Author: Scott Kennedy

Bored In Lockdown!, Why Not Organise Your Finances?
After we have re-decorated our houses, spruced up the garden and exhausted our streaming options on Netflix & Amazon Prime. Now is the perfect time to look at our personal finances? It may mean looking out paperwork and going online to update passwords, but it will keep you busy for the next couple of hours.

As a Financial Advisor, the finance sector has managed to cope very well in lockdown, most companies have remained open, with many people working from home and servicing clients. For me in terms of work, nothing much has changed. However, the epidemic has made me look at my own financial situation.
- Here are some areas, I have been looking at:
- Check your Insurance policies – are you covered, are you getting a good deal?
Do you have enough cover?

Personally, the Coronavirus Pandemic has caused me to re-look at my personal insurance policies, to double check what exactly am I covered for? The pandemic really puts into context what is important and has made me really contemplate my own mortality. Also, I wanted to check that I was still getting value for money for the coverage I hold and the price I am paying.
- Review your investments (Bank Accounts, Investment Portfolios & Pension pots).
- Are your returns beating inflation in your area?
- Can you save more?
The Coronavirus outbreak has had a dramatic impact on people’s personal finances and investments. Stock markets have fallen considerably which impacts people’s pension & investment portfolio valuations. Although falls in financial markets are only a loss on paper if not crystallised, for the savy investor, market volatility is seen as an opportunity. In recent weeks we have witnessed more stabilisation in financial markets, as investors begin to look at life outside of lockdown. Financial markets tend to be more forward thinking than their underpinning economies.

There will be undoubtedly be an impact to property markets around the globe during lockdown, however you would expect a return to activity once restrictions are eased. In times of economic downturn, estate agents rely on the 3 D’s (Death, Divorce & Debt) to stir up activity.

And finally, there has been a direct impact to bank deposit rates too. In wake of the crisis, central banks rushed to cut interest rates to shore up their economies. While this is good news for borrowers, it is bad news for savers.

What can you do about it?
- Increase diversification and utilise different asset classes, most notably fixed income products to secure return in a challenging environment.
- Financial markets are offering buy in opportunities, so now could be a good time to invest, if you currently do not have equity market exposure.
- If you hold pension and investment exposure, the advice is to ride out volatility, check your holdings diversification range, check fees and look at moving providers to cut costs.
- If you hold cash, check your real rate of return against inflation rate in your area. It may be that by simply holding cash, your earning rate is less than the rate of inflation, which essentially means your purchasing power is less. (You are losing money)
- If you are relying on bank deposit interest rates to fund your income stream, again look to more attractive fixed income investments that return higher than bank deposit accounts.
The lockdown if nothing else will provide us with real evidence on what we spend our money on. Many of us…me included, have realised that we probably do spend too much on entertainment, going to restaurants and bars and overspending on clothes etc. We have learnt that we do enjoy having home cook meals and with a little more organisation, will be easy to maintain when lockdown is over. Don’t get me wrong, I am looking forward to getting back to normal, but I think I will be socialising but spending less to do so. This will help me save more going forward.

If you would like help to navigate any of the above, please contact leeann@astutefma.com for your free finance check-up.

Have a great day,
28/04/2020
2019 UK General Election

The 2019 UK election has been announced for December 12 and is likely to be the biggest – perhaps only talking point between now and Christmas. Today is the first day of official campaigning….

While these are uncharted waters, political uncertainty is nothing new. On this occasion, as in the past, people will get on with their day jobs, and life will move on irrespective of the result. Maybe the election result will provide more clarity with regards to Brexit or maybe it will return even more uncertainty. Maybe markets will go up with the result or maybe they will go down. Regardless, people will still wake up and resume their lives and the economy will function as it did. This is an important point to remember.

In times of political uncertainty, we know that people tend to hold off on plans, particularly financial plans, whether that be a big-ticket purchase, or booking a holiday. It is the natural reaction to be hesitant during times of uncertainty.

