Fortitude Financial Planning

Financial Planning

Freewheeling Fortitude

Lycra clad, bicycle mounted, financial planners may not be your ideal view when out walking on a Sunday morning… but it was all for a good cause! Last Sunday the Fortitude team borrowed, begged and (certain members of the team) begrudgingly found a bike to ride and bravely took to the road in filthy wet, windy weather to raise money for the Cynthia Spencer Hospice.

Everyone’s efforts were appreciated and we are delighted to have raised a good sum of money for this local hospice. Many thanks to all of those who were able to support us (it’s still not too late should you fancy making a donation by visiting our JustGiving page.)…and apologies to those who caught us all in our Lycra on the day!

 

…and for the bravehearted here are some more shots taken on the day!

Fortitude Freewheelers

After some gentle persuasion from me, Team Fortitude will be dusting off their bikes (or borrowing someone’s!), donning their ill-fitting lycra and embarking on a charity bike ride around Northamptonshire to raise funds for the Cynthia Spencer hospice.

We’ll spare you the photos of us in that lycra (for now); this is how we’d like to think we will look!

So why are we supporting this event?

When I was 10 years old my Nan was diagnosed with a brain tumour, aged 56. Unfortunately there was no cure but I will always remember the way the Cynthia Spencer hospice and its volunteers cared so brilliantly for her in her last few weeks as well as the support they provided to our family at such a difficult time.

Many members of the Fortitude team have also had personal experience of the brilliant work that such hospices do.

To continue providing the ongoing support to those that need it most, hospices such as Cynthia Spencer rely on donations, so any contribution you can make towards our fundraising efforts, no matter how small, would be greatly appreciated!  You can support us by visiting our JustGiving page.

With our thanks

Mark & Team Fortitude

 

e+r=o (Event + Response = Outcome)

I recently read a column on the Dimensional Fund Advisers website written by David Jones (Head of Financial Advisor Services, EMEA and Vice President).

David argues that “Combining an enduring investment philosophy with a simple formula that helps maintain investment discipline can increase the odds of having a positive financial experience.”

His argument makes sense to me, so I thought it would be a good idea to share the column here:

“AN ENDURING INVESTMENT PHILOSOPHY

Investing is a long-term endeavour. Indeed, people will spend decades pursuing their financial goals. But being an investor can be complicated, challenging, frustrating, and sometimes frightening. This is exactly why, as David Booth says, it is important to have an investment philosophy you can stick with, one that can help you stay the course.

This simple idea highlights an important question: how can we, as investors, maintain discipline through bull markets, bear markets, political strife, economic instability, or whatever crisis du jour threatens progress towards our investment goals?

Over their lifetimes, investors face many decisions, prompted by events that are both within and outside their control. Without an enduring philosophy to inform their choices, they can potentially suffer unnecessary anxiety, leading to poor decisions and outcomes that are damaging to their long-term financial well-being.

When they don’t get the results they want, many investors blame things outside their control. They might point the finger at the government, central banks, markets or the economy. Unfortunately, the majority will not do the things that might be more beneficial—evaluating and reflecting on their own responses to events and taking responsibility for their decisions.

e+r=o

Some people suggest that among the characteristics that separate highly successful people from the rest of us is a focus on influencing outcomes by controlling one’s reactions to events, rather than the events themselves. This relationship can be described in the following formula:

e+r=o (Event + Response = Outcome)

Simply put, this means an outcome—either positive or negative—is the result of how you respond to an event, not just the result of the event itself. Of course, events are important and influence outcomes, but not exclusively. If this were the case, everyone would have the same outcome regardless of their response.

Let’s think about this concept in a hypothetical investment context. Say a major political surprise, such as Brexit, causes a market to fall (event). In a panicked response, potentially fuelled by gloomy media speculation of the resulting uncertainty, an investor sells some or all of his or her investment (response). Lacking a long-term perspective and reacting to the short-term news, our investor misses out on the subsequent market recovery and suffers anxiety about when, or if, to get back in, leading to suboptimal investment returns (outcome).

