Feeling down about investments?

By John Hayward
This article is published on: 20th March 2020

20.03.20

Take advantage of this great opportunity

The last stockmarket crash was in September 2008. Here we are again. At the time of writing, the FTSE100 is more than 25% down, even allowing for dividends. For many, this is not an attractive situation when considering investments. For others, the few that look through the dark clouds, this is a great opportunity. It is very difficult, for the vast majority of people, to time when to buy into markets and when to sell out. When to sell can be simpler for those who have a nerve trigger point that will say enough is enough and they will take their profit. Those who sell when things are going down often get it wrong and crystallise a loss. Some will be forced to sell due to other circumstances and could be lucky that this happens when markets are historically high. Others who have to sell at a low point, such as now, are obviously not so lucky. This then leads to a lack of confidence in investing and the feeling of never wanting to be burnt again.

Anybody sitting on cash, wondering what to do with it, should seriously consider investing at a time like this when stockmarkets have crashed. Interest rates are close to non-existent so there is little to offer short term deposit savers. Inflation trundles on and so cash might be ”king” in the short term, but long term hardly ever. The problem is that whenever there is a crisis few can see beyond its end, so they will not invest until things have improved. By then, the potential profits on offer have disappeared. The fact is that that markets will bottom out. Where? Nobody knows for sure, but based on the fact that a big influence on why markets have fallen so much is fear and panic, it is felt that markets are artificially low. There may be further to go down but it is likely that there will be a significant rebound. Markets tend to discount the future. This means that, on the day that someone says the virus is under control, stockmarkets will have already been on their way up for some time.

One way of coping with the uncertainty of when the bottom of this particular dip might be is to drip feed your money into the markets. This means that if markets continue to slide, you don´t suffer a reduced value on all of your cash. Conversely, if markets increase in value, then you are part of that increase. By feeding your money in over a period of time you are able to reduce the downside and be part of the upside. In time, once this crisis has ended, you will already be invested and thus reap the benefits.

To find out how you could make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, contact me today at john.hayward@spectrum-ifa.com or call or WhatsApp 618 204 731.

How much do I need for a comfortable retirement?

By Chris Webb
This article is published on: 18th March 2020

18.03.20

How much money will I need in retirement?

This is one of the most common questions I hear as a Financial Adviser in Madrid, Spain.

The answer to that question differs from person to person and the numbers I discuss with my clients vary massively. To some, having a quiet retirement with little requirements is the goal; others will want to continue playing golf and attend social events weekly. There is a huge difference in what you will need in your pocket with these different scenarios.

So, what do the experts think?
Researchers have calculated how much money a person needs per year in order to enjoy a comfortable retirement. The numbers were calculated by Loughborough’s Centre for Research in Social Policy (CRSP), The Pensions & Lifetime Savings Association (PLSA) and Retirement Living Standards (RLS). A report from Loughborough University and the Pensions and Lifetime Savings Association aims to help people understand how much they will need for a minimum, moderate or comfortable quality of life once they retire.

In the UK a full state pension comes in at just over £8,500, but it’s the other savings you accrue over your working life that will make the difference in people’s post-work years.

Experts found that a single person will need about £10,200 a year to achieve the minimum living standard, £20,200 a year for moderate living standards and £33,000 a year for comfortable living standards. For couples, the minimum standard came in at £15,700, moderate was £29,100 and comfortable worked out as £47,500. The results are based on consultations with members of the public and consider what is needed in retirement for home DIY and maintenance, household and personal goods, holidays, food, transport, clothing and social engagements.

The new Retirement Living Standards describe three different standards of living with associated costs for each – all established by what the public considers realistic and relevant expectations. Associated costs are made up of household bills, food and drink, transport, holidays and leisure, clothing and personal and helping others. The standards cover a range of goods and services that are relevant to most people. These and other costs, such as tax on pension income, may need to be added depending on individual circumstances.

