An independent (financial adviser’s) view

Just about warm enough for my first ‘lesson in the playing field’ garden computer session of this year, albeit with jumper rapidly required; but a positive sign. Background listening included commentary on Liz Truss’s memoir, apparently being serialised in the Daily Mail, who’d have guessed? Highlights include the difficulty of getting Ocado to deliver to No.10 and arranging a hairdo there. Also that Boris’s groceries were still more upmarket, he had Daylesford deliveries, and his dog left the PM flat infested with fleas. Oh, and that the late HMQ suggested that she ‘pace herself’, wise advice which she sadly (for all of us) ignored. Anyway, please don’t take this as a recommendation to buy the hard or paperback, this week’s proper review is below. I’d also urge you to seek out ‘The Assembly ’ on BBC player, a highly unusual half hour which will make you laugh and cry and leave you inspired.

“Shell CEO warns the firm may ditch ‘undervalued’ London listing”

The amount held in UK shares by most managed portfolios which seek to provide an international spread of investments (as they should), has reduced pretty significantly in recent years. What has kept it at even its current-reduced levels is the number of truly global companies which are still trade their shares on the London Stock Exchange and the exposure they give our FTSE 100 to world markets. Of those, for better or worse, Shell is the largest, followed by other household names such as AstraZeneca, HSBC, Unilever, BP with (see below) SJP propping them up at number 100. Were Shell to move to the US, which it, or at least its boss is threatening, this may indeed be an acceleration of an already slippery slope towards financial backwater-dom. The post-Brexit talk of making the City a ‘Singapore on Thames’ (giving big companies and others tax breaks to stay or base themselves here) seems to have disappeared into the ether. And while, yes, we are still a great country, the country of Harry Potter, David Beckham’s left foot, etc., we can no longer rely on past financial and other glories to stay that way. I’d say.

“SJP shares crash after it sets aside ￡426m for advice fee refunds”

There has been a fair amount of schadenfreude amongst many advisers over the high-profile woes of St James Place (SJP in industry vernacular). There’s a radio and TV advertising campaign urging their clients to claim compensation if in any year they haven’t met with their SJP adviser, and a long-running press campaign over their rather labyrinthine and often high charges. This does not, however, do any of us any favours. To many, a financial adviser is a financial adviser, and yet more mud on the wall will continue to deter many who need advice from seeking it. Although, yes, charges should be at least understandable, reducing them will reduce the viability of advising all but the wealthy, or at least the already-prosperous. Perpetuating a trend which might be said, and don’t quote me on this, to have started with the banning of commission ten years ago. It really has been proven time and time again??that just making something cheaper (stakeholder pensions, for instance), neither leads new clients to water nor makes them take advice. So let’s learn a few lessons before we start chasing yet more ambulances.

“US labour market continues to show resilience with 303,000 jobs added in March”

Good news is not, of course, always good news. The US economy is doing well, higher interest rates haven’t led to unemployment and more jobs are being created rather than lost. So the matching/contrasting headline from a couple of weeks ago was ‘strong economic activity prompts Fed to hold rates for fifth time’. Everyone, well, everyone with investments or borrowings rather than cash in the bank, wants to see interest rates at least edging down. Then once again, owning ‘real assets’, shares and property will make more sense than do other options. Bonds, fixed interest loans to companies and governments, will also go up in value, if the rate they pay becomes more than you could get elsewhere. Win win, then, for a while; but they can’t go down forever, and shouldn’t as 10 years or more of rates at pretty much zero actually did not much good to most, making the rich richer and the poor poorer. We need that unattainable happy medium, or, as Gordon Brown famously once said, ‘no more (Tory) boom and bust’. Would that it were so simple.

“The secret behind the world’s happiest country”

Finland has been voted the world’s happiest country by its citizens for the fourth successive year. Even though it’s bloomin’ cold and dark for a good part of the year, Fins feel financially and physically secure, healthy, looked after and governed by uncorrupt MPs. We’re 32nd and both the Land of the Free and Germany are outside the top 20. In fact, those living in Moldova, Kosovo and El Salvador feel happier than we Brits. You’d assume that in Finland and the other consistently-happy Scandewegian countries, they pay more tax. OK, the booze is more expensive to theoretically stop them drinking too much in those long winter months. But income tax in Finland is between 17% and 23.5%, with 0.5% for medical care and 7% for pensions – employers pay 20%. Sounds reasonable to me; although I’m not keen on saunas, which it’s thought are a big contributor to Finnish well-being. And the language is as challenging as the climate, but, I guess, you can’t have everything and a little onnellisuus counts for a lot, I’d say.

The Trading Game by Gary Stevenson

To say the author is quite a character is quite an understatement, and I went for this (in audio version) having heard him interviewed recently. Gary is a proper Eastender who, as he says, could have gone in many a wrong direction when he was expelled from his grammar school at 16 for drug dealing (they were easily available down his way and he was satisfying demand from the posh boys). He was bright, got himself to uni at the LSE and by using very good maths skills and a bit of common sense, won a competition to become an intern at Citibank. Within a couple of years, he had become their most successful trader (in short-term interest rate swaps, I know) This is the story of his brief glory years, when he went from working part-time at DFS to millionairedom in the space of a few months. That’s one half; the other is his bid to escape, once he realised what a sham it all is, his descent into mental illness and Citibank’s hardball fight to keep both him and the bonuses he’d previously earned. It’s an exciting ride to the top, and an equally thriller-like fall. If the f-word offends, then neither this book nor life as a trader is for you. Despite the dozens in pretty much every paragraph, it is very well and engagingly written and a real insight into the real world of bankers bonuses. Gary has since reinvented himself as an economics guru and equality campaigner. And good for him.