Chief among these is the temptation to react too quickly or with too much confidence in the lead up to these significant events. Politicians and Financial Big Whigs are very guilty of this. I share the below quotes from the US election and Brexit referendum, where even the smartest of people got it grossly wrong:

Incorrect US Election 2016 Predictions

“We would expect a small global stock market rally if Clinton wins (about 2%) and a large decline if Trump wins (about 10%)”. Eric Zitzewitz, Professor of Economics at Dartmouth College

“The S&P 500 will fall by 3% to 5% immediately if Trump is elected”. Tobias Levkovich, Citigroup’s chief US equity analyst.

“If investors are wrong and Trump wins, we should expect a big markdown in expected future earnings for a wide range of stocks – and a likely crash in the broader market.” Simon Johnson, professor at MIT Sloan and former chief economist of the IMF

What happened? US stocks rallied 2.22% on the day after the election and around 9% in the three months following.

Incorrect Brexit Referendum Predictions

“A vote to leave would tip our economy into year-long recession with at least 500,000 UK jobs lost”. George Osborne, former Chancellor.

“Leaving Europe would tip the country into recession”. David Cameron, ex-UK Prime Minister

“Brexit would trigger recession” – IMF, predicting -0.3% GDP for Q3

“Short term impact of -1.25% GDP”. OECD forecasts.

“It would be likely to have a negative impact in the short term… I certainly think that would increase the risk of recession”. Mark Carney, Bank of England

What happened? UK stocks fell 3.15% the day after the referendum but gained around 13% in the six months following. Economic growth also continued to rise.

What About a Corbyn Government?

Putting any political biases aside, one of the widely quoted risks to investors seems to be in a Corbyn government. When I meet with clients, it is a fear that is mentioned almost as many times as Brexit. It is easy to build an ugly bear case, in which the media will no doubt take full advantage of between now and election day. Therefore, we urge investors to keep a level head and while these issues have substance, investors should look through exaggeration as political risk, which is largely unpredictable. Just as we seen in the 2016 Referendum & the US Presidential Election.

Opportunity Knocks

The key question on many investors lips is whether they should sell, hold or buy during these unpredictable times. The answer is simple: investments are made for future gains, therefore if you are looking to buy, continue to buy assets based on their merits and their ability to provide future returns. Short term events should not influence your long-term investment strategy. Of course, we all need to manage risks, and stay informed and if in doubt stay the course. The best investors are the ones who seek out opportunity and stay the course.

There is no doubt the current period is very unsettling for investors and will cause debate among your families, it certainly does mine. If you are lucky or unlucky enough to follow me on Facebook, you will know that I am never too far away from political or financial debate amongst friends and family.

In terms of making financial decisions – any turbulence in markets may create great opportunities to purchase assets that will add meaningfully to returns in the future. We therefore look at this current period through the prism of opportunity, rather than fear.

In case you are wondering the moral of the story is – buy that new sofa, book that holiday, continue as normal, as life and the economy will tick over, and we will all carryon regardless.

06/11/2019
Non-UK domiciled and owning UK property?

Life Insurance is the perfect solution

Whilst property investment in the UK remains an extremely attractive investment opportunity, there have been significant changes in recent years to the taxation of UK residential property held by offshore entities.

Historically, UK property owned by an offshore company which was owned either by a foreign domiciled person (“non-dom”) or by a trust set up by a non dom would fall outside IHT and would be treated as ‘excluded property’.

However, since 6th April 2017, inheritance tax is charged on UK residential property where it is held directly or indirectly by any individual or trust and this includes properties held through an offshore structure, such as a company.

The new charge applies both to individuals who are domiciled outside the UK and to trusts with settlors who are non-UK domiciled.

The new legislation means that even though the property may be ‘enveloped’ and the owner of the offshore company may be non-dom or be held in a trust set up by a non-dom, there will still be a liability to UK inheritance tax at 40%.

The tax due will be on the value of the company at the time of their death or (in certain cases) every ten years. Furthermore the legislation extends to loans made by non doms to trusts or relatives to purchase UK residential property.