To see the same hypothetical example from a different perspective, a surprise event causes markets to fall suddenly (e). Based on his or her understanding of the long-term nature of returns and the short-term nature of volatility spikes around news events, an investor is able to control his or her emotions (r) and maintain investment discipline, leading to a higher chance of a successful long‑term outcome (o).This example reveals why having an investment philosophy is so important. By understanding how markets work and maintaining a long-term perspective on past events, investors can focus on ensuring that their responses to events are consistent with their long-term plan.

THE FOUNDATION OF AN ENDURING PHILOSOPHY

An enduring investment philosophy is built on solid principles backed by decades of empirical academic evidence. Examples of such principles might be: trusting that prices are set to provide a fair expected return; recognizing the difference between investing and speculating; relying on the power of diversification to manage risk and increase the reliability of outcomes; and benchmarking your progress against your own realistic long-term investment goals.

Combined, these principles might help us react better to market events, even when those events are globally significant or when, as some might suggest, a paradigm shift has occurred, leading to claims that “it’s different this time.” Adhering to these principles can also help investors resist the siren calls of new investment fads or worse, outright scams.”

In summary, “The important thing about an investment philosophy is that you have one you can stick with.”
David Booth, Founder and Executive Chairman – Dimensional

The Fortitude philosophy is based on 6 guiding principles.

We established these principles more than 10 years ago and believe that they continue to be relevant today.  They will continue to inform the advice and guidance that we provide for our clients.

Neil

What’s Your Story…?

I’m having some time out…thinking…how can we engage with clients at a deeper level?

Our clients tell us the Financial Planning experience gives them clarity, confidence, peace of mind and freedom.

Here’s a goosebump moment; the time my client felt he had to continue working until age 66, but the lifetime cashflow we prepared demonstrated he could stop at 56, which he did.  He continues to live out his values and now volunteers for a number of charities.  He says “I am free”!

At Fortitude we never rest on our laurels:

  • We strive for continual improvement.
  • We seek to understand our clients’ lives better.
  • We come alongside and help position them for success in life.

How do we do this…?

We seek to understand our clients’ Past, Present and Future stories in a deeper way.

‘Past story’ – What are your values, beliefs and experiences? What are your behaviours around money?  What is your earliest childhood memory about money?  These things have shaped you into the person you are today.

‘Present story’ – Where are you today? Is there a problem you are trying to solve? What’s happening in your life right now? Do you have clarity about your financial future? Are there dreams you feel could never be achieved?  What are the stumbling-blocks?

‘Future story’ – What do you want your future life to look like?  Would there be regrets? Who would you want to be? What lifestyle are you trying to create? Do you have any dreams that you need help to figure out how to achieve?

We put ‘LIFE’ in the centre of ‘Financial LIFE Planning’!

Every client has a voice.

Every client is valued.

Every client has a story.

What’s your story?

Luck, fate and the IFP: The story of Fortitude Financial Planning

Neil and Chris were recently interviewed by Natalie Holt for an article that has been published on the Nucleus website; here’s an excerpt:

“I don’t want to get too deep too early on here, but sometimes you find yourself wondering about the role luck and fate have to play in how life turns out.

I’m thinking this as Chris Bowmer and Neil Bailey tell me that before they came together to set up Fortitude Financial Planning, they worked across the road from each other, not knowing the other existed. They were both working as IFAs, separately searching for an as yet elusive role that was both personally fulfilling and that aligned with their values. As luck (or fate) would have it, it was to be another 11 years before they were brought together in the same office to build the business they were looking for all that time.

Chris and Neil came to work together, alongside fellow Fortitude director Mark White, via separate but similar career paths. Chris came to advice via a management trainee job at Leeds Permanent building society, which went on to become part of Halifax. He went on to join an estate agency firm doing mortgage advice.

