Business

Peter McGahan: Best type of life insurance

07-04-2010

WHICH is the best type of life insurance to cover my family in the event of my death?

There are two basic types of life insurance: Term assurance and whole of life. Term assurance allows you to protect yourself for a set period of time. After that, the plan stops and you no longer have any cover.

This plan is normally the cheapest as there is a clearly defined period of cover as opposed to an open ended period of cover.

There are a number of bolt-ons you could consider. For example you could have a renewable or convertible option on your term assurance life cover which allows you to renew the plan for another term without the need for medical evidence or the ability to convert it to another more permanent plan.

The risk of starting a plan without such bolt-ons is that your health might deteriorate and when the initial plan ceases you may be uninsurable.

Another bolt on is the benefit of critical illness cover. Its quite expensive but is pretty useful. This option allows for an amount to be paid out on diagnosis of a range of conditions rather than just on death. The conditions include a heart attack, cancer, coma, stroke, for example.

It is important to fully check your plan to be sure you are definitely insured as some companies are better than others. For example if you had a heart attack you might believe you would be able to claim against the critical illness plan. However some companies have restrictive guidelines as to what determines a ‘heart attack’.

Whilst one organisation may pay out on diagnosis by your doctor that you have had a heart attack, others can be quite different. For example one company needs evidence of chest pains to pay out, and another needs evidence that there is irreversible damage to the heart.

When you least need the stress, you do not want to be having the above conversation so be sure you check now if you are fully covered.

Whole of life is the other form of life cover.

This is a more permanent type of plan where you will have the cover as long as you are paying the premiums. This plan can run forever.

Premiums are more expensive than term assurance as effectively the company is guaranteeing to be paying out the sum assured (death benefit) as long as you pay the premiums.

This plan has an investment content included where a proportion of the premium is invested to produce a return if you wished to encash it at a later date.

It is often therefore sold as having free life insurance where you are receiving the life cover and the savings element gives you your money back. This is misleading. If you bought a straight forward term assurance policy and saved the difference between that and a whole of life plan by placing that in an ISA you would be better off as an ISA is tax free and a whole of life plan pays tax as it grows.

Be careful of another cute trick used with both the above schemes to keep your premiums down initially but you may find your self paying through the nose later.

You can ask for a guaranteed or reviewable plan. With the reviewable plan this allows the company to change your premium at any point in the future and if their claims history rises the costs could soar. A guaranteed plan ensures the premiums stay the same.

If you have taken out a life insurance plan ask your independent financial adviser to check every couple of years if your plan is still the most cost effective, as premiums are very competitive, rates change daily and you can save quite a bit of money.

If you would like your life insurance policy reviewed call Peter on 0845 230 9876, e-mail info@wwfp.net

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

The attraction that was saved from recession

01-04-2010

LEMUR Waterparks’ Jackie Richmond describes summer 2009 as a “hard slog”, but is anticipating good things for this coming season, in which support from Torbay’s tourism organisations has been invaluable.

She and husband Alan took over running the resort’s Quaywest Water Park on Goodrington Sands, after it was handed back by former operator Freetime Leisure Management to Torbay Council at the end of summer 2008.

“We signed the lease on May 8 and opened on June 9,” said Mrs Richmond. “It was a late start, we missed all the promotional publications and had a huge job to do. We invested £200,000 and a lot of time and effort on tidying up the park and reinstating the kitchens and beach shop.”

The Richmonds are also hoping to secure Carbon Trust loan support for a £60,000 boiler this year – after taking over the park to find the existing one broken and having to lease one for the season.

The Richmonds – who have also owned a water park in Poole for 20 years – faced new challenges in Torbay. Unlike their Dorset waterpark – which is 75 per cent under cover – Quaywest is open to the elements.

“The huge difference for us when you compare the two, is the additional spend in Devon,” said Mrs Richmond. “The large restaurant on site, beach shop and cafe makes a massive difference.”

Even if rain stops play, a significant proportion of turnover comes from this additional consumer spend. And, as the Richmonds discovered, local businesses play a major part in generating footfall.

“When we took over, we were quickly approached by people asking ‘where’s the discounts vouchers?’ It’s not something we had really experienced in Dorset.”

Torbay’s proactive hospitality and leisure sector actively sought offers from the park to pass on to their own customers, a two-way support system that has benefited Quaywest.

“We’ve had a lot of support from the English Riviera Tourism Partnership,” said Mrs Richmond. “And once we’d agreed the lease, Torbay Council really bent over backwards to try and help us in terms of publicity.”

Mrs Richmond added that recession had been a boon for the business in terms of recruitment. “We had more than 400 applications for 100 jobs, on the back of a single mention in the newspapers,” she said. “We were very pleasantly surprised by the response we got and the support of our staff was fantastic. They worked for the business as if it were their own.

“We are really looking forward to this season. There’s a lot going on in Torbay in terms of its new tourism strategy and its an exciting time.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Luggage business strides out for rapid growth

01-04-2010

By Liz Parks

A LUGGAGE transfer business for walkers on the South West Coastal Footpath is set for growth with ambitious plans to turn it into a global franchise.

Ben Charity, managing director of Helston-based Luggage Transfers, bought a bed and breakfast on the Lizard 10 years ago.

Over time, he became aware that more and more walkers were willing to pay a supplement to have their bags transported to where they were staying the next evening.

“I was one of about 20 different accommodation providers on the Lizard who were all delivering bags for walkers. I found that I was driving two or three bags in the same direction and I thought ‘if I’m doing this so are other accommodation providers’,” he said.

On average, he found that walkers were paying around £25 to have their bags delivered – with rates on some stretches of the path going up to £60.

Mr Charity set up the business last February with friend and work colleague Mike Kearan and Mike’s mother, Sue McKnight.

After putting together a leaflet to accommodation providers on the path, the team was joined by another friend, web designer Graham Reader.

Within three months, the business had taken off and was carrying 1,000 bags a month.

Originally, the business was run out of the dining room of Mr Charity’s home but, after securing private investor funding, it moved into an office in Helston, in October.

The business went limited last month and has recruited around 40 drivers, working on a self-employed basis because of the seasonal nature of the business.

With each of the drivers using their own cars, the start up costs have been minimal.

And, unlike, many other tourism businesses, Mr Charity said it was not reliant on good weather.

“The weather doesn’t affect walkers, they don’t mind the odd shower and because they’re walking, they don’t want it to be too hot,” he said.

Charging around £12 for two bags, the firm’s website, www.luggagetransfers.co.uk, allows walkers to book luggage transfers for the duration of their walk.

Earlier this month, the business expanded to include the 630-mile length of the coast path with each section of the route allocated its own stretch manager and a team of drivers. It also ferries bags between accommodation on Dartmoor and the Two Moors Way.

Mr Charity continues to run his bed and breakfast business with his wife, Jo. The couple also run a shop and a self-catering holiday cottage business.

He is currently seeking spin out opportunities from the luggage transfer business and is keen to expand the business via a franchise arrangement to other parts of the UK and the world.

“It’s our pricing policy that has made the difference with the business,” he said. “We don’t want to expand too soon. We’re making sure we know what’s next and we have to make sure that the core product is reliable and develop key partnerships before we roll it out.”

Mr Charity has already identified popular walking routes in the south of France and Italy as possible targets for overseas operations.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Publisher marks 50 years of how-to’s

01-04-2010

A PUBLISHING firm launched by two railway enthusiasts marks its 50th anniversary today.

David & Charles was established by David St John Thomas and Charles Hadfield in 1960, in order to publish their own non-fiction work.

Both members of the Railway & Canal Historical Society, their Devon Flood Story – a booklet charting the havoc wreaked when the River Exe burst its banks – was written, illustrated, printed and published in just a few days.

The firm is now owned by US based F+W Media, which publishes books and magazines based around niche interests, leisure pursuits and hobbies.

Over the decades it has published books addressing a bewildering array of topics for the amateur enthusiast, from bestsellers on cross stitch to the perils of growing wonky vegetables.

From a two-man operation based in a garden shed to a firm with 70 employees, it has also diversified into digital publishing, selling books, puzzles and other products direct to the consumer via two dedicated websites.

They evolved from the former Readers’ Union book clubs, acquired by D&C in 1971.

Parsimony was key to D&C’s success in the early years and returned books would go through a ‘refurbishment’ process, undertaken by six employees.

Rubber hammers would be used to flatten bent book covers, with pages sandpapered or rubbed with erasers to remove finger marks.

If the book jacket wasn’t marked or damaged, it would be sprayed with polish and put back into stock – complete with mark up, if cover prices had increased in the meantime.

This year, D&C has published a tie-in book to accompany the Monty Don BBC2 TV series Mastercrafts.

It has a working relationship partnership with the Met Office, with its latest books, The Met Office Book of the British Weather and The Pocket Cloud Book published in this year.

A book to coincide with The International Garden Photographer of the Year competition, will launch at Kew Gardens in May.

The firm’s first major best selling title – still in print today – was Kings & Queens by the late Westcountry author Eric Delderfield.

First published in 1966, it has sold more than 800,000 copies.

Over the past five decades, D&C published hundreds of books reflecting the interests and occasional eccentricities of both its authors and readers.

Titles have included Great Boiler Explosions, Couplings To The Kyber, Making it in Leather and If your Rhurbarb is Backwards, Bend it Forwards.

US domestic goddess Martha Stewart’s Encyclopedia of Crafts is among the titles on its current bestseller list, while the late Jo Verso sparked huge interest in needlecraft, with her book Picture it in Cross Stitch selling hundreds of thousands of copies in the 1990s.

Charles Hadfield resigned from the company in 1964, but continued to write until his death in 1996.

Mr St John Thomas sold D&C to Reader’s Digest in 1990 and a management buyout followed in 1997. It was acquired by F+W in 2000.

The firm now also distribute books in the UK on behalf of American publisher Dover and also Readers Digest.

The latter’s UK arm is currently in administration, but has attracted an estimated 100 suitors and D&C’s managing director James Woollam expects a “positive outcome”.

“Book sales are still resilient,” added Mr Woollam, “and we are generating more sales than ever through Amazon.

“This year, we will be distributing around 600 titles, of which 72 are David & Charles publications.”

D&C’s parent company’s US base also enables the Newton Abbot publisher to link to technologies – including Apple iPad applications – pioneered in the States, ahead of UK firms.

Staff will celebrate the firm’s anniversary with a works outing to a “surprise” location.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Businesses ‘need better understanding of CUC’

01-04-2010

By Liz Parks

THE Combined Universities in Cornwall initiative to grow higher education in Cornwall is generally well-known and understood but needs to do more to engage with business, according to new research.

A study by the University of Plymouth’s Socio-economic Research and Intelligence Observatory surveyed businesses, community groups and other stakeholders to see how much they understood CUC’s role and the way it functioned.

CUC – originally an Objective One initiative – is a partnership of six universities and colleges with the aim of giving students the opportunity to study in Cornwall and to use higher education to boost the Cornish economy.

The idea of the report is to “get a proper evidence base” to evaluate how CUC is performing.

Some research – not necessarily a full report – is likely to be commissioned every two years.

Researchers interviewed 92 people on the street in St Austell and Truro, surveyed 100 businesses online and interviewed 24 business support organisations and key decision makers by phone.

General awareness of CUC was relatively high – 52.2 per cent of people on the street having heard of it, with 65 per cent of businesses, nearly all of the business support organisations and all of the key decision makers aware of CUC.

But there was some confusion around CUC’s role and the relationship with its partner colleges, with some respondents under the impression that CUC was a provider of higher education services rather than acting as an umbrella organisation.

Just over 70 per cent of businesses said they would consider using services from CUC partner colleges or universities in the future, with business workshops emerging as the service most respondents would be likely to use.

CUC director Dr Sue Brownlow said: “The research is trying to find out what people know about higher education in Cornwall and do they think it’s a good thing. In both cases, the results have taken me by surprise by how good they were.”

Dr Brownlow said she wasn’t concerned about aspects of the report highlighting confusion around CUC’s exact role and the relationship it has with partner colleges.

“It’s clear from the data that not every business understands the difference between CUC and the six partner institutions,” she said.

“What I’m not sure about is whether that matters.”

Dr Brownlow cited the comparison of well-known brands that are owned by large parent companies where the brand itself is well-known but the parent is not.

“I don’t think it’s necessarily a cause for concern if the partnership delivery is done by the institutions – people do know about the institutions,” she said.

She added the feedback from firm about CUC’s exact role was something that would be addressed.

“It has clearly given us messages about what we need to work on,” Dr Brownlow said. “We know we need to do more in relation to the work with businesses and key stakeholders have confirmed some of the details and we have now set up an advisory forum.”

Businesses indicated they had only a general understanding of services available at higher education institutions in Cornwall, meaning only a small proportion had used a partner’s services.

Dr Brownlow said CUC was set up under Objective One funding with the aim of expanding the level of undergraduate teaching in the Duchy, with a business focus a relatively recent goal. She said that to address this, an advisory forum had been set up comprising of a mixture of public and private sector representatives.

CUC was also now working more closely with Business Link and other business support organisations. “If we are still getting that in three to four years, it will be a problem,” she added.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Marine energy park will support 190 jobs

01-04-2010

By Liz Parks

A MARINE energy business park is being planned to capitalise on the pioneering Wave Hub device off the coast of Hayle.

The Government yesterday announced it was contributing £5 million to infrastructure costs of £12.8 million to allow the scheme to go ahead.

The development is part of the South West’s status as the UK’s first Low Carbon Economic Area and will help the region harness the potential economic benefits of the Wave Hub scheme – which is creating the world’s largest test site for marine energy devices 10 miles off Hayle.

The infrastructure project includes a bridge, construction of a new road, flood protection works and restoration of harbour walls on North Quay, including the creation of a promenade.

The Departments for Business, Innovation and Skills said it would be contributing £5 million from a £19.5 million fund that was earmarked for investment in marine energy projects when the Low Carbon Economic Area status was announced last summer. The funding has been secured by the South West Regional Development Agency.

The infrastructure works will enable access to the site of the proposed business park, next to the old power station at Hayle Towans. The park is expected to support 190 jobs when completed.

The proposed business park would capitalise on Hayle’s status as the home of Wave Hub by attracting related industries to the area and acting as a focus for a cluster of businesses based around marine energy.

This could include marine renewables operations planning, maintenance and inspections, marine and environmental research, sub-sea and diver operations support and an education centre.

The infrastructure work is due to start in the autumn and is likely to take a year to complete. Preparatory work for the marine energy park is expected to start in early 2012.

The £5 million depends on similar investment being made by Cornwall Council and support from the European Regional Development Fund Convergence programme. Council financial support is likely to be confirmed in May, with the whole funding package finalised in June.

Business Minister Ian Lucas said: “The UK has huge potential to lead in marine energy – not just the natural resources but the industrial and technology base and the R&D and skilled workforce.

“The grant we’re announcing today is part of the Government’s investment in the South West as a leading area for marine renewable energy.”

Claire Gibson, director of sustainable resources at the SWRDA, said: “This is another significant step in establishing the South West as a leader in marine renewables.

“With Wave Hub now under construction, the business park will be an important facility that will support the nascent marine renewables industry.

“We’ve worked extremely hard behind the scenes to make the case to Government for this investment so we are delighted by today’s announcement.”

Carolyn Rule, Cornwall Council’s cabinet member for economy and regeneration, said: “Hayle is a priority area for regeneration which can support delivery of our economic vision for the county.

“Investment towards the realisation of a marine renewables business park will help ensure that Hayle maximises the economic benefits of the Wave Hub and its potential to act as a catalyst for new skills and jobs in the low carbon economy.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Mole Control goes global

01-04-2010

A COMPUTER game designed and developed in Plymouth has been signed to a US games portal with 25 million users worldwide.

Mole Control, created by Tamar Science Park games studio Remode, is a colourful animated puzzle game, which was signed by Leamington Spa’s Blitz Games Studios in November.

The game has already been translated into five languages since its launch and worldwide release by Blitz, via PC digital distribution portals, in January. The portals are online stores where browsers pay to download games onto their computer.

Next month, the game will be launched on Steam, the world’s biggest gaming portal, which is owned by US firm Valve.

“Getting on Steam is very difficult, as they are so big and picky about the games they accept, so it is a really big step for any game developer,” said Remode managing director Ella Romanos.

So far, the game has had impressive industry reviews, with gamers describing it as “absolutely top notch” and an “addictive, attractive puzzle game”.

Web gaming site ironhammers.co.uk described it as “cute and fun”, recommending Mole Control as “a game anyone can enjoy”.

Remode – which began as a Plymouth university graduate start up in 2007 and now employs five staff and four freelancers – was a finalist at the National Council of Work Experience in London last week.

Its year-long undergraduate placement scheme – launched in September – was nominated for the award by Marius Varga, a University of Plymouth student working for Remode under the scheme.

Mr Varga is studying digital art and technology, the same subject read by Remode’s founding directors.

“We are already looking for another placement student to start in September, when Marius goes back to university,” added Ms Romanos.

“We are also taking applications from school kids for a work experience week in the autumn.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

McAlpine wins £48m university contract

01-04-2010

By Liz Parks

THE contract to build the University of Exeter’s £48 million Forum Project has been awarded to the international construction company, Sir Robert McAlpine.

The firm’s staff moved on site this week to begin work on the scheme, which will create a landmark Student Services Centre, refurbished library and lecture theatre alongside new retail and catering facilities.

It is the seventh major building project to get under way on the university’s Streatham Campus, which the university says will make it the largest construction site in the South West.

The total value of projects under development over the next two years is in excess of £275 million.

The Forum Project will also see a new university reception and landscaped piazza to give more of a focus to the campus.

These elements will be the first part of the project to be completed in the spring of 2011 with the main building following in December next year.

It has been designed by London-based Wilkinson Eyre Architects and managed by construction consultants Davis Langdon.

David Allen, the university’s registrar and deputy chief executive, said: “We are delighted to see Sir Robert McAlpine arrive on campus to begin work.

“A huge amount of preparation has already taken place to get us to this point and we look forward to rapid progress.

“The Forum will provide the university with world class facilities and solve a 50-year-old flaw in the original design of the campus.

“The campus in its present form is largely a 1960s creation and very fine it is too; but it always lacked an obvious focal point.

“The Forum solves this problem once and for all by providing the campus with a new heart.”

The investment plan will cap a decade of extraordinary development for the University of Exeter.

Since 2002 turnover has risen by 250 per cent from £96 million to £241 million. During this time, student numbers have increased by nearly 50 per cent, driven in part by large increases in international and postgraduate students.

The university has risen up the league tables to its highest ever position of ninth in The Times Good University Guide.

It is also ranked in the top five universities in the UK for student satisfaction.

Despite the recession and cutbacks in public spending, the university has remained profitable and able to progress with its investment plans, creating and safeguarding hundreds of jobs in the process.

Having seven major construction projects under way at once has required intensive planning to ensure the normal work of teaching and research can continue.

The university is already well on the way to completing some projects.

Work has started on new laboratories and aquaria for biosciences, an international students centre is due to be completed by December and a major extension to the Business School by February 2011.

A total of 2,600 new student bedrooms will start to come on stream over the next two years to reduce pressure on the private rented housing sector in Exeter.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: 120p a litre, 150p or normality?

30-03-2010

PETROL prices are very much the talking point as we speak but what is behind it? Talk of 120p per litre was quickly extinguished as fuel is already selling on some forecourts at that price.

Prepare for it but if the logic we are being given to support 120p is true, 150p is just a few months away. Do I believe that will happen? Very probably unless all the relevant authorities take the correct and responsible action.

You'll remember that fuel prices were attributed in 2008 to the soaring oil price which we correctly attributed to speculative traders. In the five years from 2003 to 2008, these traders had purchased more than twenty times the amount of capital invested in index traded strategies in commodities than in the total invested in history to that point.

The result - oil was driven through the roof to $147.

The excuse at the time was soaring demand from the world including China etc. Obviously that was exposed here as nonsense and that can be borne out by fuel at near 120p today with oil poised at $80, and guess what, we are only just coming out of a recession.

Oil was 83% more expensive when fuel was last at this price. What a discrepancy that is.

When you are next stood at the pump filling up, consider that two thirds of the time you are stood there you are assisting the taxman as tax today accounts for 67% of fuel prices. When the conservatives where last in power the tax was 76.9%.

However the collect today is actually 77p per litre as opposed to 39.4 back in 1996. (1)

It's worth noting that fuel tax is applied on petrol then Vat is added to that, so we pay tax on our tax. Easy money.

One of the biggest issues for us is a weak sterling. As oil (even UK oil) is denominated in dollars, any weakness in sterling will reflect in fuel prices. Oil is also seen as a hedge for the dollar. If investors are worried about the dollar they buy oil to protect their investments.

And so the strength of the dollar and sterling are key. A stronger US economy will mean investors become net sellers of crude oil and move toward the dollar, thereby driving oil southwards. If the UK economy is strengthening at the same time the impact of the rising dollar on oil is alleviated. The only flip side to that is the potential for greater usage of oil in the recovery process which of course will create a true supply and demand price rise.

If Obama gets his way with the proprietary traders and blocks the loopholes the CFTC (commodities futures trading commission) opened, the price of oil will relate to demand again. Remember between 2003 and 2008 oil jumped from its average price of $32 to $147 as the capital above was invested into commodities.

The government could assist with this by heavily taxing all gains from proprietary trading. It's not complicated for them to consider that but I suppose it depends on who has a hold of who.