A series of profiles and infographics have been created on the PLSA website to help people calculate their own finances. The research for the Retirement Living Standards was adapted from the approach used to produce the Minimum Income Standard – a calculation of what the public thinks is an acceptable minimum standard of living. The data was gathered through 26 group discussions with around 250 members of the public already retired or approaching retirement, from a wide range of backgrounds. Expert views were taken into account for some areas, such as transport, energy usage and food costs.

The discussions set the parameters for how higher living standards should be described and defined. Through these discussions, three retirement living standards were agreed: minimum, moderate and comfortable.

The standards:
At a cost of £10,200 per year for a single person and £15,700 for a couple, the minimum lifestyle covers all your needs plus enough for some fun – including social participation and social occasions.

The moderate lifestyle (£20,200 a year for singles and £29,100 for couples) provides, in addition to the minimum lifestyle, more financial security and more flexibility.

At the comfortable level (£33,000 a year for singles and £47,500 for couples), retirees could enjoy some luxuries like regular beauty treatments, theatre trips and three weeks in Europe a year.

*Table from https://www.retirementlivingstandards.org.uk/

Breaking down the RLS:

House: Household utility bills, decorating and maintenance, furniture, cleaning supplies, lightbulbs, cooking utensils, appliances (e.g. fridge, washing machine), garden supplies, towels, bedding, gardener/cleaner/window cleaner & funeral plan.

Food and Drink: Household food shopping, eating out, beer & wine.

Transport: Car running costs, railcard/train travel & taxis.

Holidays and Leisure: TV, DVD player, laptop, printer, speakers, CDs, stationery supplies, TV license and subscriptions, internet, activities & holidays.

Clothing and Personal: Clothing, footwear, cosmetics, toothbrush, toothpaste, shaving supplies, hair styling, beauty treatments, dentist, opticians, podiatry & minor first aid supplies.

Helping Others: Gifts, helping others (if applicable) & charitable donations

Planning early is key to getting your retirement plans in order. You can look up another of my articles here on this subject titled “It Is Never Too Early”

Don’t delay your financial plans. For planning, yesterday is better than today, which is better than tomorrow. Contact me, Chris webb on 639 118 185 or chris.webb@spectrum-ifa.com if you want to discuss your own circumstances.

Sources:
Loughborough’s Centre for Research in Social Policy (CRSP).
Pensions and Lifetime Savings Association (PLSA)
Retirement Living Standards (RLS)

The luxury of your own local financial adviser

By Alan Watson
This article is published on: 17th March 2020

17.03.20

To say we are living in volatile times could be somewhat of an understatement. The French stock market, the CAC 40, experienced its largest ever one day fall last week, over 12% in just one trading day!

The market crash in October 1987 was severe, the dot-com boom and bust caused great misery, a global banking crisis in 2008 even caused the mighty Lehmans to fall. Why am I reciting this? Because, like most of my colleagues, I witnessed all of these events.

Covid-19 now appears to be at its most prevalent exactly where all Spectrum advisers work: Europe. The French Prime Minister has declared that all non-essential shops, offices, cinemas and restaurants should now close, and as I write this my mind wonders about the next weeks’ market activities, especially as traders and brokers will most likely decide to work from home. We have a very long climb to recover from the exceptional falls of late.

When I make initial telephone contact with a person who has requested information from our website, or maybe a personal referral, or interest from our advertising, it quite often happens that they appear surprised just how local I am, “Oh, so you’re not based in London, you live in Chambery? But that’s so close, you must be a keen skier,” and this opens up a very important conversation, mainly because the person on the other end of the phone has rarely spoken with a financial professional who has 25 years of experience in this region of France. At this stage the conversation explodes, “Where did your children go to school? Can you suggest a good one? Do you know a good company to insure my car with? How do you start to build a pension in France?” The questions are many, and I consider it my personal duty to assist, after all what is all the experience worth if you cannot help your fellow expatriates?

