Investors ponder the potential effects of de-dollarisation
Although we are only halfway through the year, 2023 has already been an incredibly dramatic and worrying year in geopolitical terms. Multiple conflicts are either live or simmering alongside the Ukraine-Russia war, and it seems that the BRICs nations are leading the world towards a new multi-polar world where the United States’ economic hegemony faces huge challenges (if not an outright end).
Certain oil-rich nations settling sales in currencies other than the dollar would have been unthinkable not so long ago, but the rule of the ‘petrodollar’ is now looking shaky indeed. While we should not catastrophise too much, there are now many voices warning of huge floods of dollars returning to the US once their cachet wanes and that inflation could spiral out of control as a result. Such prognostications have certainly reached our users’ ears, prompting many of them to look at their entire portfolios anew for risks.
It very much remains to be seen how far and how fast the power of the dollar may wane, but investors would be very well advised to review their entire investment strategy through this lens at this point so that they can be well positioned for whatever may come
It very much remains to be seen how far and how fast the power of the dollar may wane, but investors would be very well advised to review their entire investment strategy through this lens at this point so that they can be well positioned for whatever may come. The potential implications are particularly expansive in this case, however, and it may well be that you need to speak to several experts to get the full picture for your wealth. These are just the kinds of conversations we can help to expedite, so don’t hesitate to quell any worries you might have by getting started on your wealth management search with us.
Curiosity builds around new Consumer Duty rules
It seems fair to say that most investors might not be particularly interested in the ever-expanding alphabet soup of regulations financial institutions have to contend with (as long as a good job is being done for them). Yet the new Consumer Duty rules that are being phased in do seem to have caught our users’ eyes as their implementation deadline approaches. The new rules come into force at the end of next month for new and existing products or services that are open to sale or renewal (and for closed products and services on 31 July 2024).
The Financial Conduct Authority has regulator has termed its Consumer Duty programme a “paradigm shift” in its expectations of the UK’s retail financial institutions. Really, it focuses on all the service qualities that the wealth managers on our panel hold dear and which should be table stakes across the industry: clear communications and meaningful customer support; fair charging; and a client-centric approach to providing financial services and products. This last part, however, is the most interesting. At Consumer Duty’s heart is a drive for firms to define what good outcomes will look like for users of their products and services, and then to demonstrate that these really have been attained over time.
At Consumer Duty’s heart is a drive for firms to define what good outcomes will look like for users of their products and services, and then to demonstrate that these really have been attained over time
The new regime will bed in over a number of years and it remains to be seen how much of a difference it will make to client outcomes, but it the regulator is surely to be praised for making its expectations explicit in this manner – and for serving a reminder to all institutions that they should be laser focused on clients’ objectives, costs and service standards all of the time.
If the Consumer Duty rules have got you thinking about the results and service standards you are getting from your wealth manager, don’t wait for them to get a wake-up from regulator. Consider instead if it’s time to simply make a move to one which will give you the outcomes you require – through our matching service, it is faster and easier than you might think to make a change.
Top Tip
Lee Goggin
Co-Founder
Pension savers are pondering significantly boosting their pots
Last month, we highlighted how our many of our users are keen to make use of an extension to the National Insurance top up window in order to be able to get the maximum state pension despite coverage gaps. Now we are hearing from high earners who are thinking big when it comes to increasing their pension pots.
The annual allowance is the maximum amount of pension contribution a person is able to make without a tax charge (or have made by an employer or other third party for them). The Spring Budget dramatically increased the annual allowance from £40,000 to £60,000 for this tax year, and this is a huge boon in itself. However, what we’re also now hearing is that many savers have foregone topping up their pension pots in recent years due to a combination of worries about exceeding the annual/lifetime allowances and pandemic preoccupation, and that they now want to maximise their contributions in large tranches.
The good news is that as well as the £60,000 for 2023/24, such savers could also make use of ‘carry forward’ provisions which will allow them to also pay in maximum of £40,000 to cover the preceding three years when they did not contribute
The good news is that as well as the £60,000 for 2023/24, such savers could also make use of ‘carry forward’ provisions which will allow them to also pay in maximum of £40,000 to cover the preceding three years when they did not contribute. For those who have built up excess cash, this might be an excellent way to deploy it – although there might be other options to explore on both the investment management and financial planning sides. If you would like a health check for your retirement plan, please just let us know when completing your wealth manager matching questionnaire.
Shine a light on your concerns
Investors currently find themselves having to wrestle with really significant changes affecting their wealth at both the UK and global levels, and it must sometimes feel like all the news in the world is not enough to get a good handle on everything that is going on. Be assured that you are not alone in feeling a degree of overwhelm at the current moment.
The best remedy for that, however, is to shine a light on your concerns, rather than burying them and simply hoping for the best. Time and again, our users report a huge feeling of relief having come from speaking to a real expert able to take a 360-degree view of their portfolio. Getting the ball rolling is just one step away: complete our short wealth manager matching questionnaire or speak to our expert and unbiased team and well-established and respected firms can come to you for an introductory chat with no obligation at all.
Important information
The investment strategy and financial planning explanations of this piece are for informational purposes only, may represent only one view, and are not intended in any way as financial or investment advice. Any comment on specific securities should not be interpreted as investment research or advice, solicitation or recommendations to buy or sell a particular security.
We always advise consultation with a professional before making any investment and financial planning decisions.
Always remember that investing involves risk and the value of investments may fall as well as rise. Past performance should not be seen as a guarantee of future returns.