Providing further respite (and more cynicism for me) is that according to the energy department, US stockpiles of crude oil have increased for a seventh week to 344 million barrels. This is 5% above the five year average which shows demand for oil is low. Demand declined 4.2% to 18.8m barrels a day which is the biggest weekly drop since November. (2)

It is no surprise that Oil futures dropped 2.1% on Friday the 20th March thereby showing the expected downward pressure on oil. (3)

So in summary, all the logic given re supporting petrol prices does not make sense. If the government want to deal with it they can complete the simple action points I have shown above and we can go back to £10 of fuel at least getting rid of the red light on the dash.

If you would like to speak to an independent financial adviser call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

(1) Energy department

(2) Business Cornwall

(3) BBC

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: The budget? Budge it more like

23-03-2010

DON'T expect anything at all. Remember when we wrote about the impending 'doom' in January '08 when the government and Bank of England were talking about inflation. We then explained that the economy was indeed 'being brought forward' and to expect the doom merchants to ensure that if we were going into a recession we would do it right away. Sure enough it happened, and we are coming out of it by design just as the election arrives.

And so what sweeties might you expect to lure you for the votes, or will it be a non budget which will be followed post election by a battering ram. The latter I will imagine.

I suspect the concerns regarding capital gains tax will come true, not pre election, but post election.

Capital gains tax is now widely tipped as a change where the current rate is taxed at 18% as opposed to the higher rate of income tax of 50%. They are relying on the amnesia of the tax payer.

Whilst the basic rate of capital gains tax is 18%, the allowances that previously existed pre the 18% band meant that when most people added their gain to their income, there was probably less than 18% tax to pay. Any alteration to this rate of tax will be seen by many as benign, whereas it is a rip off. Don’t expect that in the budget, that's an election loser. Brace yourself afterwards.

What would I like to see in the budget and might we see? Look closely for something for elderly savers. I suspect a new tax band may be introduced for savers who have been battered because of bank's inadequacies. Savers today enjoy rates of well, nothing, whilst banks lend it out at 4-5%! I am confused.

The Bank of England and government have allowed these banks to get away with shenanigans beyond comprehension but it’s the saver who is having to pay for it. I suspect a temporary zero percent tax rate for savings up to a prescribed level will go a long way to show intent. Alternatively they could double the cash ISA allowance for those over 65. Ignoring this problem is a vote loser.

What else would make sense? Corporation tax should be reduced heavily to bolster company's reserves or even consider a temporary tax measure that allows companies a much lower tax on retained profits so they can gain some stability without having to worry about a hefty tax bill.

Measures need to be put into place to prepare business for the impending honeymoon ending of lower rates and quantitative easing. This will mean that we will soon enter a very, very rough period that will make this little river rapid seem like a scene from the wind in the willows.

The government also needs to think about the taxation of brains. At 50%, coupled with national insurance and all the other measures of tax (including those local) that is a step too far.

Entrepreneurs should be encouraged rather than being penalised. They are the life blood of the country yet somehow they are discouraged from making money. This stifles effort, vision and brains. It simply encourages top business people to leave, or just take a long relaxing break until tax rates get back to normal, but they are exactly the people who will propel us out of recession. So either relax the tax rate at the higher level (there is no evidence in history to show that it has a positive impact), or slash corporation tax.

Petrol prices? Its an easy touch. Labour might say that when they took over, the tax on petrol was 72.9%, and the conservatives might say that although it's now only 66.99% that motorists are paying nearly twice as much money (75p as opposed to 39p). (1) Personally I would say they are both clueless. Drop the tax.

If you would like independent financial advice call Peter on 0845 230 9876, e-mail info@wwfp.net

Source

(1) Petrol prices

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: No thanks to state-owned banks

16-03-2010

'State owned banks'. Boy do I detest that statement. That's were the 'government', known to you or I as the UK taxpayer, has promised to protect banks who have shown they are clueless in running a business.

Let's remember that Banks are responsible for 79.15% of all complaints upheld by the Ombudsman. (1) Lloyds tops the shop, holding three of the first eleven places. This appalling advice has cost the tax payer dearly in bad advice.

The government's response to this is to protect them, whereas I suspect if they were a less important sector on the 'contribution to UK tax' they would just have been closed as a national embarrassment. The whole purpose of protecting the banks was so that they could begin lending and supporting the business community

The reality is rather different. Base rate has been battered down to 0.5% yet commercial deals are pretty common at 4.5% and 5.5%, a whopping margin for the lender who, by tightening up on lending has created a market where they can also charge excessive fees of c2% for set up and even exit fees. How does all this fit in with the stated objective of loosening lending?

One would assume that no-one at a government level is the slightest bit interested in loosening bank's purse strings; rather they are fully supportive of using the extra cash created above to bolster bank's reserves so they remain solvent. There are varying views on this but if the Bank's contribution to the UK economy is as thought (over 10%) you can see why a country with dwindling manufacturing might want to focus on supporting this brutal sector.But if they are to be supported they need to be given much tighter guidelines to follow.

This comes at a time when the banks who are effectively state owned have been accused of charging mortgage customers considerably more than the banks who have not been bailed out. Lloyds, the company who is pouring our money into adverts to make them look pretty, is once again at the bottom of the pile. If we look at two year fixed rates, a Cheltenham and Gloucester (part owned by Lloyds group) mortgage would cost 4.75%, whereas the average is 4.19%.(2) Halifax (part owned by Lloyds group) was third worst with a rate of 4.27% whereas northern rock, 100% owned by the UK tax payer was second worst with a rate of 4.37%.

This is a massive impact on the unsuspecting mortgagee who should be made fully aware of the potential for saving elsewhere. For a mortgagee with a £150,000 mortgage they will be paying £840 more per year with C&G than the average lender out there.

RBS (84% state owned) buck the trend however, with an average fixed rate deal of 3.84%, or £1365 per year cheaper than C&G, so there can be no excuse for the Lloyd's group's activities.

These same banks have a long hard road ahead of them as they rebuild their finances and reserves but they are rebuilding because of their appalling lending practices, quite extraordinary swashbuckling investment decisions and the poor standard of advice and service they have been offering as reflected in the upheld complaints above.

But after making those shocking decisions they need to remember that the person rebuilding their reserves by paying through the nose for mortgages should not be the people who have bailed them out via tax payers money or via previous advice that has been given by the banks.

Customers should be aware, and they should take advantage of the fact they can shop around to beat the deals offered to them via their existing banks. At £1365, apathy can be expensive. Not being anti-banks, but its difficult to be pro them, as savers are also being battered. They didn’t cause the problem but whilst banks are lending at so far above base rate, their savings rates do not have the same monetary dyslexia with the average easy access rate offering 0.72% and many paying 0%.(3)

If you need independent mortgage advice call Peter McGahan on 0845 230 9876, e-mail info@wwfp.net

Sources:

1) Ombudsman

2) Independent

3) This is Money

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: With profits and how they don't work

10-03-2010

FOLLOWING on from last week's with profit bond comments I thought I would use this week's column to explain exactly how they work - without the salesman and insurance company's noise.

Let's look at why investors invest, how they understand risk, and how with profits are contrived to sell to that fear.

Investors invest to seek a decent return over and above inflation. In the 22 years from 1987 to 2009 cash only returned 28% more than inflation. (1)

As most investors are not fully explained risk and how it can impact them negatively or positively, they are reliant on the 'adviser' who is wheeled in front of them to explain that.

Unfortunately for the average investor there is very little investment expertise available and investment advice can be offered by most advisers with no specific investment qualifications. Most advisers pass minimum levels of qualifications but are allowed to advise freely on complex areas such as investments.

The result is that the advice is very much at a 'product' and 'commission' level. Banks, all of a sudden decided they were investment advisers and this 'product sale' exploded.

A third of all complaints to the ombudsman last year were against just three of the UK's banks. More than half of all complaints came from eight banks alone. Indeed banks and their subsidiaries command the first 14 places in terms of the amount of complaints.(2) Well done.

More than 63% of all complaints were against these 14 banks and 37% from the remaining 99,986 firms (of which quite a few banks were still in there) 79.14% of all complaints upheld on the ombudsman's website were against banks, building societies or their subsidiaries. Less than a quarter of 1% of the complaints were against Independent Financial Advisers.

The Lloyds group must be over the moon with grabbing three of the first eleven places for the total amount of complaints -but their adverts are catchy and nice.

And so commoditised speedy product sales have been exposed. With profits are indeed a symptom of this commoditised 'advice' process.

In order to 'sell' to a customer; this product is designed as a lower risk vehicle but it is not. Think of this in its simplest form of two comparative pots. A managed fund and a with profits fund.

A managed fund is designed to beat inflation but decrease risk by diversifying across different assets such as property, equities, fixed interests and cash. A with profits fund invests in exactly the same assets.

The difference between the two as far as an investor is concerned is that every day the value of your managed fund changes, whereas the with profit bond 'apparently' does not. The actual return you receive from a with profit bond is based on what an actuary tells you he is going to give you from the returns they are making.

Both the managed fund and with profits are invested in virtually the same manner. A with profits would like to be invested the same as a managed fund, but they are restricted because of the 'guarantees' or 'vague promises' they have to give to other policyholders, so often have to sell out of equities when they have already fallen, and buy them back after they have already risen. Disaster.

With a managed fund you always know what your plan is worth, but with a with profits plan, the actuary holds back your returns and gives them to you over the years.

The idea is that they are supposed to protect you from downsides but that was exposed as nonsense the first time they were put under any sustained pressure. Think about it once again from its simplest form: A with profit bond cannot pay you out any more than the fund it's invested in performs, so by definition it has to underperform.

The golden ticket they used to wave was the protected downside but when the market fell, with profit funds simply applied a market value reduction to reduce the value of your with profit bond back to what you would have received if you had a managed fund. So it's 'heads the insurance companies win, tails they win'.

I'll bet you have never seen them marketed or explained like that. But 8% commission every bond is hard to miss.

For a free initial check on your with profit plan call Peter on 0845 230 9876, e-mail info@wwfp.net

Source

(1) lipper

(2) financial ombudsman

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Companies ‘among the top 100 to work for’

03-03-2010

THE national ranking of two Westcountry businesses listed among the “Top 100 small UK companies to work for”, has been revealed.

Clinton Devon estates came 11th on the recent Sunday Times best small organisation to work for in the UK and top for its commitment to the environment. Some 87 per cent of the estate’s 61 staff who responded to the employee-led survey said that they loved say they working for the organisation.

They also lauded Clinton Devon Estates environmental agenda. Workers were asked for feedback upon a list of 70 questions covering topics including leadership, wellbeing, management, teamwork and their personal development in the firm.

Clinton’s farms manager George Perrott was featured in the national Best Companies supplement and said: “For me it’s like working for a large, well-oiled organisation but with all the benefits of working for a small, friendly family business.”

Redruth based independent radio group UKRD – parent of local radio station Pirate FM – learned on Sunday where it was ranked in the list. UKRD chief executive William Rogers said: “We came 27th in the list of 100 top companies which, for the first time we have been reviewed, is remarkable.”

The WMN revealed last month that both companies were the only two in the Westcountry to achieve three-star accreditation reserved for “extraordinary performance” in the Best Companies guide.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Civic pride at heart of city’s rebranding

03-03-2010

By William Telford and Catherine Barnes

THE company brought in to rebrand Plymouth has begun consultation with a dozen leading national business and media figures, to assess the city’s impact in the UK.

LloydNorthover is also to include local feedback from a study carried out by the shadow Plymouth City Development Company (PCDC) in 2008, as it develops a new commercial identity for the city.

The consultancy was appointed last month by the PCDC to design a “toolkit” of brand components to launch marketing and investment campaigns upon.

The London-based international brand consultancy spoke to the Western Morning News for the first time yesterday, following a recent fact-finding mission to the city to assess its selling points and meet with key stakeholders.

LloydNorthover’s Plymouth-born managing director Rebecca Price praised the city’s distinctive identity, which she said would be a significant factor within the rebranding campaign. She said the branding campaign would focus on building upon a sense of civic pride within the residential and business community.

Ms Price added local feedback from the PCDC survey had tended towards the negative.

Comment had included criticism levelled at the city’s lack of motorway connection and the visual impact of its Drake Circus shopping mall.

Ms Price said: “All too often, people in Plymouth will talk about what Plymouth is not or has not got. It’s our job to turn that on its head.

“It’s important to talk to people beyond the city to see what preconceptions there might be – they could be misconceptions.”

LloydNorthover – which has global offices in Barcelona, Dubai, Hong Kong and Singapore – achieved a marketing renaissance for Belfast, overseen by creative director Jeremy Shaw.

Just a year after unveiling its new brand ID for Belfast in July 2008, the city experienced a 41 per cent increase in tourism.

“The difference between Belfast and Plymouth is that externally, Plymouth is not well known,” said Mr Shaw.

“Everyone knew Belfast, but for the wrong reasons. It was our job to change that perception, to reinvent Belfast.”

Ms Price said: “Plymouth is a fabulous city. It’s a place full of hidden treasures.

“It has an extraordinary history and an exciting future ahead – but what it has today, is very distinct.

“Our job is to capture that and make sure Plymouth communicates it effectively.”

She said that landmarks including the Hoe, the Sound, Mayflower Steps, Smeaton’s Tower and the thriving business community would play a key role in attracting visitors and inward investment.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Investment to create business park infrastructure

03-03-2010

A TOTAL of £8 million is to be spent to provide the infrastructure for a new business park next to the A30 at Scorrier near Redruth.

Half will come from European Regional Development Fund Convergence funding, with the remainder coming from site owners Hallenbeagle Estates Ltd.

The investment will be used to clear the site and to create roads and infrastructure to service the proposed business park, which could act as a hub for recycling and waste management firms.

The work will deliver 13.5 hectares of employment land divided into 23 industrial plots and creating up to 31,000sq m of high-quality employment space. Work is likely to begin in August and to be completed by May 2011.

Hallenbeagle director Russell Dodge said: “There is an acute shortage of serviced employment land within the county and the development will provide the opportunity for significant investment in employment space and job creation in West Cornwall.”

Ian Whale, infrastructure manager at the South West RDA, which handles applications for ERDF Convergence investment for work- space gap funding, said: “This site has long been earmarked for significant employment use and the investment from ERDF Convergence will unlock its potential.

“This is the latest in a string of gap-funding investments designed to create high-quality workspace so businesses can grow and prosper.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Death of with profits - at last

02-03-2010

I AM hoping that 12 years after writing my first column on with profit bonds that this will be one of my last. I faced heavy criticism from many about the initial articles, but thankfully the basic natural laws brought this contrived rip off 'investment' crashing to its knees.

The FSA were even guilty of this plan, referring to it as having 'smoothed' investment returns - a point they will be eternally embarrassed about.

It is difficult to know how much money is still wasting away in the compost that is known as with profits, but Norwich union (Aviva) alone detail their investments at over £50 billion.(1) That is staggering and for the life of me I cannot see why £1 was ever invested into such a contrived bucket of twaddle.

Let's investigate. Firstly if commission for an investment bond was capped at 3% rather than the 8% these products can pay, less would be sold. In a couple of years when commission is thankfully banned, the level playing field will mean that advisers have no financial benefit from this commission quandary.

Second reason is very similar to the reason you, as investors are being sold structured or 'protected' investments. Many so called advisers are not comfortable with explaining what risk means to the investor.

A with profit bond simply hides risk by effectively 'lying' to you about the value of your plan. It is only when you actually ask what the surrender value will be that you will know what you have been put into.

'Advisers' often do not really want to explain risk as this may affect whether or not an investor will invest, which, as a commission based salesman, means they will not get paid.

If investors were explained how risk really works, and how it is beneficial to them, coupled with how returns are actually achieved with their investments over time, they would never ever invest in either a with profit bond, or a structured contract. The latter, I understand has over $41bn invested in them! I despair.

Customers are also lied to about how their investments are managed. When they invest, they are told they receive an 'extra allocation'.

If you have been subjected to this, it will look something like '103% of your capital will be invested'.

This is completely misleading and will be banned when the next FSA review is put into place within the next two-three years. This contrived process simply states you have more money invested and then it takes it back via an establishment charge over five years, just in time for 'with profit bond salesman' to come back again for their next round of commission.

Post the next review, your independent financial adviser will have to tell you exactly how you are charged.

Investors are also not explained to how a with profit bond actually works, and indeed how the market value reduction could actually affect them. I'll explain next week exactly how with profits do work.

Every investor is told (when I say told, it's a one line in a document they have to give you, but you'll never see it. In fact it's the ultimate get-out-clause for an adviser).

A market value reduction simply says that the firm can apply, at will, a penalty that will reduce the value of your investments. This simply means your returns are down to an actuary.

You'll be made to feel guilty by their marketing boys who say 'it's to protect other with profit policy holders' but in reality that's nonsense. It's to protect the actuary who may well have got his numbers wrong.

In the meantime, investors who took out with profits bonds in 2000 to 2002 and curdled £38.4 billion into with profits should not miss out on the ten year guarantee which allows them to exit their plan without an MVR. (2)

Check your start date and ten year anniversary and go to a fee based independent financial adviser for advice.

For a free initial check on your with profit plan call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

1. nunion

2. what investment

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Electronics firm opens new office in city

24-02-2010

AN ELECTRONICS firm has opened a new office, based in the Plymouth factory it sold last year to a Swindon-based manufacturer.

X-Fab, which makes silicon chip technology, has established a research and development office and test facility at the Roborough plant now owned by Plessey Semiconductors.

X-Fab has maintained a team of 20 staff, who will provide research and development to support the company’s output of semiconductors for analogue and mixed-signal applications.

The German firm has four manufacturing plants in Germany, Malaysia and the US.

Its Plymouth base will also serve as its headquarters for customer sales support services across the UK and North West Europe.

One hundred and fifty Devon workers were taken on by X-Fab’s new landlord, Plessey Semiconductors, when the latter acquired the facility in October.

Swindon-based Plus Semi acquired the share capital of X-Fab UK Limited and received a £1 million Regional Development Agency grant to part-fund the transferal of its manufacturing logistics from Wiltshire to the Westcountry.

Following the merger of the two operations, the Plymouth business was renamed Plessey Semiconductors.

Plus Semi retained its own R&D team at its Swindon HQ, while its Roborough factory manufactures some X-Fab developed silicon chips under licence.

X-Fab’s Roborough base will see its team of experts focus upon the development of silicon chips deployed in fields including optoelectronics, which can be applied to technologies including Blu-Ray.

Dr John Ellis, senior member of X-Fab’s technical staff in the Plymouth team, said: “We have built up an expert community in the field of optoelectronics.

“It’s a community that spans the X-Fab international organisation, but many of our new developments are being led from our Plymouth office.”

X-Fab’s chief technology officer Dr Jens Kosch said: “We are delighted to have retained the team, to contribute to our future development activities, which are becoming increasingly application focused.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Caines aims to expand luxury hotel portfolio

24-02-2010

CHEF Michael Caines has announced plans to expand the luxury hotel portfolio he founded with greetings card entrepreneur Andrew Brownsword.

The business partners are to launch their sixth ABode boutique hotel in Chester in April and are eyeing two further possible sites in Salisbury and Oxford. They aim to establish a chain of 15 ABodes, which launched with their Exeter hotel in 2005.

ABode was founded with a mission to provide contemporary, stylish accommodation with a selection of dining choices to suit all budgets. They are located in towns and cities “renowned for culture and heritage”.

Managing director, Nick Halliday said: “We believe the current economic climate presents opportunities for growth. ABode has been well received to the market and doubling our portfolio will lead to stronger brand awareness as well as increase our presence in key short break destinations.”

Turnover for the ABode group – including its Baby ABode opened last year in Chelsea – grew from £12 million in 2007 to £16 million by the end of 2009.

Mr Brownsword is owner the Gidleigh Park Hotel, near Chagford, where executive chef Mr Caines heads its restaurant.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Tourism group to start US campaign

24-02-2010

By Catherine Barnes

SOUTH West Tourism is to launch a US consumer campaign this month, to coincide with a promotional launch of direct New York to Bristol flights by Continental Airlines.

It is to take a stand at the New York Times Travel Show on Friday as part of a £100,000 bid to build upon the region’s appeal to American visitors.

The show, which runs until Sunday, attracts more than 20,000 US visitors and will see South West Tourism showcase the region’s “vast heritage connections”.

The travel show display is part of Explore England’s Heritage – Discover the South West, which will run out of VisitEngland’s office in New York until June.

South West Tourism described it as a “small, but well targeted campaign”, aimed to increase stateside hits at www.visitsouthwestengland.com/USA

South West Tourism is responsible for coordinating the US campaign, £73,000 of which has been funded by the South West Regional Development Agency. Bath Tourism, Destination Bristol and Bristol Airport have contributed a combined £37,000.

The marketing drive will also include a programme of consumer-based marketing and PR activity run in partnership with VisitEngland. It will include playing host to US travel media including Conde Nast Traveller magazine, The New York Times, and the LA Times at an “exclusive” media event.

A thousand Continental Airlines call centre agents will also take part in workshops to provide them with insight into what the region has to offer.

The South West played host to around 200,000 American visitors in 2008, generating an estimated £77 million for the South West economy.

South West Tourism’s marketing head Kirsty Cumming said: “The American visitor is often motivated to visit England by its history and heritage connections and the South West is a perfect destination with this in mind.

