Courtiers Wealth Management
Courtiers Wealth Management

News & Insights

Clients in focus as Advisers have plenty to ponder

18 Sep 2023

With interest rates on savings accounts reaching levels not seen for years, a significant announcement by the Shadow Chancellor on Labour’s future tax policy and the reported rise of the ‘Bank of Family’, there’s been plenty for Rikki Doré and Paul Kemsley, joint Heads of Private Clients to think about since the last Quarterly Adviser Review.

Beyond this, Courtiers is continuing to evolve, with important changes in the pipeline that clients should begin to notice over the coming months.

Higher interest rates can be a drag

With recent weeks seeing significant hikes in interest rates offered by UK banks and building societies, Paul says some clients have been asking whether savings accounts are now a good home for their cash.

On one level higher interest rates are, “all well and good,” he says. On the other hand, there are potential downsides. A combination of rocketing interest rates and the personal savings allowance that has remained frozen since 2021 and is due to remain at the current level until 2028, means that almost one million more savers are expected to be dragged into paying tax on savings interest this year. The current personal savings allowance is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers pay tax on all their interest.

Some people may not be aware of how this could affect them and that in some cases they may need to complete a Self-Assessment Tax Return. “HM Revenue is probably not going to let people get away with, ‘Oh, I didn’t know I needed to fill out a tax return,” warns Rikki. It’s “an important part of our work” to highlight how aspects of the financial world like frozen allowances and rising interest rates could affect clients, says Paul.

Accessing your own money

A drawback of putting money into fixed-term savings accounts is that it makes it difficult to access the money when you need it. Unless it’s surplus cash or cash above your emergency contingency money, Rikki always advises his clients never to put money into fixed deposit accounts because if you do need the money you’re going to be penalised. “It doesn’t make sense. It’s just another way for a bank to make more money.” Rikki says he always follows this advice himself. An additional reason for not locking money away for a fixed term and keeping it invested in Courtiers Funds is that you could miss out on an upturn in the markets.

For Courtiers clients wishing to withdraw money from their investment account or SIPP, Rikki highlights a recently introduced simplified process that “typically means we can get the money to them within a week.” Although he hastens to add, “Courtiers is not a bank.

Keeping a finger on the political pulse

Although the next General Election is not expected to take place until 2024, a recent pronouncement by Rachel Reeves, Shadow Chancellor of the Exchequer that there will be no wealth tax if Labour comes to power and that taxes are already high enough made headlines. Paul says that while potentially significant, it’s still quite a while until the next General Election and things can change. He notes there’s particular uncertainty about the Pension Lifetime Allowance (LTA) and the Pension LTA charge. “Obviously we’ll have an eye out when the parties start coming out with their manifestos, but we can only plan based on the rules in place at the moment.

Bye-bye ‘Bank of Mum and Dad’?

Another story that piqued Paul’s and Rikki’s interest was the rise of the ‘Bank of Family’, with two reports highlighting how more and more grandparents and even siblings were helping homebuyers to fund property purchases. The story, and the apparent demise of the ‘Bank of Mum & Dad’, came as no surprise to Paul, who says that advising clients on how best to financially support their children and grandchildren to get on the housing ladder, attend university, or purchase a car has long been a feature of the Advisers’ role. “We’re here to facilitate that and make it happen, while balancing that with our clients’ own requirements.

Courtiers’ evolution

As a company Courtiers “never stands still” says Rikki, and following a major overhaul of the back office systems and improvements in the way that client data is recorded, Paul and Rikki are at the heart of changes that aim to transform the client experience.

The centre piece will be a new online portal. Described by Rikki as like “online banking for investments”, this will allow clients to drill down into the funds to find more detailed information than simply fund performance. Better use of charts and other visuals will succinctly convey information. When fully rolled out, this will reduce the amount of paperwork for clients, and allow them to access their own personal information, including Annual reports and Suitability Reports.

With more and better-quality information available to clients before meetings, they will be better armed to ask questions. And rather that use up valuable meeting time collecting data, already having information in the system, for example, on a client’s expenditure, will allow Advisers to concentrate on “the nuts and bolts of financial planning.” “It’ll be more like, right – we’ve got that information, let’s talk about what you want to do in retirement over the next 5,10, 15 or 20 years.

Paul and Rikki are excited by the planned introduction of a new cashflow modelling tool, allowing Advisers to explore different scenarios, for example, stopping work now rather than continuing for another five years. Having as much information as possible in the system before an Annual Review begins “will link seamlessly into cashflow modelling.” The overall aim is to produce a roadmap for how clients can meet their objectives and dreams while aligning with their risk profile.

If you’d like any advice on any of the subjects covered in this piece, or you have questions about anything else, please speak to your Courtiers Adviser or contact us.

Important information

The views expressed by Courtiers in this summary are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this article. Investors are recommended to take independent professional advice before effecting transactions and the prices of stocks, shares and funds, and the income from them can fall. Past performance is not a guide to future returns. Tax treatment depends on individual circumstances and may be subject to change in future. We do not endorse or accept responsibility for website content on any websites other than those operated by Courtiers, which may be accessible via links in this article.

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