When embarking on merger and acquisition deals, it is worth seeking the best advice you can. In this TV show John Paleomylites discusses lessons won from selling to the market leader, twice.

Negotiating merger and acquisition deals

The most important lesson I think that the entrepreneur really needs to learn and understand is to negotiate the best deal that you can possibly get. There is always the temptation to accept what you are offered and to accept terms that you are offered. BeatThatQuote management together with our lawyers, really negotiated the best deal that we could possibly get. But you need to look at what you have, the value of what you have to the acquirer. Not necessarily the value of what you have to you. Look to see what else is in the market and what else that they could acquire if they wanted to, or what it would cost them to develop what we have developed, both in terms of direct costs as well as opportunity cost, and the time that it would take to get them there. When you factor all of those things in, you kind of get somewhere to a price that makes sense, and to terms that would make sense. As I say, getting an experienced M&A firm with a great lawyer to represent you is extraordinarily useful. I think one key lesson is not to loo to skimp on the advisors. If you get bad advisors, you will get bad advice. You get good advisors you get good advice. I think getting the right legal advice is essential to maximising the value of you business.

Continue browsing Inside Finance for more great TV shows on merger and acquisition deals.

 

High net worth families want a good relationship with their advisors as Frank Akers-Douglas explains in this TV show.

High net worth families' survey

One was that most of the interviewees that we surveyed and spoke to felt that their professional advisors needed to work closely together and in particularly they would have a lead advisor who would coordinate the various professional advisors that they used in their team and I find that interesting because that’s something that we’ve tried to concentrate on here at Smith & Williamson and it shows the importance of that relationship creation. The second point I would think was to do with the handing on of money and the really quite diverse answers we got from the families that we interviewed as to when was the right time, how to involve children, whether to involve them at all, and that is probably one of the most thorny issues facing a family with money is when to involve future generations. I think it tends to be the older, the older the older generation is the less comfortable they feel about involving the younger generation.

Inside Finance will continue to produce more great videos about high net worth families and related subjects.

Informed financial planning advisors pass on their wisdom to clients. If a company fails they will naturally look at back at this advice. In this TV show Doug Hall discuses throwing the spotlight on professional advice.

Informed financial planning advisors

For example auditors, we are dealing with a number of cases, where a company has failed, and if the company had not failed there wouldn’t be an issue. But in the company going into administration for example, major creditors had lost and they may say that they have relied for example on audited accounts to make decisions, to lend money or to support the company and in the cold light of day the company having failed, that’s an example where you may go back and look at what the auditor said in earlier years.  So we have situations arising from insolvent companies where the spotlight is thrown onto a whole range of professional advice that they were given before the company failed. Which never would have come under that spotlight if the company hadn’t gone into administration for example.  It's not an area that we get involved in but valuers have seen a big increase in the number of actions against them very simple because the banks relied on valuations of properties for example, and then when the company has gone into administration and the bank has lost out, they then go back and look again at the professional opinions that they relied upon, in making their original lending decisions.

Inside Finance will continue to produce great videos on informed financial planning advisors and similar subjects.

High net worth families may have high profile lives. Research by Smith & Williamson shows that wherever possible they will try resolve conflict within the family, as Frank Akers-Douglas explains in this TV show.

Conflict in high net worth families

I was very surprised that virtually all of the respondents have said ‘We don’t have family disputes’. You only have to read the press to read about some pretty high profile family disputes and if those are in the press imagine all the ones that aren’t. So I think there is more conflict than people probably care to admit to and it can start from something simple or it can be quite a complex and diverse issue. Again it’s trying to get involved, or perhaps I should go just back a step in that again in the survey most families said that where there was a dispute they would want to deal with it internally, i.e. within the family. Again I found that quite a strange answer because by definition if there is a dispute there is a dispute within the family and are they really best equipped to deal with it. So I think the answer is to get somebody, an external trusted advisor involved at an early stage just to try and talk to the party, if it’s a relatively straightforward dispute that should be simple to resolve. The more complex and the more sort of aggravational disputes are much more difficult and there I do think professional, whatever the right word is, counselling, is needed. For more insight in to advice and issues for high net worth families take a look at our briefing on family business.

Business assets that are being bought or sold should only be valuated by a professional. Ignoring this may lead to huge losses or even liability. In this TV show John Rugman discusses getting the right valuation advice.

Getting professional advice for business assets valuations

It’s important to get some professional help. The area is quite technical, there’s a lot of judgement involved and it’s important that the end number is sound, it can be cross checked against experience of valuations and other assets and companies. There’s something around the expertise in this area, because it’s an area where quite often people have a go. So there’s quite a lot of unprofessionalism if you like, people have a go at doing a valuation, anyone can calculate a number, yeah that’s the easy bit. So I think there is something around specialists who do evaluation work all day every day, I think there’s something around the fact that I’ve seen people get it really badly wrong and get sued, so. So there are a variety of different sources from where you can see a valuation. I think the key thing to note is there is usually a lot of money at stake and the discipline itself is quite subjective. So it’s important to go to specialists who are familiar with the circumstance, used to doing valuations, understand the methodologies, so they can reach a conclusion which is right.

Inside Finance will continue to share comments on areas of risk for business and business assets. There are more TV shows to come from John Rugman.

Evidence of financial impact must be shown in court to win a breach of contract case. Doug Hall of Smith & Williamson explains further in this TV show.

Good experts prove financial impact

The adage is something like a good expert may not win you the case but a bad expert can certainly lose you the case. So if you take the sort of work I do where there is some sort of contractual breach, there’s two hurdles broadly to get over before let’s say the claimant gets a good result, firstly it’s to demonstrate liability, that there’s a case to answer. And once you’ve cleared that hurdle it’s pretty pointless if you can’t actually demonstrate that you’ve suffered a loss from it and you can have that loss awarded by the court. So the second limb is quantum, which is what I do. So okay there’s been a breach, liability is established, what’s it worth and therefore what does the claimant get awarded, and similarly from the other side acting for defendants, obviously hopefully to bring down the level of damages that are awarded against them.

Keep an eye on Inside Finance for similar content about financial impact and related issues.

   

Informed financial planning with trustworthy advice means that entrepreneurs can make appropriate, realistic, investments. Michael Pagliari explains in this TV show.

Informed financial planning and bottom lines

Lots of entrepreneurs sort of start with double digit return expectations and in an era of financial repression with interest rates at zero that is ambitious and I think it’s very important that you don’t play along with the client and say ‘okay, fine, let’s do that’, I mean you have to actually explain to him that to get to 10% there’s going to be some significant risks in the portfolio. Personally what I’ve found is that most clients actually have a fairly modest sort of bottom line expected return and it’s really in case they’re in the concept of protecting against inflation and perhaps adding something at the margin. So whilst tens might be ambitious, in this kind of environment five might be a more realistic sort of bottom line target for many of the portfolios that I manage. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer.

If you enjoyed this video about informed financial planning, then why not watch more TV shows on Inside Finance?

The legal sector now has less resources to pursue action for business disputes, as Doug Hall discusses in this TV show.

