Fortitude Financial Planning

Financial Planning

Over 2 years on but the message is unchanged

Along with the rest of the country we are waiting with bated breath for clarity on what Brexit will mean for us and our clients!  And, like many others, we are dismayed by the divisions within our country and somewhat fearful as we see the lack of progress towards a constructive agreement.  However we remind ourselves that, over the years, there have been many events that have resulted in similar feelings of uncertainty and fear.  During such times we manage our fear and avoid making costly “knee-jerk reaction” investment decisions by going back to, and continuing to behave in accordance with, our core beliefs and principles.

Immediately after 2016’s referendum result we published a Blog which continues to resonate today, so we thought we would republish it:

“Keep calm and stick to your Plan

24th June 2016

A few days ago Neil was asked, by Nucleus, to comment on how we had prepared for a possible Brexit.  Now that the result has been confirmed we thought we should share the gist of his response to the question.

“We have not done anything to our clients’ portfolios because we can’t predict the future and therefore why would we make changes to portfolios that we have already designed the best we can to cope with movements with markets?

The portfolios are long-term investments and over that investment journey there will be things that happen.  Some of those things will be pre-warned like Brexit. Some of the things will be completely unexpected;   the markets will either go up or down but nobody knows in advance what impact those changes will have. So we think it is a waste of energy to attempt to predict or react to short-term market “events”.

The important thing is to have a plan, and have a set of beliefs that drive your investment policy. If you have a plan and a properly constructed investment policy any changes you make will be to do with long-term changes not short-term blips.

I don’t expect that all advisers will share the Fortitude approach.  Hindsight is a wonderful thing and the passage of time may prove others were right and we were wrong. But I want to stress, we have an investment philosophy that we share with our clients. If the clients didn’t agree with this, why would they invest with us?  Our clients have been getting a consistent message from us, we don’t chop and change for the latest fad, and presumably clients are happy with the results they’ve seen so far and are reassured with our approach.

If the UK does vote to leave the EU, the UK equity market could (if you believe in the doomsayers) collapse quite rapidly.  If we were to react to that it would be like us shutting the stable door after the horse has bolted.

We will continue to review and rebalance portfolios in accordance with our investment philosophy and in the context of our clients’ Financial Plans.”

This morning the votes were counted and the results announced.  The “Brexit” campaigners have persuaded the majority of voters with their argument and the Prime Minister has announced that he will resign to make room for a new leader to negotiate the terms by which the UK will leave the EU.

It is impossible to say with any certainty what the long-term implications will be.  In the short-term markets will, no doubt, continue to react as they always do – by going up or down.

It is at times like these that we all need to demonstrate Fortitude and stick to the plan that we have developed.”

 

Another success to celebrate

We are delighted to have been awarded the ‘2019 Citywire New Model Adviser of the Year Award – Midlands Region’ once again (the fourth time in the last 6 years).

The New Model Adviser Awards, held each year in London, celebrate the very best of the financial planning profession, and in particular the firms that have made a real impression upon their respective regions in the last year.

Five leading firms from the Midlands Region were shortlisted based on their previous 12 months’ business performance, processes, professional qualifications, client education and communication as well as recruiting new talent and developing the Financial Services Profession.

Publishing our achievement New Model Adviser commented “The Northampton-based firm attributes its success to the Japanese philosophy of ‘Kaizen’, which focuses on constant improvement.”

Collecting the award on the team’s behalf Neil said ‘The firm is the real winner. I’ve been very lucky to be the face of Fortitude, but it’s always a team effort. The team are going to be delighted.

We really try not to rest on our laurels.  We try to find ways of improving what we do by fine tuning. It’s not always big steps, but we look at what we do and we ask: “can we do this better?”

We invite a lot of feedback from our clients and our team to make sure we’re doing things the best we can.’

We are tremendously proud of The Fortitude Team for achieving such consistent recognition and we look forward to continued improvement and success in 2019.

 

At last…pension cold-calling has been banned

A new law has come into force which makes it illegal for companies to cold call about pensions.

The ban on unwanted, unsolicited phone calls to people about their pensions follows an industry campaign to make the practice illegal.

Companies breaking the new law could face fines of up to half a million pounds.

It’s an important change in the law because pension fraud has such a devastating, lasting impact on its victims, leaving them financially vulnerable in retirement.

The government has taken action to ban pension cold calls because these are one of the most common methods used by scammers to gather information about pensions and then defraud their victims.

According to research carried out by the Money Advice Service, there could be as many as 250 million scam calls about pensions every year in the UK.

This is equivalent to 8 scam calls every second.

Pension scammers stole on average £91,000 from each victim in 2018, according to the Financial Conduct Authority.

John Glen, Economic Secretary to the Treasury, said:

“Pension scammers are the lowest of the low. They rob savers of their hard-earned retirement and devastate lives. We know that cold-calling is the pension scammers’ main tactic, which is why we’ve made them illegal.”

“If you receive an unwanted call from an unknown caller about your pension, get as much information you can and report it to the Information Commissioner’s Office. I’d also urge all savers to seek independent advice if you’re thinking about making an important financial decision.”

Guy Opperman, Minister for Pensions and Financial Inclusion, said:

“Pension scams are despicable crimes, fleecing people of the retirement they’ve earned by doing the right thing, working hard and saving for the future. Banning pensions cold-calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law.”

