The ethics of Chapters Financial. A view from our Para-Planner, Suzie Harrowing

I encountered quite a culture shock when arriving at the small family-run business of Chapters Financial Limited in the leafy market town of Guildford, having been City based before. I have been in the Financial Services industry for around 10 years, eight of these in central London, and it is has been a breath of fresh air to work at Chapters Financial Limited for the last four months.

Firstly, it is a joy to arrive at my desk within 20 minutes after leaving my front door rather than a 10 minute walk to the station, 45 minutes on a packed commuter train and half an hour (if things were running smoothly) of fighting my way through the London tube network. It certainly sets you up for a much happier and more productive day!

The ethics of this small Independent Financial Adviser (IFA) office are entirely contrasting to that of a large organisation and I have discovered this on a daily basis since working at Chapters Financial. My foremost observation is trust between client and company. Keith Churchouse, owner and Director of Chapters Financial, has a thorough understanding and knowledge of his clients and establishes an important and continuing relationship with each one. He knows far more about his clients than any adviser I have previously worked with, and this gives him a competitive advantage. Clients learn to trust honourable IFA’s and remain loyal to them, even during difficult economic periods.

Loyalty is a valuable commodity in the financial services industry and results in a low exit rate of clientele. Chapters Financial sees a steady increase in client numbers, usually approaching the company through word-of-mouth or the Chapters Financial website, with minimal clients leaving to go to competitors. Contrasting this, large organisations see a particularly high turnover of clients, many being enticed by the aspiration to increase their fortune, but comparable numbers being tempted away by more lucrative deals with rival organisations.

Many global organisations these days believe that their primary and only responsibility of business is to make money whilst abiding by the law. This clearly benefits the shareholders. However, working at Chapters Financial has shown me that businesses should benefit all their stakeholders – clients, providers, employees and their families, and the community within which the business operates. Chapters Financial are greatly involved in community matters and not a week goes by without Keith attending one of his many local Business Forum meetings. Many more large organisations are becoming involved in community matters in these times of increasing ethical standards, but they cannot get involved to such a degree as the smaller companies can. Being involved to such an extent as Chapters Financial is, lends itself to further trust and recognition from employees and local business people alike.

Although it has taken a few months to adjust to the small business working life, it has been a journey of discovery, an eye-opener and a sharp personal learning curve. My opinion of Financial Advisers has most definitely done a u-turn; financial advice is not about selling a product but about finding the most appropriate financial planning based solution to suit the clients’ needs. A simple concept but one that, unfortunately, is not widely used in financial services today.

Suzie Harrowing is a Para-Planner with Chapters Financial Limited. This is a non-advisory role. 

If you would like to consider your future financial planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

Chapters Financial receives two awards at the annual Financial Adviser Life & Pensions awards 2012 in London

The Financial Adviser Life & Pensions awards 2012 took place in central London on the 25th April at Sartoria Restaurant, the prestigious venue in Savile Row.

The Financial Adviser profession, along with their insurance and investment provider colleagues, celebrated the years success with these coveted awards.

Guildford High Street based Chapters Financial Limited, received two awards at the event, winning the independent financial advice category of Online IFA of the Year 2012 and being commended in the Small IFA Firm of the Year category. There to collect the awards was Chapters Financial Limited’s Director, Keith Churchouse.

Following the event, Keith said ‘ It was great to be nominated for the awards again this year and I was delighted to collect two awards for the recognition of the teams hard work. We live in challenging economic times, making high quality financial planning ever more relevant, and it is great for Chapters Financial to have their strengths and quality recognised with both awards’.

Related press article: Financial Adviser

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899 

Happy New Tax Year 2012/2013

We have now moved into the new tax year and this provides the opportunity to use your new tax allowances where appropriate, such as your ISA allowance (new limit of £11,280 maximum Stocks & Shares ISA or £5,340 into a cash ISA), Capital Gains Tax allowance (£10,600) and gift allowances for inheritance tax savings, amongst others, such as pension allowances.

As a point of interest, it was reported at the end of February 2012 by the Office of National Statistics (ONS) that contribution input to ISAs (Individual Savings Accounts) outstripped contributions to pensions in the tax year 2010/2011 (the last tax year) for the first time. With around £15.8bn going into ISAs and (only) £14.2bn going into pensions (excluding stakeholder plans) the margin was quite significant at this crossover point.

If you would like to review your annual tax allowances for this new tax year, in conjunction with your financial planning, then please contact us at the office by telephone on 01483 578800 or by email.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

All change in the delivery of UK Financial Services

The delivery of UK retail financial services will change at the end of this year, with the implementation of the Financial Services Authority’s (FSA) Retail Distribution Review, or RDR for short from the start of 2013.

There are also many changes planned for the FSA itself, including parts of its structure changing to the Financial Conduct Authority (FCA), with control being maintained by the Bank of England.

I am now writing on the additional important changes for this subject in this blog because the final details have now been firmly set.

The changes

The highlights of the changes are detailed as follows:

• As before, the Financial Adviser will agree the remuneration for their services (both initial work and on-going advice) with you in advance. However, services will be paid for on a fee basis, either via an initial fee or by a deduction from the plan being established (or a combination).