“With around 200,000 American visitors staying each year, many already have good knowledge of our region. This campaign will both reinforce the well know areas and also highlight other places of interest.

“It’s designed to appeal to loyal visitors and encourage new first timers.”

Jason Wescott, head of sales and marketing at Bristol International Airport, said: “Continental’s direct flight from New York enables American visitors to fly direct to the South West.

“We aim to get passengers from ‘airside to kerbside’ as quickly as possible, making the journey less stressful and meaning more time to see the sights.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Rock and a hard mountain for savers

23-02-2010

Talk about being stuck between a rock and a hard mountain. Savers today are enjoying the paltry returns of c2.8% for instant access savings and 3% for a one year fixed bond.(1) That's the rock.

Over their shoulder is the rugged mountain of inflation squashing any potential returns they may have. Inflation currently sits at 3.5%, meaning that a basic rate tax payer will be 'enjoying' 2.24% whilst inflation corrodes the real value of their capital at a rate of knots.(2)

In fact, if this continued, and a saver took no income at all, £10,000 would become £8809 in ten years. A saver who took the paltry income of 2.24% would have capital implosion as their capital would fall to £7002 over the same period.

Indeed this is no surprise as history repeats itself. If I take the period of 22 years from May 1987 (pre the big crash) up to May last year, inflation would have impacted your capital by 80% yet the benchmark comparison of the Halifax liquid gold account would have returned just 108% giving the saver just 28% (or 1.27% per year) to spend.(3)

Those caught most, are typically those who don't have readily available independent investment advice. These are the same customers who may be subjected to with profit bonds or protected/structured products on the 'whim' that they may exceed this inflation whilst apparently taking no risk.

I have given enough reasons why investors should be wary of 99.9% of these structured products, if not stay clear of completely, and I will cover with profits again next week.

But what are the solutions that an investor/saver can look for? Let's remember March last year was indeed Armageddon and any person considering anything involving anything investment related may have been considered mad. Indeed that was a sign for most that the bottom of the market existed.

But we dont really need to be market timers like that to make the best returns. Equities (stocks and shares) are a well known hedge (protection) against inflation. In a very basic example, if you think about it, energy prices cause inflation, so energy companies must be making lots of money, so it follows their share price would rise, thereby giving the investor and saver protection against inflation.

Over the same period mentioned above for example (and not including the large rise in the market in the last year) the FTSE allshare would have returned the investor a staggering 366% which is 286% over and above inflation or 13% per year.(3)

I chose this period of time because it began just before the stock market's infamous black Wednesday and includes four more catastrophic loss periods.

Subsequently the capital, in pursuit of this gain would have fluctuated wildly. Not every investor has the same appetite for fluctuation in their capital, nor might they be receiving the same investment advice, independent of the commission an adviser might be receiving.

If, however, an investor was truly informed of what the potential for return over inflation versus the potential for fluctuation really meant, they may well have a different outlook.

Let's remember the old adage that when the wind blows hard you can build a wall or a windmill. If equities were flat and rose like a building society, there would be no opportunity to buy cheap and sell high. Equities don't, and this momentum caused by greed and fear creates immense opportunities that investors take advantage of.

Unlike 'without' profit bonds - a product which was poorly contrived by the insurance providers and sold by 'financial advisers' who didn't understand them at destructive commission levels of 7-8% - there are methods of limiting risk in your investments whilst creating the potential for upside return.

Many of these are found in the cautious return sector such as Henderson multi manager income and growth, and Jupiter Merlin income. These funds aim to reduce and manage risk but enjoyed 24.8% and 21.4% over the last year. (4)

For a list of the better performing lower risk funds call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

1. Which

2. Bank of England

3. Lipper

4.Trustnet

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Pendennis buys Devonport Yachts

23-02-2010

By Liz Parks

THE Pendennis Shipyard has announced that it has bought Devonport Yachts Ltd in a bid to gain further ground in the lucrative superyacht sector.

Speculation about a possible tie-up has been rife since the autumn, with the deal due to be announced this morning.

Mike Carr, joint managing director of Pendennis, said that the acquisition would allow the shipyard to move into the 60 metre-plus category.

“This acquisition provides the group with a powerful brand with which to penetrate the 60m+ new build and refit markets and to continue to develop our position as a leading international superyacht business,” he said.

“Over our 20+ year history, we have established Pendennis as a leading brand for refit and new build of superyachts up to 60m whilst at the same time developing jobs and facilities in Falmouth.

“Placing the Devonport brand and Devonport Yacht Ltd’s other assets within the group will expand our portfolio and help accelerate plans to further develop Falmouth as the UK’s premier superyacht centre of excellence.”

Devonport Yachts will continue trading as a separate business, with its current managing director, Stephen Hills, remaining in post. It will operate out of Falmouth.

Mr Hills said: “This is a great opportunity to continue to develop the UK’s large super- yacht capability and realise the potential which exists in the South West of England.

“There are major synergies within the two businesses which will serve to continue and further strengthen the Devonport superyacht brand, offering a UK service for very large bespoke new build and refit projects.

Our immediate priority is to finalise the new operating arrangements for Devonport Yachts Ltd, after which we will be running a series of yard visits where we will explain in detail the many advantages of the new Devonport yachts business based in Falmouth.”

Pendennis is hoping that the acquisition will allow it to become one of the leading superyacht centres in Northern Europe. As part of the deal, Ernesto Bertarelli, who owns Team Alinghi, two time winners of the America’s Cup becomes a minority shareholder in the business.

Devonport Yachts was formerly part of Babcock Marine, owners of Devonport Dockyard, which announced last year it would not be bidding for any new superyacht contracts to focus instead on its core defence operations.

The brand was originally established by the previous dockyard owners DML, in 1987 as the trading name of its specialist yacht division shortly after the dockyard was privatised.

The business has worked on refit and new build projects, with plans for its current project, known as Project 1011, about to go on display at the Abu Dhabi Yacht Show later this week.

The 536ft (165m) Devonport OneSixty will resemble an ocean-going Concorde with features including 17 VIP rooms, a nightclub, drive-in garage, helipad and hangar, mini-submarine and diving chamber.

It will require a crew of 64.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Employment site could support 1,000 jobs

23-02-2010

By Liz Parks

PLANNING permission is being sought to turn 30 acres of farmland on the outskirts of Exeter into a new employment site that could support 1,000 jobs.

Development company Eagle One has announced that it has submitted a planning application for the site, which is between Yeoford Way and the Devon Hotel.

The outline application is to build 500,000sq ft of employment space which is likely to include industrial units, some office space, warehousing and trade counters.

Mike Bryant, development manager at Eagle One, said it would be a “natural extension” to the existing Matford Park development.

“We are fortunate in terms of timing that it will take a while get things ready which will coincide with the upturn,” he said.

The site is owned by an unnamed Jersey-based company, with Eagle One acting as planning co-ordinator.

If the planning application is given the green light, preparatory work would be carried out on site, with construction of the new units getting under way in around 12 months time.

Mr Bryant said that, despite the challenging economic conditions, funding had not been an issue for the development.

“We don’t envisage there being any funding difficulties, particularly as we’re not necessarily doing any speculative development,” he said.

“We are aware that there is demand out there, we have been involved in the development of Matford and it has always proved to be popular with people coming in and people coming from Marsh Barton who want to expand.”

Nick Hole, director of Eagle One, said: “We believe this will be a key addition to Exeter’s appeal for new employment and will take the city forward over the next decade.

“We have just submitted a planning application for the development.

“The site will be ready for the upturn and should attract a range of potential occupiers.

“We have worked closely with the city council to bring this proposal forward and I am confident that we will gain public support.”

Derek Phillips, chairman of Exeter Chamber of Commerce, said: “We have been concerned over recent years that Exeter is short of employment sites.

“It is thus very welcome that Eagle One have now advanced their plans to a stage where we will see development at this major site starting during 2010.

“It is a further welcome boost to economic recovery in the city.”

Coun Stella Brock, lead councillor for economy and tourism, on Exeter City Council, also welcomed the proposals:

“We have been keen to bring forward a new site within the city for expanding firms and to create new jobs.

“We believe that this prestigious location will be attractive to the market.

“We are also pleased that the scheme is being designed so that it will be able to make use of sustainable energy supplies,” she said.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Smit sings praises of social enterprise

16-02-2010

By Liz Parks

THE achievements of 15 Cornish social entrepreneurs have been celebrated at a graduation ceremony at the Eden Project.

The 15 men and women were the first to take part in a nine-month programme organised by the Penzance-based Cornish School for Social Entrepreneurs.

A total of 20 would-be social entrepreneurs were chosen for the programme last year with three pulling out and two deferring their places.

Tim Smit, patron of the Cornwall SSE and co-founder of the Eden Project, attended the event and heard about the progress they have made by taking part in the programme.

“Social enterprise is, in my view, possibly the most important development in business over the last century,” he said.

“Its recognition of the wider needs of the community and environmental impacts of business as well as the responsible social role business should play give it great relevance in the emerging post recession world.

“The school is a vital addition to the capacity of Cornwall and we at Eden are proud to be supporters and were delighted to welcome them here for this their first graduation ceremony.”

The Cornwall SSE is a partner in Cornwall Works for Social Enterprise, which is supported by European Social Fund Convergence investment via Job Centre Plus and led by Cornwall Council. It is managed through Cornwall Development Company.

Those graduating on Friday included: Caroline Driver, who runs Llamarama, a fair trade business which aims to reduce poverty through bringing artisans’ products to international markets; Jane Yeoman, who is setting up ZOOP, a social enterprise promoting sustainable living to families with children under five, and Jane Opie who has set up Smart Savings, a social enterprise providing professional and ethical financial services, particularly to disadvantaged communities, and with a specific focus on claims management.

The SSE programme has seen the graduates taking part in one day a week of study, tutorials or other activities for the last nine months.

Cornwall SSE development manager Sally Heard said one of the main benefits of taking part was being able to share problems and their solutions.

“Quite often people have had their idea for a while but they have felt quite isolated. Coming onto the programme gives them the opportunity to work with like minded people,” she said.

SSE chief executive Alastair Wilson said: “I am delighted to welcome these first Cornwall social entrepreneurs into the SSE fellowship. They are true social entrepreneurs – driven by a social mission, which they pair with the entrepreneurial spirit and skills that allows them to change the lives of the people they work with and for.”

Recruitment is now under way for the next intake of social entrepreneurs. The Cornwall SSE has organised two information days for people to find out more, with one due to take place on Friday at the Library House, in Truro, and another on Friday, February 26, at Cornwall One Stop Shop, St Clare, Penzance.

For more information, visit www.sse.org.uk

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Quantitative easing has the Red Bull eff

16-02-2010

Do you think it is a good idea to keep any investments in corporate bonds/gilts as I am hearing from some sources that they are a massive bubble?

Bubble? That's a synonym for fizz, and it's ironic that the biggest contributor to it being a bubble is the 'red bull' stimulus injected into the veins of the economy by the Bank of England - quantitative easing.

Quantitative easing is where the Bank of England creates cash in its account, with which it buys up a range of assets from other institutions such as gilts etc, who in turn pay that into their banks and for the banks to supposedly lend it on (it hasn't happened).

It's called liquidity or 'greasing the wheels of finance'.

The idea is that it also drives down gilt/bond yields, which in turn is a thermometer for lending rates which helps the business community from a borrowing perspective. That hasn't happened either, and banks have just sought the opportunity to create the extra margin for themselves to bolster up balance sheets.

Whether or not the fizz will lose its effervescence depends on a number of complicated issues.

If Barack Obama beats the investment banks, much of the inflationary risk will disappear as the cost of the raw goods (commodities) will plummet. Higher interest rates will not be needed to curb inflation so there will be less stress on the financial system and in turn sterling.

Furthermore it is not expected in the short term that the Bank will ease any more red bull into the system as it is widely expected that the current recovery is sustainable in the short term. If it is, investors will be mindful that the treasury could soon sell off its recent purchases driving yields up and capital values down.

Most retail investors in bonds are not sophisticated enough to play the market, moving between the two contrasting holdings of equities and bonds. Instead most hold them as a hedge against each other i.e. buying an ice cream company and a wellington boot company - In extreme conditions they balance each other.

It is well documented that bonds have been the better selling sectors over the last year and it's easy to see why, but the bubble could be losing its fizz and creating a potential bubble.

And if you understand g.i. indices with food, after a sugar spike there is a boring, boring lull with no energy. If you have suffered a sugar spike lull (rice cakes are interestingly pretty bad for that) you will know that you get no warning but that you are crabby and unapproachable.

The key now to successful investing is in reducing your exposure when the risk is disproportionate.

Whilst the above 'depends on what happens' there is a flip side to much of this. Any study of banking crisis will show you that there is indeed a long process of deleveraging where everyone tries to reduce debt down to reasonable levels - even governments.

Undoubtedly the next government will have drastic spending cuts, a strategy that will, along with current employment rates have a medium term dampening effect on inflation. In turn gilt yields will then be allowed to remain low and for much longer than expected, making them still an attractive sector. However, in the short term, inflationary figures driven by Vat changes and the appalling tax on fuel and energy prices will make their way into the system causing short term inflationary problems which I am comfortable will dissipate because of the dampening issues mentioned.

There is evidence already of yields rising with ten year gilts hitting 4% in December from 3.5% - a downward pressure sign on prices.(1) So in short I would take an opportunity to reduce risk by taking some of the gains and keep an eye on inflationary figures around August September time.

If you would like investment advice call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

1 Jupiter

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Law firm to sell ‘online divorce’

10-02-2010

By Catherine Barnes

A WESTCOUNTRY law firm is to launch an online store, selling “DIY divorces” through its website.

Coodes Solicitors will reveal its innovative “DIY Law Online” services at Boconnoc House near Lostwithiel on Friday. The series of fixed-price and DIY packages available via the web, will enable customers to create their own legal documents.

Clients will be able to browse the range of legal offerings at www.coodes.co.uk and – just like at an online store – will be able to put their chosen items into a shopping cart system at the click of a mouse.

Coodes said that products – with fees starting at around £25 for a letter before action to be sent when chasing a debt – would enable customers greater scope to budget for their legal advice and begin the procedure themselves.

Some documents will be ready-written to enable clients simply to fill in the gaps. Other fixed price online services will enable customers a freer hand to pen their own documents, such as a will, with the firm’s solicitors checking the finished article for accuracy, ensuring that it is legally watertight.

The fixed price divorce packages will be available for clients going through marriage splits – that exclude wrangles over children or finances – with couples able to begin documenting the proceedings, themselves.

First-time home buyers will also be able to buy fixed price conveyancing, with other packages including employment law, wills and powers of attorney and commercial property.

Coodes managing partner Ian Taylor described the new online services as “an industry first” for the South West. The firm believes that buying and selling legal services through the Internet, will become “more and more common” in coming years.

“A lot of people just need help with the wording,” he said. “Our fees are fair for the job that we do, but sometimes cover more than we actually need to do to service that client.

“Sitting in front of your solicitor could cost £185 an hour – although some clients will still need that reassurance. Yet while some people might prefer to chat over a cup of tea, many will be much happier to do the work over an e-mail and get back what they want, at a good price.”

Mr Taylor added: “We believe strongly this is the future of law – it enables us to be upfront and transparent about the costs of our services, as well as offer flexibility for customers to access our products wherever and whenever they choose.”

The products will position the firm to compete with supermarkets and high-street retailers, who will soon able to sell legal services as legislation regulating the type of firms permitted to do so, is relaxed.

Mr Taylor added: “Some may see this as a controversial move, but customers can be assured that the quality of legal advice available through Coodes Direct will be just as high as if you walk into one of our branches.

“We’ve recognised that consumers are becoming more and more comfortable with buying products and services online, are inclined to shop around for the best price and enjoy the convenience of e-commerce.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Potential for catastrophic losses

09-02-2010

WHEN something doesn't make sense, it isn't sensible.

President Obama proudly announced he would 'fight' the banking institutions who were using our money to buy up investments in commodities making record profits at the same time.

The natural reaction to this was that banks' share prices took a tumble. Interestingly Mr Obama announced this on the 21st Jan '10. What is perhaps worrying is how commodity prices have reacted.

Commodities are the very things we use every day; Oil, gas, soya beans, pigs, wheat, oats and so on. It is normal for commodities to perform well as we move out of recession, but most of these commodities have performed well, long before we have come out of recession. Hmmm puzzling!

In January '09 all we could hear was Armageddon. Yet in January '09 crude oil jumped from $49 to a massive $83 on the 7th of January 2010? (1) No explanation given.

Remember we have been in a global recession. Peculiarly, just prior to Mr Obama announcing his intentions that he would curb the activities of these banks, crude oil fell to $77.56 (-6.5% - just as it was announced we are coming out of recession when clearly global demand for oil would become much greater - very weird indeed). Amazingly, its low of $72.84 was only found on 1st Feb '10. Most commodities followed a similar pattern - almost as if they knew it would happen.

There were quite a few falls and rises over last year (5 sharp rises and 6 sharp falls ) with oil regularly hopping around by 15-18% in both rises and falls. That simply isn't logical. Clearly at the heart of all this confusion is proprietary trading - trading by these banks and other institutions in assets they should be no-where near. Indeed these banks are solely responsible for driving our costs of living through the roof.

However the threat is greater than we think. Investors, keen on making money from this bubble are piling their cash into a range of assets that could be exposed to bizarre risks.

And here is the next threat - ETF (exchange traded fund). This is generally sold as a cheap and quick access to a basket of shares or commodities. It is a successor of a tracker or an evolutionary 'development'.

There is great potential for a substantial loss for investors exposed to commodities. These are the customers exposed to certain Latin American funds, Emerging market funds, BRIC funds (Brazil, Russia, India , China), ETF's and ECT's (exchange traded commodities). But every single investor in the UK, whether they have a personal pension, endowment, ISA or investment bond is likely to be exposed to this.

Many ETF's are opaque. For tax, regulatory and cost reasons many are resident in one country, the management residing in another and the commodities or securities they are investing in are in the third. One fund was found that had a manager, trustee, custodian and listing in the Indian sub continent, the Gulf, Africa and Europe where the 'verifiers are junior people from small firms with a limited track record'. (2)

Global ETF assets soared past £625bn at the end of last year. Some of the above ETF's are highly complicated and the risk is not easily understandable to an investment adviser let alone a consumer.

Few will have been stress tested for what may happen. For example, because of poor, if not nonexistent regulation, some funds have begun to use highly complicated derivatives to get investors excited.

Every fund should also have sufficient collateral to repay customers. Some are using stocks and bonds which fluctuate daily as their 'collateral'. The investment firms response to that is that they have it clearly documented in their material how their fund is structured.

This will not mean a jot to most due to the stress testing referred to above; i.e. commodities and their associated stocks collapse, so investors try and encash their investments, but unfortunately the collateral was also exposed to this downturn - a pack of very wet cards.

If Mr Obama has his way, a number of these smaller funds will fail, there will be a mass dumping of these assets, potentially causing catastrophic losses.

If you would like to see what exposure your investments have to this call Peter for investment advice on 0845 230 9876, e-mail info@wwfp.net

Source

1. barchart.com

2. Guardian

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Firms among best in country to work for

02-02-2010

By Catherine Barnes

TWO Westcountry businesses have been named among the country’s top companies to work for.

Clinton Devon Estates and commercial radio station group UKRD – owner of Cornwall’s Pirate FM – were awarded three-star status in the 2010 Best Companies to Work For survey.

The Best Companies accreditation scheme follows a Michelin star-style system, with companies awarded one star for first-class, two stars for outstanding and three stars for extraordinary performance.

The Best Company list grades businesses through a detailed assessment it makes based on the results of questions that employees respond to.

More than 1,000 organisations from the private and public sectors applied for Best Companies accreditation this year.

Full feedback has yet to be sent to the three-star winners, but only 49 companies across the country are thought to have been awarded the status.

UKRD chief executive William Rogers said: “We are really chuffed with the three-star accreditation.”

The Redruth-based radio station group increased its staff from 90 to 240 employees around the UK after its takeover of the Local Radio Company last year – and has 24 team members at its head office and Pirate FM base, in Redruth.

Mr Rogers said: “This is something that is entirely dependent on the response of the employees.

“It confirms we have managed together to create an environment that people really enjoy working in. It’s great news for the business.”

Clinton Devon Estates estate director John Varlet said the achievement was a reflection of the firm’s policy to ensure every employee felt involved in the day-to-day running of the business.

About 55 local people are directly employed by Clinton Devon on its three estates around the county, with many other indirectly employed as contractors and professionals.

Mr Varley said: “It’s amazing – but we are not complacent.

“We are delighted with the results and when we get the detail of how we have performed, we intend to discuss it at team meetings and see how we can make further improvements to how Clinton Devon Estates employees can be further engaged in our workplace.”

Jonathan Austin, CEO and founder of Best Companies said: “An engaged workforce is essential as organisations move out of the recession and into a more stable economic situation.

“No doubt many organisations have tackled redundancies and rapid change this year.

“But only those that have kept on engaging their staff and making sure they are involved in the business will be in a good position for the future.

“Those that have ignored this and lost the trust and goodwill of their staff will find the recovery more difficult.

“The companies that have achieved accreditation are among the best employers, and are to be congratulated.

“This year’s survey also underlines the important role managers have in keeping their team productive and motivated.

“For the first time in the 10 years of our research, employees have cited their own manager as a more important factor in their engagement than the leader and senior management.”