In the last few days such local contact has taken on a whole new meaning, “Could we meet up soon? I need to decide on my new fiscal residence, the UK tax year is so close, but due to Brexit my old UK adviser cannot help me.” Or, “I have so many UK based investments, they are all severely beaten down, but the phone lines are blocked, nobody can update me, and the annual statement is eight months away.”

And this is what Spectrum is all about; we, the advisers who live close to you, all have not only many years behind us in financial services, but equally importantly have lived, worked and paid taxes and social charges in France for many years. We know how the system works, the good and the not so good bits. We know the better accountants, the real ones who actually work for you, the client, not administrators/book keepers who collect for the system. We are supported by some of the world’s best investment houses, insurance companies and trust companies. Our knowledge is vast, and often a short car trip from your home or office. There is no cost or commitment in meeting up for an initial discussion, but the luxury of having so much available experience on your own doorstep, and in your own language, makes us a unique financial services company locally.

The concern currently is real, the media has caused Europe to panic (I just tried shopping with my wife, high stress levels everywhere). We are close, capable and can at least put your mind at rest during these testing times.

Try us, you will be amazed how quickly we respond, arrange a meeting and help to guide you through this rather bizarre period.

What to do with investments in a bear market?

By Victoria Lewis
This article is published on: 16th March 2020

What a week of political, medical and financial news! Daily market commentary from asset managers, daily messages from my daughter’s school (all students’ temperatures have been taken daily on arrival for the last 2 weeks) and my stock market app has been flashing red, green, red and more red. Let’s see what today brings.

If the stock-market decline triggered by the coronavirus outbreak and the oil price slump is like past drops, there’s both good and bad news.

After a long (largely uninterrupted) run of share price appreciation since 2009, one of the longest bull markets in history, we have now entered a bear market, broadly defined as a 20% drop from recent highs.

Goldman Sachs pointed out that this week that we have never before entered a bear market because of a viral outbreak but that it may be useful to consider the history of bear markets to get a sense of their duration and intensity. There are different types of bear markets which can be described as follows (statistics from GS who analysed bear markets going back to 1835).

Structural bear markets are those created by imbalances and financial bubbles, very often followed by a price shock like deflation. Structural bear markets, on average, experience drops of 57%.

Cyclical bear markets are typically a function of the economic cycle, marked by rising interest rates, impending recessions and falls in profits. Cyclical bear markets experience drops of 31%.

Event driven bear market refers to things like a war, oil price shock or an emerging-market crisis. On average, this type of bear market results in 29% declines. The current crisis is event driven. Monetary response by central banks should be effective but time will tell. However, this is a new territory: an environment of fear where consumers are forced, or just inclined, to stay at home.

The good news is that bear markets triggered by exogenous shocks typically regain their previous levels within 15 months.

Whatever your view is on the markets, my advice is don’t try to predict the future. A recovery is inevitable and we trust professionals to skilfully manage our clients’ funds. We sometimes respond emotionally to stock market decline and volatility, but there is usually no merit in either reacting to, or trying to forecast, short term market events.

Don’t delay your financial plans. For planning, yesterday is better than today, which is better than tomorrow. Contact me, Victoria Lewis, if you want to discuss how you should react to these events.

A flight to safety, or an opportunity for investors?

By David Hattersley
This article is published on: 13th March 2020

13.03.20

I am as conscious as anybody with regard to the above virus and its potential impact and consequence. A recent financial example would be the demise of Flybe, to which the coronavirus was a contributory factor. Natural animal instincts are fear, driven by fight or flee. So how can one consider investment at such a time, when currently 24 hour news channels and the press are swamping us with a savage feeding frenzy of headline information, with many showing a scant disregard to any in depth analysis and reality.

To clarify some facts, I did some research in the reliable analyses from the UK government, “Surveillance of influenza and other respiratory viruses in the UK” annual reports from 2014-2019. The following fact came to light: deaths in England with a contributory factor from the “flu” have varied from 14,000 to below 10,000 in each “peak season” during this period.