Responsibility for paying the IHT liability will vary depending on whether the enveloped property is owned by the deceased or in a trust but broadly it will fall on the executor of the estate and the heirs as well as on the trustees of any trust and the beneficiaries of that trust.

HMRC have power to charge the UK property itself with any inheritance tax due and the time limits for collection of inheritance tax are up to 20 years (longer if there is deliberate non-compliance).

The UK Government has also announced it will introduce a targeted anti-avoidance rule which means it will effectively ignore any arrangements intended to sidestep the new legislation. Therefore any proposal which suggests a way of avoiding the UK Inheritance Tax charge will need to be examined very carefully.

This is particularly the case given that inheritance tax is not an annual tax like income tax or CGT, but a one off tax charged on events such as death or on the ten year anniversary of a trust. Thus it is peculiarly vulnerable to anti-avoidance legislation as normally such legislation will catch any schemes where the donor has not yet died.

Overall the new legislation is a dramatic change for non- UK domiciled individuals and now it will be very difficult for them to avoid paying UK Inheritance Tax on UK residential property.

Although it may now be impossible to eliminate the IHT exposure there are some relatively straightforward ways of mitigating the tax liability and these include:

Gifting the property by way of a PET to the next generation – however it may not be appropriate if the children are still minors. The parents would also not be able to live in the property unless they pay a fair market rent although there are some statutory exceptions to this but advice should always be sought as this is a complex area.

For a married couple, make sure that spouse exemption is available on the first death. Obtain advice on an appropriate Will (taking into account any foreign law issues) and if possible leave your share either outright or in a special “interest in possession” Will trust for the surviving spouse which will enable the trustees to retain some control. This can then be followed by a subsequent PET to the next generation by the surviving spouse or by the trustees holding the property on trust for that surviving spouse.

Term Life Insurance – an inexpensive way to mitigate the IHT liability. This gives maximum flexibility to the owners as they can remain in the property knowing that the IHT liability is effectively taken care of on the last death. A gift can then be made to the next generation at a more appropriate time in the future rather than being forced to relinquish full ownership of the property.

Securing a loan on the property to purchase or improve the property although any growth in the value of the property will still be subject to inheritance tax. Note that taking out borrowing after the purchase of the property simply to devalue the property for inheritance tax purposes and then depositing the borrowed funds abroad will also not now work to reduce the IHT liability.

Example : Mr and Mrs Ercan, Turkish Nationals living in Istanbul

Mr and Mrs Ercan are both 50 next birthday and live in Istanbul with their two young children who are 8 and 9 years old. Following the sale of one of his businesses, Mr Ercan has decided to use some of the proceeds to purchase an investment property in London overlooking the River Thames for £6 Million.

His intention is to let the property for part of the year and spend the summer months in London with his family. His advisers have made him aware of the new UK inheritance tax legislation that now applies and it is decided that the property should be purchased in both Mr and Mrs Ercan’s names as joint tenants to make use of the spouse exemption in the event of first death.

The advisers also discuss with Mr and Mrs Ercan the idea of gifting the property to the children at some point in the future as a way of mitigating the tax however both parents feel this would be ‘some years away’ and therefore they need a more robust solution to the IHT problem.

It is therefore suggested that they consider Term Life Insurance to cover the liability and, using some simple forecasts of the likely future value of the property, they decide to take out Joint Life Second Death Life Insurance for 30 years for £4 Million for an annual guaranteed premium of £6,350.17.

The parents are now comfortable that for a relatively small cost they know that in the event of anything happening to them at any time in the next 30 years, the children will not be forced to sell the property to pay the UK IHT liability. The insurance cover is written in a simple form of discretionary trust for the children from which Mr and Mrs Ercan are excluded although they can be trustees.

Tragically, 20 years later, Mr Ercan suffers a heart attack and dies and his widow and the now grown up children, face an uncertain future. Thankfully, ownership of the property now passes to Mrs Ercan so there is no immediate IHT liability. After a very difficult two years, Mrs Ercan decides that she will now make a gift to the children of the property under the Potential Exempt Transfer rules.