Legal Sector changes

So basically this whole arena that the commercial world changed overnight caused tension and caused a whole range of drivers for more commercial disputes.  However in more difficult times, parties or potential parties to commercial disputes were wary about committing funds to pursuing them.  So that’s the irony, that there were more disputes but less resources to pursue them and what we saw for a number of years is that cases would start and be settled very early, they’d be front end loaded and it required a different sort of input from forensic accountants for example and for the lawyers, that they would do a much more high level exercise to establish damages for example early on and then go for an early settlement.  I had a few years where I went to more mediations than I went to trials and we had to produce a different sort of report for a mediation to what we produce for a trail, a different purpose.  One really gives a less balanced view, a report, a WP report for a mediation, an experts repot for a trial needs to be very balanced and because an expert has a duty to the court. So the symptom we saw was there was definitely an increase in those sort of disputes for those sorts of reasons, but less of them actually went through towards the trial, which is really to do with cash flow and to do with companies under pressure and litigation was not a priority.  And this is the sort of picture that we had from all the lawyers we know, because we spend quite a lot of time talking to litigators, they’re the people we work with.

If you found this TV show interesting and want to hear more about the legal sector, litigation and similar subjects then browse our videos and follow @InsideFinanceTV on Twitter.

Analysing data to show profit and loss is more complicated than it may first seem, and will be done best by a forensic accountant. Doug Hall of Smith and Williamson says it’s about presenting the right information in court.

Analysing data forensically

Probably the best way of illustrating that is a lot of cases that we get involved in, we get involved at a later stage, so the case has been running for some time. Because parties to litigation tend to focus because they’re guided by the lawyers, firstly on liability and quantum is left as a second stage. And we’re often involved in cases where the quantum has been estimated by the in house accountant, it’s the first time they’ve done it and may seem simple to actually work out that you’ve lost this much in sales and this is the profit on it, but there’s all kinds of nuances and techniques that are used and really what a good forensic accountant should be doing is to anticipate how, if you’re acting for a claimant, to anticipate how it would be defended.  For example you may say that my sales have been growing at 5% a year, year on year out, and if you hadn’t caused by business to fail then I would have got another 5% in growth, but that doesn’t necessarily follow, you need to look behind the headline evidence and to look at it from every angle. There is no single right answer and the key thing in my practice is whatever opinion I come up with I need to be thinking ‘There is a counter argument to this’, because ultimately the decision by the court or the tribunal is based on the balance of probability. There’s been some sort of breach, so therefore the claimant wants to be put back in the position they would have been, but for that breach and of course that position didn’t happen, so it’s what might have been. So the short answer is there’s lots of different ways of analysing the data and there’s lots of different ways of presenting it, there’s no single right answer but an experienced forensic accountant knows what works with a court and what doesn’t. And of course there is various conceptual issues, that you can be technically wrong in how you calculate damages and we’ve seen that many times.

If you enjoyed this video about analysing data, then why not watch more TV shows on Inside Finance?

Business risk should be assessed before making investments or giving investment advice. In this TV show Michael Pagliari discusses building portfolios according to risk tolerance.

No assumptions on business risk

It’s very important because if I make some assumptions about your risk appetite I may go off on a tangent, I may suggest investments that are inappropriate, that are too risky or are not risky enough, so it’s very, very important for me to understand your risk tolerance.  And by risk tolerance I mean what sort of draw-downs you could sustain without it causing you any problems.  So there are technical terms like ‘sharp ratio’ which measure the amount of volatility that you will accept in your underlying portfolio, but as I say I don’t think it’s not just a process about numbers, it’s actually a process about understanding the levels of those draw-downs. One further point I’d make is that a lot of clients have a sort of wealthy clients have an asymmetric risk profile, so in other words they have a greater sensitivity to making losses than to making gains and I think it’s careful that you, it’s very important that you try to build a portfolio that has some asymmetric qualities to it.  In other words when it goes down, you don’t suffer massive draw-downs, even at the expense of missing out on some of the upsides when markets rally. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer. If you are interested in discussions around business risk, please explore more great free content on Inside Finance TV.

Business assets in a service based economy are more about customers, staff and ideas. This can put directors at risk, as Doug Hall discusses in this TV show.

Legal action and business assets

The UK economy has changed as we all know, from largely a manufacturing based to a service based, therefore typically when a company goes into administration, it doesn’t have any assets, it doesn’t have assets that you can kick, plant and machinery, it has intellectual property, it has customer databases, it has customer relationships. Other than that there may be very little that can actually be realised for the benefit of creditors and other stakeholders. However what the company may have is a cause of action against it’s advisors, that may effectively be it’s only asset. We’ve seen actions against directors that we’ve acted on both for the claimant, so creditors who’ve lost out, and also defending actions against directors from companies that have gone into administration, for example where the Inland Revenue, HMRC, has taken action against the directors because they’ve lost out. And we’ve seen examples where the HMRC will actually fund those actions, they’ll provide funding to the liquidators to pursue directors. Again that requires a forensic accountant to look at all the evidence to establish first of all whether the directors are liable, if they have carried out actions before the administration which has caused that loss and secondly if they have what is the value of that loss, how much of the loss that for example the bank or HMRC has suffered has been caused by the actions of the directors. Those situations can be very complex, because in the lead up to an administration company records are not the best that they could be typically, bluntly they can be a mess, so there can be a lot of work to do to piece it all back together and trying to avoid the benefit of hindsight.

Inside Finance TV will continue to follow discussions about business assets and liabilities. Keep an eye out for more from Doug Hall.

Personal planning to resolve personal issues is the common approach by high net worth families. In this TV show Charles Gowlland discusses the frequency & nature of family conflict.

Matters for personal planning

We asked about conflicts in general and the great majority of our respondents said that they were rare or very rare. When asked how they would deal with them when they did occur, the great majority, over 70% said that they would deal with them internally and we took a great amount of comfort from that in that our families felt strong enough to be able to manage these things internally. But equally we need to recognise that there are serious situations where individuals are dealing with severe family or personal problems that can have an impact on the wider family and in those instances outside help is definitely needed, and it may not necessarily be financial services but other forms of help and support and it’s important to identify these and to recognise, when outside help is required.

Inside Finance will continue to share great free content. There will be more videos on personal planning and family business issues.

There are business benefits to doing evaluations before making purchases, and there are also times when evaluations are necessary. In this TV show John Rugman explains why and when businesses need to be evaluated.

Business benefits from proper assessment

Evaluation is required for a number of different circumstances, it might be that you’re selling a business and you want to know what the value of that business is in advance of the process. It might be that you’re wanting to grant some share options or some shares to employees in that business, in which case you’re going to need evaluation for tax purposes. Or it could be that you need to report some fair values in your accounts and need some input into what those might be. So there can be substantial amounts of money at stake. I’m conscious of one client where we assisted them in relation to a potential purchase of that business and we managed to raise the initial offer for that business by 50%, so they achieved a price 50% higher than they would otherwise have achieved.

If you enjoyed this video about the business benefits of evaluations, why not browse more TV Shows on Inside Finance.

Merger and acquisition transactions work better if firms seek advice, according to Giles Murphy who discusses the issue in this TV show.

Merger and acquisition transactions

I think with any sort of transaction what you really need is people who can bring to bear their experiences of advising other firms. So as an organisation we advise Russell Jones and Walker on their transaction with Slater and Gordon, so we’ve got experience of mergers taking place where external capital is involved, and we’ve also advised on the largest domestic merger within the UK market in the last five years. In addition to that, we’re engaged on a regular basis to advise people on various aspects of mergers, and it’s this experience I think is particularly valuable when firms are actually seeking external advice on how best to proceed. I think the principle factors affecting mergers and their success is that they are people businesses. So while there are lots of regulations regarding the SRA, the ICAW and other regulatory bodies – there's also tax to take into account – a lot of it comes back to understanding the individuals involved, what their motivation is and how you can engage them in the process to allay their fears and emphasise the benefits.

Interested in merger and acquisition issues? Watch more from Giles Murphy.