Viruses do mutate and new strains appear. With COVID-19 there is a documented risk for the elderly, in particular, those who may have pre-existing medical conditions, but you need to keep things in perspective.

Investing for the future

A simple phrase from Warren Buffet springs to mind, “When everybody is being greedy, be fearful; when everybody is being fearful, be greedy”.
So how do fund managers cope with this onslaught? How can they take into account all the facts referred to above? We live in a global world which has, nevertheless, regional differences. The multi-asset fund managers that we use have the resources to have access to massive amounts of data, which enables them to take all of this into account.

They invest for the long term, with an eye kept on short term risk. But they avoid short term “knee-jerk” reactions, taking a longer term view based on a minimum 5 year investment analysis and taking a balanced approach

So what’s our role as Financial Advisers? In previous articles I have eluded to each individual’s circumstances. Apart from the pure investment questions, so many other aspects need to be considered for effective financial planning including your personal situation, how much risk you want to take and how long you want to invest for. So a detailed fact find has to be the way forward, and that is carried out by us, not the fund managers. These fact finds are free, and are based on each individual’s requirements and circumstances. So feel free to contact me for a no obligation meeting, apart from the provision of a coffee!

Being prepared for BREXIT in France

By Katriona Murray-Platon
This article is published on: 11th March 2020

On 31st January 2020, the UK left the EU. However, the real effects of Brexit, for those of us living in France, will not properly be felt until after the 31st December 2020 (what an interesting New Year’s Eve that will be!) and thereafter. Hopefully, by that time we will have a clearer idea of what our rights and responsibilities are. Until then there will still be much speculation and media noise, which may be just as confusing as it has been over the past four years.

One thing Brexit has established, from the very beginning, is that British citizens living in France, or planning to settle in France, need to get their affairs in order and decide where they would like to live for the foreseeable future. As British citizens we can always return to the UK if we so choose, but if we want to continue to live in France we must show that we have lived here continuously for the last five years or that we intend to continue living here in future.

The next few months are going to be very interesting and it is more than ever important for British citizens to consider some important financial changes.

Pensions after Brexit
In 2006, the UK introduced a law making it possible for UK private pension benefits to be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS), provided that the overseas scheme meets certain qualifying conditions.

For those pensions that can be transferred there are many benefits including:

No obligation to purchase an insurance company annuity, at any time
The potential to pass on the member’s remaining pension assets to nominated beneficiaries on death with minimal or no death duty payable. By comparison, currently a tax charge at the beneficiary’s marginal rate can be applied in the UK, where the member is over age 75 at death
A wider choice of acceptable investments offered, compared to UK pension plans
The underlying investments and income payments can be denominated in a choice of currencies, which can potentially reduce exchange rate risk
Potential to receive a larger amount of Pension Commencement Lump Sum compared to UK schemes
Depending upon the jurisdiction where the QROPS is set up, income payments may be made without the deduction of local taxes, meaning that income will only be taxed in accordance with the law of the jurisdiction where the member is resident

In 2017 the UK government announced its intention to introduce a new 25% Overseas Transfer Charge (OTC) on QROPS transfers taking place on or after 9th March 2017. This charge does not, however, apply where the QROPS is in the European Union (EU) or EEA and the member is also resident in an EU or EEA country (not necessarily the same EU or EEA country) and remains EU or EEA resident for the next five full UK tax years.

Many of those who work in the industry believe that after the transition period, it may no longer be possible for British citizens to transfer their pensions into an EU QROPS without incurring the 25% charge.

QROPS may not be suitable for everyone and much will depend upon the nature of the UK pension benefits being considered for transfer, as well as the person’s attitude to investment risk. Transferring a pension to a QROPS is not a decision that should be taken lightly nor in haste and proper financial advice with an experienced adviser is essential. Even when the decision has been made to transfer the pension it may take a good few months to complete, which is why, if you are even considering this possibility, it is important to contact a local adviser to explore what your options are.