• Future financial advice will be offered on an Independent, Restricted or Simplified basis. For independent advice, an Adviser must consider all relevant options for you and do so free from any restrictions or product/provider bias. This makes sure that the advice offered to you is truly independent.

• That the consumer will receive advice from qualified, competent, trained professionals who subscribe to a code of ethics (renewed each year) ensuring they act with integrity and treat their customers fairly.

How will Chapters Financial Limited meet these new requirements?

Having moved to a comparable financial advice system to the one detailed above to achieve these outcomes in May 2007, we hope that you have seen the benefit of using our service over the last five years. As we approach the end of this year, and the full implementation of these new requirements, we are delighted that we have the appropriate systems in place to be able to continue to offer independent financial advice into 2013 and beyond.

Powerful proposition

We also believe that maintaining our independent status will make our financial planning proposition even more powerful, with the numbers of other independent advice providers expected to reduce because of the new requirements being made.

We have seen the number of new enquirers and referrals from existing clients rise in recent years (as Chapters Financial Limited and formerly Churchouse Financial Planning Limited) because of the standards in financial planning that we have set and maintained and this is evidenced by the recent industry awards we have detailed in our last newsletters.

Referrals are always very welcome and we thank you, our clients and Blog visitors, for your continued support.

If you would like to consider your future financial planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800.

No individual advice has been provided in the text of this blog and you should seek individual independent financial advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

ISAs overtake pensions as the savers choice

It was reported at the end of February 2012 by the Office of National Statistics (ONS) that contribution input to ISAs (Individual Savings Accounts) outstripped contributions to pensions in the tax year 2010/2011 ( the last tax year) for the first time. With around £15.8bn going into ISAs and (only) £14.2bn going into pensions (excluding stakeholder plans) the margin was quite significant at this crossover point.

Why this tax efficient savings preference change has happened could be for a number of reasons, with many citing the ever growing complexities of pension rules and the relatively simple (but less tax efficient) ISA rules, which allow accessibility to the capital invested. With many family budgets squeezed in the last few years, it may be this flexibility which has increased the desirability of this savings option.

It is also clear that with the introduction of changes to allowances for pension contributions, such as the Lifetime Allowance (falling from £1.8m to £1.5m next tax year), Fixed Protection, the annual allowance limit of £50,000 in a Pension Input Period / PIP, amongst others, the planned 'simplification' of pensions in 2006 has not been achieved. Also, with pension Auto-Enrolment for many employers and employees on the imminent horizon, an additional set of requirements will be introduced. Further details of these issues are detailed in our webpage ‘National Employers Savings Trust/ Auto-Enrolment/Workplace Pensions’ here.

It is good to see the annual contribution allowance limit climbing for ISAs rising from the current limit of £10,680 in this tax year (£5,340 into Cash ISA/ £5,340 into Stocks & Shares ISA) to £11,280 in the coming tax year (2012/2013). Further benefit has also been seen by recent rises in fixed rate ISA deposit terms provided by some providers, as they endeavour to maintain market share in this busy sector. Also, with recent rises in many equity markets, some have seen encouraging rises in their capital values.

Past performance is not a reliable indicator of future performance and fund values can fall as well as rise.

If you would like to consider your savings, investment and pension planning further then please contact Chapters Financial Limited through this website or by telephone on 01483 578800. No individual advice has been provided in the text of this Blog and you should seek individual advice for your own circumstances.

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

We know you are working hard, but what about your business cash?

There has been much focus in recent years about the savings rates available to personal deposit holders as base rates have fallen to record lows for a sustainable period. With the recent additional introduction of further quantitative easing, and the prospect of additional capital being pumped into the UK fiscal system during the course of 2012, the likelihood of base rates rising during the course of the next 12 months, if not longer, is considered to be unlikely as confirmed by the Bank of England in their recent report dated February 2012.

However, it could be argued that there could be contradiction in the form of improving deposit returns, certainly for personal accounts, with fixed rates now available at around 3-4% over shorter periods of time as confirmed in my previous February blog headed “Savings rates 2012/2013? What are the possibilities?”

Moving away from the subject of personal deposits savings, raises the question as to what can be achieved for business owners who have accumulated cash during the recession, possibly in preparation for expansion where the appropriate opportunities have not manifest themselves and this cash is held at the bank, as an example, earning minimal interest because of current low base rates. We have experienced and seen in the last few months increasing interest rates both with personal accounts, as already indicated, and also with business accounts. There are few opportunities that are available to business owners to try to achieve reasonable returns to get their money working harder in line with the extra hours that they have had to put in during this recession.

Examples of deposit rates available from well-known deposit takers as follows:

Provider	Name of account	% Gross PA	Comment
Santander	Business Reward Saver	2.0% AER	Instant Access, minimum deposit amount £5,000.
Clydesdale	12 months Business Term Deposit	3.0% AER	12 months’ notice, minimum deposit amount £5,000
Investec Bank	Business High 5 Account	2.25% AER	Minimum deposit £50,000. 3 months’ notice required
Bath Building Society	Business Direct 100	2.4% AER	Minimum deposit £2,500. 100 days’ notice required

Please note that terms and conditions can apply to these rates and deposit rates can fall as well as rise and are not guaranteed.

