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16 March, 2009 - 09:42 By Tony Quested

Adrian Atkinson of Money Matters

"Intense media attention and the practicalities of the financial situation many now find themselves in, mean that more people than ever before are beginning to realise the need for sound planning. In fact, over the last quarter, the IFA market saw the biggest ever hit on search engines of consumers looking for advisers."

Backgrounder:

Money Matters was established 25 years ago in Cambridge by Stephen Clifton. Now with four directors and 18 employees, Money Matters are leading wealth managers and Independent Financial Advisers who specialise in full financial planning, discretionary portfolio management and running employee benefit packages.

1) Has the economic downturn adversely affected activity in your profession?

Yes. With the UK stock market down 40 per cent and the world markets down 50 per cent over the past 12 months, all clients have been affected to a greater or lesser extent. We have seen the global financial institutions, such as the banks and insurance companies, come under immense pressure. In a number of cases this has led to partial nationalisation and/or capital raising.

2) How aware are business executives generally of the need for sound and long-term financial planning?

I think this comes down to the quality of the financial professional. All too often we encounter business executives who are receiving little or no financial planning advice. If they are, it tends to be limited to the details, such as the employee benefits they receive, and not how they fit into their overall financial planning and current personal position.

3) Does it often take a catastrophe to force people to plan for the future?

Yes, unfortunately. Intense media attention and the practicalities of the financial situation many now find themselves in, mean that more people than ever before are beginning to realise the need for sound planning. In fact, over the last quarter, the IFA market saw the biggest ever hit on search engines of consumers looking for advisers.

4) Has the current economic downturn made it more important than ever to get one’s finances in order?

Absolutely! Too many people attach insufficient time and attention to this. Virtually everyone will have been affected by the economic downturn so it’s absolutely vital that they review their situation and make changes accordingly.

5) In such challenging times and with most stock markets virtually closed are there still sensible sources of investment open to executives?

Yes but the key is to make sure you thoroughly understand the executive’s aims, objectives, time horizons, risk profile and their current position before making investment decisions.

6) Should executives keep their individual finances and their business finances separately or can an adviser cover both aspects without compromising the executive concerned?

An adviser can cover both aspects but as a client, you must ensure they have the relevant experience, knowledge and, if applicable, professional qualifications.

Actually, by providing advice on both personal and business finances it can make the overall financial planning for the short and long-term more beneficial.

7) How important is it for the sustainable growth of the region for company bosses to have a firm grasp of their own and their company’s financial positions?

Very important, but it’s also vital that company bosses have a greater understanding of the wider economic conditions within the region and further afield.

8) Have you had to re-evaluate your approach or services you offer to clients since the global banking crisis and the subsequent economic fall-out?

We have always delivered an ongoing review process to clients to ensure they are fully informed and aware of both their situation and the wider economic and stock market issues. What has changed over the last six to eight months is the frequency of contact with clients who now need to be kept informed and reassured.

9) Most executives we talk to are cynical about the prospective value of their pensions when they retire. Should they be looking at property or other investments now to try to generate retirement income and ensure they are not left with time on their hands and a black hole in their finances?

I understand their cynicism which may result from the advice they may have received to date and the media attention on this matter. What is important with any form of savings such as pensions is to ensure you have a spread of underlying assets to provide diversification.

You must remember though that with pension planning there are wider considerations, such as the tax relief on contribution for the executive at potentially 52.8 per cent, and to the company via corporation tax savings.

Furthermore, the pension assets are protected from inheritance tax in the unfortunate event of death before retirement.

10) Is legislation governing your profession liberal enough to allow you to deliver the full spectrum of advice that you would like to give people in an ideal world?

Too liberal, perhaps, because too many advisers have insufficient knowledge, understanding and professional qualification to provide good advice to business executives.

I am sure part of the fallout from the credit crunch will be a tightening of legislation from the Financial Services Authority.

 

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