Mattioli Woods PLC - Financial Planning Newsletter

Bob Wood in the early 90s Bob and Ian at their beloved Leicester Tigers ground Part two 15 14 Tell us about how you support local communities through Mattioli Woods. IM On the one hand we have this responsibility to make sure that our clients’ outcomes are as strong as possible and I think we’ve got the balance right. I think we’ve got the way we charge which has historically been time cost, we were time costed when everybody was charging commissions so we have been a disruptor. We have taken on those big institutions for the benefit of our clients. But we are a successful business and for a client to use us to look after their money, there is this expectation that we should be able to look after our own. In the last few years, we’ve very proudly given back clients the best part of three and a half, four million pounds in fees that we used to charge because we’re more efficient. Some of that technology I was talking about. But also at the same time that has enabled us throughout the country, not just Leicester, to share that success with other people. With other charities. Other people need help so one of our businesses up in Edinburgh, ten percent of their profits is always made to charity so when we bought them we’ve carried on with that. At company level we make charitable donations and then individually we all do. I know what you’ve (Bob) done for Leicester University. I’m helping out students, I’m helping out Leicester Cathedral at the moment and I’d like to support what they’re doing. Because the cathedral has been there for 500, 600 years. It houses Richard III now but there isn’t a visitor centre on it so it needs changing and attitudes need changing. So hopefully we can support all of those things over the next few years as well as creating great outcomes for our clients because that’s what our clients really want. BW I think humans are generally altruistic. I mean there’s obviously a small number who are not but I think most people fundamentally are. The great thing about having achieved the success we have is actually we’ve now got the wherewithal to actually express with altruism and that desire to help that I think sits within most people. We’re just very very fortunate that we can do so. IM Let’s not forget we do have some good buying power so when the NHS couldn’t get any scrubs or masks- (at the beginning of the pandemic) we could. And we took them down there and delivered them because the NHS, there’s real people underneath and they needed help and support before the rest of the world picked up on the fact that people needed PPE. BW Yes, and there’s going to be a lot more help needed in the years to come because there’s lots and lots of challenges out there for sure. Looking back over the last 30 years, is there anything you are extremely proud of, and anything you think you have done wrong? IM Some of the things I’m most proud of as an organisation is actually the things we’ve missed, you know the things that have gone so horribly wrong for clients. When we looked at them, they didn’t work did they, so we never got involved in those things. I’d say the only thing that we’ve done wrong throughout the whole of 30 years of trading is we kept hold of our moustaches far too long. BW Maybe we did. We all know we must make sure our children are fully equipped when we go out – sun cream, hats, drinks and food – however are we equipping them for a financially sound future? You may agree that there is little financial education available for the younger generation. One of our key objectives is to ensure our clients’ children have the financial education they need, bespoke to their needs Childhood pensions Encouraging your children to take control of their pensions may not always be an easy task. They may not deem pensions to be important, given they cannot access the funds until at least age 57 under current legislation. Pensions can also be complex and because of the lack of education, the younger generation may not realise the power of funding their pensions in their younger years, the benefits of compound growth or the benefit of having the right investment management. Many of our clients may wish to incorporate their children into their pension planning. As such, we have developed multi-member pension arrangements, allowing our clients’ children to consolidate or build their retirement fund in a family pension arrangement. This means our clients’ children can have the benefit of receiving advice and investment management while benefiting from only having fees associated to their share of the fund rather than the full cost themselves. University and school fees For many parents and grandparents, establishing a financial strategy to pay school and university fees, in a tax efficient manner, is a huge focus. There are many options to consider in identifying the most appropriate route. A thorough understanding of your current financial position is essential. Many parents and grandparents may have surplus income each month, so we can look at whether gifting out of regular expenditure is suitable. We will always ensure these gifts are documented correctly. Investing funds appropriately in trusts for the children or grandchildren is another option. Our dedicated consultants can go through the options available and most suitable to your individual circumstances. Junior ISAs In addition to major expenses such as school or university fees, your children might want to purchase their first car, put a deposit down on a home or even marriage. Just as your loved ones are about to stand on their own two feet, most parents do not want to see their children weighed down with debt. Currently 1.3 million students in higher education in England receive a student loan – with the government loaning £17 billion each year – leaving the average student with around £40,000 of debt. 1 Therefore starting to invest for them now in an ISA structure can make covering those costs easier in the future, especially as any investment returns are free from liability to income tax and capital gains tax for both you and your child. Getting planning in place sooner rather than later can be hugely beneficial to you and your children, as you can build a sizable pot over a long period of time, while benefiting from potential growth on the underlying investments. By providing financial education from an early age, we can ensure young adults understand the rationale behind the advice and can talk through the investments held to allow them to build up an understanding. By helping to create a wider picture, they should be encouraged to make the most of their pensions and investments from an early age, as they understand and can see the value of them. With social media nowadays, many young adults are investing into high-risk investments with lack of knowledge or experience. Therefore, with the help of your consultant you can have peace of mind your children are getting sound investment advice. Furthermore, Mattioli Woods has a team of in-house investment managers who actively manage our investment portfolios. We offer a variety of different investments for our clients and their children to invest in, dependent on their needs and risk appetite. As your children get older, we can adjust the risk profile as appropriate, thus providing a truly bespoke strategy for them. 1. https://commonslibrary.parliament.uk/research-briefings/sn01079 rotecting your children for the future by Nathan Smith