Paraplanners -Dont Leave Home Without One
What Low Yields are Really Telling Us
Osbornes Tradable Annuities
1 = $1 AGAIN?
PARITY LIKE ITS 1999
MARCH 2015 ISSUE 38
For today s discerning financial and investment professional
Cover.indd 1 19/03/2015 14:35
C O N T E N T S
CONTR I BU TORS
Brian Tora an Associate with investment managers JM Finn & Co.
Lee Werrell a senior compliance consultant and industry adviser.
Richard Harvey a distinguished independent PR and media consultant.
Nick Sudbury known for his columns in many leading financial magazines.
Neil Martin has been covering the global financial markets for over 20 years.
6 News All the big stories that affect what we say, do and think
14Parity and the Euro
Its been a long time for the undervalued greenback, says Michael Wilson
19 UK Equity Income FundsNick Sudbury says the current popularity of UK plc is entirely rational
And why you need one. Sara Arthur, MD at the Parahub, explains
29 Its All About the Timing Pensions expert Steve Bee takes some lessons from Tom and Jerry
Neil Martin talks to Mike Parsons, of JP Morgan Asset Management, about the joys of the open road
36 Low Yields, Clear Hints Theres a lot you can tell from the current state of risk aversion, says M&Gs Caitlin Hughes
Are you sure you know whats in that index youre tracking, asks Brian Tora?
41 Rethinking the Adviser Model Neil Martin talks to John Spiers, the head of crossover adviser EQ
Editorial advisory board: Richard Butler, Michael Holder, Ian McIver and Mark Pullinger
Editor: Michael Wilsoneditor@ifamagazine.com
Art Director: Tony Merlinitony.firstname.lastname@example.org
Publishing Director: Alex Sullivanalex.email@example.com
THE FRONTLINE: What goes around, comes around. If you wait long enough, that is. So what happens now?
WHEN BRIAN RETIRED AS SALES DIRECTOR HE NEVER EXPECTED TO GO BACK.
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*Source: Partnership data 2014, Compared to a standard annuity and depends upon individual circumstances. Telephone calls may be recorded for training and monitoring purposes. Local call rates will apply. Partnership is a trading style of the Partnership group of Companies, which includes; Partnership Life Assurance Company Limited (registered in England and Wales No. 05465261). Partnership Life Assurance Company Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The registered office is 5th Floor, 110 Bishopsgate, London, EC2N 4AY.
For authorised financial advisers only not for retail clients
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C O N T E N T S
44 Plain Talking Defaqtos Gill Cardy is back!
46Still the Big Country
Our panel of senior analysts tells us that America is far from being structurally overvalued
55 Compliance Doctor PS 15/4 is important but its been cobbled together at high speed, says Lee Werrell
65FCA Publications and IFA Calendar
In the news, in print and in court. Our monthly listing of whats new in FCA-land
65Thinkers: Thomas MalthusThe world is not enough, he said. Was he right?
65The Other Side
Lifes a gamble, says Richard Harvey. But has the government rigged the odds?
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Contents.indd 3 19/03/2015 14:21
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Job No: 49694-2 Publication: IFA Magazine Size: 297x210 Ins Date: 01.03.15 Proof no: 1 Tel: 020 7291 4700Ed's Welcome.indd 4 19/03/2015 14:23
Look on the Bright Side
I suppose its probably the sunny Fisher grin and the annoyingly perma-bull approach to life that grates slightly on a poor jealous Englishman stuck in Wiltshire on a grey day in March. But the other weekend Mr Fisher came up with something that made me properly sit up and take notice. In fact, Im still trying to work out now whether hes onto something eternally profound, or just a long run of historical coincidences? You decide.
We are getting our venerable English knickers in a proper twist, Mr Fisher said (I paraphrase him slightly), about the dire financial prospects that are likely to arise from the forthcoming election. It currently seems next to impossible that any of the major parties can hope to form a government without having to sacrifice its bold autonomy to some sort of a messy coalition that will stop it from doing anything decisive.
Lessons from History
And that will be just terrible for stocks. Wont it? Actually,
The point, says Fisher, is precisely that a badly hamstrung coalition cant do much damage through being clumsy. It cant pitch its economy headlong into a bold new ideology. Id personally add that it cant get away with starving the economy into recovery, as George Osborne has tried to do.
8nifieG, DctiYe JoYernments Dre liNelier to Go thinJs stocNs hDte, says Fisher. 6Xch Ds chDnJe SroSert\ riJhts, reGrDZ reJXlDtions DnG reGistriEXte resoXrces DnG cDSitDl... /DZhDSS\ 3DrliDments creDte Zinners DnG losers JDlore, GriYinJ leJislDtiYe risN DYersion DnG hXrtinJ stocNs.
I wish Id said that, Oscar. But is he right? Well find out soon enough.
Mike Wilson, Editor
Its not every day that I
acknowledge a profound debt
of gratitude to the inimitable
Ken Fisher, the chief executive
of Fisher Investments, who writes
periodically in the Financial Times
about all things transatlantic
says Mr Fisher, no it wont. The markets only thinN that they hate an indecisive government with no scope for bold innovation. In practice, they absolutely love it. And history provides an endless sequence of incredibly profitable stock market runs that have happened during periods of political gridlock.
There was the infamous Lib/Lab pact of 1977-79, which saw a 60% resurgence in the Footsie. There was the awful second Clinton term in the late 1990s, when a powerless Democrat President presided not just over a Republican Congress, but also over one of historys longest bull markets. Theres Germanys toothless grand coalition, which is currently turning in a fantastic Dax performance. There were all those bickering, incompetent European administrations in the 1980s, all of which managed to outperform the UK even though we had Margaret Thatcher running the show.
The point, says Fisher, is
of Fisher Investments, who writes
says Mr Fisher, no it wont. The that they
hate an indecisive government with no scope for bold innovation.
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