 

Informed financial planning can help people maximise residence tax reliefs, as Chris Springett discusses in this TV show.

Informed financial planning is a team effort

As you would expect most of our clients own and have one if not numerous properties.  As such we get involved very regularly in dealing with property issues that can arise for them, tax on property, given the property market, is obviously a key figure for a lot of clients, and property prices rise and so the tax charge on them also arises.  So it’s again making sure that reliefs are available and claimed as appropriate.  I’ve also co-written a book on the main relief that’s available on capital gains tax, this main residence relief. So again I get involved quite a lot, even if the client isn’t directly mine, in assisting other members of the team and making sure the claims are maximised.

Browse Inside Finance TV for more videos about informed financial planning and property ownership.

In this business growth show Paul Garwood explains how Smith & Williamson's recruitment strategy ensures a high quality service for its clients.

Business growth show: Smith and Williamson

We’ve a very, very fussy recruitment policy. So we’d like to think that the people that we recruit are the best advisors available on the market. We also have a training programme which ensures that individuals are trained to chartered financial planner level. I think it’s fair to say that the majority of our advisors are now trained to chartered financial planner level and that certainly gives me comfort that they have the technical knowledge and understanding to be able to lead clients along the correct path when they’re advising them.

There are more business growth TV shows on Inside Finance.

Financial reporting of pay is complicated. In this TV show Caroline Newsholme explains why it can be a good idea to seek advice.

Seeking advice on financial reporting

Well a lot of companies will have to think quite hard about how they put their pay policies together. And to get a sense for what is and what isn’t going to be accepted in the marketplace and the degree to which you need to call on external resources to help you in that thought process. I think certainly there will be a good deal of one company looking to see what the others are doing as the new legislation takes effect. I think trying to present, for example, director’s remuneration for one year as one single figure will probably prove quite challenging because, as I have said, it can be made up of many different components. The reporting element of it is still going to present some challenges.   Inside Finance TV will continue to bring you expert perspectives on issues like financial reporting.  

Informed financial planning comes from awareness of tax requirements and potential pitfalls of any decisions. In this TV show Michael Pagliari explains why investment managers need to be tax savvy.

Informed financial planning

Taxes are a difficult area and we don’t give, as investment managers we don’t give tax advice, however I think it’s really important that investment managers are tax-aware and understand most of the pitfalls. And that means that if you see you know, being able to spot potential issues and making sure that portfolios are properly structured so that you don’t pay any more tax than is necessary and this is not some sophisticated type of tax planning but it means picking the right types of securities, picking the right types of funds. In my sort of experience doing this job I’ve come across so many incidences where basic errors have been made which have been very expensive to clients in terms of inappropriately-structured tax investments. Investment does involve risk. The value of investments can go down as well as up. This video contains information believed to be reliable but no guarantee is given. See Video for full disclaimer. If you are interested in discussions around informed financial planning, keep watching Inside Finance TV for more great free content.  

Smith & Williamson offer person centred planning advice. In this TV show Chris Springett explains how obtaining residential tax advice could save you millions.

Person centred planning: Property

It’s a fantastic relief that’s available, this main residence relief. It exempts the gain, to the extent that the property was your main residence. So for a London property gains could be millions on it. And we’ve seen this where properties have been sold for, you know, tens, fifteen million more than they were acquired for If you can claim this main residence relief and exempt that gain, then you’re talking, you know, millions of pounds in tax savings and just for making sure that your records are in place, that things are done correctly and you get contemporaneous advice on it really. It’s aimed at individuals, it’s a relief that individuals claim for their residence. So it’s really focusing on that person, what they do and how they go about doing it. So very much geared at anyone who’s got either one or more … more than one properties, so aimed at anyone who’s got more than one properties and/or aimed at someone who is perhaps not using their property that they own for a particular purpose. So for example, they go away to work, if they go travelling for a year, again it’s making sure that the extensions that are available under the legislation are properly claimed.   There are more TV shows about residence and person centred planning on Inside Finance TV.  

Personal planning will involve paying out to different funds in different times of life, in this video Paul Garwood explains why most people start retirement planning when they are mid-career.

Personal planning factors

A lot of the work that we focus on is retirement planning. So we look at individuals who are just starting out on their career. And we maybe establish a pension plan for them or mid-career and at that point perhaps they have, you tend to find that individuals who are mid-career have more funds because as you go through your working life, you have different commitments. First you’ve got to pay off university fees and you’ve got to pay off your mortgage, then you have school fees to pay. So you tend to find that a lot more planning gets done from mid-career to at retirement. We then deal with or help to look after individuals when they get to retirement, helping them with their choices. How do they divest their or their pension plans? How do they take their retirement income? How do they generate that income that they need to look after them in retirement?

If you enjoyed this video about personal planning, why not watch more TV shows on Inside Finance?

 

Tax law for properties can be more complicated than people often think, as Chris Springett suggests in this TV Show.

Why people need tax law advice

A lot of people think it’s really straightforward, which often it is. If you own one property, you live in that property, you sell it, the relief’s available and so you claim the relief and it’s all very straightforward. The problems arise when you get something a little more unusual. So you have two residences, perhaps you have a property in the country and one in the city or you have a period of absence, perhaps you work abroad for a number of years, or finally you use your property as part of your business, so a workshop in there, an office that you’re using exclusively. And again that can cause issues for the relief. So it’s making sure that we manage those from the outset rather than trying to piece together things from the end. The legislation that provides the relief is in itself reasonably straightforward. The problem comes, trying to fit your facts into the legislation itself. That’s where the real difficulty starts and that’s why there’s a vast sway of case law on the matter, on the subject. And it’s navigating that case, although I think a lot of people, (a) perhaps just wouldn’t have the resources to do, and secondly, even then drawing conclusions from it can be very tricky.

If you enjoyed this video about getting advice on residential property tax law, why not watch more TV shows on Inside Finance?

High net worth individuals deal with tax compliance on a day to day basis. In this TV show Chris Springett discusses his work with wealthy clients.

Services for high net worth individuals

I’m an associate director in our private client tax services team, so part of the accountancy function at Smith and Williamson. And I specifically, I deal with high net worth individuals. And it’s really dealing with day-to-day tax issues, be that on a compliance basis, so ensuring that they’re meeting their obligations with HMRC, the UK tax authority, but also wider issues, so making sure that they’re being efficient in using available reliefs. And yeah, being efficient in making use of available reliefs and making all the relevant claims.

Inside Finance will continue to follow issues around tax compliance and high net worth.

 

Personal planning around pensions has become more complicated due to the limits that are now put on contributions, as Paul Garwood discusses in this TV show.

Personal planning for pensions

It can get complicated these days because we now have a regime – a tax regime on pension plans, which is governed by a limit on the amount that you can put in each year, the annual allowance. And it’s limited by the amount that you can accumulate within a pension plan, the lifetime allowance. And these limits or these measures were first introduced in 2006 at which time it was possible to put £215,000 into a pension plan and accumulate a pot of 1.5 million. And that 1.5 million rose over the subsequent four years to 1.8 million. The government soon realised that they were being too generous with tax relief. So we now have a position where the annual allowance has been reduced to, or will be reduced to, 40,000 as of next year. And the lifetime allowance will be reduced to 1.25 million as of next year. Now, that puts people who are getting very close to that allowance in a bit of a complicated position because they may well exceed it, so they have to make decisions on whether they should be further funding their pension plans. We also have a new rule whereby you can protect your pot up to the lifetime allowance that exists at the time the legislation is changed, and it’s currently 1.5 million. So people will have to make decisions regarding whether to adopt the 1.5 million and not pay any further contributions or drop down to the 1.25 million. And doing those calculations and making those decisions can be very, very difficult.