A further 46 organisations across the South West also received accreditation on the list.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Obama and the banks

02-02-2010

IF you fully understand what Obama is doing with the swashbuckling banks, you will note the financial world as we know it will never ever ever be the same.

In May 2008, I wrote a column 1300 words long, which said that banks were at the heart of spikes in commodity prices such as oil, wheat, maize etc. That article was pretty much ignored by the investment companies who were making so much money off the back of it – until they weren’t. That was the day that oil plummeted and every other commodity with it.

Most of us know we can buy shares and we sit and hope they will go up. What is quite sinister and worrying however is that it is possible to also make money betting on stocks and shares to go down.

Think it through. If you could in some way use your clout to talk a share or market up (commonly called ramping) to a point that it was overvalued, you could then make similar numbers betting that the price would fall and use your media clout again to ‘de-ramp’ the share by talking it down. Naturally that would be morally wrong wouldn’t it?

If this was left open, the stock market could just be a merry go round of someone pushing up prices and then pushing them back down again. The only winners would be the banks, as customers would remain in exactly the same position whilst bank bonuses would redistribute your wealth to them on an annual basis.

In May 2008 I showed that investments in commodities through index traded strategies had leaped from an all time historic high in 2003 of $13bn to an amazing $260bn in 2008. The price of all commodities had artificially soared with it, and we all paid for that through the supermarkets and petrol pumps.

In the U.S. it transpired that the body which was put in place to govern this practise (CFTP) had actually relaxed the rules. So much so, investment companies could buy $100 dollars worth of commodities by putting down just $8 and borrowing the rest.

This was a bubble waiting to explode. It also allowed banks to create ‘swaps’, a method of making and investment and effectively ‘hiding’ it by creating a separate swap with a bank.

The result of this is that speculative investments could then be created way beyond the normal market as investment banks borrow to invest. The result – we all pay more for our food, metals, oil etc.

President Obama has made it clear to the banks: ‘If these folks want a fight, it’s a fight I am ready to have’ – good man.

Goldman Sachs borrowed an astonishing £10bn from the U.S. government in 2009. Goldman’s bonuses and incomes are now under fire, especially when it has become clear their average income per employee is £300,000. The chief exec received $68 million in 2007, which should have been enough to feed the kids.(1)

So what might the impact be? President Obama, surrounded by his economic advisers made it clear he would halt proprietary trading where banks were being allowed to risk huge sums of money predicting the prices of oil/commodities etc. His concern is not only about the scenario of ‘heads, the banks win; tails, the tax payer bails them out’.

The major issue is that the process of buying up such speculative investments effectively forces prices through the roof and can cause economic mayhem.

Normal supply and demand creates the price of markets and goods and they should not be allowed to be artificially manipulated by speculative investors, whether that is up or down.

The average price of oil is c$32 and there is no reason why oil should be any different than that. Today oil sits at $74.18. (2)

If President Obama gets his way, these banks will be brought to their knees, all speculative positions removed, and market forces will bring our petrol, food and metals plummeting down to earth. Normality resumes.

If you have a query and which to speak to an independent financial adviser call Peter on 0845 230 9876, e-mail info@wwfp.net

Source

1. Times

2. Bloomberg

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: Property price rise

26-01-2010

Do you think the current rise in property prices will be sustained?

No. There is no real reason why residential property should increase in value at all.

Whilst I was negative on all property from 2005, in February last year I was happy to buy back into real estate investment trusts (REITs – commercial property shares), and four months ago I was happy to buy back into the physical commercial property asset.

Residential property is rather different and for me is still too overvalued. I am pretty confident we will look back two years from now at the current rise as a minor blip, driven by the current fantasy financial climate we have.

Much of the public has actually acclimatised themselves to the current interest rates and as such are enjoying a honeymoon period which is beyond comprehension.

There are three key issues that will impact house prices and they are inflation (and in turn interest rates), debt repayment and employment/wages.

The average house price in the UK peaked at £184,023 (1) in January ’08. It hit rock bottom in April ’09 at £152,748 and today stands at an amazing £161,554. That would seem quite peculiar when we are in the midst of apparent Armageddon.

Well not really. If we look at the bank of England base rate since 1972 there are only two very short periods that interest rates have pipped briefly below 5%. (2) It was only back in 1990 that borrowers were paying 15% for their mortgage yet today they enjoy the fantasised luxury of 0.5% base rate. In mortgage terms, that’s the difference between an average mortgage owner of £112,000 paying £1400 per month at the peak of the market as opposed to £46.60 per month now.(3)

Clearly it is a supportive measure but it is not sustainable by any means.

The biggest threat of inflation is already upon us.

January noted a huge rise in inflation which surprised on the upside. It was the biggest monthly rise in inflation since records began.(4)

Naturally if you were a mortgage owner, you would panic at that thought

High inflation is generally curbed by high interest rates.

However I don’t believe this is as big a threat as many would believe.

Firstly, we had VAT revert from 15% to 17.5%, then we have the colossal tax which is being levied against fuel. I filled up last week at 111p per litre. Two years ago we had hurricanes, global demand from China and all sorts of other twaddle being blamed for oil prices driving fuel to these sorts of levels.

What is the excuse today? None. Its just tax. The great thing is that the government are controlling this as opposed to market forces. No seriously, that is good. If they are controlling inflationary pressures by creating them, they can easily ‘uncreate’ them. Furthermore, it is generally believed in the economic world that the current fantasy interest world we are living in is simply a supportive measure which will disappear.

Most believe that companies will not be passing wage increases to employees and that the current shocking state of public finances will put huge downward pressure on wages and employment.

So whilst that will ease any short term inflationary fears, the reality is that 2010-2012 will be a period of global deleveraging – we will continue to try and lower our debt, both the general public and government. More on that next week.

Unemployment will rise due to cutbacks, and wages will fall.

Inflation will recede but interest rates cannot stay as they are. Higher borrowing costs will take money out of all markets and unfortunately house prices will stay flat for quite some time (3-4 years).

I pay as much attention now to the ‘marketing’ arms of ‘house price indexes' as I did in 2008 before the market went pop. Enjoy the next ten months because the twenty four after that will be about being thrifty as we emerge from interest rate fantasy land.

If you wish to discuss your financial options, speak to an independent financial adviser on 0845 230 9876, e-mail info@wwfp.net
Sources:
(1) landregistry
(2) bankofengland
(3) bbc
(4) ifaonline

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Veg box deliveries exceed expectation

20-01-2010

THE best result possible was the verdict of South Hams-based Nearly Naked Veg Company founder Ben Brunning who said that online veg box sales, as well as meat and other groceries, were more than double what he had expected in the run up to Christmas.

But with credit card payments looming as well as the usual bills the end of the month brings, he warned that consumers should not become complacent in their desire to make a conscious choice about where they buy their food as well as supporting local businesses.

Ben said: “Our pre-Christmas sales far exceeded our expectations to the degree that we had to deliver our Christmas boxes over two whole days before Christmas rather than the anticipated one day.

“At Nearly Naked we give people the choice of having boxes delivered to their doorstep which are affordable to virtually every pocket and we want more people to realise that they can all have access to seasonal produce which is fresh out of the ground. The New Year is a great time to make it a permanent resolution to buy locally grown and reared food.”

Since Ben set up the veg and fruit box delivery company in June he has won the prestigious Taste of the West online retailer of the year award and was runner up in Devon Life’s newcomer of the year category at its annual food and drink awards.

“More and more people are coming to us having made a conscious choice about where they source their food from.

“We’ve also seen more people asking for advice about how to grow their own veg and at the Nearly Naked Veg Company, we absolutely support this and are happy to give advice whenever we can.”

The Nearly Naked Veg Company’s cropping plan for the months ahead is available to see at www.nearlynakedveg.co.uk or contact 01364 646106.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Cautious investors could lose millions

20-01-2010

CAUTIOUS investors could easily become fooled by some of the investment options available on the high street; and judging by the millions poured into so called 'guaranteed products' investors must clearly be reading information I am not.

The biggest concern for investors is the potential for loss of their capital. Most of these types of 'guaranteed' or 'protected' investments will be sold via the high street in banks. They are typically marketed to those who have an aversion to risk, or as I prefer to say it, where the financial adviser neither explains risk or cannot explain risk.

Risk comes with a potential gain and a potential loss. Understanding what it means to you and can do for you is fundamental to your capital gains and protection.

If I opened a high class Christmas cracker it might say about risk 'if there are strong winds, you can build a wall or a windmill'. Christmas is great.

So why might many investors be close to losing all their money when they believe they are protected?

These plans work as follows: A plan provider (a bank for instance) creates a product by placing some of your money with another financial institution. That financial institution offers a fixed return to the bank over a set period of time. So for example (in really simple terms) the bank is offered 5% per year over the next five years with UBS. The bank knows that if UBS pay that 5% per year they will have 25% (simple terms) in five years time.

And so they can place 80% of your money with UBS and in five years time the 80% will grow to 100% - hence your capital protection. The remaining 20% will be used to buy a range of complex financial instruments which participate in the upside of the stock market. So you might then see them marketed as '100% capital protection* (note the very expensive asterix) plus 60% of the upside of the stock market growth' (typically the FTSE100).

Seems good? Prepare for the deluge:

There are three key points: Firstly the 'capital protection' only works at maturity (end of five years typically) and you have to ask yourself over how many five year periods in history has the FTSE 100 not returned at least your capital back? Rarely. So what value does the capital protection really have? None really.

Secondly, these 'protected' plans will not benefit from the yield in the FTSE100 (i.e. its dividends). This is currently running at c3.2%. (1) So if you were invested into a product such as that above you would be 17% worse off at the end of the term.

The most worrying issue however, is in relation to the 'capital protection'. Remember these are aimed at investors who are risk adverse.

There is a potential with these plans that an investor could lose all their money, unlike the stock market where your capital simply fluctuates up or down. If the institution from which you are buying the capital protection goes bust, there is no protection under the financial services compensation scheme, due to the 'large company' rule. Therefore your money could be completely 'out the window'.

And here is where companies put investors at risk. The lower the credit rating of the institution, the bigger the return they offer, so banks can simply move downwards with their choice of provider to then offer higher returns, catapulting your risk skywards.

A credit default swap (basically the cost of insuring a company's debt) is a good analysis of a company's strength. Today the cost of insuring £100 of Lloyds TSB's debt (127.35) is 119% more expensive than the cost of insuring HSBC's debt. (2)

This cute move of moving down the credit curve is putting millions of cautious investor's capital at risk and they are oblivious to it.

If you would like investment advice call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

(1) Invesco

(2) BSAM

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Princess Yachts in cruise control

14-01-2010

PRINCESS Yachts has been awarded the title Boat of the Year for one of its vessels being exhibited at the London International Boat Show.

Its acclaimed Princess V62 (pictured) won in the sports cruiser category and is one of 12 yachts from the Plymouth boatyard on show at the event.

Judges said the luxury yacht was their “unanimous choice” as category winner, praising its “blistering performance and agile handling”. The panel said: “The V62 is as close to sports cruiser heaven as you can expect.”

It is the second year running that Princess have collected the award in the Sports Cruisers category. Managing director Chris Gates said: “We take real pride in making every Princess the best they can be, so to receive independent recognition that you have succeeded is extremely rewarding.

“The whole team can be very proud of this award, it is yet another testimony to the passion we have throughout the firm to produce world-class boats.”

Princess premiered its 22.35-metre 72 motor yacht at the show.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Firms urged to help raise £1m for local communities

14-01-2010

BUSINESSES in the region are being urged to help the Western Morning News raise more than £1 million for community groups in Devon and Cornwall.

As part of our Think Local campaign, sponsored by independent financial advisers Worldwide Financial Planning, we aim to raise £1 million extra cash for grassroots projects helping people in need through the WMN 150th Anniversary Challenge Fund.

To mark the paper’s 150th anniversary this year, the WMN is inviting all businesses to get involved in a unique opportunity to secure matched funding from the Government for voluntary and community groups.

The Government is making £1 million available through two local charities – Devon Community Foundation and Cornwall Community Foundation – as part of the Grassroots Endowment Challenge.

If local people can help us to raise £1 million, the Government will match the amount to benefit community groups across the region. If the money is not raised, the match-funding will be lost.

To date, companies and organisations helping us include Worldwide Financial Planning, Devon and Somerset Law Society, Crealy Adventure Park, Coutts & Co and Tregothnan Botanic Garden. We are urging more companies to take the lead to help us secure this funding which will go elsewhere in the country if we do not secure it in conjunction with Devon Community Foundation and Cornwall Community Foundation.

Last month we launched the Dinner 4Good fundraiser, supported by the region’s celebrity chefs, who are encouraging readers to host their own dinner parties either by using celebrity chefs’ menus or their own.

Michelin-starred chef Michael Caines of Gidleigh Park in Chagford and ABode, Exeter; Mitch Tonks of the Seahorse, Dartmouth; Jason Hornbuckle of Lewtrenchard Manor, near Okehampton; Paul Wadham of Hotel Tresanton at St Mawes; and Neil Haydock from Fifteen Cornwall, at Watergate Bay, have supplied their favourite menus and recipes to inspire readers to hold their own dinner parties.

Using the website, www.dinner4good.com, readers can mail out invitations to guests and receive donations online.

If you would like to Think Local and help the WMN raise this much needed cash boost, contact deputy news editor Eleanor McGillie at thinklocal@westernmorningnews.co.uk, or by calling 01752 765538 to discuss ideas.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Olympic tourism opportunity for holiday let firm

13-01-2010

A LUXURY holiday lets firm has agreed a deal to market 50 apartments in the heart of what is likely to become an Olympic tourism hot spot.

Brixham-based Blue Chip Vacations has already begun taking bookings for the first single story, duplex and triplex apartments to have become available near the 2012 sailing venue, in Portland, after entering a marketing deal with London-based property developer, Comer Homes.

Blue Chip Vacations will take a quarter of Comer’s Ocean View apartments – currently being fitted out – in tranches of 10 between now and 2012.

They have begun to market them as luxury self-catering units, with an eye to accommodating competitors taking part in the Olympic and Paralympic Games, as well as sailing events held in the lead-up to the major sporting events.

Blue Chip’s head of property portfolio Philip Newnes said: “Ocean Views overlooks the Olympic course and some of the best sailing waters in Europe, making it a prime location for visitors, competitors and sailing fans looking to stay on Portland.”

Weymouth & Portland Borough councillor Howard Legg said the accommodation would also benefit the region’s high-end tourism market.

“Combined with a growing interest from sailing competitors and support teams who have been looking for accommodation close to the 2012 sailing course, these new self-catering apartments will help to meet a very real demand,” he said.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Sales hike boost for housebuilding group

13-01-2010

By Catherine Barnes

CONSTRUCTION and housebuilding group Galliford Try has been “very encouraged” by half-yearly figures indicating a hike of more than £40 million in sales.

In its trading update ahead of the publication of its results next month, the construction plc said total sales on reserved, contracted or completed properties within its housebuilding sector stood at £324 million on December 31, compared to £281 million the previous year.

It added that while the housing market had provided an opportunity for cautious optimism, the spread and depth of its construction business across its market sectors would continue to be a key strength.

It said cash generation within its contracting business was “excellent” with the group holding net cash of around £100 million, compared to £34.1 million in June 2009.

The firm said the housing market had continued to demonstrate a stability that returned during 2009.

It said 638 homes were completed in the period, at an average selling price of £181,000, compared to 964 units last year, at an average selling price of £171,000.

It said lower unit completions in the first half were a result of “minimal stock levels” at the start of the financial year, as a follow-on to a reduction in capital spending in 2008/09.

Last month, the group – which owns Newton Abbot based Midas Homes and Gerald Wood Homes of Totnes – said it has continued to make “good progress” in bringing land acquisition opportunities to fruition, following the raising of a net £119 million in the rights issue that was completed during October.

This includes 156 plots with the £200,000 acquisition of award winning Truro-based Rosemullion Homes, announced in December.

Galliford’s total land bank stands at 8,800 plots of which it said 3,200 plots were acquired under current market conditions, since the start of its last financial year in July 2008. It has also agreed to acquire a further 1,600 plots.

Galliford Try is one of six organisations to have been selected as a delivery partner on all three of the Homes and Communities Agency’s (HCA’s) development partner panels, which will develop affordable and private housing on public sector sites across the whole of England.

The group said the move had given its affordable housing and regeneration business a “significant advantage” in securing new development opportunities.

It has been allocated £31 million of Kickstart funding from the HCA’s housing stimulus package.

The group said its construction business continued to perform well in challenging markets, with a “resilient” contracting order book standing at £1.75 billion – 3 per cent higher than at the same point last year. Almost 90 per cent is for public and regulated sectors, with 92 per cent of anticipated revenues for the financial year to June 30 secured.

In November, the company announced it had submitted an appeal to the competition appeal tribunal, following an £8.33 million fine imposed by the Office of Fair Trading for cover pricing which took place in the early 2000s.

Galliford Try said exceptional provision will be made for the financial penalty in financial statements for the half year, due on February 24.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Sovereign debt crisis looms

12-01-2010

A NEW year, a great year? Unfortunately not. This column accurately predicted the inevitable back in 2007, and how that would run out in time for an election, and the very real potential of a hung parliament. (By the way prepare for lots of media coverage on that subject).

Politics are very political. In 2007, Mr Brown was (probably as any politician would have been at the time) under big scrutiny. It was clear a recession was on the way. With that much excess in the system, an inflated economy would inevitably cause a bubble. Faced with an election in 2010, I figured they would use the old skill of bringing forward an outcome. If you know something is inevitable, bring it forward.

And so all the headlines from the chaps at the top were about very difficult times ahead. 'The UK needs to brace itself' and so on. One minute we were all told to be happy then we were all told to be sad. One minute all the different folk at the 'house price index' say house prices are rising then they are falling. The power of the media.

And so with the recession brought forward, the timing of when to drive us back out was the next key. Eighteen months ahead of an election is the prime time, as that is how long it takes for any changes in fiscal policy to make their way through to the economy in full. Sure enough, with more timing than an 'x' factor singer, we had both quantitative easing and record low interest rates thrown into the system.

The next few months will be about winning an election, and the following couple of years will be about paying for that. So expect a nice run through over the next months. Expect news that we have been taken out of recession sometime over the next few weeks. Expect inflation to return and with it a threat of interest rate rises. We might even have a rate rise with the self appointed 'gold star' being the fact they have had to do it because they have been so successful in taking us out of the state we were in.

Then the pain will start. I might be cynical in thinking that capital gains tax was reduced to 18% at the same time that many other allowances were discontinued, only for the next budget to bring capital gains tax back in line with other taxes i.e. why would you have income tax at 50% and Capital gains tax at 18%. Watch out for that, and if you are thinking of selling assets I would approach your accountant to chat through the timing of any sale.

If you are a higher rate tax payer, what fun you will have. Mr Darling who announced higher earners will 'have to contribute a bit more' only 'while we resolve this situation' made the mother of all gaffs last week when he announced (mistakenly) that the higher 50% tax rate has been factored into the budget until 2015.(1) The higher earners will expect to pay £10.7b more over that period. Whilst that mightn't worry those under the higher rate tax barrier, most have seen that taxing brains doesn’t achieve much, as the better brains leave the country, or simply find the right adviser to mitigate the tax. There is always a way.

All this is coming at a time when PIMCO, the world's biggest bond house is preparing to sell off its UK Gilts.(2) Hmmm. The potential for a sovereign debt crisis looms large. This was always a risk, a risk we mentioned here in this column on countless occasions and the inevitable sell off of gilts will not be favorable. Gilts are seen as a benchmark rate for lending. The drive upward will not be favorable for the borrowers as gilt prices fall and the yield rises. PIMCO rated the probability of a UK downgrade to 80%. If it happened the U.K. would have to pay more for its foreign debt driving us further into the mire.

In the meantime however, equity investors are having a field day. In November '09 the investment management association announced that private investors bought £2.4bn unit trusts and OEIC's breaking the previous record of 2000.(3) Happy new year.

If you would like investment advice call Peter on 0845 230 9876, e-mail info@wwfp.net

(1) Daily Mail

(2) The Telegraph

(3) The Telegraph

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Finance deal agreed to upgrade wind farm

12-01-2010

By Catherine Barnes

THE company behind Delabole Wind Farm has secured £11.8 million funding to begin construction work on four giant wind turbines.

Good Energy Group said that a £9.6 million debt finance package from the Co-operative Bank, combined with £2.2 million equity from its own resources, was now in place to enable work to begin on “repowering” the North Devon site.

Final planning permission for the work, which will see Delabole’s 10 existing turbines replaced by four 357ft (110m) windmills, came through at the end of last month, after council approval was given in December 2008.

The building project is expected to be completed towards the end of this year.

The repowering of Delabole will see the 10 existing 162ft (50m) turbines replaced with the four, more powerful, Enercon turbines which, said a Good Energy spokesman, would harness the wind more effectively.

With a total combined capacity of 9.2MW, the turbines will increase the wind farm’s output by roughly two-and-a-half times, enough to supply more than 7,800 homes.

A spokesman for Good Energy said that there had been “few objections” locally to the proposed upgrade, which, he added, would take up a smaller surface area than the present turbines.

Good Energy chief executive Juliet Davenport said: “Increasing the capacity of Delabole will help contribute to Cornwall’s renewable energy targets, increase price stability for our customers and take another step in helping the UK reduce its carbon footprint.”