He says: “I went from being a manager in a money business to being a client-facing adviser, in the days when you were a salesman not an adviser. That taught me a lot, mainly that I was quite good at it, which rankles a little now.” By the time the housing market recession hit in 1989/90, Chris had been promoted through the company to head up a team. “I had to make a large proportion of my team redundant. I decided I never wanted to do that again – that was the most horrible experience.”

Chris went on to work for Legal & General and then started as an IFA on 1 January 1994, the first day of commission disclosure. In 2002 after being made redundant from Mazars, he set up Fortitude with Mark and Paul Herbert, who later left the business.

Meanwhile Neil started his working life as a manager in Clarks, the shoe shop chain. He rose to become an area manager but resigned when he realised the disdain among the senior management for the people he had worked alongside. He ended up at Allied Dunbar via his mortgage broker, after hearing how he could earn significantly more in a financial services firm than staying in retail.

Neil’s experience with training and development led him down the assistant manager route. Neil says: “Because I was training others, I wanted to make sure I knew more than the people I was training. I started to do all the exams before you needed to, and found out a little bit more about independent financial advice.

The more Neil learned about being an IFA, the more the idea appealed.  He became an IFA in 1992.

Despite the shift, the emphasis on sales still dominated to the point where Neil considered giving up on advice altogether. But, in the first of many interventions in the Fortitude story by the Institute of Financial Planning, Neil attended an IFP meeting where Julie Lord was speaking. The message about financial planning resonated with him, leading to him set up The Sensible Financial Planning Company with his partner and now wife Helen.

Fortitude – the ethos and the personalities

Chris and Neil continued to plug away in their separate businesses for several years. They met through their local IFP branch, which Neil ran. A home move for Neil and Helen meant their home office was no longer tenable, and at the same time Chris was looking for someone to help with the rent for the office that was well located but bigger than they needed.

Luck and fate struck again, and The Sensible Financial Planning Company moved into the Fortitude offices in Towcester in Northamptonshire. It later became a Fortitude appointed representative, as Fortitude became more financial planning-minded and given Neil’s work for the IFP running fast-track courses and training Certified Financial Planners.

The stars aligned once more when Chris and Neil attended an IFP annual conference (there it is again) and heard a US speaker called Dan Moisand who espoused the virtues of what a professional planning practice could look like. That inspired the pair to merge their two businesses over a deliberate, considered six-month process. They formally merged on 1 September 2008 (one wonders if that point their luck had run out).

Chris says: “We were growing more and more similar in the years we were in the same office. We’d had conversations with various consultants to talk about how we did things, and the 2008 merger was all about putting it together and making sure everyone did the same thing. As luck would have it, we had a year when we didn’t have anything else to do!”

Neil says that in the run-up to the merger, there was a certain amount of “testing the strength of the relationship” between Chris, Mark and himself.

Almost ten years on, and that relationship is standing the test of time.

Chris says: “Going back to our original conversations, one of the things we wanted to do was create a financial planning-only business that wasn’t about product sales. The intellectual challenge was to create a scalable financial planning business.”

Neil chips in: “Ethical, profitable and scalable.’

Chris nods. “We haven’t yet evidenced the scalable bit. But we’re working on it.”

Neil picks up the story: “Our original mission was to deliver a financial planning service to clients who value knowing how to get to where they want to be, in an environment where clients, employees and owners can all achieve their lifestyle and financial goals.

“We’ve looked at that several times in the last 10 years and we’ve never changed it. It still makes the hairs stand up on the back of my neck.”

The other mantra Fortitude lives by is to help clients feel “comfortable, confident and in control”. As Chris puts it: “What other outcomes are there?””

Please contact us if you would like to find out how we can help you to achieve that outcome.

How to avoid investment and pension scams

In the next few weeks there will be changes to the way that we send sensitive information to our clients by e-mail to reduce the risk of this data falling into the wrong hands…we will confirm those changes in due course.