If you found this video interesting and want to hear more about personal planning, please watch more TV shows on Inside Finance TV.

 

Transaction services at Smith & Williamson is headed up by Philip Quigley who explains his role in this TV show.

Transaction services

I head up transaction services, that covers financial due diligence, reporting accountant and valuation services, which is not my particular area.  We have a team based in London and in Bristol and Southampton.  And we generally cover the marketplace in terms of those services.

If you found this video on transaction services interesting why not watch more TV shows on Inside Finance TV?

Professional practice taxation is complex. In this video Pamela Sayers discusses providing tax advice to professional practices and individuals.

Professional practice taxation

I’m primarily a tax partner within our professional practices group, so very much looking after the taxation of those firms – mainly lawyers, a few architects, chartered surveyors and some patented trademark attorney practices as well, which is always a very interesting sector. Not only do I look after the business entity, I look after the individual partners within those firms as well on their personal taxation.

If you found this video about professional practice taxation  interesting why not watch more shows on Inside Finance TV?

Professional practice taxation is what Pamela Sayers specialises in at Smith & Williamson as she explains in this TV show.

Professional practice taxation and personal planning

I’m primarily a tax partner within our professional practices group, so very much looking after the taxation of those firms – mainly lawyers, a few architects, chartered surveyors and some patented trademark attorney practices as well, which is always a very interesting sector. Not only do I look after the business entity, I look after the individual partners within those firms as well on their personal taxation.

If you found this video about professional practice taxation interesting, please browse Inside Finance TV for similar TV shows and more from Pamela Sayers.

Smith & Williamson has a private client tax services sector. In this TV show, Associate Director, Chris Springett discusses this work.

Smith & Williamson's private client focus

Private client focus means that we see a lot of cases in this area. Main residence relief is always dependent on the specific facts, specific circumstances and the availability of the claim is then, flows through from that. Because we’ve got such a large private client practice, we see a lot of different circumstances, looking at one at the minute involving a garage and how that might impact when the garage has been let out. Again, just different fact patterns and the experience that that gives us, puts us in a very strong position to review and to consider how the relief might

There are many more videos from Smith & Williamson experts on Inside Finance TV including, Pamela Sayers and Paul Garwood

Innovative thinking will often come from someone who has a fresh perspective. In this TV show Mike Fosberry discusses his work in family finance.

Innovative thinking from a second pair of eyes

I think it just brings a fresh perspective in terms of another set of eyes on what's going on in the family situation. And coming at it from a totally sort of independent perspective and saying, “These are the things you may want to consider.” Almost on a scale of one to ten, how important are these issues for you? I think we're dependable. We are here to answer the queries when they want to raise them. And we are also innovative when there are new ideas which we think will be appropriate to solving their issues, we will bring them to their attention. And that is keeping on top of what's happening within the legislative framework and trying to identify issues which arise out of that which are going to impact upon them.

If you found this video about innovative thinking and objective financial advice at Smith & Williamson, please browse more TV shows on Inside Finance TV.

Person centred planning for pensions would explore more options for people who have reached their pension cap. Mike Fosberry explores these options in this TV show.

Person centred planning for pensions

If they're maximising their annual pension contributions or they've had to apply for protection, one of the issues with protection is that once you've applied for protection, you can't pay future pension contributions. So it is another issue which we're trying to deal with at the moment because if you're a member of an employer’s pension scheme where under the terms of your contract your employer makes pension contributions on your behalf. You may be in the situation where you're telling the employer, “Don't pay any more pension contributions because I have this protection in place.” The supplementary question is, if you're not paying it in pension contributions, what are you going to do with that money? And are you going to add it to my salary, etc? So we're involved in quite a lot of negotiation between employees and employers in terms of determining what happens in those circumstances. But for people who are saying, “Right, I can't pay pension contributions or I'm very restricted with what I can pay.” The issue then is what should I do? And the concerns there will be is it going to be as tax efficient as a pension contribution? Quite honestly, there's nothing quite as tax efficient as a pension contribution. But you've got other tax advantaged investments such as individual savings accounts where husband and wife can put in almost 23,000 between them into tax advantaged investments, investment profile. And beyond that it rather depends upon the amount of risk that people are prepared to take in terms of where they invest their money. So again, part of our job is guiding them through that process and making sure that they're taking an appropriate level of risk in relation to their affairs and also their attitude to risk.   If you enjoyed this TV show about person centred planning and options for people who have reached their pension cap, please browse more videos and briefings on Inside Finance TV.  

Record keeping is necessary to prove property ownership and residency. Property tax is assessed very carefully by the HMRC, as Chris Springett discusses in this TV show.

Record keeping and property residence

I think a lot of the recent cases have really just shown the importance of maintaining evidence of when you used the property. I mean some of the recent ones, people have tried to make claims when there’s been no electricity connected to it, no gas, no water. And it really does show that HMRC are looking at the specific facts of each case. They’re not just ticking them through. They’re not just allowing arguments, of well it was the only property I owned, that’s insufficient. They really want you to show it is a residence. Coming to an advisor such as Smith & Williamson nice and early allows us to advise you of this, make sure you are doing what you need to do from day one. And when it comes to day of sale you’ll know exactly what position you’re going to be in.   If you found this video about record keeping and property residence interesting, please browse more TV shows on Inside Finance TV

Tax law and the market it applies to is changing so much that it can be easy make a regrettable mistake unless you have a good advisor. In TV show Mike Fosberry discusses dealing with recent changes.

Tax law since the coalition

Essentially there are two big factors. Firstly, the taxation scene there's been a huge number of changes, particularly since the coalition government came to power. And we've seen raft upon raft of tax legislation. We've seen a far more aggressive stance taken by the Inland Revenue and by government in relation to what they perceive is tax avoidance. Tax avoidance at the end of the day is not illegal, tax evasion is. But they've almost been classified in the same way. So, I mean, taxation first of all is a big issue for high net worth families and it's a constantly evolving scene. I think the other aspect to it is that investment markets having been so, how can I put it, irrational, it's been quite a difficult period for anyone managing money and unless you're a professional I think you can really take some very wrong turns. _______________________________________________________________________________ Tax law is just one issue discussed on Inside Finance TV. There are videos clips fr0m dozens of interviewees across varying industries.  

Personal finance planning is important but very complex. In this video Paul Garwood of Smith & Williamson discusses his work as an advisor in personal finance, and why people need help.

Personal finance planning industry

The pension planning issue, the big issues for us at the moment are the changes in legislation, which are constantly affecting our clients and we have to make sure that we’re on top of them. And we’ve seen changes on a very regular basis over the last four or five years which has made planning more and more difficult. I think it’s very nice that people have got a lot of choices at retirement, but with choices comes complexity. But again, individuals need to have advice. And in some ways I suppose that’s good news for us, that people have got choices because they will need help. They will need us to guide them in the right direction and point out things that they won’t have thought of. I think a lot of the people that I see are, because of the nature of what they do, and the nature of the individuals that they are, they’re very thorough with their affairs. But there are always things that we find and point out to everybody, there’s always something that we can help them with that they haven’t thought of. And I think that that will always continue to be the case. ___________________________________________________________________________- If you enjoyed this video about personal finance planning why not watch more TV shows on Inside Finance.

In this business growth show, Phillip Quigley of Smith & Williamson discusses the junior marketplace.

