. Individuals will judge us on excellent service and solid performance, not how clever we try to be.
By some estimates, about 90 per cent of the UK investment advisory market is controlled by around 10 businesses. It is within the remaining 10 per cent that some firms believe they can carve out a different type of service.
One of those is the Bowmore Wealth Group, a mid-size family-run UK firm that wants to develop a one-stop wealth planning and asset management business that can deliver the sweet spot between highly personal services and economies of scale.
While a new round of industry consolidation is at the mercy of a pandemic that is shifting more than disappearing, it hasn’t stopped issues of low interest rates, crunched fees, and varying degrees of digital adoption success from forming pontential new alliances behind the scenes.
The global pandemic has presented unique challenges to us all, re-enforcing the need for couples to sit down and talk about their finances.
Many individuals often leave their financial arrangements, which can at times be hugely complicated, solely to their other half to organise. But should anything go wrong, this could leave one partner in a potentially vulnerable and troublesome position.
Bowmore Asset Management Ltd is authorised and regulated by the Financial Conduct Authority (626431)
Bowmore Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority (115180)