Following the completion of the PET after 7 years, ownership of the property now passes to the children and the Life Insurance is cancelled since the potential IHT liability has been removed. If, however, Mrs Ercan died in the ten years after Mr Ercan’s death, there will be a cash lump sum available to the children to pay the inheritance tax.

Important Note: Assumes both clients are non-smokers and current Inheritance Tax legislation including PET rules remain in place. Mr and Mrs Ercan and family are fictional and any resemblance to actual persons or events are coincident

30 year Life Policy for £4 Million on a Joint Life Second Death Basis – Guaranteed Premium of £6,350.17 per annum.

18/10/2019
The importance of ‘pre-departure’ travel insurance for Expats

Expats are being reminded to ensure they have taken out a travel insurance policy which includes ‘pre-departure’ cover, after a recent survey found that most of short-term travel insurance claims relate to trips which had to be cancelled or amended before they even begun.

A study of thousands of holidaymakers recently published in the International Travel & Health Insurance Journal suggests that in 2017, around 30 per cent of travel insurance claims lodged with one prominent provider related to ‘pre-departure’ trip cancellations.

Of 2,282 travel insurance claims processed over the course of the year, as many as 859 involved unforeseen illnesses or events which prevented travellers from being able to go through with their holiday plans, the research reveals.

Furthermore, around 20 per cent of claims related to ‘unexpected medical expenses’ incurred following an accident abroad, while one in seven involved lost suitcases or valuables.

The data highlights the fact that holidaymakers need to ensure that they are prepared for all eventualities when planning a trip – including the likelihood that they might not even end up going in the first place.

Naturally, individuals who neglect the importance of a sound insurance policy run the risk of losing thousands of pounds in lost hotel bookings, flight bookings and more. Focus is on Expatriates, as many fail to consider travel insurance prior to a trip back to their country of origin.

Astute FMA can recommend the appropriate type of insurance to anyone including Expats taking a short-term trip or family holiday’s. For more information, please contact us:

30/06/2019
Why a world of low-returns is here to stay

From soaring market returns, solid and dependable government bonds and even cash protected in some way from the debilitating impact of inflation in the past, investors are now left with a bleaker future ahead, investment managers have warned.

The regulator has backed this glum prediction with the Financial Conduct Authority’s latest consultation paper confirming its estimate for returns over the next 10 to 15 years from investment products was around the 5% mark.

It said projection rates provided for investors to see how their money might grow should not exceed this measure.

Rather than shouting down a pessimistic regulator, investment managers have instead agreed, noting with a glum realism that things are indeed different this time but alas, not for the better.

Tom Becket, chief investment officer at Psigma Investment Management, points to three key factors that hinted at what the future holds.

Rock bottom interest rates and bond yields, expensive equity valuations and a prediction of sluggish global growth over at least the next decade all suggest returns will remain lower over the next 10 years than they have been over the previous 10.

He says: “Our own in-house forecast is for equities to return just under 5%. The FCA is absolutely correct on this call.

“My view has always been to under promise and over deliver. It’s time to be realistic and I think our industry has been very good at over promising and under delivering in the past. I think being realistic is particularly appropriate at this point in time.”

The globe was bloated by booming economic growth over the latter half of the twentieth century and the early years of the twenty first, and equity returns over a long 40-year time frame came in at around 7%.

Future global growth even after an economic recovery, is expected to remain sluggish, if it exists in any meaningful way at all, and consensus says 7% equity returns will be but a pipedream for future investors.

Darius McDermott, managing director at Chelsea Financial Services, says: “I think 5% is a very realistic bet, you might hope to do better over the long term.

“But over the 7% return period we have had strong global growth and a number of very experienced managers have come to me and said growth will be much lower in the future, and so you should expect lower returns from equities.”