Business growth show - AIM

The ones that come to us are people who are going to AIM, the junior market in the UK which is for growth companies rather than long established companies. And in terms of sectors, that can be tech companies, natural resources companies, and a broad range of activities, probably, I mean the most recent ones I’ve done was a gaming company coming to AIM, raising money at a fairly early stage in its development. But raising money on the public market to get going, that was in the summer, a long and drawn out process. But they got there, rather a lot of cooperation between the client, us, the lawyers and the financial advisor, the nomad.

If you found this business growth TV show interesting why not watch more shows on Inside Finance?

 

A finance advisor will help you understand what you need to do to comply with tax law. In this TV show Smith & Williamson's Chris Springett explains the best process to follow with your advisor.

Tax law for property

One is record keeping, record keeping absolutely vital, making sure that they retain the evidence that they were living at the property, when they were living at the property. Secondly, come to us early. There’s, under the legislation there’s an ability to make an election, if you own two or more properties and you want to decide which one is your main residence for the purpose of the relief, you can make an election. So again, if we can do that, there is a time limit on that, so if we do that earlier then that’s great. And then I suppose finally, when coming to sell the property, again let’s have a chat, see what’s happened, put together a timeline and perhaps there might be something to do at that stage. It’s a lot easier to do it at that stage than after the sale has happened and we’re looking to piece together stuff from perhaps 5/10, even 15 years ago. ______________________________________________________________________________ For more discussion on tax law, keep checking back on Inside Finance TV    

The informed financial planning industry is in a "in a state of flux." In this TV show Paul Garwood explains the changes he has observed.

Informed financial planning: Changes to planning and savings

I think one of the things we’ve had over the last 10 or 15 years is a change in the mentality towards advisers. But I think it’s fair to say that those individuals who have always taken advice with reputable advisors, are now benefiting from the advice that they have taken over the years. They have in some ways been, if you like, in the past, sold savings plans. And my experience is that that has been a very good thing, some of the savings plans that were recommended during the 1980s and early 1990s have grown to significant values since then. I think unfortunately the industry, the financial planning and savings industry is tainted a little by some advisors who perhaps don’t necessarily put their clients’ interest first. They might put their own interest first. And I think that that to a certain extent is has been motivated by the way that individuals were in the past remunerated for selling financial products by commissions. We’ve seen a change in that as of the beginning of this year, there are no more commissions on financial products. Now, that should in theory mean that people are getting objective advice. But on the other side of the coin, unfortunately they will be individuals who won’t be able to afford or won’t see the benefits of paying for advice. Now, I think that could lead to a situation where we don’t have in 20 or 30 years’ time as many people in the position now because they were sold products 20 years ago. So I think we’re in a state of flux and my own view is that whilst it’s a very good thing that all fees should be agreed with clients before we undertake any work for them, I think that there is a certain area of the market where that may not necessarily be of benefit. ________________________________________________________ If you found this video about informed financial planning interesting. Why not browse more TV shows on Inside Finance TV

Business risk can be discovered by looking at finances of the past, present and future, as Philip Quigley explains in this TV show.

Business Risk - Past financials and future projections

There’s two basic elements.  I suppose the first is the review of historic financials. So are the targets numbers believable or are they properly prepared and been properly audited etc? And secondly, going forward what’s the combined business going to do? So we will look at both the historic numbers and the forward projections.  We’ll do that by discussing with you what you want, discussing with the target, how they run their business, and trying to pull together where the risks lie in terms of the business model. ___________________________________________________________ If you found this TV show about business risk interesting, why not browse more interviews and briefings on Inside Finance TV.

High net worth individuals and families have turned to trusted advisers during a period of economic crisis. Mike Fosberry discusses the issue in this TV show.

High net worth losses in uncertain times

I think a lot of high net worth families thought they were clever people in advance of the machinations of 2008 and what happened in terms of the banking crisis. I think a lot of people have now gone back to advisors who perhaps looked after them in the past and said, “Help, we thought we knew what we were doing.” Life has changed pretty dramatically. We need our hands held through what have been some turbulent times.” I think in terms of investment markets, certainly back into sort of 2008/2009 we saw markets fall very dramatically. So people's net wealth disappeared off the table. Obviously markets have recovered since then and certainly sitting here today we seem in a better place than we were. So perhaps it's less than an issue sitting here today but who knows what's around the corner?  But it has a very dramatic impact on net family wealth. ______________________________________________________ If you found this TV show about High net worth and economic crisis, why not browse more interviews and briefings on Inside Finance TV.  

Pensions are a complex part of personal finance planning. Paul Garwood discusses different ways to receive pension payments in this TV show.

Personal planning : Different ways to receive pension funds

When you reach retirement if you’ve got a pension plan and that pension plan is one that you’ve contributed to and has now grown into a fund, you don’t just have to buy an annuity with that fund.

And you tend to find that those with larger funds wouldn’t necessarily want to buy an annuity because it’s quite inflexible.

 Once you’ve purchased an annuity, if you were to pass away very quickly thereafter, the annuity fund or your pension savings go to the annuity provider.

 Furthermore when you purchase an annuity you may have to make a one-off decision regarding spouses’ pensions.

And if your spouse predeceases you, then again you’ve bought something you don’t need.

Also with annuities you may have to consider inflation at outset.  And that’s quite a difficult call to make.

So what a lot of people do who have reasonably sizeable pots is they enter into income drawdown.

Now, income drawdown enables them to dip into their pension plan and take out an income as and when they require it. And depending upon their circumstances, their income within that drawdown plan is capped at a specific maximum or sometimes it’s open-ended, you can actually take out as much or as little as you want from that plan, as and when you want. And the other thing to consider perhaps with less successful people or with people who I think less successful is not the right expression, but people who have got a more tighter budget when they get to retirement, they might want to phase in their tax free cash. Pension plans allow you to release 25% of the fund on retirement and historically a lot of people have used that, perhaps to pay off debt or to buy assets, notably overseas property perhaps. But I think we’re finding now that a lot more people are perhaps using that tax free cash to supplement their income.  So they will phase it in over a period of years rather than taking it all in one go. __________________________________________________ Inside Finance TV are following discussions around personal planning and finance, and are releasing more videos daily.

Life expectancy is rising. Mike Fosberry of Smith & Williamson discusses successfully advising a growing number of retirees.

Financial services respond to higher life expectancy

I think the successes are people obviously living much longer nowadays.

 Longevity I think it one of the biggest issues we face economically from a family life perspective.  It's a huge impact in terms of well an economic perspective in terms of things like care costs, etc.

And how do you deal with longevity?

People are, let me say, they're retiring at 65, they may have a spouse who's three years younger than them on average, that's normally the case.  One of them is likely to be alive in 30 years’ time, actuarially speaking.

 So that's a huge issue because their retirement life may in some cases be longer than their working life.  So do you have enough money when you retire to sustain yourself through what could be a very long retirement?

And bear in mind that the latter stages of the retirement are probably going to be in pretty poor health as well.  So how do you cope with that?  How much money do you need to cope with that?  And so we've got to get people focusing on those issues now.

Government is looking at it.

Obviously we've seen extension of state retirement age. For most people it's going to be 67 or 68, perhaps longer in the future.

That's only part of the solution the government will put to it.  They can't afford to increase the amount of money set aside for things like care bills, we haven't got the money to do it.

So there's going to be a huge incentive or a huge requirement for people to fund for themselves.

And that's part of my job, making sure that they focus on those issues.

 In terms of success, well we have a lot of clients who are well into retirement, in their late 80s, who seem to be surviving on the income and capital that we're able to provide them with in their retirement.