Another opportunity for businesses who may not be prepared to tie up money for a long time are Money Market Accounts. These are accounts normally offered by the banks. However, we have noted in our experience that they are not widely marketed and are usually for sums in excess of £25,000. One easy way to find the details of the Money Market Accounts is to type “Money Market” into the search box of your bank’s website and this will normally provide you with the contact details of the Money Market Department. This may also provide you with some of the rates that they will currently offer. In our experience, you will find that the rates offered under Money Markets are lower than those of Deposit Accounts, however it does provide the opportunity for short-term interest gains which may be important if a business requires flexibility for its cash when seeking capital opportunities.

It should be noted that it is possible for businesses to invest into other areas such as stocks and shares, property and other investment derivatives. Chapters Financial can help you with your business investment planning, if this is of interest.

As you can see from the above many companies are working very hard at the moment to achieve their overall objectives in this continuing time of austerity. It is also important that their money works as hard as they do and if there are opportunities to receive returns on capital whilst deciding how to utilise this for their businesses future gain then this is usually worthwhile considering.

Please note that any interest earned is subject to Corporation Tax at your highest marginal rate.

The details above are for information only and should not be seen as specific advice. If you would like to receive specific advice for your business investment planning then please contact Chapters Financial on 01483 578800.

Keith Churchouse FPFS

Director

Chartered Financial Planner

Certified Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Services Authority.

Savings rates in 2012/2013? What are the possibilities?

Following my last blog, I have been looking at the current market for deposit savings rates and the possible investment alternatives available.

With what appears to be some greater ' stability' in the expectations of very low base rates (currently 0.5%) and the significant likelihood of additional Quantitative Easing to help UK cash flow further. I am sure many mortgage borrowers will be delighted at this potential prospect. The Bank of England also suggests that there will be no further expectation of the UK falling into recession, although other fiscal think-tanks currently think otherwise.

But what could this mean for savers over the next 12-24 months?

Savings rates

We have seen savings rates climbing over the last year, which is good news for deposit savers. This is not a guarantee of a future trend. However, I have provided some examples below to reference this:

1 year Fixed

AA	3.60% Gross AER	12months Interest paid annually
Post Office	3.25% Gross AER	12months Interest paid at maturity

3 year Fixed

Saga

4.00% Gross AER

36months Interest paid annually

These rates are correct at the time of writing this Blog (February 2012). Other offers are available.

• Deposit interest earned (outside an ISA allowance) is taxable at your highest marginal income tax rates. Please check the terms and conditions of each plan/offer before investing.

• Please remember the Deposit Protection Limit of £85,000 for a single investor when planning your savings strategy.

To check current rates, I would recommend that you check the Financial Services Authority Website, Money Made Clear here:

http://tables.moneyadviceservice.org.uk/Comparison-tables-home/Savings-accounts/Compare-savings-accounts/

Chapters Financial Limited is not responsible for the content of external websites.

Cash ISAs

Many will know that you can invest £5,340 in a Cash ISA in a tax year and receive interest from the investment in a tax efficient manner. This is usually worthwhile if you have not used your ISA allowance elsewhere (see below). However, it should be noted that most 'deals' are time bound and revert to a low return rate after a period of time, such as a fixed rate for 1 or 2 years.

ISA Transfers

It is possible to transfer ISA arrangements whilst keeping the tax efficient wrapper. If you are in the position, then it may well be worth taking financial planning advice to investigate alternatives and the options available.

Alternatives?

For those investors who are prepared to take greater investment risk, it is possible to consider alternative investment medians, such as a portfolio of Stocks & Shares/Unit Trust/ Open Ended Investments Companies (OEICS) designed to provide a dividend income stream. It should be noted that dividend income can be variable, being received at different times of the year.

It would not be unreasonable for a UK Equity dividend (average) return to provide approximately 2-4% pa gross.

Dividend income is taxable at 10% for basic rate taxpayers, 32.5% for higher rate taxpayers and 42.5% for additional rate taxpayers (tax year 2011/2012).

Capital Gains & Stocks and Shares ISAs

There is also the potential of the investment making capital gain. This gain can be tax efficient in using the annual capital gains tax allowance (currently £10,600). If you select this route, you could also use your ISA allowance of £10,680 (or £5,340 if you use your Cash ISA allowance in the same tax year).

Any capital gain achieved by individuals above the allowance ceiling of £10,600 is taxed at flat rates of 18% for basic rate taxpayers and 28% for higher rate taxpayers.

Seeking Financial Planning Advice

Clearly there are a lot of issues to be considered in this article and no individual advice has been provided in this text. If you wish to consider your end of tax year financial planning then please contact Keith Churchouse at Chapters Financial Limited in Guildford (Independent Financial Advisers/ IFA) on 01483 578800 or at info@chaptersfinancial.com.

Chapters Financial Limited is authorised and regulated by the Financial Services Authority, Number 402899.

The Financial Services Authority does not regulate tax advice.