Commenting on the introduction of the pension cold calling ban, Alistair McQueen, Head of Savings & Retirement at Aviva said:

“From today the message is clear; if you receive unsolicited contact about your pension, hang-up the phone, delete the email or dump the text. It is now illegal to make such contact, and any perpetrator could be subject to a fine of up to £500,000.

“This is good news, but there is no room for complacency. Fraudsters continue to circle the pensions market – the biggest single source of private wealth in the UK.”

“We may spend 40 years saving, so we should spend more than 40 minutes considering our options at retirement. We should not feel rushed into action.”

Anyone on the receiving end of a cold call about their pensions should try to obtain as much information as they can about the caller, including their company name and phone number. This information should then be reported to the Information Commissioner on 0303 123 1113 or via their website.

If you think you have been the victim of a pension scam, you should report it to Action Fraud by calling 0300 123 2040 or via their website.

It’s also important to take immediate action if you think you’ve been targeted by a pension scammer. Call your existing pension provider immediately to tell them you are worried as they may be able to stop any transfer of monies.

The old adage that ‘if something looks too good to be true it probably is’ should be kept in mind when it comes to all financial matters. The promise of better than typical investment returns or access to pension money before the age of 55 are big red flags that suggest something dodgy is happening.

Always check that any financial adviser you work with is authorised and regulated by the Financial Conduct Authority. Do this by checking the Financial Services Register and also asking the adviser for a current copy of their Statement of Professional Standing.  Only by working with an authorised and regulated adviser do you get recourse to the Financial Ombudsman Service and Financial Services Compensation Scheme, should things go wrong.

Looking back at 2018

As we prepare for Christmas we have been reflecting on another busy year and have chosen the following highlights to share with you.

Before you read on please note that the office will be closed on Monday 31st December in addition to the Bank Holidays…we would all like to wish you a very Happy Christmas and we look forward to continuing to work with you in 2019.

January

We won New Model Adviser 2018 award for the Midlands Region (snappy we know!) and Mark had his photo taken with Rory Bremner!

Niamh joined the Client Support Team as a Paraplanner.

Neil went travelling in Thailand; motorcycling in the north.

February

Richard passed the first of several exams this year.

March

Fortitude entered the highly coveted Chartered Financial Planning Firm of the Year award.

Richard passed another exam.

April

We must have been busy because there is little else to report!

May

Neil and Chris were interviewed by Natalie Holt at Nucleus and they tell their story of Luck, Fate and the IFP: the story of Fortitude Financial Planning.

June

It was hot.

Richard passed yet another exam.

July

It was still hot.

August

We welcomed our latest addition to the team; Sam Colby Butcher joined as a Planner having relocated to the area to keep his wife happy.

September

We all went cycling in the rain and raised money for the Cynthia Spencer Hospice. Thank you to everyone who sponsored us!

October

Paul passed his driving test and bought his first car.

Neil, Chris and Paul came to work in matching jumpers.

Niamh passed an exam.

November

We were shortlisted as finalists in the Chartered Financial Planning Firm of the Year award. We missed out on the top spot but we are extremely proud of making it through to the final four out of over 700 firms.

December

Niamh, Richard and Chris passed more exams and Niamh danced around the office in celebration.

Neil went travelling (motorcycling in Thailand again) and sent lots of photos to our WhatsApp group.

The Team celebrated an early Christmas with lunch and a curling session.

 

How can we top this in 2019? Watch this space!

Who will make decisions for you if you are unable to?

How would it feel if financially you could achieve all your goals and objectives?

How would it then feel if you were now prevented from living out your goals and objectives because of an injury, illness or condition that affects the way your mind works, leading to difficulties in decision-making?

If you were mentally incapable of making decisions you would no longer be able to manage your own financial affairs or make health and care decisions.  Unless you have previously appointed someone to look after you, an application would need to be made to the Court of Protection for a deputy to be appointed.  This means:

  • A costly and time-consuming process.
  • You will not have a say in who will be managing your affairs or making decisions on your behalf.
  • Your assets (including jointly owned bank accounts) will be inaccessible until the deputyship order is in place.
  • An annual fee is payable to the Court of Protection to pay for supervising the court-appointed deputy.

The consequences could be devastating and at the very least inconvenient!

This does not have to happen…

You can authorise someone you trust to administer and manage your affairs so that in the event of losing mental capacity, your life’s plan can still be carried out.

All you need to do is set up and register Lasting Powers of Attorney.  This can be established yourself or by using a Lawyer.

There’s some really useful guidance on the Office of the Public Guardian’s website which you can access here.

Lasting Powers of Attorney come in two forms:

  • Financial Decisions – the power to make decisions about property and financial affairs. Examples include paying bills, selling a home and collecting income.  This power is effective as soon as it is registered (although it can be stipulated that the power only becomes effective when the donor; you, loses capacity).
  • Health and Care Decisions – the power to make decisions about healthcare and personal welfare. This power can only be used on the onset of mental incapacity.  Examples include granting or refusing consent for medical treatment and deciding how and where the care is delivered.

If you have established an Enduring Power of Attorney already it can still be used upon mental incapacity but would only cover Property and Financial decisions so you would still need to set up a Lasting Power of Attorney for Health and Care decisions.

At Fortitude, we seek to enrich our clients’ lives.  We want you to live the best life possible and we want to keep it that way so would urge you to take control of your future by ensuring that someone you trust can act on your behalf if you are unable to.

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.