So I'm touching wood when I say this because ultimately peoples’ expenditure patterns, etc differ.

 But in the main I think we've done a pretty good job.  And I think one of the issues there is being in a situation where you're able to provide that long term advice and have the capability of being able to do that as an organisation.

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Life expectancy is just one issue that is changing the ways businesses are thinking and operating. Inside Finance will bring you more perspectives on the big issues in 2014.

Record keeping should be done thoroughly from the start. In this TV show Smith & Willamson's Chris Springett discusses property ownership and case law.

Record keeping and Property

Recent case law in the area it really does highlight just the importance of record keeping.

I mean for us in the profession it’s something that obviously we discuss with clients quite carefully to make sure that all the documents are there.

But recent case law where people haven’t been able to prove that they’re using the property as a residence, that alone, it’s their main residence and so entitled to the relief.

Yeah, the case law has been very much based on the fact that these individuals couldn’t produce the evidence.

So even things such as making sure that you’re retaining gas bills and electricity bills to more useful or even more interesting uses of maximising the relief such as making sure your post from the tax authority goes to that address.

So then they can’t claim that you weren’t living there if that’s where they’re writing to you at.

 And it’s these sort of matters that, you know, if we can get talking to clients early when they perhaps get their second property or where they’re perhaps looking to expand their property ownership, that we can start from day one, rather than trying to prove something after the fact.

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Record keeping is just one of the varied subjects broached during Inside Finance TV's interviews.

Under the Companies Act itself probably not, because we’ve already had the, you know, the big overhaul of company legislation for this generation I hope.

There is as always more law and regulation emanating out of Europe.

At the end of last year the European Commission put out their company law and corporate governance action plan listing areas they wish to review so to the extent which Europe has more to say on all of this, things like the Listing Prospectus Disclosure and Transparency Rules, you know, may have to be changed to comply with the various European directives.

 

I think the key there is actually capturing payments that are made from an offshore source, because sometimes they will have a withholding tax attached to the income itself. And usually you need to get a piece of paper from that jurisdiction’s tax authorities to say that this amount of withholding tax applies to this particular part of income.  And that can usually be offset against your UK liability for example, or possibly even reclaimed.  But you need the paperwork trail to get there. And sometimes that can be quite labour intensive, some people don’t bother.  Some people don’t even know you can offset offshore taxation against UK taxes. So it can be difficult to get hold of this.  But there are mechanisms also for minimising the withholding tax deductions upfront. So for example, we do have a reduced rate of withholding tax that applies for the UK, so visiting sports people and musicians can apply to the Revenue to say, “Please don’t take a flat rate 20% from my income, because I’m going to be receiving ... sorry, incurring all these initial expenses which is going to therefore reduce the amount of profit that’s then assessed to UK income tax.” And therefore we can do a projection of what that level of expenditure might be and then present a sort of a profit and loss account, if you like, to the Revenue to say, “Look, tax the net bit, not the gross.” But it can be quite labour intensive.

Dr Stephanie Hussels, Lecturer in Entrepreneurship, Cranfield University on connecting classrooms with corporates

Cranfield is quite unique in the landscape in the UK.  We only have postgraduate students, we don't have undergraduates so they all have experience who come to the campus.  But more importantly, in terms of revenue, if I talk of Cranfield like a business school, more than 60% is done through teaching executives.

Whether it's corporates, large corporation or it's companies that we predominantly work with which are ambitious owner managers.  The business growth programme which is our flagship programme, and that's been running for 25 years.

So we have now 1200 and more businesses coming through the door and wanting to grow, being challenged and sort of having come out at the other end hopefully improved.

There are some nice examples we had on the programme looking at... if we look at consumer goods such as Go Ape you might have seen climbing in the trees.

Or Hotel Chocolat who came at this point where it was really important to take the business to the next level and the programme has helped them.

Henry Shinners, Partner - Restructuring & Recovery Services, Smith & Williamson on independent review of a business in trouble

Typically it will be what is the business' current financial condition, so that's primarily looking at assets and liabilities.

What is the business' market, where does it stand in that marketplace, is it a leader, is it a pawn in a big game?

Looking at the business' forecast and we often find that businesses that have financial difficulty have inadequate forecasting.

They either don't do forecasting at all or they make a very poor job of it and so if they don't know what the financial position is going to be in the future, they don't know what the pinch points are in terms of their cash, then it's very difficult for them to plan ahead.

So that's one key thing that where we add value is identifying what the future holds for the business in the short and medium and longer term by helping management to come up with some proper forecasts.

So those are the key things, what's the current financial position, what's the future financial position likely to be and if that's a position that's not viable or sustainable, then what recommendations can we make to either steer the business away from the insolvency process or to plan for a process that will maximise the outcome for stakeholders.

Henry Shinners, Partner - Restructuring & Recovery Services, Smith & Williamson on how Acting early can avoid failure

Often, as I said earlier, directors leave it too late, come to us when they have to pay the wages at the end of the week and don't have any money to do so and in those circumstances it's often very difficult for us to do anything other than advise them to commence an insolvency process.

If they come to us earlier, there are ways in which their working capital facilities can be restructured or the business can be restructured so that they can avoid an insolvency process.  But the key thing is for management to spot the problems early, come and seek advice and we can help them.

Jonathan Pryor, Partner - Assurance & Business Services, Smith & Williamson on Four steps to prepare for FRS 102

I think there’s a combination of things.  The first thing you’ve got to do unfortunately is invest some time in getting to understand what FRS 102 is all about.

And it may be the easiest route is to talk to us and we’ll give you the overview.

You then need to do a more forensic examination to go into individual accounts account codes and understand precisely what the repercussions will be.

Then you’ve got to map out in quite some detail, exactly how you’re going to move from where you are at the moment to where you need to be in the future and then finally you’ll need a process that gives you assurance that you’ve picked everything up and that what you’ve done works.

James Keeton, Partner - Assurance & Business Services, Smith & Williamson on how FRS 102 changes everything

The implementation of FRS 102 is probably the largest single change to an accounting framework for the majority of companies in a generation.  Not only that, it will also impact on profitability of businesses, the way their accounts looks and because of the impacts on tax, it means that there will be proper real money effects as well.

The way that tax is accounted for in the UK, is that the tax payments often, under many situations follow the accounting rules.  When the accounting rules change, therefore the amount of tax you have to pay also changes.  This means that when you dot the new FRS 102, you will be paying more or possibly less tax, depending on the effect that it has on your profit and loss.

I think people have heard about it.  They heard it’s coming, lots of people haven’t really understood the impact it’s going to have on their accounts.  And lots of people don’t realise that it’s going to have that real money effect that we were talking about.  It is a huge change and the devil is in the detail.

When you throw out all the current accounting standards and replace them with one, that is going to have a huge effect.

Jonathan Pryor, Partner - Assurance & Business Services, Smith & Williamson on why you should focus on FRS 102 today

The transition date for a December year end is effectively 31st of December 2013.

So to the extent that there are these options that you can deal with earlier, you really need to give now a clear picture before that date.

And that will be quite challenging if you’re starting now.

Dani Glover, Director - Director - Personal Financial Planning, Smith & Williamson on financial planning.

Sometimes it can take a while to work out what somebody has but I think one of the first meetings that you have with the client is really important because you understand just them talking through what they think they have.

It gives you an idea of where they want to go and it gives them an opportunity to work out where they want to go, what's important.

The lovely thing about financial planning, you can't walk up to a cash point and press a button and it tells you what you should do, it's all very personal.

We all have different hopes and aspirations and dates that we think we're going to retire or what we want to do with our money.