In the meantime, we should all continue to be vigilant to ensure that we don’t fall prey to this ever growing risk.  Our Regulator, the Financial Conduct Authority, has published some useful guidance which can be found here.  You may believe that you are already aware of the danger signs, but we still hear horror stories about similarly savvy people who are taken in and lose money so it’s worth taking a few minutes to review the guidance.

It may surprise you that, according to Financial Fraud Action UK, 36-55 year old men are recognised as one of the most confident and assertive segments of the population but are one of the most likely age groups to lose money to fraud.

This group are shown to take risks when investing, have the ability to invest large amounts and tend to act on impulse. This increases the likelihood of them becoming a victim and then when they do so they often feel a sense of shame that results in them not reporting the fraud.

As Sergeant Phil Esterhaus (in the TV show Hill Street Blues) said as he finished up his daily roll call by bidding his officers farewell with the important advice—”Let’s be careful out there.”

 

Have you registered an LPA? You may be due a refund…

The Ministry of Justice and Office of the Public Guardian (OPG) have announced a refund scheme for those who registered a Lasting or Enduring Power of Attorney between 1 April 2013 and 31 March 2017.

The Ministry of Justice is only supposed to charge enough to cover the cost of providing the service, but the large number of applications meant it made a surplus, which it now needs to repay.

Making a claim is quick and simple using the online service which you can access here. Only one form needs to be completed for each donor (the person who made the power of attorney) and the OPG will find all Power of Attorney application fees paid by the donor during the qualifying period.

Before you start the process it would be helpful if you have the OPG’s reference number to hand (which is in the format xxxx-xxxx-xxxx).  You will also need the bank details of the account (which has to be the Donor’s) into which the refund should be paid.

Please contact us in the usual way or by completing an enquiry on our website if you are unsure what you should do or have any difficulties claiming a refund that you believe you are due.

(WHY) DON’T ALL FINANCIAL ADVISERS DO IT THIS WAY?

In September we reported that Neil Bailey had been invited to be a member of the Personal Finance Society’s Financial Planning Practitioner Panel.  We are very proud to add that Chris Bowmer and two valued clients have been involved in the publication of a new guide which you can view here.

We continually struggle to explain the value of financial planning to people who contact us wanting financial advice; after all we are rarely approached with requests for a financial plan.  Who better to convey our message than our clients?  The following are excerpts from the guide.

“Like many people I came to financial advice in mid-life, arguably far too late. In my case it was triggered by my move from secure employment status in a large multi-national to self-employment.

Being salaried and in a defined benefits pension scheme meant that I had the default assumption of the equation:

Occupational Pension + State Pension = OK

But crucially, at that time nobody asked me to define or quantify “OK” by asking the question “How much is enough?”

My first financial adviser was fairly typical. I had to do something about my pension arrangements and he recommended that I move my existing pot to his tied insurance company. The rationale was predicated on the impressive investment returns, both historically and projected forwards. That was pretty much it. From time to time he sent me statements from the insurance company, which I studiously ignored, content that my pension was “safe”. After a few years, as the regulation of financial advisers began to bite, my man decided that he’d had enough and closed his business. Naturally I was annoyed but little did I know how fortuitous an opportunity it created.

I stumbled across the newly formed Fortitude Financial Planning not long after it had been established. I met Chris Bowmer and that was the start of a very different relationship with a financial adviser, or as I now know, to be pedantically precise, a Financial Planner.

Immediately I was struck by the amount of time and interest that Chris invested in unearthing the minutiae of my life and initially I was a little cynical. At this stage, investment financial returns were not even mentioned. He fed all my answers into a computer model and, for the first time I was engaged in a Financial Planning process and discussion.

Looking at a detailed income and expenditure plan through to the age of 99 is a sobering, yet comforting, experience.