Taxes after Brexit
As tax between the UK and France is determined by the Double Tax Treaty, this will not be affected by the fact that the UK has left the EU. However, whilst not directly taxed, a lot of UK income, such as UK rental income, is added to the taxable base and increases the tax margin of the French taxpayer. If you intend to live in France, you may want to consider whether it is really in your interest to hold onto UK assets.

It is possible to protect your capital investments in France and ensure that they can grow in a tax efficient environment by way of an Assurance Vie policy. French Assurance Vies or French approved foreign Assurance Vies offer valuable benefits when it comes to income tax, inheritance tax and estate planning. Foreign portfolios and bonds are not treated as Assurance Vies and any gain is subject to tax and social charges irrespective of whether this income is taken or whether it is brought into France. If you are French tax resident, you are taxable on your worldwide income in France. Proving that you are French tax resident will be an important factor for establishing the Right to Remain in France.

Being resident in France does not necessarily mean that all your assets have to be in France or have to be in euros. There are many opportunities for holding sterling based diversified portfolios in a tax efficient manner.
For anyone intending to live in France for the foreseeable future, be aware that today’s valuable financial planning opportunities are unlikely to remain beyond the short term (31st December 2020 could be an important date in this respect). Contact me, Katriona Murray, and I will be happy to arrange a meeting.

Stay Safe

By Gareth Horsfall
This article is published on: 11th March 2020

11.03.20

As I write this E-zine financial markets are entering free fall due to the events surrounding coronavirus in the last few weeks, no more so than in Italy.

It certainly seems a very difficult and strange time to be living in, and clearly is spooking the financial sector. However, in this E-zine I want to offer some rational thought about this and why this is neither a time for panic nor something that we should think is out of the ordinary. It is certainly unprecedented from a health point of view and I hope you can remain safe during this time, but it is just another ‘unpredictable’ event from the perspective of our money and will have the short term effect of scaring investors.

We should all think back to the events of 2008 / 2009 and remember the thoughts and feeling we had when the world’s media told us that we were heading into a financial crisis of unforeseen proportions and that Armageddon would prevail. This is no different, from a financial point of view, and should be thought of no differently. It will throw up opportunities for those who are sitting on cash and should be a time of reflection and restraint for those of us who are fully invested.

I would like to add that I do not wish to minimise the effects of this virus in any way. I understand that there could be many at risk, myself included: I have suffered from asthma all my life, and we also have members of the family who are at very high risk of developing severe problems from the virus if everything we are to believe is true.

Equally, what I am about to write should in no way be taken as a conspiracy theory and born out of superstition. I am going to write based on historical facts and reflect on the behaviour of humans. We have tended to exhibit and repeat the same patterns of behaviour in very similar circumstances throughout history.

EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS
This is the title of one of my favourite books written in 1841 by author Charles Mackay.

It is one of my favourite reads because it is a historical account of the typical behaviour that we. as humans, exhibit

repeatedly. There are many examples throughout history, which are discussed in great detail in the book and which I will come to in a moment, but let me ask you:

Just because all the governments around the world, all the doctors, all the councils and all the media say that coronavirus could be the greatest threat to mankind, does this make it true?

This might seem a rather provocative statement to be making, but it does bear thinking about for a moment. Some suggest that the coronavirus may be no more serious than the regular flu, although some estimates suggest it may be worse. The facts to date cannot prove either way. Clearly, given that we have no idea how it will manifest itself, it makes sense to adopt urgent measures but it may turn out to be no more than another SARS / MERS/ Ebola (interestingly Ebola virus kills 9 out of 10 people who get infected, but the alarm over that was nowhere near the panic over coronavirus). In addition, we have had panic surrounding mad cow disease, swine flu and avian flu. None of these have gone on to prove to be any more than a passing moment of concern and affected a small proportion of the population overall.