So it's wonderful, you get to know your client very well.

Peter Fairchild, Partner - Private Client Tax Services, Smith & Williamson on UK tax laws for sports stars.

UK tax laws for sports stars can pose an issue for sportspeople who generally don’t focus on tax issues. Furthermore many receive the wrong kind of advice as to how the UK tax laws for sports stars apply. According to Peter Fairchild, a Partner specialising in Private Client Tax Services at Smith & Williamson, it is often not until the first investigation from HMRC that sportspeople realise they have a problem.

I think at the young age, I’ve certainly got some young footballers who perhaps think that they can take on the world, shut the lights out, all that sort of stuff, which perhaps we’re all guilty of at, you know, in our late teens, early twenties.

However, once perhaps they’ve had one investigation from HM Revenue & Customs and it hasn’t quite gone as they thought they would because of the arrangements they’ve got into without seeking proper advice upfront, then it’s a bit of a reality check and it’s, “Okay, I do need to talk to you.

I do recognise the value that you bring to the relationship we have.

And I’ve learnt my lesson, I won’t do it again.”

For further information on the impact of UK tax laws for sports stars, watch more of Peter's videos. The key it to get proper advice as to which arrangements are appropriate and not to wait until potential difficulties with HM Revenue & Customs arise. There have been plenty of examples, in football in particular, where footballers as well as clubs have entered into tax arrangements that have been found to be inappropriate by HM Revenue & Customs. In the case of famous footballers, this can result in unnecessary embarrassment and expense later in their careers when an investigation has an unfavorable outcome.

Guy Rigby: "We’ve done it with lots of businesses and we’ve encouraged businesses to come to us and at a very early stage we involve different team members who may not be relevant to them for two, three, four, five years in the future.  So when we take on a new client we often get our corporate finance guys involved, because there might be an exit proposed five years down the track.  We get them involved at the beginning. We follow the principle of beginning at the end, wherever the entrepreneur wants to end it, we try to get that embedded at the outset and we know exactly then how to work backwards to help him achieve his goals."

Frank Akers-Douglas: "I hope they would say that they had utter confidence in the advice and service that we were bringing, that we were proactive in bringing ideas and thoughts to them, and that we were prompt in dealing with matters as they arose.  It comes back to this confidence thing the whole time.  And I think in reality Smith & Williamson against its peer group, the peer group is always going to be able to produce good technical advice and services.  What we feel we bring is that extra element which comes with the client having confidence and security in what we provide."

Ian Luck: "I spend most of my day looking after the employee benefits of small to medium enterprises.  So that’s really anything we think above 50...but around the 250 to 500...in the main, giving advice and guidance to HR departments about the way in which they should be structuring their employee benefits, pensions in the main but also life assurance, permanent health insurance, and the medical benefits that they offer."

Peter Maher: "We have about 120 staff.  We have 60 plus are authorised and registered to give advice.  And that sets us apart from our competitors in that most of our competitors have deregistered their staff because they don’t want their staff giving advice because that assumes risk.  We want to give advice to members.  On top of that we have the back office administration, which is as … slick would be the wrong word but as efficient as you could possibly hope for.  I would say that our team of people with no exceptions are the team I would want.  And that’s what makes building the business so difficult because finding the right calibre of individual to complement what we’ve got is proving difficult."

Peter Maher: "The Oxford English Dictionary describes the word ‘unique’ as one of a kind and this firm is truly unique.  You’ve got an investment bank, or an investment house rather, a private bank, an accountancy firm, a stockbroking firm, a corporate finance house and our bit, which is generically called financial services but my supposed area of expertise is what we call employee benefits and that means that we design, implement and administer benefit packages for the corporate entity for the employer, for his staff.  It’s the attitude that makes us different.  We all know our stuff.  I mean frankly, most people in the business world that we work in either do or should know their stuff.  So it’s attention to detail and the fact that, you know, we keep per Director or Consultant, we have no more than 12 to 15 clients so we can service them and they’re not left hanging or waiting for a week for a response to simple stuff."

Frank Akers-Douglas: "We would like to put to anybody who comes and see us what we are able to provide in terms of service and service areas and the added value that that can bring.  And we certainly feel that the more of the available services we can give that a client uses, the better added value that they get from us.  Having said that we are entirely comfortable and there are plenty of examples of it within our client base where we work with other investment managers, other lawyers, indeed other accountants on occasion.  So it’s really what is best for you.  And we would certainly, I hope, always be true to that maxim, that what we would suggest to you is what we view to be the best for you in the long term."

Frank Akers-Douglas:  "We’re of the view that you may be incredibly wealthy but you need probably more than £400 million to your name and your family’s name to really warrant establishing your own family office.  It’s an incredibly expensive thing to do.  You’ve got to recruit good people, you’ve got all the overheads, you’ve got the infrastructure etc, etc.  So you’ve got to be very substantially wealthy in our view for you to justify establishing your own family office.  Therefore, what we would offer to you is a quasi family office services, bringing to you most of what you might want to have in your own family office but taking away from you the financial pressure of maintaining it.  And also giving a degree of independence so that we can give an independent view on the performance of your investment managers etc, etc, which if you have your own internal family office can become more difficult."

Frank Akers-Douglas: "The most important thing that we need to do or I need to do, when I first meet you is to gain your confidence and vice versa.  And if we can have a relationship of confidence then I’m much better able to give you advice in the structuring of your affairs and in the way in which you may want to pass it on to your family etc.  If we don’t have that confidence then it’s very difficult to get a relationship to really work.  Well I think it’s twofold, it’s personal chemistry.  If you don’t like me then I’m really never going to be able to give you the advice you want because you’re always going to be thinking I don’t like this chap and I don’t like the advice he’s giving on the one hand.  On the other hand it is a confidence that you will tell me what your ideas and plans are in sufficient time for me to be able to say, “Right, well this is what we need to do.”  If I feel you’re holding back on me or not telling me the whole picture again I find it difficult to give you solid advice."

Frank Akers-Douglas:  "Like high net worth individual, it depends, it means different things to different people.  To Americans it largely means the investment management process for a family.  But a European family office model is much broader than that and really brings together all of the financial advisery aspects that you as a family need, whether it be tax, accountancy, investment management etc, financial planning, to your and your family’s affairs.  So what we are seeking to provide is those services to wealthy individuals who either choose not to have their own family office and there are good reasons not to, or frankly, can’t afford to establish their own family office.  But nevertheless are sufficiently wealthy to need a cohesive and comprehensive suite of advisery services."

Frank Akers-Douglas: "I think there are classically two types of wealthy person.  One is the sort of old fashioned landed estate type families where inherited wealth has been passed through several generations and then they need help in being able to successfully pass on their wealth to future generations.  So that’s where the planning aspects come in.  Alternatively you’ve got people who have made their wealth in that first generation either through selling a business or whatever.  And they’re again, they may have been very successful at the business they’re running, but have never really had substantial wealth in their own name and need help in structuring that and putting it together for their family and again starting the sort of the generational thing."

Guy Rigby: "We’re going to be looking at your interaction with your own business.  So whilst we’re not perhaps working for the business, although we’d like to do that as well, we’ll be working for the entrepreneur himself, so we’ll be making sure that he’s as efficient as he can be from a financial perspective.  That means his tax structuring. That means if he’s going to sell the business that he’ll qualify for entrepreneurs relief. We’ll look down on the business from a sort of helicopter view from his ownership interest, if you like.  So we help him maximise the value of the business.  We could help him raise money for the business.  We could help him dispose of the business.  But we can also look after him, his family, his personal tax, his financial planning, his investments and the whole nine yards really for a private client.  So Smith & Williamson is all about looking after people who own things.  In this case, it’s someone who owns a business, an entrepreneur."