The repowering of Delabole is Wiltshire-based Good Energy’s first wind farm development project.

The company said it was currently “actively progressing” a pipeline of further investment opportunities.

Co-operative Bank business development manager James Sutcliffe said: “Delabole is a very exciting opportunity for our renewables team.

“We are very pleased to be working with Good Energy Group on this project and our aim is to utilise the experience gained from working with them going forward on other similar projects where there is an established demand for funding for such schemes.”

Delabole Wind Farm, the UK’s first commercial wind farm, began generating in 1991.

More than 26,000 homes and businesses across the UK now source their electricity through Good Energy, according to the company, which is unique in the supplier industry by buying and selling only 100 per cent renewable energy.

By paying them for the energy they produce, Good Energy also supports a pioneering community of more than 1,000 independent renewable generators that use wind, small-scale hydro, solar power and sustainable biomass to generate heat and power.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Students benefit from universities’ Flybe link

11-01-2010

FLYBE has teamed up with universities in the Westcountry to offer a foundation course designed specifically for the airline industry.

The airline is partnering Exeter College and the universities of Plymouth and Exeter to create the Partnership in Education project.

The project, which officially launches next week, will provide a “suite of qualifications” including leadership, management, airside operations and engineering.

Wendy Purcell, vice-chancellor of the University of Plymouth, said: “Partnership in Education is an exemplar of Government policy that advocates higher and further education institutions working together with British industry.

“By partnering Flybe, we have gained a unique insight into their educational needs, and from that we have been able to create a model that satisfies their requirements, but can also be applied across any sector with demands for work-based training to higher education level.” Last September, FlyBe announced that it has secured funding for a £24 million training academy in Exeter, which is expected to be completed in March.

Simon Witts, Flybe’s director of safety quality and training, said the new courses – many of which will be held at the academy – would help position the South West at “the very forefront of industry sector training worldwide”.

He added: “These critically important new foundation degree courses have only been made possible by the close co-operation of the key partnerships forged with the eminent educational institutions involved.

“As we move towards the reality of opening our own Flybe Training Academy, the prestige added to this new institution by these industry-specific foundation degree courses is yet another important milestone.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

£89m new look for city’s skyline

11-01-2010

AN £89 MILLION development that will transform the Plymouth skyline has begun in the city centre.

Demolition of the old TSW television studios and Foot Anstey offices at Derry’s Cross started shortly before Christmas. Two hotels, student accommodation and shops will rise in its place, with a 31-storey tower block at the heart of the Oceanique scheme.

“It will help the renaissance of Plymouth, which did falter slightly with the recession,” said Lawrence Butler, of Falmouth-based Devington Homes.

Demolition is expected to be finished by early April. Ian Hurst, demolition manager at contractors Ashcroft Group, said the icy weather had delayed work.

“The next thing will be to dig a great big hole in the ground and start pouring concrete into it,” Mr Butler said. “It’ll be this time next year before it reaches the level of what will become a boulevard through the development, and we can start building upwards.”

The first building to be finished will be a 170-bed five-star hotel on the Crescent, followed by a budget hotel with 140 rooms. Devington Homes will also build 182 student apartments.

The last part of the project will be the tower, which will contain 109 apartments for sale, with shops underneath.

The project was given the go-ahead in May, under the city’s Market Recovery Action Plan, designed to kick-start developments stalled during the recession. The scheme replaced an earlier version incorporating more luxury apartments and offices.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

They’re queuing up for Alfie’s red sledges

11-01-2010

SALES were certainly not on the slide for a Cullompton business which seemed to be one of the few beneficiaries from the heaviest snowfall in decades this week, writes David Shepherd.

While a number of retailers battened down the hatches as showers continued on Wednesday morning, Alfie Dolbear raked it in with sledge sales. Customers drifted in to his discount store on Fore Street where a total of 216 sledges were sold on Tuesday and Wednesday morning alone, at £8.99 apiece.

The businessman, whose plastic sleighs brought in a total of more than £1,900 over the two days, arrived at his outlet to find a queue of people at 8am on Wednesday who were all keen to hit the whitened Mid Devon hillsides.

A total of 500 sleds have been sold over the past three weeks after he stocked up on surplus supplies from wholesalers.

Mr Dolbear, 63, who has run Alfie’s Bargains for 35 years, said: “I sold 94 on Wednesday and 120 on Tuesday, but I had loads of people queuing up and I only had 80 in the shop so I had to get back in the van go and back to my shed and pick up some more.

“But I have had these in stock since February as I was offered a special deal because nobody wanted them, so I sat on them since then as I knew the snow had to come at some point.

“Up to a fortnight ago we also had blue, but now customers can have any colour they wanted as long as it is red,” he added.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Explaining insurance funds

05-01-2010

Is there really that much difference in performance between investment funds or are they all much of a muchness as I have some investments and pensions and I have no way of knowing whether or not I am getting the best performance for my money or not.

That’s an interesting one. Let me give you a really quick example by using the 'cautious' sector, why everyone should immediately look at who their money is invested with and look for independent investment advice.

Let's take an investor who has decided to invest into a cautious managed fund in pursuit of protection of their assets. The investor's general expectation would be that the returns would be broadly similar across most funds. Unfortunately not. Over the last year you would have had some very interesting results.

For example Marlborough fund managers have a fund that is down -12.4% over the last year with its MFM Tait Walker cautious fund.(1)

That may not seem to be much of an issue but when you see the average for the sector is +16.8% and that only two other funds have lost money over that year out of 168, you may think it peculiar. The best two funds returned 43% and 31% respectively. And so an investor in the best fund would be 85% better off than the worst fund for that one year!

Such disparities should not occur in a sector that is supposed to be cautious, yet they exist.

Similarly on a study of risk, the difference is immense. The riskiest fund, as measured by Standard deviation over five years, carries 221% more risk than the most cautious fund.(2)

If you look over five years the numbers are even more interesting. Top of the 'I didn’t do a thing with your money' list is AXA defensive distribution with a shocking -3.3% return over the period when the sector average was 18.8%.(3) Consider the poor folk who have over £132m invested here have the joy of an annual total expense ratio of 1.64% for the joy of losing that much money.(4)

A really useful measure of a fund is something called Sharpe ratio. In simple terms, Sharpe ratio measures how well the return of an asset compensates the investor for the risk taken. And so it’s a measure I rely on when ascertaining which funds to purchase or not to purchase for investors.

So consider what happens when I ascertain the worst Sharpe ratios over the five year period i.e. those funds who add least value for the risk taken. Ranking very highly in the 'we really haven’t done very well top 20' are some high profile names. Joining AXA are: three funds from Santander (was Abbey), two funds from a Barclays legal and general fund, one from Norwich union (Aviva), one from Lloyds (Scottish widows) and HSBC.(5)

As if banks haven’t had a bad enough time overcharging and making inappropriate decisions, here they are providing the worst value for the risk they are taking with investments.

And the charges are not too favourable: For example the Scottish widows balanced fund has a total expense ratio (basically the total charge) of 2%.(6) The Legal and General (Barclays) balanced portfolio trust has an even worse total expense ratio of 2.05% per year.(7)

Investors are also being subjected to an age old tradition of up front charges that they don’t need to endure. For example HSBC income fund of funds has an up front fee of 4%, and that is one of the cheaper options.(8) Three years ago we moved most of our customers to a system that enabled them to buy all their investments at cost (c0.3%), yet customers within these banks' funds are still being subjected to brutal costs and investment capability.

Seeing as the decade I have dubbed as the naughty noughties are out of the way, perhaps in the 'ones' investors will put oneself first.

If you have a query regarding a fund that you would like to ask Peter about call 0845 230 9876, e-mail info@wwfp.net

Source:

(1) Trustnet

(2) Lipper

(3) Trustnet

(4) AXA

(5) Lipper

(6) Scottish widows

(7) Barclays Legal and general

(8) Digital look

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: Paying through the nose

28-12-2009

Am I better paying my independent Financial Adviser via a fee or commission?

The answer here relates to any financial adviser rather than just an Independent Financial Adviser.

There is a perception in most people's eyes that if they have not actually paid out a cheque for financial advice that they have indeed got it for free. It will undoubtedly be the most expensive free lunch you will ever have purchased. Read on.

I'll cover the shocking costs in a moment but firstly, let us remember that the FSA have changed this and within the next couple of years an adviser will only be allowed to be called independent if they charge a fee.

In the meantime consider that when you approach a financial adviser, you expect advice. If a financial adviser is compensated for the 'advice' you are given only by way of selling you a financial product, how can that be good for you from an independence point of view.

I analysed three months of recent work and found that after a review of the prospective clients' needs and aspirations, as well as a two-hour conversation about risk, 38 per cent of customers did not need a product of any shape or form.

Interestingly, 41 per cent of those actually needed to stop a policy which had been sold to them through an 'adviser' (the definition of which is: one who gives advice; a fortune teller).

If this is the case most advisers would be giving their advice for free as they would be receiving no commission. There is no way that will happen.

As a consequence, the motivation to either sell a product or even 'churn' one (stop your existing policy and start a new one) is very high.

That covers off the motivation aspect but consider also the actual costs to the customer. A fee based adviser is typically a specialist adviser in that they will be highly specialist in one particular area rather than a generalist. As such the adviser is likely to be able to locate the correct solution very quickly rather than having to research the entire market place whilst charging you for this inefficiency.

Moreover, let's look closely at the actual costs of financial products. I will look at three aspects here: Life insurance, investments and mortgages.

Life insurance: If a 40 year old took out some life cover for £50 per month with commission attached, the total life cover is £328,626. If they had used a fee based independent financial adviser, the total cover would be over a third more at £444,428. (1)

Investment: If you purchased an investment bond via a bank or financial adviser the typical cost would be c10-11% including fees for set up and commission. The vast majority (99%) of what I see is an investment in an investment bond, which is the highest commission paying, but the least tax efficient product you can buy.

If you bought a unit trust or ISA, the typical set up fee is c5.25%, of which an adviser is paid 3% commission. In both these situations a fee based adviser would have no up-front costs and even if they charged you 3% set up fee, the savings to you are colossal.

Most quality investment advisers have access to the best products and unit trusts at virtually zero cost (there is always a creation price of c0.3% on an investment).

It is also quite common practise for an adviser to return every five years and move a product around (churn), thereby generating a new set of charges and commission for themselves which is invariably disguised with something contrived called extra allocation (another practise which will be shortly banned by the FSA).

Mortgages: Today, rates are not competitive and invariably many banks are not paying commission to mortgage advisers. The best rates are often achieved by the customer going direct to the bank some of which do not offer certain mortgages via a financial adviser. A fee based adviser would be charging for his service and would simply direct you to the best lender.

If you have a financial query or would like to see if you are being overcharged call Peter on 0845 230 9876, e-mail info@wwfp.net

Source: (1) The exchange

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Initiatives to benefit from European cash

22-12-2009

By Liz Parks

TWO separate Cornish projects have been awarded a total of more than £500,000 in convergence funding.

A bid to back business growth in the environmental goods and services sector by offering higher level skills training and advice to more than 200 employees and managers, is to receive almost £500,000 of European Social Fund convergence funding.

And an historic former dairy building in Penzance is to be converted to provide high spec, flexible, office accommodation with support from European Regional Development Fund convergence funding.

The skills project, Strengthening the Environmental Sector, is being delivered via the Learning and Skills Council which has awarded the contract to Cornwall College.

The college will use partners – Rezolve Kernow, Cornwall Development Company, Global Action Plan and Environment Kernow – to deliver the project which will include conferences, seminars and bespoke training to address skills gaps in the sector.

The project will target those involved in businesses and organisations including those involved in life sciences, marine and coastal, food and renewable energies. It will also support businesses diversifying into the sector and aims to strengthen the newly-formed Environmental Skills Network.

Mark Williams, ESF director for the Learning and Skills Council South West, said: “We are focusing on core aspects of training within those business areas central to the longer term economic potential of Cornwall and the Isles of Scilly.

“The environmental sector in Cornwall is growing and it is very important to support that with the specific skills the industry needs. This particular project will also help to ensure knowledge and skills keep pace with convergence research and infrastructure investments.”

Meanwhile, a former dairy building in Penzance is to be converted into flexible office space with support from the European Regional Development Fund arm of the convergence programme.

The Dairy Knights building, in Belgravia Street, will be converted to provide 168sq m of office accommodation with high speed broadband access.

The completed development will provide offices for up to 13 people. It is estimated the work will be completed in February 2010. The project, worth just over £241,500 has been approved for just under £90,000 from the ERDF convergence programme.

The project will be delivered by BBCB Ltd – a company which has worked on the conversion of a number of older buildings in the town including Leskinnick House and the former Meeks Emporium.

Neil Badcock, BBCB director, said: “This investment has made all the difference and without it the project and the resulting employment space would not have happened.

“We are very positive that there is demand for high quality office space in Penzance.”

Carleen Kelemen, director of the Convergence Partnership Office for Cornwall and the Isles of Scilly, said: “Higher quality workspace is key to supporting the growth of higher value businesses in Cornwall.

“Turning our historic buildings into workspace fit for the 21st century will give tenant businesses a unique offer to achieve a more competitive edge.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Pain-free Pre-Budget Report

22-12-2009

A Pre-Budget Report just before an election is never going to be too painful. If we expected anything other than vote winning ideas we were unrealistic in our expectations.

Such was my lack of interest; I avoided doing any of my normal phone ins and newspaper/website contributions and went to watch Snow Patrol with the children in Belfast. It seemed like a good gamble and it worked.

The Pre-Budget Report could be summarised via vote winning attacks and that's about it.

It's easy to tax and attack the rich and invariably the rich are the only ones who complain. But we have to think for a moment about why taxing brains may not be the best attack. Faced with the choice of setting up in business in Macedonia or the UK, one might feel a little inclined to trot off to the country that is a stone's throw from Greece and the beautiful Adriatic.

Personal tax is only 10% for both individuals and companies, who also enjoy 0% on any retained profits with only profits that are distributed being liable to tax.

With Labour costs at €428 per month you can see why companies may well consider it as a better alternative and the brains head Southeast.(1)

Interestingly, incentives in the Technology Industrial Development Zones (TIDZ) has put tax at 0% for the first ten years, no Vat and customs duties for export production and a subsidy of up to €500,000 towards building costs!

So why would someone with brains want to stay here and be taxed to high heaven? I hope Mr Darling has thought that through, but if recent reports are correct, he may well have landed us all with a bigger tax bill for the future. As the brains disappear, someone else has to pick up the slack and it will be the middle earners (basically all of us in work) that will foot the bill.

A leading UK money broker has now reacted by offering to assist its entire staff in relocating elsewhere in the world to avoid the tax being paid. That doesn't seem illogical does it?

But in our keenness to hate the rich we need to understand that we all play our part in paying fair and reasonable taxes to keep the world spinning.

Without a fair tax regime, you repel entrepreneurialism, brains and solid hard working people.

Admittedly the 50% super tax is only being levied until April on bonuses over £25,000 but this appears to be supported by the Conservatives and may signal a time for these companies to pack up and go.

Now whilst these banks are saying that people and capital are easily mobile, they will need to remember (when they are mid rant at a press conference) that our bank accounts are much more mobile than they are.

Much of this concern is actually relating to the feeling we, as tax payers have given the banks the capital so they shouldn't be paying bonuses.

Hardly. What has in fact happened is that banks have been supported or protected with capital which is simply a digital transfer of information on a screen at best.

The banks however have used this opportunity to now charge higher interest rate margins. Whilst base is sitting at 0.5%, typical commercial deals are being offered at 4.5%.

The customer is also being charged a hefty 2% fee ingoing and often an exit fee. It's hardly appropriate.

After a few years the banks will pay back their debt or relinquish their support, the government will take credit for that and the tax payer will be content. The true pain however will have been felt via the unsuspecting businessman who has paid through the nose for access to finance, and those battered by falling sterling such as overseas holiday makers and importers of goods where sterling's demise has crippled the costs.

All of this noise will have gone unnoticed in the pursuit of a hung parliament.

If you have a business finance query or problem call Peter on 0845 230 9876, e-mail info@wwfp.net

Source: Investinmacedonia

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: Getting business finance support

15-12-2009

My bank is telling me that it is still very active in lending in the commercial market but they are not supporting me and my commercial finance broker is struggling to assist me with my business finance. Are banks really being more relaxed with their lending or is this all hype?

Unfortunately banks haven’t really loosened their approach to lending that much; but expect to see things change soon. With financial Armageddon avoided and bank reserves heading north, things can only get easier for the business borrower.

Consider, however, the other potential solutions that are available to the business borrower.

Let me give you a few scenarios that we have come across in the last few weeks with readers; but first let me explain what a commercial broker can be: By and large (nearly every situation I have seen) a commercial broker offers advice on just commercial finance and there is no requirement under their ‘regulator’ to be independent, nor are they allowed to give any advice about any financial product you may have such as your self invested personal pension, your investments or tax position. This does not fall within their scope of advice and they are not trained to give this advice.

This is particularly worrying in that a pension is often the best way to buy your commercial property and a residential mortgage can often be the best place to raise deposits or finance yet the commercial broker in the above instance will not be able to assist.

An independent financial adviser is required to give independent financial advice but most importantly they can look at every potential solution as the examples below will show:

A reader called us asking if he could raise cash for his business. He owned his commercial property with a mortgage but his bank would lend him no more. He hated pensions yet his pension fund had nearly enough to buy the property from him. So we used his pension and raised a small mortgage inside his pension so it had enough money to buy his property and he now pays a rent to his own pension. He now has a tiny borrowing within his pension, has £112,000 in his bank account and can communicate rather differently to his bank, who now owe him.

In another situation we had a business owner who had a residential mortgage and he also had a director’s loan account within his business. A director’s loan account is where the business owes the director money either through capital he injected or through income perhaps he has not taken; but clearly already been taxed on. Directors tend to leave the cash in the account to assist with cash flow.

We advised he take the director’s loan account from his business, then repay his personal mortgage. He would then take out the same mortgage and inject back into the business. The net effect is the same in that he now has a mortgage of the same amount and the director’s loan account is the same value.

However, because it can be seen that he has injected this cash into the business he will now be able to claim tax relief on the mortgage interest payments. Cute.

All too often business' approach their bank in a position of weakness. For example they approach a bank with too small a deposit and as such the rate and terms are hiked northwards. If they had raised cash through their pension or even against their residential property (often at much more competitive rates) they would be in a position of power to negotiate the best fees and terms.

Furthermore we are now seeing many more foreign banks come to the market place. Of the most active in London are the German and Asian banks with Germany being easily the biggest players. With 85% of all transactions being overseas, it’s easy to see why.

I hope that helps but in simple terms make sure you seek Independent advice from someone who can cover all areas in-house.

If you have a business finance query or problem call Peter on 0845 230 9876, e-mail info@wwfp.net

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Flybe reopens its flights to Norwich

15-12-2009

FLYBE has reintroduced a route from Exeter to Norwich which was previously dropped due to a lack of demand.

The link from the South West to East Anglia was ditched from the airline’s winter schedules in 2008 and was not revived for summer this year.

But tickets have now gone on sale for flights which will operate from Sunday, May 23, to Sunday, September 26, 2010.

The route – which was deemed “economically unsustainable” less than 18 months ago – is one of five from Exeter which are making a comeback in the summer schedules.

Flights to provincial French destinations Rennes, Avignon and Bergerac, as well as the Croatian city of Dubrovnik, will return again next summer after proving sufficiently popular with passengers earlier this year.

The announcement of the airline’s full summer schedule means Flybe will operate a total of 20 summer routes from Exeter, with 226 flights a week.

It follows the news of a brand new through-running route from Exeter to Hanover via Newcastle, which will operate three times a week beginning on March 31.

Mike Rutter, Flybe’s chief commercial officer, said: “We’re delighted to be able to offer our Exeter passengers a choice of over 200 summer flights a week next year.

“We are committed to ensuring that Flybe offers an extensive range of affordable quality flights to the widest possible range of attractive destinations.”

Confirmation of the routes was welcomed by Exeter Airport’s commercial manager Jonny Rayner, who said: “Flybe really do offer a fantastic choice from their home base here at Exeter.

“It is great to see the full portfolio of routes continue in 2010 together with the additional link to Germany. This really shows the resilience of the South West market. We predict abundant demand for these destinations and a boost to inbound tourism for the region.”

At the time it was announced in July last year that the Exeter to Norwich route was being withdrawn, a spokeswoman for Flybe said: “We have introduced a number of destinations from Exeter and while we are keen to maintain as many as possible, it is simply not possible to continue with routes that fail to produce passenger numbers and are economically unsustainable.

“Flybe remains committed to growing its routes out of Exeter International Airport.”

Across the whole of its network, Exeter-based Flybe’s summer 2010 schedule includes 16 brand new routes, meaning the airline will operate a total of 3,738 flights a week.

Mr Rutter said: “In an environment in which other airlines are withdrawing services, we’re delighted to be offering close to 4,000 summer flights a week that include the operation of another 16 brand new routes.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

£100m shopping spree

13-12-2009

By Liz Parks

A FIFTY per cent stake in Exeter’s Princesshay shopping centre has been sold to the Crown Estate for almost £100 million.

Land Securities has now exchanged contracts with the Crown Estate on the 530,000 sq ft scheme which is home to more than 60 units featuring retailers including Debenhams, Topshop and Zara.

It is the first retail property acquisition in the Westcountry for the Crown Estate, which is broadening its London-centric property portfolio.