The FCA’s growth prediction was based on a portfolio made up 60% equities, 20% gilts, 10% corporate bonds, 7% property and 3% cash and money market funds.

For products without a tax exemption estimated returns were even lower at 4.5%.

Put fees into the mix and returns would drop further still – although of course lowering fees is also something the industry is working on.

So, it seems the low yielding world we have lived in since the financial crisis is not going to be the short-lived beast many had hoped.

However, while returns look likely to remain significantly lower than many have been used to in the past, you will still be better off in the markets than outside holding cash.

Tom McPhail, head of policy at Hargreaves Lansdown, says: “In spite of all the economic and political fluctuations and uncertainties we have experienced in recent years, the FCA is still comfortable with the view that an investor holding a typical mixed portfolio predominantly invested in equities, can expect to enjoy a real return of around 3% a year.

“For any investor fearful of committing their savings to the investment markets, this is an important message: if you want to make your money grow over the long term, take advantage of the tax breaks on offer and invest in the stock market; holding your money in cash is fine for the short term but over time it is likely to be eroded by inflation.”

30/06/2019
How to Double Your Money in Half the Time

Want to turn £1 into £300? Invest in equities. Want to turn £1 into £22,000? Reinvest dividends – such is the power of compound interest.

These figures aren’t plucked from thin air – they represent the movement of the US stock market in the 20th century. Albert Einstein called compound interest the eighth wonder of the world – saying: “He who understands it, earns it, he who doesn’t, pays it.”

Warren Buffett, the sage of Omaha himself described investing to Forbes magazine as “forgoing consumption now in order to have the ability to consume more at a later date”. Compounding interest is when you pay dividends back into the capital sum, allowing that capital sum to grow and in turn the dividends will grow too. These larger dividend payments are invested back in to the pot, and the process repeats itself. Reinvested dividends have been the single biggest driver of equity returns in the UK, the US and Europe over the long-term.

If you want to double your money in half the time, you cannot simply rely on returns from investing in local cash deposit accounts. You have to invest in the open financial markets and purchase good quality stocks. Some Private Investors who are actively investing in the stock market tend to forget or overlook that income-oriented strategies can also be a source of capital growth. Dividend-paying stocks benefit from the compounding effect that occurs over the life of the investment, which explains why dividend-paying stocks tend to outperform.

Dividends can also help act as a barometer to a company’s financial health. Simply put – if a business has enough cash on its books to reward shareholders it probably means it has low debt levels and is in good shape. Take HSBC Bank PLC for example. You can purchase HSBC PLC Shares today on the London Stock Exchange for £5.18 per share. HSBC PLC in turn are paying shareholders an annual dividend return of 6.97% GBP. Alternatively if you held an HSBC Bank savings account, the interest you would earn in a year would be less than half of the dividend HSBC is paying to shareholders in way of dividend payments.

In times of low interest rates this method is not fail safe however as many large corporations are loading their books with cheap debt to boost dividend payments. In emerging markets where corporate governance is not as prevalent as in developed markets, dividends also indicate that the company’s interests are in line with shareholders’.

Inflation Proof Your Portfolio

Dividends not only maximise your growth potential, they help protect your portfolio from the erosive nature of inflation, this is a particular issue for savings account holders in Turkey, where inflation tends to run high with the weakening of Turkish Lira. Equity income should provide a level of protection against inflation. While quantitative easing remains a prominent feature in many leading economies, we think that inflation poses a risk to investors no matter where they reside. While income returns on traditional assets such as government bonds and cash deposits remain low, and in many cases are below the rate of inflation a well-managed equity income strategy which offers both stability and shield against inflation should be an attractive option for investors with long-term horizons.

If you would like to receive more information on how you can double your money and increase your future purchasing power, Contact us here

30/06/2019
BUZZWORD: Cryptocurrencies – Bitcoin and Ethereum.
In 2017 the world went mad for Cryptocurrencies, with some analysts predicting it’s a bubble waiting to burst and others predicting the future will be dominated by digital currencies.