Guy Rigby: "My Personal FD, well it’s our new service for busy entrepreneurs, time poor executives etc, who can’t really find the time to look after their own affairs or might actually have to go to lots of different places to do that.  So they might have a tax adviser, a financial planner, an investment manager.  And if you’ve got that kind of structure often things will fall down the cracks. So Smith & Williamson is probably the only accountancy firm in the UK that actually is an accountancy firm and a bank with an investment management arm and a very large IFA.  So by ... we just piece it all together, we call it My Personal FD so the idea is that you as an individual will get an allocated person to look after you as your personal FD who will give access to all of the firm’s services, very unusual.  Well there’s no compunction to use My Personal FD for all of the services that it offers.  So if you’ve got your favourite tax adviser we can still do the financial planning and the investment management.  Alternatively, if you’ve got your investment manager we can do your tax.  So what we’re saying is, we can provide all of these services seamlessly through Smith & Williamson if you want to use them that way.  So we’re not forcing you to change other favourite advisers."

Guy Rigby: "Well you can get by with just building up a business often, but what will happen is that you will find that you made the wrong turning at some point.  What we do is we find that a lot of businesses that come to us two, three years after they’ve been created, they haven’t really taken proper advice at the outset, and we find that they’ve made ... they’ve fallen into bad traps, if you like.  And we have to kind of unwind them and start again.  And that be a very painful exercise, if you’ve, you know, if you’ve set off on the wrong foot.  The reason that we think we are suitable for entrepreneurs is because of this personal bit, so we care about the entrepreneur.  But what we’re also trying to do is to make sure that they don’t hit those bad traps early on.  So what we always say to people is, “we’re a big firm, we have all of these skills and capabilities so that should give you enormous peace of mind.  We’re not going to wheel all of those services in to your first meeting and start charging you for them.  But you know that when you want to put in a share option scheme to incentivise your employees, we can do it.  You know that if you want to take your business international we can advise on it. We know that if you want to raise finance you can rely on us to help.”  So all of those things are really, really useful even though they might not be needed on day one."

Guy Rigby: "We think that there’s a gap in the market for entrepreneurs these days. You know, we’re the eighth largest accountancy firm in the UK and we feel that all of those above us and indeed around us aren’t giving this community the attention it needs.  We want to be the all round adviser to entrepreneurs, helping them achieve their goals, you know, getting their ball across whichever line they want to get it across. Okay.  So most accountancy firms do audits and tax.  What they don’t really do is get underneath the skin of the business.  What we try to do is to work for the entrepreneur and then the business.  So effectively what we’re trying to do is to help the entrepreneur get his particular ball across the line, whatever that may be.  It might be to grow a 10 million pound turnover business, it might be to pass it on to his family, it might be to sell it, whatever they want, our job is to help them achieve that.  That’s unusual, you know, it goes beyond doing an audit and a tax computation."

Guy Rigby: "We believe they’re pretty good.  We hire them.  We interview them. They’re all professionals.  They’re experts at what they do.  And we choose the lead adviser that’s most appropriate for the client.  So if the client’s main requirement is tax, looking at their personal tax affairs or their family’s personal tax affairs, then our lead adviser would be a qualified clever, hopefully, tax representative from our private client tax team.  And he would then be responsible under My Personal FD for making sure that the other services were available.  Those other services are then delivered by qualified professionals in the other areas, financial planning, investment management, corporate finance, whatever it may be."

Mark Webb: "There’s quite often situations for companies where they are being looked at to be acquired or to go and acquire other entities.  Now, if those companies get their advisers involved early, what it can mean is that the adviser can ensure that you get tax relief for acquisitions.  But equally then if you’ve got people that you’d like to reward within the business if you’re disposing then we can work to make sure that those individuals get some reward on exit. But also that’s dealt with as tax efficiently as we can, simple rule is, the earlier you advise your adviser, that they can ... that a deal is on the horizon or an acquisition is on the horizon the better the chance for structuring something that is tax efficient and useful for everybody’s purposes."

Mark Webb: "The UK tax code has multiplied in recent years.  The tax code is now in excess of 13,000 pages.  When I started it was in pretty much a couple of books.  I now have about eight books next to me.  It’s extremely complicated and it’s very difficult to process yourself through all of the rules.  That said a good adviser should be helping companies to actually go through those rules and make sure that what that company is entitled to, the reliefs it should be having, it is claiming.  And equally that where it should be paying tax it is paying tax because the one area where the Revenue are becoming very fierce is on if you do not do things properly, penalties.  Usually tax laws move so quickly that there’ll quite often be an area or something within a corporate affairs or an individual affairs where there’s probably some uncertainty.  And it’s quite useful to get a second view to actually determine whether there’s opportunity to do something different, or indeed if there’s risk to an individual or the company."  

Mark Webb: "Generally we do two things.  When you take on a new engagement, you give people some comfort that their previous tax has been dealt with correctly, within the confines of the law.  And that’s always the starting point.  Then we’re looking to try and maximise relief as far as we can.  And usually by pushing hard enough and looking at things with a fresh pair of eyes, there’ll be something you can find that will help a client.  And generally that is to help them with either some tax cash flow or an actual real saving.  Recently I’ve taken on a client and we’ve identified within their portfolio of companies around about £800,000 to £900,000 of allowances, which will give them about £25,000 to £30,000 tax relief per annum for the next few years."

Mark Webb: "I basically look after companies so that within the law they pay the right amount of tax.  And so what I do is make sure that they’re applying every applicable relief they can.  I look at everything on the margins to help them make sure they’re looking after their function.  And that way they get the most cash flow in their business so they don’t worry about the tax side, they’re worrying about running their businesses.  We will look within the confines of the law always.  That will be the starting point and then we’ll look at the commercial organisation, what it actually does.  And therefore within that what tax relief that supports.  A lot of companies or a lot of the presses around, there have been very large planning ideas.  That’s not what we do. What we do is make sure that all of the small parts that are very, very straightforward are all maximised and therefore they all add up to a good saving for companies.  So it’s making sure the detail is looked after."

Mark Webb: "If people spoke to my client base to get an idea of how I approach things, I think they would say that I am extremely proactive and that I give an incredibly high level of service.  My view is that a client is buying your expertise and your understanding of the marketplace, your commercial approach.  And that critically in that, when you do something for one client, which is something that has actually helped that client, that on a no names basis you talk to your other clients to say, “is this something that could be useful for you?”  I think that’s key to being a good adviser."

Mark Webb: "If someone feels they’re not getting enough from their current advisers they should just speak to someone else.  Start a dialogue, everybody is very, very keen in organisations to have a conversation with people, I certainly am, to find out what people ... is happening in the market for those individuals, what that individual is doing in their business.  And consequently what people are planning for that individual or that business.  Once you start to have that dialogue, quite often you will identify some areas where there might be opportunity for there to be either a better capital structure, a better reward structure, some form of tax relief. And when you start to join all these pieces together, all this menu of ideas, the actual global change to the business could be quite profound."

Business is no longer linear and you have to adapt your thinking to suit. Julie Meyer explains further in this TV show.

Business strategy models - Networks

If you are still, in any way shape or form thinking linear or hierarchical, you need to update your thinking to a network orientation. That's much more important than just the Facebook as a phenomena or LinkedIn as a phenomena. Everything has moved to a world of interdependency and multiple dependencies in that.