Land Securities will retain a 50 per stake in Princesshay and will continue with its property management role in the development, including its relationship with retailers.

The property giant has said it still intends to lead on any future development around the bus station.

It is understood that the Crown Estate will effectively act as a silent partner in the shopping centre.

Paul Clark, director of investment and asset management at the Crown Estate, said: “This acquisition forms part of a focused diversification strategy to reduce our central London weighting and we are delighted to be involved with such a high-quality, sustainable, city centre scheme.

“Joint ventures like this are increasingly attractive for us.”

Richard Akers, retail managing director for Land Securities, said: “The sale was agreed in July as one of the last disposals in our retail sales programme. We will continue to manage the retailer relationships established in Exeter and will use our development expertise to lead any future development activity for the centre.”

Exeter retail bosses said that the sale would not affect the day-to-day running of Princesshay.

Princesshay centre director Wayne Pearce said: “We’re delighted to enter into a mutually-beneficial partnership with the Crown Estate. The Land Securities team here in Princesshay will continue to deliver the best for our customers and retailers by handling the day-to-day management of the shopping centre.”

Exeter city centre manager John Harvey said: “I think it is helpful and healthy to have the Crown Estate now involved in the city centre. I’m not expecting that this development will have an impact that people would necessarily immediately notice.

“The Crown Estate is clearly a very significant player and, therefore, one could only conclude that it’s a welcome position that they are now involved in the city centre as it moves forward.”

While the Crown Estate has a strong commercial property portfolio across the UK, it has a much smaller presence in the Westcountry, with its main asset being much of the foreshore off the Devon coast.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

West flight academy construction begins

08-12-2009

BUILDING work has started on a multi-million pound training academy next to Exeter International Airport.

During a turf-cutting ceremony to mark the start of construction of the £24 million Flybe building, aviation minister Paul Clark described it as a major boost for the both the local and national economy.

The Flybe Training Academy is scheduled to open late next year. Once complete it hopes to provide world-class training not only for its own staff but for the airline industry as a whole.

The building, being designed and built by local firm Rok, is being part-funded to the tune of £4.3 million by the Learning and Skills Council’s new Capital Specialisation Fund with a further £2.8 million contributed by the South West Regional Development Agency, with Flybe footing the rest of the bill.

The 25-classroom academy will house up to four flight simulators and an apprentice workshop. It is being built on a 12-hectare site off Long Lane and will create around 200 jobs.

During his visit Mr Clark said: “I am delighted to see for myself the excellent work being done by Flybe and others to invest in its future.

“Our country has a proud aeronautical history, and I believe it also has a bright future. But we need to ensure the right skills are in place to deliver the high-quality workforce the industry needs.

“This new academy will present an exciting opportunity for all involved, and will be good news for the local economy and the country as a whole.”

Months prior to becoming the first UK airline out of 150 leading UK companies to sign the Government’s Skills Pledge in June 2007, Flybe had already announced its intention to replace its outdated training accommodation with an academy to incorporate flight simulators and an independently owned 160-room hotel.

Jim French, Flybe’s chairman and chief executive officer, said: “We are delighted that the Minister is here with us to share this important moment and officially mark the start of building of our world-class training facility.

“This major investment into training and skills’ development reflects a commitment that is very close to our hearts; it is a necessary component to the sustainable development of our company and staff.

“In today’s competitive global economy, it is vital to create and retain a highly skilled workforce to succeed and survive.”

Rok’s construction leader in Exeter, Bruce MacDonald, said his team was extremely proud to be working on such a prestigious and high-profile project for the region.

He said: “We have been doing plenty of ground work with Flybe to ensure the building fulfils its aspirations for a first class, environmentally sound facility for nurturing the much-needed skills of the future.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Boatbuilder to re-hire

08-12-2009

By Liz Parks

BOATBUILDER Princess Yachts is set to re-employ more staff in the New Year as it begins work on larger craft at its new Devonport base.

The Plymouth-based firm has already announced it will be re-hiring 20 staff who were made redundant earlier this year.

Now, with work at its new 15-acre waterfront site at the South Yard under way, the manufacturer is set to re-hire more skilled staff in January.

Managing director Chris Gates said around 70 staff would be working at the new site from January.

The firm has already spent around £1 million refurbishing and remodelling facilities in the yard in readiness for production of new 32-metre boats.

Princess Yachts has identified larger yachts as a key potential growth area for future sales.

But Mr Gates warned while the firm was optimistic about the future, it was still feeling the effects of the recession.

He said: “The economic environment is getting tougher. One of the things we have had for many years is a long order book. It’s normal for us to have a 12 to 24 month order book that has cushioned us. Now, that’s down to six to nine months which is more uncomfortable.”

Mr Gates said the firm was also facing competition from international rivals who had not moved swiftly enough to cut product levels and were heavily discounting their older models to achieve a sale.

“We need to take on some more staff in the not too distant future to enable us to grow into large craft – the 32m and 40m – but we are going to be very cautious,” he said.

Mr Gates was speaking as he signed an agreement with the Unite union to give employees access to more training opportunities.

Princess Yachts is to create a dedicated learning centre at its Coypool base where it will give employees access to PCs and learning materials so they can develop new skills in areas relevant to their jobs and elsewhere.

Princess Yachts will work with training providers such as City College Plymouth and the Sector Skills Councils to provide the training.

In January, a steering committee made up of management and employees, Unite representatives and City College Plymouth representatives will be set up.

The committee will develop the learning strategy, oversee its introduction and monitor its progress and by mid February, it is hoped that a funding bid will be in place.

Dave Springbett, regional officer with Unite, praised Princess Yachts for developing the initiative.

“This proactive step by the company is especially welcome in the current climate where many employers are cutting back on their commitment to training employees,” he said.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

New service to Germany by Flybe in the spring

08-12-2009

By Liz Parks

SOLDIERS’ friends and families are likely to among the main users of a new air route linking Exeter and Germany for the first time.

Westcountry airline Flybe will be launching flights between the city and Hanover next spring. The route will operate via Newcastle and will begin on March 31.

Mike Rutter, Flybe’s chief commercial officer, said that friends and relatives of armed forces personnel based in northern Germany were likely to make up a considerable part of passenger numbers on the route, following the success of other Flybe-operated services between Hanover and the UK.

“Because of the large armed forces concentration in Hanover, we have built a large business in getting family and friends over there to visit,” he said.

As well as tourists, business travellers are likely to make up the remainder of passengers because Hanover has a strong light manufacturing base as well as a reputation as a conference centre.

The service to Hanover will run three times a week, leaving Exeter at 7.20am and arriving in Hanover at noon and departing Hanover at 12.25pm to return to Exeter at 3.05pm.

Mr Rutter said he did not believe that passengers would be deterred from using the route because it was via Newcastle.

“We have got a through plane so passengers do not have to get off at Newcastle. They are on the ground for about 20 minutes which is nothing compared to the additional time they would spend if they were trying to go from somewhere else like Heathrow or Southampton,” he said.

With the aviation industry in a state of contraction, few airlines are announcing new routes at the moment.

But Mr Rutter said that Flybe would shortly be announcing more new destinations. “There will be a couple more announcements of new routes from the South West and from Exeter, probably next week – they will be leisure destinations,” he said.

The announcement has been welcomed by Devon’s business community, who said it could lead to increased tourism revenue and the chance to build better business links with northern Germany.

Exeter International Airport’s managing director, Jamie Christon, said: “Links to Germany have been on our wish list for many years and this route to Hanover looks set to please many travellers from the South West.

“There has been a gap in the market and we are delighted that Flybe is able to provide a service that will also bring extra in-bound tourism to the region.” Derek Phillips, chairman of Exeter Chamber of Commerce, said it would help bring inbound tourists into the region.

“Because of the Rosamunde Pilcher books there are quite a number of German tourists who want to visit the Exeter and Devon areas,” he said.

“We would hope to pick up more tourists because we know that the Westcountry is very popular with the German market.”

Tim Jones, chairman of the Devon and Cornwall Business Council, said: “The business community should now be looking to see what sort of doors could be opened by this, it’s not just about tourism, it’s a great opportunity to see what’s there.

“We need to be much more aware of opportunities in northern Europe. We already do a vast amount of trade with northern Europe and the indications are that this is where the future should be.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Don't forget your consumer rights this Christmas

07-12-2009

THE Christmas shopping frenzy is now in full swing but in the midst of all the excitement, Cornwall Council’s Trading Standards team are keen to remind people of their consumer rights.

What are the rules when returning unwanted gifts; are you protected in the same way if you buy on line; and, as the sales approach, what consumer rights apply to items bought in the sale?

Stuart Benson, Cornwall Council Public Health and Protection Service, Area Manager said: “The Know Your Consumer Rights campaign, launched earlier this year, is reminding people of their rights during and after the festive period.”

The key rules highlighted by the campaign are:

Goods must

. fit the description given

. be of satisfactory quality

. be fit for purpose

The Cornwall Trading Standards Team answers some common festive queries:

Do I have the same rights if I buy something in the sales?

Yes. If something is faulty, mis-described or not fit for purpose then it doesn’t matter if it was full price or in the sale – you are entitled to your money back. However, it is up to an individual retailer whether they want to take back an item because you have simply changed your mind.

What about unwanted gifts?

Again, it is up to the individual store whether they want to take back unwanted gifts. The advice is to check with the retailer when you buy the gift. If you are unsure what to buy, a gift voucher might be a better idea but do check any conditions and the expiry date. Some retailers offer a gift receipt to return unwanted gifts so it is a good idea to ask the seller if they provide these.

Do I have any rights if I buy from the internet?

Yes. You actually have additional rights when you buy a gift from an internet retailer. You have a ‘cooling off’ period of seven working days, however there are exceptions to this rule, for example when the gift has been custom made. During this cooling off period, any order can be cancelled or returned without any reason being given and they must give you a full refund.

Buy from well-known companies, those that you have done business with before or those that have been recommended to you. Make sure you have a postal address and telephone number, and have printed out your order and any terms and conditions in case of problems after Christmas.

If my new gadget breaks on Boxing Day who should give me a refund – the manufacturer or the retailer?

When you buy something your contract is with the retailer and not the manufacturer so if the goods are not up to scratch then it is the retailer, and not the manufacturer, who should give you a refund or replacement or repair the item. Return the item to the seller as soon as possible after purchase as your rights to a full refund may diminish as time goes by. Always keep receipts to show proof of purchase should you need to return the goods to the seller after Christmas.

What protection is there for credit card purchases?

If you use a credit card to buy goods or services costing over £100 and up to £30,000, you may be protected under the Consumer Credit Act. This states that the credit card company is equally liable for any breach of contract, so if a problem arises you can claim from the trader or the credit card company.

Stuart adds: “You are much more likely to get a fair deal, save money and get the right result if you are aware of your rights. This is especially important at Christmas when many people are spending money both on gifts and in the sales.”

How can I find out more about my rights?

If you’ve paid for something and you’re not happy, establishing your rights is the first step towards claiming the refund, repair or replacement you may be entitled to. Consumer Direct is a government-funded advice service for consumers and should be your first port of call for practical help with how to complain.

For more information go to www.consumerdirect.gov.uk or call the helpline 08454 04 05 06.

There’s also a quiz on the website where you can test your knowledge of consumer rights and win £150 of shopping vouchers.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Help for businesses struggling with rate increases

07-12-2009

TORBAY Council has pledged its commitment to help local businesses struggling with new business rate increases.

Every five years, the Valuation Office Agency re-values premises that are business rated. The object of this is not to raise more income but to re-distribute rateable values more evenly across the country based on activity in the market rental sector. The government has also re-introduced a transitional relief scheme to phase in changes over the five year life of the re-valuation.

Some premises, such holiday accommodation, licensed premises and petrol filling stations, are assessed slightly differently from other businesses and turnover over a three year period forms the basis of valuation, while for others the data collected is based on the position as at April 1, 2008.

As the proposed rate poundage will decrease by around 14 per cent, some business will pay less rates and transitional arrangements will phase in these reductions.

Torbay Councillor Kevin Carroll said: "While the draft rating list for Torbay shows that 4.2 per cent of businesses have a reduction in their rateable value, over 94.5 per cent will see an increase. The remaining 1.3 per cent will not change.

"It is clear that the data used to inform the re-valuation was gathered before the recession set in, and we will be approaching central government about this to try to get it re-considered.

"We will do everything we can to help local businesses deal with this including support and assistance with appeals and applying all of the statutory relief available. Business Link advisers offer a 90 minute session for businesses and will be working with us, Torbay Development Agency and the Town Centres Company to try and help lessen the impact in these difficult times."

The council are lobbying central government through the Local Government Association and will be preparing an advice leaflet for local businesses. This Will be available in January when the full implications are clear.

The council's Business Rates Team will be visiting the local chambers of commerce to offer assistance and advice. These meetings will take place at Brixham Chambers of Commerce (December 8), Torbay (January 11) and the Business Forum meeting (January 14). A representative from Business Link will also attend and will be able to take away any questions for resolution and response.

The meetings will cover the following topics;

. the actual financial implications of the new rateable values

. the impact on different types of businesses

. small Business Rates relief

. discuss appeals

. answer questions and give general business rates related advice

The council is asking all local businesses to contact their Business Rates Team for advice and support on 01803 207197 or email business.rates@torbay.gov.uk if they have concerns. The Business Rates Team can then do a 'health check' to make sure that businesses are getting all the help they are entitled to.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Yacht launch at boat show

02-12-2009

PRINCESS Yachts International is to reveal its new Princess 72 Motor Yacht at the London Boat Show next month. The Plymouth manufacturer will also be showcasing three of its latest yachts – the Princess 78 Motor Yacht, the Princess V78 and the Princess V56 sports cruiser at the event. Princess said the 72 introduced “new standards in design, space and finish”. The luxury craft features a deep V-shaped hull, infused with resin or weight-reducing efficiency and “poise” at sea. The yacht – which sleeps eight guests and two crew – comes with standard equipment including an integrated navigation system with autopilot and GPS and a large bathing platform which can be lowered and raised hydraulically to launch and recover a tender or “wetbike”. The 72 Motor Yacht has an asking price of £1,904,400 including VAT.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

May Gurney profits up 21% to £8.5m

02-12-2009

By Catherine Barnes

CIVIL engineering and maintenance group May Gurney has reported pre-tax profits up 21 per cent to £8.5 million for the first six months of this year.

The company – which has bases in Bodmin, Exeter, Plymouth, Plymstock and St Austell and about 850 South West employees – said long-term prospects were good, with a “record” £1.4 billion forward order book.

The Norwich-based firm – which provides maintenance and enhancement services to the highways, rail, utilities and general infrastructure sectors – said potential contract extensions were worth a further £900 million.

In 2008, it was awarded a £24 million three-year contract with Western Power Distribution, which delivers electricity to 2.5 million customers across the South West and South Wales.

During the past six months to September 30, May Gurney has secured contracts totalling more than £500 million. Last month, North Somerset Council announced it had agreed an £85 million deal with the firm to manage its waste collection and recycling services over a period of up to 14 years.

May Gurney chief executive Philip Fellowes-Prynne told the Western Morning News that new job opportunities could arise in the area, when the contract comes into play, in April.

Mr Fellowes-Prynne said the South West remained a “key heartland” for May Gurney, despite the loss of 150 jobs across Devon and Cornwall, as a major 10-year project to renovate mains water pipes was completed, this year.

“There is a lot of work in the South West coming forward,” he said. Among the contract bids that May Gurney has submitted is a new contract opportunity with South West Water. “We remain positive about the opportunity to win the work and await the decision with baited breath,” said Mr Fellowes-Prynne.

May Gurney’s most significant bid win over the past six months, was a new highways maintenance contract for Lincolnshire County Council worth up to £350 million.

During the period, its structures framework for Network Rail was also extended by a further two years and across a wider geographical area, with a contract worth of £40-50 million.

May Gurney said the total annual value of its public and regulated sector markets is now £14.9 billion.

Mr Fellowes-Prynne said: “Within the past six months, May Gurney has become the market leader in the UK’s local authority highways maintenance market following the win of the Lincolnshire County Council contract.

“In addition, we now deliver environmental services to 18 local authorities, with two of the UK’s most progressive local councils recognising our environmental services as essential to the delivery of their ambitious recycling and carbon reduction targets.

Despite these significant achievements, we are aware that our clients in the public sector face challenges in the coming years, with the impact of political change and a potential budget squeeze set against the trend of increased demand for ‘essential’ services.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

New managing director runs transport firm

02-12-2009

A NEW managing director has been appointed to run Plymouth CityBus after its sale to Go-Ahead was completed in a £20.2 million deal.

Andrew Wickham, who was previously operations director for Go South Coast, was appointed to the role with immediate effect.

Keith Ludeman, group chief executive of Go-Ahead, said: “Andrew has a wealth of experience in the UK bus industry and I am confident he will build on the strong reputation that Plymouth Citybus has for delivering high quality, locally- focused services for the community of Plymouth.”

The firm’s previous managing director, John Ackroyd, will be taking up a post with Go-Ahead’s operations in London.

The sale was completed yesterday after a meeting of Plymouth City Council on Monday where councillors voted in favour of the deal.

Council leader Vivien Pengelly said: “This is a good decision that will benefit the city and improve our local bus services. Go-Ahead is very well respected in the transport industry and in cities in which they operate.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Irish firm buys up a slice of Somerset

01-12-2009

By Russell Lynch and Catherine Barnes

SOMERSET-based Blackthorn, Olde English and Gaymer Cider have been sold to Bulmers’ Irish parent company C&C in a £45 million deal.

C&C – which owns Magners and the Tennent’s beer brand – plans to add the Somerset beverages to its portfolio of leading labels in the purchase from Constellation Brands.

The company is paying for the deal through a £60 million facility arranged with banks including Lloyds Banking Group.

The sale includes its Cider Mill at Shepton Mallet and Bristol distribution centre, which employ a workforce of around 250 people.

A spokesman for Constellation said: “Transfer arrangements are being worked through for existing Gaymer Cider employees and transitional plans are also being developed jointly by both C&C Group and Constellation.”

Constellation said following completion of the deal in mid-January, it would “continue to support” the cider operation, joining with C&C Group for “up to six months” to ensure the continuity of service for customers and suppliers.

C&C said the deal would strengthen its position in the UK, which is the world’s largest cider market by value.

The addition of Blackthorn will C&C an established mainstream draught cider, as Gaymer and Olde English are mainly sold in shops and off-licences.

It said that Gaymer was the smallest of the firm’s three main cider brands, but had the best potential for growth.

Of the 900 million litres of cider sold in the UK every year, only around a third is drunk in pubs with the rest bought in shops and off-licences.

The Shepton Mallet site is one of only three large-scale cider-making bases in the UK, capable of producing 200 million litres a year.

C&C chairman Tony O’Brien said: “This transaction strengthens our position within the world’s largest cider market and broadens the scope of the group’s existing cider offering.”

Troy Christensen, president of Constellation Wines Australia and Europe, said: “As part of the company’s efforts to enhance the prospects of the UK business, we embarked on a strategy to simplify the business and this is another move towards that goal. For the UK and in Europe, the drive is to focus primarily on wine.

“For Gaymer Cider, a successful and profitable business, the opportunity now exists to develop as part of a business that is focused on the cider and beer sector.”

Peter Spencer, managing director of GCC said: “This represents a real opportunity for Gaymer Cider and the people within the company.

“However, it is business as usual for both organisations for now at what is a very busy time of the year.

“Once the deal is completed we can look to manage the issues of integration and future planning. In the meantime my colleagues and I have a clear focus on our existing plans and business.”

Mr Christensen added: “The Gaymer Cider business and its employees have made an enormous contribution to Constellation over many years.

“The business will be in good hands and will complement C&C’s existing cider and beer portfolio.

“Their track record for growing brands makes this mutually beneficial for both companies.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Airline rejects suggestion of stock market floatation

01-12-2009

EXETER airline Flybe has dismissed reports it is preparing for a stock market flotation next March.

A report in the Sunday Times said the airline would be valued at £300 million and would look to float in March.

The report said Flybe advisers Merrill Lynch has been asked to prepare for a listing next year.

Flybe has been planning to float since 2005 and scrapped plans last year because of the economic downturn.

The company has said it is still planning to float – but not until market conditions improve and IPO (Initial Public Offerings) levels pick up.

A Flybe spokesman said: “Flybe’s business is delivering a robust performance against the backdrop of difficult industry conditions.

“The directors of Flybe are very pleased with these results and with the numerous growth opportunities which the business has options to action.

“Flybe has a long-standing business relationship with Merrill Lynch across a range of advisory and IPO levels transaction services.

“Flybe may consider the possibility of a public listing at some point in the future when the demand for IPOs returns and provided an IPO could be undertaken in the best interests of the company, its shareholders and customers.

“Flybe will continue to monitor this situation.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Airport to sell more land

01-12-2009

By Liz Parks

A FURTHER slice of land at Plymouth City Airport will be sold off next month in the second phase of a deal agreed with airport leaseholders Sutton Harbour Holdings.

The AIM-listed company, which is based in Plymouth, yesterday posted its interim results for the six months ended September 30, 2009.

The results reveal that Sean Swales, finance director of Rotolok (Holdings) Ltd, joins the company’s board from today – fulfilling a long-held ambition of Rotolok owner and major Sutton Harbour shareholder Dan McCauley to have board representation.