The book I have mentioned above is well worth reading, if you have the opportunity, and explains how as humans, we tend to exhibit behaviours which reinforce one another. In our case, the government creates the alarm, therefore the doctors must respond with equal alarm and response / preparation ( they are afterall paid by the government), the media equally react in an alarmist way because it helps them to sell their services, the people become alarmed and start stock piling because they fell under threat. The problem is that is is now hard, in a communal state of panic or enthusiasm, for one to stand out and say ‘maybe this is not the case’, because they are ostrazied or ridiculed and called out for being unreasonable.

But don’t just take my word for it.
Let’s look some of the evidence:

GREAT RECESSION 2008 / 2009

Merely 10 years ago we had a very similar experience, when financial markets collapsed after the bundled mortgage debt crisis that led us into the crash of 2008 / 2009. However, isn’t it interesting that leading up to this crisis, economists and central banks told us that the world was in permanent state of growth and could likely maintain 3% per annum; estate agents told us that property prices would keep on rising; even banks and financial institutions believed the hype and continued to offer highly risky investments to risk averse investors because they believed that stability was the new norm:

The Guardian 30th January 2007: Still going through the roof – the property boom goes on
Fortune 500: July 12th 2007: The greatest economic boom ever
Harvard Business School: 27th December 2007: Chimerica’ and the Global Asset Market Boom

No one could challenge the norm at the time, for fear of being branded the one who wanted to end the status quo. The same logic applies to financial exuberance as it does to fear about a global pandemic. Just because everyone says it will be this way doesn’t necessarily mean it will be (if you haven’t seen the film, ‘The Great Short’, then I would suggest it as a great example of the treatment of those who go against the masses).

TECH BOOM 2000

For those of you with a memory of the events surrounding the financial market collapse of 2000, you might remember that running into the collapse we were told that the internet would change our lives forever and in ways that we could not imagine. The theorists were absolutely right. But unfortunately, they had not thought to add a timeline to that prediction. Financial market exuberance took over followed by collapse. At the time economists, central banks, financial institutions and pundits in the media bought into the same rhetoric, that the internet would reshape our lives immediately. Little did they know that it would take about another 10 years for the effect to happen. Just because everyone says it will be this way doesn’t necessarily mean it will be.

WITCH MANIA

In the mid 1400’s Europe was fixated with the idea that every calamity that befell a person was the cause of a witch. Here is a passage from the book:

“But in the early days of ‘little knowledge’ this grand belief because the source of a whole train of superstitions, which in their turn, became the fount from whence flowed a deluge of blood and horror”.

The writings are not a million miles removed from the fear surrounding coronavirus. In this case, just because everyone said it was true didn’t mean it was. More horrendous is that those who challenged the belief were deemed to be witches themselves and didn’t live to see their reality come true.

THE CRUSADES

I won’t go into the historical account of how the Crusades came about, but we can reflect on a passage from the book, which in some ways mirrors what we see today:

” Fanaticism and the love of battle alike impelled them to war, while the kings and prices of Europe had still another motive for encouraging their zeal (in the case of the Crusades it was money and land grab). Policy opened their eyes to the great advantages which would accrue to themselves…….Thus every motive was favourable to the Crusades. Every class of society was alike incited to join or encourage the war; kings and the clergy by policy, the nobles by turbulence and the love of dominion, and the people by religious zeal……skillfully directed by their only instructors”.

POPULAR FOLLIES OF GREAT CITIES

This phrase is to illustrate the power of the word to spread far and wide and for superstition and hypothesis to become fact:

“And first of all, walk where we will, we cannot help hearing from every side a phrase repeated with delight……by men with hard hands and dirty faces – by saucy butcher lads and errand boys – by loose women – by hackney coachmen, cabriolet drivers, and idle fellows who loiter at the corners of streets….it seems applicable to every circumstance, and is the universal answer to every question; in short, it is the favourite slang phrase of the day, a phrase that, while its brief season of popularity lasts……throws frolicsomeness over existence and gives them motivation to talk as well as their more fortunate fellows in a higher stage of society”.