A cryptocurrency is a medium of exchange like normal currencies such as USD, GBP & TRY, but designed for exchanging digital information through a process made possible by certain principles of cryptography. Cryptography is used to secure the transactions and to control the creation of new coins. The first cryptocurrency to be created was Bitcoin back in 2009. Today there are hundreds of other cryptocurrencies, often referred to as Altcoins.

Put another way, cryptocurrency is electricity converted into lines of code with monetary value. In the simplest of forms, cryptocurrency is digital currency.

Unlike centralized banking, like the Federal Reserve System, where governments control the value of a currency like USD through the process of printing fiat money, government has no control over cryptocurrencies as they are fully decentralized. This is extremely appealing to investors particularly in countries where state manipulation of local currencies occurs.

Most cryptocurrencies are designed to decrease in production over time like Bitcoin, which creates a market cap on them. That’s different from fiat currencies where financial institutions can always create more, hence inflation. Bitcoin will never have more than 21 million coins in circulation. The technical system on which all cryptocurrencies are based on was created by Satoshi Nakamoto.

While hundreds of different cryptocurrency specifications exist, most are derived from one of two protocols; Proof-of-work or Proof-of-stake. All cryptocurrencies are maintained by a community of cryptocurrency miners who are members of the public that have set up their computers or ASIC machines to participate in the validation and processing of transactions.

Cryptocurrency Security

The security of cryptocurrencies is two parts. The first part comes from the difficulty in finding hash set intersections, a task done by miners. The second and more likely of the two cases is a “51%” attack“. In this scenario, a miner who has the mining power of more than 51% of the network, can take control of the global blockchain ledger and generate an alternative block-chain. Even at this point the attacker is limited to what he can do. The attacker could reverse his own transactions or block other transactions.

Cryptocurrencies are also less susceptible to seizure by law enforcement or having transaction holds placed on them from acquirers such as Paypal. All cryptocurrencies are pseudo-anonymous, and some coins have added features to create true anonymity.

High demand for crypto exchange traded notes

While some Crypto investors prefer to purchase coins directly and hold them in electronic wallets which need constant monitoring for fear of hacking & theft. Other investors prefer to gain Crypto exposure via Crypto Exchange Traded Notes (ETNs). These notes are easier to purchase and sell without the hassle and stress of maintaining high level security on your electronic wallet.

Exchange traded notes (ETNs) are debt backed securities which offer investors exposure to the change in value of an underlying cryptocurrency asset. They are typically listed on public exchanges and can be purchased by any broker with access to the listing exchange.

In May of 2015, Stockholm Stock Exchange authorised ‘Bitcoin Tracker One’ (denominated in Swedish Kronor), the first ever Bitcoin-based security available on a regulated exchange. In October the same year, it followed up with Bitcoin Tracker EUR, a Euro-denominated Bitcoin-security — available through Nasdaq OMX.

Recent data released revealed that Bitcoin ETNs took a year from launch to attract their first $10 million in Assets Under Management (AUM) and then ended 2016 with $36 million. By end of 2017, however, high demand has seen AUM increase more than $450 million.

The 4 major reasons why an investor might consider taking a position in a Cryptocurrency ETN — as opposed to buying their own coins
- Security — When you invest in bitcoin or Ethereum via an ETN, you are not responsible for ensuring the security of your cryptocurrency.
- Speed and Convenience — The route to purchasing an ETN is via a familiar broker or brokerage platform and the ETN is listed on a trusted exchange. This means an ETN is often the fastest way to purchase exposure to Crytocurrencies.
- Potential Tax Advantages — In the UK for instance, the bitcoin ETN is uniquely eligible for inclusion in a tax-advantaged SIPP account, so this type of investment in bitcoin may experience a more efficient tax treatment than simply purchasing bitcoin outright.
- Cost – Purchasing an ETN instead of your own coins is the most cost-effective way to gain exposure to the cryptocurrency market. Instead of buying coins you purchase shares in a fund that tracks the underlying value of a specific cryptocurrency like Bitcoin & Ethereum.
For people who believe in the technology and use behind Cryptocurrencies without the hassle of holding coins independently, ETNs can provide an alternative cost-effective route to gain exposure into Crypto currency investment.