The results show a pre-tax profit of £1.2 million compared to £505,000 for the same period last year when the firm was hit by the full force of the recession.

Turnover levels were up 18 per cent to £19.2 million, compared to £16.19 million last year.

Chairman Michael Knight described the past six months as “a period of considerable progress”.

“I think, overall, we have made very solid progress. In line with market expectations we have had a good performance from our marine business. Overall, it has been pretty solid and we’re pleased to maintain our dividend,” he said.

The firm reduced gearing levels to 41.4 per cent, from 58.2 per cent in 2008, following cash injections from the sale of land at Plymouth City Airport, which will raise at least £11.8 million, as well as a successful share placing deal in September, which raised £6.7 million.

Managing director Nigel Godefroy said he was unable to give any further details about the amount of land that would be sold because of Stock Exchange rules.

The results say that the firm is “well within its agreed banking facilities”, although it may need to increase short term borrowing levels in the closing stages of some of its development schemes.

Sutton Harbour’s aviation activities through its regional airline, Air Southwest, made a loss of just under £1.5 million.

Mr Godefroy said the firm’s heavily-promoted London City route was performing well, with the aviation sector as a whole under significant pressure during the downturn.

“It comes down to maximising revenue and keeping costs as low as we can, but not at the expense of service,” he said.

Marine activity levels increased, with profit levels up to £858,000 compared to £701,000 last year.

Regeneration activities made a profit of £2.84 million, after fair value adjustment, compared to a loss of £312,000 last year.

Sutton Harbour has said that has made good progress in this area but it has warned that the general economic climate will see some schemes taking longer to deliver “and brought forward as market conditions permit.”

Mr Godefroy said yields from developments had dropped because of falling land values.

He said a development in Swansea would be delayed and waterside schemes in Plymouth could also be delayed, adding: “Perhaps there will be other schemes around the harbour we will delay to maximise the value to shareholders in the medium term.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Airport to sell more land

01-12-2009

Peter McGahan: Oil sharks? Hardly...

01-12-2009

‘Oil sharks sit off Brixham coast’. ‘Dear oh dear’ I thought as I passed the newsagent window. And like most of these things I yawned and resigned myself to that old saying ‘it’s like that déjà vu all over again’.

So is there any credence to the fact that bad boys are sitting off the coast ripping us off? I can’t believe I am even giving this space but here goes: Firstly, when oil was driven to $147 last year the resulting petrol price (which was blamed on oil) was less than it is today. Crude oil is priced at $77.07 today. (1) Explain that then.

Need I go on?

Secondly, this would only be true if we had a shortage of supply and/or an increase in demand. Neither is true, so I definitely could end this column here.

Thirdly, to my knowledge there are no product berths in the UK capable of taking vessels of this size and of course the real reason they are there is because this area of the coastline is one of very few places in Europe where ship to ship operations are actually permitted at sea.

Before I make my way to the real culprit you might like to consider how petrol prices are where they are. Currently VAT and tax represent just over 70p per litre and this will rise to over 72p when VAT returns to normal. (2). So forget the ‘sharks’, petrol without tax would be a mere 35p.

In any event, part of the blame offered for the price increase is the increase in demand, yet Mr Darling’s reason for increasing duty was detailed in his budget as: "Fuel duties in 2008-09 were £0.4 billion below their 2008 Pre-Budget Report projection and were lower than in 2007-08. Since fuel duty is charged on a per litre basis, this reflects a reduction in the demand for fuel."

So because demand is low he is saying he needs to charge more, yet we are being told prices are rising because of demand. Furthermore, the budget reveals that petrol will rise by 1p over indexation for the next four years! So I assume they believe that demand will still be low and can forecast four years ahead. Give me strength!

And so who else has their hand in your pocket? Last year oil prices were being blamed on global demand surging, blah, blah. Yet at that time, the reserves were all full and oil tankers sat in Louisiana and Iraq with nowhere to go.

Goldman sachs (who used to run the largest commodity index in the world) touted a $200 oil price which everyone fell for, except this column. However, very mysteriously, Goldman Sachs were ‘neutral’ on their oil stocks (i.e. they believed they were not worth investing more into).

How could they believe that the companies delivering the commodity would not benefit from the price of that commodity (oil) doubling in price? Their share price should have been tipped to soar. Perhaps because they didn’t believe it?

And so I decided to research the reason. To cut a long story short the culprit was speculative investors in commodities and in particular a certain type of investor.

In 2003 the total amount of money invested into commodities via index traded strategies was $13bn. In 2008 if this had risen to $17bn it would have been a spike. The total however was $260bn. So we had $13bn in history and $247bn in five years!

In 1936 US congress passed the commodity exchange act with the understanding that speculators could not dominate the futures markets. Unfortunately, the CTFC took steps which have now allowed these speculators virtually unlimited access to the futures markets. Wall Street banks were given exemptions from speculative position limits (they are blocked from investing too much).

The CTFC have now met to decide how to regulate this area closely and to close off such speculative position limits. They do it for agricultural and other commodities yet they don’t do it for energy. Perhaps the current noise around energy prices will be something to do with a last gasp push to get invested before regulation changes.

If you would like to speak to an independent financial adviser call Peter on 0845 230 9876, e-mail info@wwfp.net

Source

(1) oil price

(2) Tax payers alliance

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Safety product nominated for award

25-11-2009

AN INNOVATIVE safety product developed by an Exeter firm with support from the city’s university has been nominated for a national business award.

Packexe SMASH will feature among shortlisted products at the 2009 Real Business Growing Business Awards in London tomorrow.

Launched in May, it is an adhesive film used by rescue services to minimise the danger of shattered windscreens at the scene of road accidents. Scientists at the University of Exeter’s Advance Technologies department designed and engineered the unit used to dispense the film.

The innovative product prevents trapped casualties being showered with glass fragments as windows are removed or buckle under the pressure of rescue services’ hydraulic tools. Until recently, emergency services often used a sheet or piece of card to protect casualties from glass fragments.

Tomorrow, Packexe and the university team will find out if SMASH has been named New Product of the Year by a panel of judges including Dragons Den’s Theo Paphitis and Phones 4 U founder John Caudwell.

Mike Felstead, from the University of Exeter, said: “We’ve worked with Packexe on the dispenser project from the beginning. The team already had a great range of products, but this application process represented a significant new challenge. Packexe are worthy finalists for these awards and we are delighted to have been part of such a successful project.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Co-op begins £10m rebrand of Plymco

25-11-2009

By Catherine Barnes

THE Co-operative Group has launched a £10 million makeover programme to rebrand and upgrade 68 former Plymco stores in Plymouth, South Devon and South East Cornwall.

The Manchester-based consumer co-operative took over the operation of the Plymouth and South West Co-operative Society in September. It has already begun its multi-million pound revamp schedule – due for completion by the end of 2010 – with a £350,000 store makeover in Crownhill, Plymouth. The new-look outlet will be officially unveiled tomorrow.

Two further former Plymco stores will be relaunched under the Co-operative’s branding before Christmas. A spokesman for the group said that it had spent £1.1 million on upgrading the branches in Torquay’s St Marychurch and Fore Street in Torpoint.

David Parker, chief officer of the Co-operative Group in the South West, said: “The Co-operative brand is changing the face of high streets nationwide and is a highly visible representation of the renaissance of the Co-operative.

“This major investment in the former Plymouth and South West Co-operative Society stores will provide customers with an enhanced service and contribute to the growing financial success of our business.”

With the addition of the Westcountry’s 70 Plymco stores, the Co-operative Group now has a portfolio of 5,300 outlets across the UK, and is the world’s largest consumer co-operative.

Children from Plymouth’s Widey Court and Manadon Vale primary schools will perform the ribbon-cutting at the Crownhill branch tomorrow. Store manager Adam Fritzsche, will present each school with £100, to mark the occasion.

The Co-operative – which announced a 17 per cent rise in interim profits to £228.8 million, last month – acquired the Somerfield chain in a £1.6 billion takeover in March.

To date, three Somerfield stores in Devon and Cornwall have been converted to Co-operatives – in Exeter, Launceston and Sidmouth.

A spokesman said: “The Group plans to convert Somerfield stores to Co-operatives over a period of two years. The re-brand programme is already under way.”

Under the terms of the takeover, the Office of Fair Trading called for the Co-operative to offload 133 of the Somerfield branches it acquired. Yesterday, the spokesman said the group had concluded “all the OFT competition issues in Devon and Cornwall.”

Last month, it was revealed Saltash-based Spar distributor Appleby Westward Group had acquired former Somerfield branches from the Co-op in Keynsham, Liskeard and Minehead. They will be modified to become the region’s first Eurospar stores.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Talking commercial property

24-11-2009

Back in February I was asked about commercial property and if I would buy it and I said no.

The reason for that was because I believed that REITs would outperform them.

A REIT (real estate investment trust) in very simple terms buys real estate. Its main advantage (or disadvantage) is that it is effectively a share and that share can trade at a discount to the asset it holds.

For example, the REIT buys property that is worth for example, after all the market falls, £10m.

If there were 10 million shares you would expect each share to be worth £1. That would make sense? However in difficult markets REITs trade at a discount to their actual net asset value, so you can effectively buy exposure to the aforementioned property at quite a discount to its real value at that time.

When the market turns positive the REIT can then change and trade at a premium. The primary reason for this is that they expect the next valuation of the assets to be upward.

In July some of these REITs were trading at large discounts to their net asset value with Hammerson at 42%, British Land at 43%, Brixton estates at 51%, Segro at 42%. Had you bought this share in July when I wrote the column it was worth 279p. It is worth 449p this morning – a cool 61% return. (1)

Whilst REITS still have further to go because of the benefit of their gearing (borrowing within them to invest more), and in anticipation of the next valuation point where all their assets will be re-valued, the actual commercial property asset itself is now beginning to look good. A sure sign of the bottom of the property market is lots of for sale signs, but with a few noticeable exceptions this has not happened this time.

So why, after five years of advising against commercial property do I believe the commercial property asset is a worthwhile investment.

Firstly, commercial property is now a target for overseas investors and in particular pension funds who are focusing on the inflationary protection that commercial property will offer.

Armageddon was expected, and priced into the market, but that has not happened, and no-one now expects it to happen, so with depressed capital values the yield/income has been driven up.

Many rents in the city have upward only rent reviews and this is attracting the large sovereign wealth funds keen to make a yield. Income is everything, especially if it has inflationary protection which commercial property income benefits from.

What has caught the market by surprise is the fact that banks have not had to sell their properties and have retained them. The lack of supply to the market has kept prices buoyant whilst demand has soared. Whilst much of this has occurred in London, it’s a matter of time before it ripples out to other key areas.

From their current oversold position, commercial property is expected to rise by around 15-20% over the next six months.

In the city today there are 30 banks that are now keen to lend. Interestingly most are foreign banks and 13 are German. The overseas investor is buying UK assets at quite a discount because of the currency exchange rate and this is driving up demand for the commercial asset.

Many of the larger REITs such as Helical Bar, London and Stamford have been very buoyant and raised sizeable cash positions which are now looking to take advantage of any weaknesses. Most of these will also have hedged (protected) any threats of interest rate rises on their debts so that threat when higher inflation returns will be excluded.

Savill's announced that city Demand is now at a parallel with January ’08. The general belief is that demand will continue for the next 24 months whilst overseas money continues to pour into London. 85% of all transactions in London are from overseas investors. Sounds favourable. (2)

Source:

1)Yahoo finance

2) JLL EMEA

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Landlords raise glass to pub’s tenancy

24-11-2009

A HISTORIC Devon pub is being given a new lease of life after being bought by the St Austell Brewery.

The Three Crowns Hotel in Chagford, near Newton Abbot, which dates back to the 13th century, is now being run by landlords John Milan and Steve Bellman, who have more than 30 years in the industry and who already hold the tenancy for a number of the brewery’s pubs in Cornwall.

The purchase brings the total of pubs and hotels in the brewery’s estate up to 174 across Cornwall, Devon and Somerset. The acquisition came at the end of a successful year for the company, which saw it celebrate several major awards, including the title of UK Regional Brewer of the Year, which recognises the success of the business, the quality of its ales and its pub estate.

The brewery and the new landlords have embarked on an investment programme that has already seen the lounge bar and dining room refurbished. Six bedrooms at the front of the property will be the first to be completely overhauled, with work on other bar areas and the other 13 bedrooms set to follow.

Mr Milan said: “The Three Crowns Hotel is a fantastic traditional inn and I’m delighted to be running it. The next few months will be a really exciting time and I look forward to welcoming locals and visitors alike.”

Aiming to put the Three Crowns on the South West’s food map is new head chef Beatus Esholtz, who most recently spent 12 years as chef at the St Andrews golf course in Scotland.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Fact-finding mission from China

18-11-2009

BUSINESS envoys from the Chinese province of Deyang were in Plymouth yesterday on a UN-sponsored fact-finding mission.

The delegates visited the University of Plymouth and the Tamar Science Park to learn more about the potential for mutually beneficial relationships in the city. Their focus is upon areas including investment, strategic alliances, knowledge transfer and academic exchanges.

The visitors included the deputy mayor of Deyang’s municipal government, Siqing Li, the city’s economic administration committee chief, Zheng Pu, and a representative of the province’s industrial park, Xin Wang.

Yesterday, they met with representatives from the University’s Enterprise Solutions team, who run the Formation Zone and Formation2.0 business incubation centres.

They visited some of the institution’s centres of excellence in areas including robotics, advanced composite materials and marine technology. The group also met with businesses operating from the Tamar Science Park.

Professor Julian Beer, director of research and enterprise, and pro-vice-chancellor at the university, said: “This is a tremendously exciting visit and demonstrates that Plymouth’s reputation now extends around the world.

“Deyang’s economic strategy fits with many of our areas of expertise, and they are keen to understand the knowledge and technology transfer processes that we enjoy with the Tamar Science Park and incorporate that best practice into their own partnerships.”

Located in the west of China, Deyang has one of the fastest-developing economies in the country.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Home trader hot spots

18-11-2009

By Catherine Barnes

THREE Westcountry locations are among the UK’s top 100 hot spots for launching a business from home, according to a report.

Plymouth, Exeter and Taunton are among 11 towns and cities across the broader South West favoured by workers who become self-employed.

Enterprise Nation’s 2009 Home Business Report has revealed that home-based firms are generating an estimated combined annual income of £21.9 billion for the South West economy. The figure is anticipated to increase, with 89 per cent of UK home businesses expecting to increase turnover next year.

But the BT-sponsored report warns home businesses are “missing out on vital advice and help” because their success and growth is not being fully recognised.

It also calls for more out-of-hours support to help a new “five to nine generation” of home entrepreneurs, who hold down a day job and build their businesses during evenings and at weekends. Enterprise Nation – itself a home-based business – says that the awarding of grants and support from Government, regional development agencies and business support bodies should be more dependent on growth in earnings, rather than growth in employees.

It found that almost half of UK firms surveyed plan to increase turnover using freelances and outsourcing, while 42 per cent intend to make better use of existing resources. Only 4 per cent said they would consider hiring full-time employees.

Emma Jones, founder of Enterprise Nation and author of the report on the UK’s 2.8 million home businesses, said: “This report confirms that more people are starting up at home on account of lower costs and wanting a better work/life balance.

“Basing a business at home is certainly no obstacle to growth as home business owners are making the most of technology to outsource work and collaborate with other talented minds.

“It’s a most modern way to grow, yet it is not recognised in business support programmes and policy.”

Technology, including broadband, was vital for home business expansion, and 81 per cent said it was “critical” to their success.

Jon Reynolds, BT’s South West regional director, said: “These home-based entrepreneurs really are the lifeblood of their local communities.”

More than 60 per cent of businesses started in the UK begin at home, and nearly a third of the businesses surveyed this year were started during 2009.

The spare room is the most likely location for a home business.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Taxing time for lottery winnings

17-11-2009

£45.5 million. That surely is a good Saturday morning reading when you pick up your lottery winnings. But it isn’t all plain sailing as some of you might think! Consider the problems Les and Samantha, the lottery winners now have. There may be some mild sarcasm to follow.

What about inheritance tax (IHT)? The UK government will have helped Les and Samantha with the extra nil rate band for Inheritance tax. That will have pulled the total IHT bill down from £18,070,000 to a mere £17,940,000 - What a bonus that is. No sooner will they have the cash than they will indeed be trying to get rid of it.

And for savings and investments - the extra allowance for an ISA will help as Les can now put £10,200 into an ISA but Samantha will have to suffice with £7200 as she isn’t reached the fine age of 50 yet. She can enjoy that pleasure in April 2010 when everyone will benefit from the higher allowance.

There are investments they can make which are taxed as income and investments which are taxed as a capital gain. An investment into a range of products that attract capital gains tax which performed at a growth per year of 7% will, after allowances, attract £573,300 in tax per year and will be rising year on year.

This is still more attractive than the good old investment bond which most people invest into. Unfortunately for Les and Samantha they will be hit for their highest rate of tax on the income on any gain in a bond. For example an investment into an onshore investment bond (which is basically a default vehicle for most bank or tied financial advisers) would enjoy the highest rate of tax on the gain. So they invest at year one and five years later after a return of 7% per year they decide to encash. The gain which is added to their income for the year is £18,316,103.

If plans to tax higher rate tax payers at a mere 50% come into play in April 2010, Les and Samantha will have to part with nearly £9m in tax. But consider the poor commission based financial adviser with his 7% commission who will have to struggle with over £3.1m commission initially. I suspect the Scaddings might bargain with them on their commission though.

So a few tips to consider: The accountant you used to work out your day to day expenses will probably need an upgrade.

Investments into an offshore bond should be considered but use a fee based adviser so as to pay for the services in a tax efficient manner. An offshore bond allows for tax free growth on the investment (apart from a small element of withholding tax in certain countries of origin). All the investments inside this tax efficient wrapper can be traded without any liability to capital gains tax. Les and Samantha could disappear for a year and become non resident and then encash the bond outside of the Uk's tax regime. This would potentially save nearly nine million; They should now, much to their childrens' delight, make whatever gifts they can to mitigate inheritance tax; they should also use a qualified investment specialist rather than a generalist and ask for lost of opinions on their ability; If they decided to set up a business with their family they could receive 100% relief for Inheritance tax on death as it may be classed as a business asset. There are other trusts which can be created to allow the capital to be gifted away but retain an income but they will need careful advice at the £45.5 million mark.

And….whilst I am sure they will not let it affect their lives, they will probably, for tax reasons, knock the overtime on the head.

For investment advice call Peter on 0845 230 9876, e-mail info@wwfp.net

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Burgh Island wins top environmental award

17-11-2009

AN ICONIC South Devon island resort has won a top industry award for its environmental responsibility.

Burgh Island and Hotel has received the Green Tourism Business Scheme’s Gold Award, following a recent inspection which examined all areas of its business practice.

The Green Tourism Business Scheme (GTBS) is a national sustainable tourism certification scheme, approved by Visit Britain, through the International Centre for Responsible Tourism.

The organisation awarded Burgh Island top marks for its commitment to sustainability. Praising owners Deborah Clark and Tony Orchard, the GTBS judges said: “The owners and staff have taken the opportunity to embrace a whole island environmental approach, with success.

“In an environmentally sensitive area, surrounded by coastal habitats and natural and cultural heritage, efforts have been made for the hotel and guests to have the least impact.”

Ms Clark and Mr Orchard married at the hotel on the island in April 2001 and became owners in residence of the entire place, six months later.

The couple invested £1 million to restore the hotel to its original 1930s luxury. The island orders supplies from local food producers and craftsmen and actively promotes its support for – and involvement with – other local business, said Ms Clark.

In 2007, Burgh Island received a Gold Award from the Green Apple Organisation for conservation.

Ms Clark said: “We are over the moon about this award from a nationally recognised organisation. We were one of the first businesses to join the GTBS on its inception in 2003 and are deeply supportive of its aims.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

£40m broadband cable plan for city

17-11-2009

By Liz Parks

PRIVATE and public sector organisations in Plymouth have been urged to back a £40 million scheme to secure better broadband connectivity for the city.

Kick-starting the city’s celebrations of Global Entrepreneurship Week, a report on the business case for superfast broadband in the city was unveiled to the city’s business community yesterday.

Economic development consultancy Adroit Economics, which compiled the business case study commissioned by the City Development Company and project managed by the Chamber of Commerce, delivered their draft report at the city’s New Continental Hotel.

A price tag of £40million has been put on the scheme, which is called Digital Plymouth.

Most of this funding is expected to come from the private sector, with a small amount of pump priming funding being sought from the public purse. There are three main strands to the scheme.

Firstly, connecting Plymouth up to the transatlantic cable that passes near the city and would offer much faster speeds.

Secondly, building a “world class” data centre at Mount Wise to offer a high-class data storage centre to businesses based across the UK and even internationally.

Thirdly, the scheme would involve connecting every building in the city – residential and commercial – to the Internet by fibre optic cable to give faster and cheaper broadband access.

Fibre firm H20 has said that it was willing to foot the estimated £35 million bill for installing this network of cables, using the city’s sewerage system to give access to the buildings with minimum disruption.

The firm is currently in “advanced negotiations” with Plymouth City Council to sign a memorandum of understanding to allow this to go ahead.

If this is agreed, the scheme would take around 12 months to plan and a further two to three years to roll out.

