Informed financial planning is essential when it comes to investments. Investment managers should be well informed of tax rules so that no errors are made. Michael Pagliari explains further in this business TV show.

Informed financial planning and investments

There are different categories of planning, so for resident domicile UK clients the principles are pretty well-established, there are certain types of securities that should and can sit perfectly well in portfolios and there are other types of securities that shouldn’t. So, to give an example, there are some tax efficiencies through using fixed income securities which trade at which trade at discounts, there’s advantages in using OECs but there are some other instruments which effectively take a capital gains tax charge and transform it into an income tax charge at, you know, a much higher rate. And then if you move on to the sort of res non-dom world, that’s a very sort of … a much more complicated area with much more potential for error. So for example it’s very important that income and capital are separated, managed in separate buckets; if those are mixed there can be very severe tax consequences. So it’s really basic housekeeping-type issues but extremely important that the investment manager has a good handle on them. 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.

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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.

 

Attitude to risk may depend on the age of the client or the business. Younger people lean more towards risk, as Michael Pagliari explains in this TV show.

The young person's attitude to risk

I think that goes back to sort of life cycle questions.  As clients are younger and are looking to build assets they may well have a higher disposition towards risk and that might lead them towards more growth-type portfolios.  As clients advance through that life cycle and perhaps sell a business or begin to retire then it’s really a question about draw-downs and inheritance tax planning and so on, and portfolios tend to de-risk to some extent.  So as you grow through that life cycle portfolios do tend to sort of de-risk over time.

Inside Finance will continue to follow discussion on attitudes to risk and we have plenty more videos featuring experts from our channel partner Smith & Williamson.

There are many business benefits of the UK environment as Stephen Drew of Smith & Williamson discusses in this TV show.

UK's business benefits

I think there are a variety of reasons as to why people would choose the UK as a good place to invest. Certainly we have some interesting sectors that appeal to a large number of investors from outside of the UK, and in particular we’re seeing a lot of activity in life sciences, the creative industries around professional practices and professional services and in the technology space. So they’re sectors that are seen as high growth and there are foreign investors that want a piece of that action and therefore they have a certain amount of appeal to see how they can get involved with those sectors. When combined with a business environment that’s reasonably friendly and it’s quite easy to get involved with those businesses, to make the investment programmes, and to start fresh businesses and that makes it an easier investment decision compared to other territories. The UK government has been very helpful in trying to make the taxation environment business-friendly and therefore there are attractions again for encouraging foreign investors to actually put cash into the UK economy, which will help the general improvement in what we’re looking for within the UK as well.

If you are interested in discussion around UK business benefits and investment in different environment, please browse more TV shows on Inside Finance.

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.

   

Government legislation is dealing with tax leakage between corporate partners according to Pamela Sayers, who explains further in this TV show.

Government legislation: Limited liability partnerships

It’s particularly important for professional partnerships and limited liability partnerships because probably for the first time really since the introduction of LLPs in 2000 we’ve seen more changes in partnership taxation in the last 16 years and the Revenue are concerned on two main areas: one being whether there is any disguising of remuneration and avoidance of employers’ national insurance on partners’ salary, so to speak; and also the allocation of profits to corporate partners, because some LLPs and indeed partnerships have a mix of both individual partners and corporate partners. And really on the latter, where there is a corporate partner which is perhaps, in owned, that corporate partner is owned by one of the individual partners, there is a risk that some profits will be diverted through to the corporate partner for corporate partners will be taxed at lower rates than individuals, say 20% as opposed to 47% and the Revenue have been very concerned that there is a tax leakage there.

If you are interested in finding out more about the effects of changing government legislation, browse more TV show on Inside Finance.