MONEY MATTERS

So, to bring the subject of this E-zine back to money matters for a moment I would like to write that what we do and how we act now is of utmost importance to the long term health of our personal finances.

Most people will be in one of two situations right now. The first are those who, for whatever reason are sat on cash which available for investment. Whilst financial market collapses might seem the worst time for investment they are quite the opposite. They are the greatest opportunities. The opportunity to see substantial gains on investments when the volatility settles. It is in no way easy to invest when market indicators are all red and the financial media are professing Armageddon, but they are wrong. I know this from experience because I had the fortune to have some cash in 2008 when the financial crisis happened. You have to get through the volatility and the psychological reluctance, but long term returns on most assets during these times are substantially greater than at other times.

However, a word of caution. Financial crises can create imbalances in certain sectors. It is wise not to just jump into any asset during this time, but to invest in a well balanced portfolio based on your own attitude to investment risk.

The other class of investor is those who are fully invested (I include myself in this category). We are investors who have been invested and should remain invested during these periods (not accounting for anyone who must disinvest because of cash needs). Panic is not an option. Level headedness must prevail. And if you are unsure of what to do then you can always pick up the phone and speak with me. This is my 5th financial market crash in my career. I have coached many clients through periods like these and suspect I will have to coach many more, so if you are in doubt then please do get in touch and we can talk about how it affects your personal situation.

If you are a client who has invested capital through one of our selected group of asset managers then please feel comforted that they have everything under control and have made provisions for these unforeseen events (i.e. investing a proportion of the assets in gold and other low volatility safe haven assets). What we are going through is quite normal and I suspect will be something we look back on with great interest in the not so distant future. In the meantime, if you yourself, or anyone you know is at risk from the virus please take all measures to stay safe.

Do I need to declare my UK bank accounts?

By Amanda Johnson
This article is published on: 10th March 2020

10.03.20

Yes, you do. In a drive to reduce tax evasion and ensure transparency as to where money comes from, banks are now required to share details of overseas accounts, if asked by another country’s tax authorities.

All UK bank and savings accounts need to be declared on your French Tax return. You also need to declare if you have opened or closed any accounts during the last tax year.

Any interest that you have received on these accounts must also be declared. The penalties if you are found to have not declared accounts are very stiff, at up to €1500 per account.

In France, there are tax efficient savings accounts called Livret A and you can save up to €22,950 per person. The interest is not subject to French income tax or social charges and it is a perfect account for an emergency fund because you have access to this savings account without a notice period. For money that you can put aside for a longer period, it is worth getting in touch with me to discuss whether an Assurance Vie would be suitable for your needs.

Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.

Stock markets falling, should I sell?

By Charles Hutchinson
This article is published on: 6th March 2020

06.03.20

There are four big subjects dominating the public arena at present: life after Brexit, life after the coronavirus, life after climate change, life after the dramatic falls in the global markets.

We live in an interdependent world where news is instant across all continents (although I’m not sure whether the penguins are interested). We are aware of climate change, the antics of Widow Twanky Trump, the spread of the coronavirus and Brexit (an outdated game in which the British people have kicked off in the hope of a repeat performance of their imperial past). Hopefully we have taken onboard the catastrophy of climate change in time (not Widow Twanky, yet) before we are reduced to a desert of Mars proportions. Hopefully the coronavirus threat is a storm in a teacup. Hopefully Brexit will work out. These are all uncertainties – except one: the global stock markets.

All life is cyclical; this is enshrined in history. Take any historical event of extreme proportions; the pendulum will at some point begin to swing back the other way. The only possible exception I can think of is the reincarnation of the Dinosaurs and the Dodo. There will be other tyrants, exterminations, plagues and climate changes at some point; but in our lifetime at least you can depend on the markets bouncing back. Why? As I have described in other articles, the markets are like the tides, they come in and they go out. The sea does not disappear over the horizon in a great hiss of steam into the sunset. Money has to have a home and it is to the markets, at the end of the day, that money’s guardians largely turn. In a post apocalyptical world, bartering will still continue, even if it is with seashells and potatoes. Money is merely the lubricant of trade, whether it be between you and I or corporations or countries.