I’ve now been with Fortitude for a long time. We now have an annual meeting to update and to assess progress by re-visiting the fundamental question of “How much is enough?” I had naively thought that this must be the modern way of doing things for all such financial advisers, oops sorry – planners. But last year, being part of the Fortitude Client Group I was shocked to discover that Fortitude are members of a rare breed of advisers and were defining “Financial Planning” as a unique selling point.

Rather dubious of their claim, I asked “USP? But surely – don’t all financial advisers do it this way?” Sadly not, and hence the title of this article, “(Why) don’t all financial advisers do it this way?”

Frank Donlon, Financial Planning Client”

“A revolutionary approach

Over many years I experienced very poor service from financial advisers trying to sell me products. Only gradually did I realise there was no overall strategy tailored to my changing needs.

I was flying blind.

I discovered Financial Planning in 2004.

Thirteen years later my plan is still clear, realistic and updated regularly. I feel in control. I wish I’d had this experience 45 years ago!

Andrew Humphries, Financial Planning Client”

Contact us if you would like to discover financial planning for yourself – if not now, when?

Too many highlights to mention…

We’re back at our desks after a fabulous 5 1/2 weeks and over 2,700 miles touring Spain and Portugal….we’re sure you won’t be interested in a blow by blow travelogue so here are some of the highlights:

The scenery in the Picos de Europa was breathtakingly beautiful and the roads virtually empty (other than some cattle being walked down to winter pasture and wild horses).

The Muga winery in Haro, Rioja was fascinating; not a stainless steel vat in sight because they continue to use entirely traditional methods (which includes the separation of 400 egg whites from their yolks to clarify each vat by hand and a cooperage where the coopers travel annually to France to select the trees that will be felled, transported to Haro for seasoning so that 1,000 barrels can be crafted by hand every year, each one taking 6 hours).

The Douro valley was magnigicent shrouded in Autumn colours. The many and various Ports that we tasted were sublime and when we unpacked we found we had purchased enough supplies to last us a while!

The Portuguese were incredibly hospitable and friendly, though their architecture of the last 50 or so years is unlikely to win any prizes and they really need to find dimmer switches for their bars and restaurants!

We did have one very sobering day when we drove for over 5 hours through the area that was devastated by wildfires just 10 days previously; thankfully few dwellings appeared to have been damaged even when gardens, hedges and trees were completely destroyed however the damage was chilling and we were too shellshocked to take photos.

We would not have had the confidence to take such a long break without our financial plan showing us that we can start living our dream (even on a part-time basis) now without compromising our future life (which we call the Life/Life Balance TM).

Now we will start to plan our next trip….Neil and Helen

Are you having a ‘Wow’ or ‘Now What’ moment?

We believe we do not have the right to talk about our clients’ money until we have an understanding about what that money needs to do for them in order for them to be able to live the life they want; both now and in the future.

Only then can we help our clients build their financial plan.

Plans evolve over time; so our process is designed to provide ‘clarity’, ‘confidence’ and ‘peace of mind’ around the decisions that need to be made.  We aim to put our clients in control of fulfilling their plan.  One client recently said this has given him a “real sense of freedom”.

Most clients have worked hard for many years; building up assets, paying down liabilities, enjoying their lifestyle now while being diligent about planning for their future.  There comes a time where we say to our client “You can now choose to stop paid work”, in other words they are no longer dependent on earning money to live out their life goals. They can begin the next phase of their lives knowing they are financially independent!

This is a ‘wow’ moment for some…a ‘now what’ for others.  It can be a scary – but it doesn’t have to be.  With the right support and ‘tools’ in place our clients can continue to enjoy clarity, confidence and peace of mind knowing what their next phase of life looks like.

We want our clients to fulfil their dreams and desires.  We want them to live out their purpose.

We understand that clients do have their ‘now what?’ moments so we coach them throughout every stage of their journey.  Understanding what our client is living for and helping them achieve it is the foundation of the Fortitude Way.

What’s important to you? What are your values? What are you living for? What will your life look like when you become ‘financially independent’?

Come and talk to us and we can discover the answers to these questions together.

Richard