If you wish to find out more information on Cryptocurrency ETN’s contact us
30/06/2019
Finding the right Financial Advisor

First of all, it’s important to establish the difference between a Financial Advisor and an Independent Financial Advisor (IFA). What makes an IFA different is that they are independent – that means they aren’t acting on behalf of any particular product provider or any other body. They usually work for themselves, acting on behalf of you, the client alone. This badge of independence is important because it means that the advice they give you must be impartial.

An IFA’s role is simply to help you reach your financial goals. They do this by looking at your financial circumstances and building up a picture of what you want your finances to look like in the future. In the process they will take into account all aspects of your financial situation as well as looking at how you can make your finances more tax-efficient.

An IFA will spot the areas in your personal finances where improvements could be made in order to help you reach where you want to be financially now and in the future.

The Golden Rule.

“If you’re using an adviser, always, always, always ensure it is an Independent Financial Advisor (IFA)”

If you’re going to get professional advice, always check it’s from an Independent Financial Advisor, as the IFA will look at products from the entire market; unlike tied or multi-tied advisors who can only sell/advise from a limited range of companies. There is a legal distinction so ask them, Are you an Independent Financial Advisor? Don’t accept any hedged answers.

The writers of this article are Independent Financial Advisers and as such are writing for the paper and you as opposed to a particular product or investment company.

While it’s not foolproof the best way to ensure sound financial advice is to ask the following questions, which should help you find a reputable IFA.

Questions to ask a potential Financial Adviser: –

How long have you been established?

In the UK when looking for an IFA company, one would recommend that it has been established at least three years, however in the TRNC I would go to five years. It is important that those looking after your financial needs are here to stay and will not be moving on.

Are you authorised?

This is difficult in the TRNC because there isn’t a Regulatory Body at present. All companies need to be registered and known by the Central Bank but sadly this is where it ends. A reputable company will self regulate to the EU standards, this will be seen in how they conduct business and themselves. A reputable IFA will gather the full facts and record your financial situation, advice will be given in writing and you will be issued with a terms of business (TOB). The advisors will hold the relevant professional qualifications.

What qualifications do you have?

There is NO requirement in the TRNC for a financial advisor to be qualified but a reputable company will want to make sure their advisors are fully qualified to the EU standard and maintain the knowledge that they need to give solid advice. Therefore, an important question to ask is: what qualifications do you have and how do you keep these up dated? This is known within the business as Continued Professional Development (CPD).

Can I see your Terms of Business documents?

Ask to take a look at their ‘Terms of Business’ document, which will set out how they will work for you explain their charges and confirm that they are truly independent.

What experience and knowledge do you have of the TRNC and offshore investments?

There are very good advisers in the UK and other jurisdictions but when it comes to helping clients in the TRNC they are lacking because they do not have the local knowledge or expertise to make sure they get the best for a client.

Do you hold client money?

You should not give money directly to a financial adviser; IFA’s do not hold client money. This is very important and safeguards against theft or fraud!

How many advisers do you have?

A one man band may offer you a personal service but problems can arise in the event of illness or relocation. If the firm is bigger than just one or two advisers then these problems will not be an issue. Firms with a group of advisers often have a greater level of technical expertise with ideas and training being shared.

I believe the above will clear up any uncertainties about selecting an IFA. Astute FMA are Independent Financial Advisors established here in the TRNC in 2006. Astute FMA is steadily growing and expanding within the local community, we now have five fully qualified financial advisers and a team of ten employees looking after our client’s needs. Astute FMA are conveniently positioned in the heart of Girne thus making it easier to help you and the local Expat community.

Each week in the Astute Angle I will cover various financial topics that may affect life and living in the TRNC, therefore if you have any financial questions or queries drop me a line, I will endeavour to answer your queries.

29/06/2019