Believe it or not, the professional market traders relish market falls (or corrections, as they call them) because it presents them with the buying opportunities which are needed to make money. The falls are caused by a mixture of inexperienced emotional investors and market makers (to create the buying opportunities). What is sure now is that markets will move up again and it might be sooner than expected. No person, company or country can stay in lock down for long. We have to eat and carry on our normal lives. Sooner or later, a cure for COVID-19 will be found (they announced yesterday promising results with HIV and Ebola antiviral drugs). The old may be vulnerable, but they don’t need to go out to work, tilling the fields or driving the engines of manufacturing. They are mostly at home enjoying a good rest after a lifetime’s toil. So with a bit of care we may be able to keep them protected until the virus burns itself out.

The lesson is clear: stay invested, or if you are a little brave buy into these low levels to enjoy a potentially better return and maybe average down (don’t commit all your spare investment capital at once but buy into the falling markets in stages to increase the odds of buying near the bottom to increase your potential profits).

Remember, Spectrum does not risk our clients’ hard earned capital. We just know the tide will come in again and as long as we are in sound and sturdy boats (investment funds), it will take everyone back up the beach to new heights. Spectrum chooses fund houses for their experience and expertise, some of whom have been around for more than 200 years. It is their fund managers’ job to react to world events on a daily basis. We use them to protect our clients’ money. We arrange for our clients to access these superb funds through structures called Investment Bonds (or Insurance Wrappers) which are Spanish compliant and which offer unparalleled security (against corporate collapse) and low taxation with both income tax in Spain and the UK and also inheritance tax in Spain.

If you would like to talk to me more about this subject and the points raised, please contact me as per below and I would be happy to discuss this further.

Moving to Spain – When should I take financial advice?

By David Hattersley
This article is published on: 2nd March 2020

02.03.20

For the majority of those who move to Spain, speaking to a qualified financial adviser, who is regulated where you plan to live, is something which happens after you have made the move. But, talking to one before you embark on the journey can help avoid some of the issues that expatriates can find themselves encountering.

Many UK based advisers are not fully regulated to offer advice for Spain and may not be aware of the most current regulations or tax efficient solutions for your needs. A Spanish regulated adviser can ensure you are financially prepared for your move in terms of any investments, savings and taxes which can be due on both income and windfalls you may be expecting after your move. A local adviser will also be able to clarify the potential impact of Spanish succession tax.

An additional complication in Spain is the variety of laws in each autonomous area. The classic example is the differing laws between Andalucia, Murcia & Valencia, so it makes sense to deal with a regulated adviser who is based in or near the autonomous area you are moving to.

Many people buy in Spain with plans of using their new Spanish property to retire to, either now or eventually. If it is the latter, in the interim period the property may be used to produce rental income, either via summer rentals or long term rentals, so there will be tax considerations. Depending on how long you are planning on living in Spain each year, residency may also become an issue. When holding property both here and in the UK, “Cross Border” regulations and differing types of tax are applicable to each country. Having a “Partner“ relationship brings its own complications.

Everyone’s situation is unique and there is no single ‘recipe’ that we can give to navigate buying a property in Spain. A regulated local adviser has no vested interest in which property you buy, yet will have a long history of experience of the path you are undertaking and will be able to help you create a plan to fit your own specific circumstances.

Investing an hour of two of your time to go over your project with an adviser before you make the move to Spain can provide direction, peace of mind and financial comfort when planning your new adventure. Rules and regulations can change. The potential impact of Brexit provides an example of how quickly this can happen, so consider taking action sooner rather than later.

Why don’t you contact me to arrange a free, no obligation discussion of your plans – either you will get confirmation that everything is in order, or perhaps some points will come up that you hadn’t thought about. Please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports or recommendations that we provide.