The private sector is also working on plans to fund the Internet exchange that would be needed to connect to the “broadband motorway” – likely to cost up to £6 million – but this would be reliant on securing advanced orders for very high speed broadband to unlock the necessary bank funding.

Dr Steve Sheppard, managing director of Adroit Economics said Plymouth was in a strong position to become a UK leader in connectivity – if it seized the opportunity.

“If Plymouth falls significantly behind competitor cities and regions, its businesses and residents would find it more difficult to use applications and services that are starting to become commonplace using high bandwidth broadband in the rest of the world,” he said.

Dr Sheppard said that 44 per cent of businesses in the city wanted broadband of at least 50mbs but were currently unable to get it. He warned that Plymouth would be at a “substantial disadvantage” without better connectivity.

Neville Cannon, Plymouth City Council’s head of ICT, said: “The speed of change is so great that if we don’t keep pace with things then we will lose out.”

David Parlby, chief executive of Plymouth Chamber of Commerce, said the scheme should be a priority for the city to help it realise its ambitious growth targets. “It’s absolutely fundamental if we are serious about building the finest European waterfront city,” he said.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Authority’s quarry buyout saves 12 jobs

13-11-2009

A CORNISH quarry has been sold out of administration to Cornwall Council.

Castle Granite, which operates from Castle-an-Dinas Quarry at Ludgvan, near Penzance, went into administration in April.

It has been sold as a going concern for an undisclosed sum to Cornwall Council. All 12 jobs have been secured.

Administrators Ian Walker and Gilbert Lemon, from business recovery and insolvency specialists Begbies Traynor in Plymouth, undertook an extensive marketing campaign during which time the business continued to operate.

The quarry’s granite is used in building and construction, and there is a strong local market for its natural stone and aggregates.

Its Macadam plant supplies material for road construction throughout Cornwall.

The council’s highways business manager Robin Fisher said: “This is an excellent purchase for the authority which secures employment for local people and enables us to enter the coated stone supply market at a very reasonable entry point. We look forward to this being an excellent addition to our provision.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Lawyers to run seminars on planning process

13-11-2009

THE planning team at law firm Foot Anstey is hosting seminars this month aimed at all those involved in the planning process.

The team is inviting people to attend an event whether they are involved in the process individually or as advisers, and whether promoting or opposing development.

The seminars in Plymouth, Exeter, Truro and Taunton will update delegates on a range of topics, including recent and imminent changes in planning, occupancy conditions and criminal liability in the field of planning.

The objective is to provide practical guidance as well as explaining current trends.

Gareth Pinwell, partner and head of the planning and regulatory team at Foot Anstey, said: “We hold two of these events a year so that we can keep the planning community as informed as we can on developments, and what we see as emerging issues.

“Not only will we discuss changes in law, but we also try to look at topics and provide practical solutions to those attending. By holding a seminar in each one of our regional centres, we provide the opportunity to keep the event local and the conversations relevant.”

To reserve a place, e-mail www.footanstey.com/events or telephone 01752 675136.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Tenders sought for former landfill site

13-11-2009

TEIGNBRIDGE District Council has begun advertising for a development partner for a former landfill site in Teignmouth.

Development plans for the site at Broadmeadow include a new supermarket with 2,000 sq metres of sales space as well as additional work space to attract businesses to the area. There are also plans to clean and restore contaminated land at the site.

This week, the council has begun to actively seek partners to tender for the opportunity to develop the site, advertising in trade publications. It is asking interested developers to complete a pre-qualification questionnaire by December 9, ahead of a formal tender process.

It plans to award a contract for the work by May 2010 and hopes to see preliminary work on formal development proposals begin soon after that.

Playing fields at Broadmeadow have not been used since 2001 due to contamination issues associated with the former landfill tip, which ceased operating nearly 30 years ago.

The council has investigated various proposals for the site since the closure of the playing fields, with a view to bringing them back into use.

Councillor Alan Connett, leader of Teignbridge District Council and executive spokesman for resources and budget, said: “In the current economic climate, the regeneration of Broadmeadow will help in providing jobs and long-term employment space for new businesses and bring playing fields back into use.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Group to focus on developing airport

13-11-2009

By Liz Parks

A NEW development group for Newquay Cornwall Airport will eventually seek to find a private sector operator for the airport, it has been revealed.

Plans to set up the group, in response to John Mills’ report into the airport’s 19-day closure last year, were given the go-ahead at Cornwall Council’s cabinet meeting on Wednesday.

The now-disbanded Cornwall County Council, which owned the airport, had been due to take over running the airport from RAF chiefs in November 2008.

But because it failed to get the correct licence from the Civil Aviation Authority in time for the RAF pulling out on November 30, the airport was closed for three weeks December at a cost of more than £1 million.

Mr Mills’ 97-page report recommended that “a specific, small group needs to be established within the council to promote and govern the council’s interest as shareholder”.

Members of the development group will be chosen by Coun Carolyn Rule, Cornwall Council’s cabinet member for economy and regeneration.

She said it was likely to include herself, Coun Graeme Hicks and senior council officers such as Tom Flanagan, the council’s corporate director for environment planning and economy.

The group’s remit will include developing a strategy and identifying priorities for the airport, monitoring its performance and advising on plans to attract a private sector operator to run the airport.

“It’s all at a very early stage. The first meeting will be to set the terms of what we hope to achieve from the group,” said Coun Rule, adding she was keen to hold the first meeting of the group as soon as possible.

At present, the airport operates at a deficit which this year is predicted to reach £5.14 million.

The council has said it wants to reduce its subsidy to the airport as it finds its feet as a commercial operation after years of military infrastructure support.

Council figures show its deficit in 2010/11 should drop to £4.23 million and £3.99 million in 2011/12.

The council is currently working on a “fundamental review” of the airport’s business plan which is due to be completed by March next year.

Coun Rule said improving the airport’s finances would be a key role for the new group.

Finding a private sector operator for the airport was a “long-term aspiration”, said Coun Rule, with the short-term priority for the airport team to “do the day job”.

“We have got excellent airport directors. The airport has been recognised by the industry and the team there are all doing a good job,” she added.

The three council scrutiny committees, which already consider decisions made about the airport, will continue to operate as normal when the group is up and running.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Image makeover sees bottled water sales rise

12-11-2009

A NEW-LOOK image for a Cornish bottled water brand has seen sales soar, say the company’s owners.

In the first full month following the re-launch of their Just Water, retail sales increased by 29 per cent, according to Pauline and Colin Dyer.

The Bodmin company – launched by the Dyers on their working farm in 2002 – commissioned its fresh new look from Truro-based Aawen Design.

“We have come out with an extremely strong identity for our range, which in turn has had a really positive impact on sales,” said Mrs Dyer.

“The new identity has also been directly responsible for us picking up new customers, including a number of the Spar shops in Cornwall, in addition to our existing customers such as the Eden Project. Our wider retail customers also reported increased sales.

“We had never really developed the brand for our retail range. Despite good sales, we felt the original branding and labelling was getting tired and needed a fresh new look.”

Aawen’s director Adrian Taylor has worked on Schweppes and Bulmers brands in the past and re-configured Just Water’s image to appeal to its target market of 18 to 30-year-olds.

He said: “The original branding just didn’t fit in with this age group. Pauline and Colin now have a much stronger and more identifiable brand for the range.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Accountancy online

12-11-2009

A CHARTERED accountancy has introduced an accounting package that will enable businesses to manage their paperwork online.

Exeter-based Simpkins Edwards, which has five offices and two market-based practices in Devon has launched Libertyse, which it says will allow businesses to manage their accounts securely through their web browser.

The software, developed by Liberty Accounts, has been introduced as a “value added service” by the Exeter firm to its clients. Customers will be able to log on anywhere to view and review their details, in between meetings with their accountant.

Simpkins Edwards partner Mary Jane Campbell said: “Our software is cost-effective, flexible, easy to use and above all convenient. It’s accessible from any Internet connection, which is a big plus for busy people. Libertyse is a fully-functional online accounting package, perfect for businesses that have remote or multiple offices or for owner-managers who travel. It also works on any PC, Mac or Linux-based computers.”

The system’s book-keeping and payroll facilities have been built to manage the online filing of VAT and PAYE returns.

Adrian Hemmings, partner at Simpkins Edwards, added: “Because the accounts are online, it is easy for us to work collaboratively with our clients.

“We can simply log on to do month or year-end reports. We can see who owes money and chase the debts. We can even load transactions on to the system for you.”

A CHARTERED accountancy has introduced an accounting package that will enable businesses to manage their paperwork online.

Exeter-based Simpkins Edwards, which has five offices and two market-based practices in Devon has launched Libertyse, which it says will allow businesses to manage their accounts securely through their web browser.

The software, developed by Liberty Accounts, has been introduced as a “value added service” by the Exeter firm to its clients. Customers will be able to log on anywhere to view and review their details, in between meetings with their accountant.

Simpkins Edwards partner Mary Jane Campbell said: “Our software is cost-effective, flexible, easy to use and above all convenient. It’s accessible from any Internet connection, which is a big plus for busy people. Libertyse is a fully-functional online accounting package, perfect for businesses that have remote or multiple offices or for owner-managers who travel. It also works on any PC, Mac or Linux-based computers.”

The system’s book-keeping and payroll facilities have been built to manage the online filing of VAT and PAYE returns.

Adrian Hemmings, partner at Simpkins Edwards, added: “Because the accounts are online, it is easy for us to work collaboratively with our clients.

“We can simply log on to do month or year-end reports. We can see who owes money and chase the debts. We can even load transactions on to the system for you.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Savebuckets compares well to the competition

12-11-2009

By Catherine Barnes

THE technology arm of a Cornwall-based independent radio group has developed a website to rival leading price comparison websites. UKRD, which owns Pirate FM, commissioned its eight-strong Exeter based website development team to create and launch www.savebuckets.com.

The team is behind the content management system that supports all UKRD radio station websites, and the format has also been licensed for sale to other companies.

Savebuckets is the latest “sideline” to emerge from the broadcaster’s technology department, following the successful launch of a number of consumer sites, which offer “tried and tested” advice on products ranging from pushchairs to toys.

Its developers say the site improves on the services currently offered by price comparison sites, which they found to be “confusing”.

UKRD’s chief technology officer, James Wenger, said: “There are a plethora of price comparison adverts on the television – mostly for financial services.

“We spent a considerable amount of time looking at these sites and ended up going round in circles on them. Most we looked at made it pretty complicated to find what we were actually searching for.

“We thought we could better, and actually add in a couple of useful things that no-one else was doing.”

One innovation the UKRD team developed for the site was a price tracker, which enables customers to “name their price” and e-mails an alert when goods become available or are advertised online, within their price range.

Mr Wenger said: “When customers hunt for something on the site and it’s too expensive, they can tell us how much they’d be prepared to pay for it.

“We then check the price for that item every day and when it becomes cheap enough, we send a link to the product.”

Customers can make their purchase by following the link to their selected suppliers’s website.

The company does not charge suppliers to be listed on the site, or add a commission of its own to the listed prices.

“We wanted to be as transparent as possible with this site,” Mr Wenger said.

“We don’t have any special relationships with the retailers, so there is no ‘favouritism’ in terms of how products are ranked.

“Our front page shows the most popular items people have been looking at, based on what products have been looked at on the site.

“We also wanted the site to be as clean, simple and clutter-free as possible, so we don’t carry product reviews.”

UKRD partnered with plebble.com, an independent ratings organisation. Plebble supplies savebuckets.com with consumer ratings awarded to retailers featured on the site, so that customers can opt to narrow their choice of a supplier down, according to fellow shoppers’ preference.

As an independent radio station UKRD has been able to support its latest website launch with on-air advertising, but Mr Wenger says ensuring top ranking on search engine listings has been the key tool for driving customers towards the site.

“We have worked very hard on our site to make it as easy for Google and the other search engines to find their way to it,” he said.

“We work closely with another local company – the Search Engine Optimisation arm of LBi – and they have helped us get some pretty good positions in search engines.

“Search for cheap toys, or iPods, for example and you will find us listed.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

£1.95m for former Toshiba location

12-11-2009

PREMISES in Plymouth formerly occupied by electrical giant Toshiba are now for sale at a quoting price of £1.95 million.

Acting on the instructions of Richard J Smith & Co, Alder King are marketing Lynher House at Estover, which represents an opportunity for owner occupiers seeking premises with investment potential.

The premises comprise a large distribution warehouse and office accommodation totalling 78,806 sq ft.

It is available freehold with vacant possession of the warehouse and two of the office suites.

The total site area is 3.65 acres and there is extensive car parking for the office suites attached to the accommodation, with five office areas and storage areas on the lower ground floor producing a total rental income of £108,800 a year until December 31 this year.

Scott Rossiter, partner in the Exeter office of Alder King handling the instruction, said: “The premises would ideally suit a firm looking to purchase their own premises and run a distribution operation, while benefiting from the income of the lower ground floor offices. There is also scope to expand into these areas should they become vacant.”

For further details contact Scott Rossiter at Alder King on 01392 353080.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Olympics offer £700m in new opportunities

12-11-2009

ORGANISERS of the 2012 Olympic Games and Paralympics have launched a tranche of contracts worth £700 million for tender, presenting golden opportunities for South West SMEs.

More than 5,000 business across an area from Cornwall to Swindon have already registered to supply the Games in some capacity since the ODA (Olympic Delivery Authority) initiated construction works on the competition sites.

Now Westcountry firms are being urged to put themselves forward to supply goods and services to furnish the 2012 sporting venues and accommodation.

Almost 80 regional firms have already been contracted by the ODA for the delivery of services. Many hundreds more operating within a seven-tier supply system have provided equipment, consultation and logistics as back-up to major contractors servicing the 2012 Games.

In this latest round of contract opportunities, the London Organising Committee of the Olympic Games (LOCOG) – the private company contracted to stage and deliver the Games – is seeking businesses to provide the Olympic venues and village with supplies as diverse as beds, uniforms, bag-scanners and flowers, to performing arts, IT backup and transport.

“The list is into its hundreds,” said Ian Gent, head of marketing and communications for Business Link in the South West. “The way to find out more is by registering on www.competefor.com.”

Support can also be found for firms wishing to register, via the Business Link website.

Businesses that wish to be informed of opportunities relevant to them must then be “published” – the next stage in the procurement process – which involves providing “non-intrusive” company details including turnover, policies and staff numbers.

“Businesses considering this route are seeing other opportunities connected with major national and international sporting events over the next 10 years, open up to them,” Mr Gent said.

“We haven’t found that people have been backward in coming forward to register – from sole traders to bigger companies. Some smaller companies might even wish to register as consortiums.

“The new round of Olympic and Paralympic contracts being issued over the next six months is a great opportunity.”

Guy Lavender, the Regional Development Agency’s South West director for the Olympics, said: “There are more opportunities for smaller SMEs coming up than there were during the first round of bids.

“Value for money will be key – the Games’ available budget is under close scrutiny. The second criteria is deliverability – there is only one go at the games – so whatever firms deliver has to work to the time scale. And the quality of the goods must meet the organisers’ needs.”

Mr Lavender – who is to become the RDA’s new general manager for Wave Hub in the New Year – added: “Weymouth’s sailing venue was delivered a year ahead and on budget. The stadium is up and progressing on track – so I have no concerns that we are not going to deliver.

“Now is the time for many different business sectors to get involved. We want South West firms to register.”

Anthony Grills, director of Bideford-based TC Office Interiors, said that the company – established by Adrian and Rebecca Sealey in 2006 – had flourished through its links to an Olympics site contractor, Premier Interlink.

TC has fitted out temporary buildings erected for firms working on the east London Olympic Village site, with furniture, flooring and joinery. Business Link also helped the firm to register online to get Olympic tenders through.

“We already had a relationship with Premier and they invited us to do the work,” Mr Grills said. “Since then, contractors have approached us through word of mouth recommendation, and we recently did work directly for the ODA.”

From a start-up firm in the Sealeys’ garage to a business with a purpose built showroom and £1.1million turnover, Mr Grills accords around 50 per cent of the firm’s rapid growth to 2012-related contracts.

“We’ve probably had a presence on the site every week,” he said.

Paulex Environmental, of Topsham, has supplied training – on and off site – to Olympics contractors in order to prevent chemical spills leaching into the water table in the event of an accident.

The emergency spill equipment it manufactures and distributes have also been deployed in “bins” across the 2012 construction sites. It also supplies “socks” and booms to contain spillages in water.

“We’re very proud of what we’ve achieved,” said the firm’s projects manager, Andy Chesterman.

Waycon Precast, of Plymouth, has supplied its patented lift shafts as a sub-contractor to works on the Olympics’ media centre.

“We were approved last year,” said its director, Ray G\erson. “People have approached us with on-going things since, and it’s nice to be involved.

“However, our products are normally signed up with logos, which has not been allowed – even though they would only be visible during the construction process. We can’t really shout about having been involved.”

Although the Olympic and Paralympic Games venues will ultimately become a showcase for what British manufacturing, suppliers and services can achieve, the organisers have taken a fairly uncompromising line on their promotion. Their priority is to protect to the commercial interests of the major sponsors being wooed to pump millions into the events.

Business Link and the RDA have been negotiating to ease the stringent publicity rules to encourage involvement from businesses through example, while respecting sponsorship specifications.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Hub awards will reward young entrepreneurs

12-11-2009

CORNWALL’S young entrepreneurs will be recognised at the Hub awards later this month.

Sponsored by Business Link, Cornwall Development Company and Unlocking Cornish Potential, the awards will take place on November 26 at the Atlantic Hotel, Newquay.

The event’s guest speaker will be Dave Meneer, chief executive of Fifteen Cornwall. Before Dave joined the Jamie Oliver-inspired restaurant in September 2007, he was the marketing director at the Eden Project.

Awards will include Employee of the Year, Innovator of the Year, Best Business Start-up and Entrepreneur of the Year, as well as Hub Contributor of the Year.

Hub committee member Andrew Weaver, of Live Events South West, said: “We’re delighted about the response to this year’s Hub Awards and are really excited about unveiling the winners at what should be the most exciting awards yet.”

Initially set up for young business people in Cornwall, The Hub has expanded to accommodate people working at all levels of business, from newly-appointed graduates to company directors.

Tickets for the Hub Awards are priced at £25 each. For more information, log on to www.cornwallhub.co.uk.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Lifestyle team put their backs into service

12-11-2009

A CORNISH chiropractic practice is celebrating after gaining national recognition for its patient care and customer service.

Lifestyle Chiropractic, which has clinics in Truro and Mawnan Smith, has been awarded the Patient Partnership Quality Mark by the College of Chiropractors.

The award was presented to chiropractors Amanda Hensman and Mairi Dowlen.

“The whole team at Lifestyle are extremely pleased and honoured to have gained this award,” said Amanda, who founded the business in 2005.

“We’re dealing with people with health issues such as back pain on a daily basis, and it’s our job to ensure that they receive high-quality care in all aspects of our service, as this can assist their recovery.”

In order to achieve the PPQM mark, Amanda and her team had to demonstrate they met patient expectations across a number of areas including accessibility, ease of booking and out-of-hours service, cleanliness, safety, privacy, communication and patient education.

Tim Jay, president of the College of Chiropractors, said: “The College of Chiropractors believes that chiropractic services should be centred on the users of those services.

“The college supports the delivery of services that are flexible and responsive to the needs of patients, acknowledging them as partners in their own care.”

Lifestyle, which has recently launched its How’s your Gait? campaign to highlight how focusing on feet can help improve health, has received a PPQM plaque and will be able to use the kite mark logo on its practice literature and correspondence.

Mairi Dowlen added: “We’re proudly displaying our award and getting some great feedback from our patients, who seem as excited as us about it.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

New investment will help salt firm to grow

12-11-2009

By Liz Parks

A CORNISH business that makes salt which is used by chefs including James Martin and Rick Stein has obtained £430,000 in venture capital funding.

The Cornish Sea Salt Co, based in Porthkerris, on the Lizard peninsula, has received backing from South West Ventures Fund, which is managed by the YFM Group.

Julian Dennard, senior investment manager with the YFM Group, said: “Over the last few months, Cornish Sea Salt has established itself as a key player in the market – it is a strong, ethical and environmentally-conscious brand which now deals with some of the UK’s leading retailers and independents.

“Its new sales team is already securing outstanding results and its new export strategy really demonstrates that this is a high-growth company with a global vision.”

The business is the first sea salt plant in the UK that harvests direct from the ocean. It employs 13 people.

Managing director John Steel said the funding was being used to fund new appointments to its sales and marketing team and to invest in equipment to increase production capacity.

The business was launched 18 months ago and has already secured listings in more than 800 independent delis, farm shops and high-end food halls such as Harrods, Selfridges and Fortnum & Mason.

Since August, the firm has been stocked in all 219 Waitrose stores after a successful regional trial.

“We are proud of our achievements over the past few months,” Mr Steel said. “An increase in home cooking due to the recession and people’s demand for a high-quality, natural and local produce, has meant that sales of Cornish Sea Salt have rocketed.

“The company is going from strength to strength. This latest round of funding comes at a pivotal time of growth for us and we are delighted with the support from the South West Ventures Fund.”

As well as focusing on securing listings in more supermarkets, international sales are also a key part of the firm’s strategy for the future.

It has already picked up sales in Australia, Germany, America and the Far and Middle East.

Mr Steel said that the identity of the Cornish brand seemed to translate well overseas.

“When we started trying to set sales overseas, we wondered if people would get it,” he said.

“What they see is that it’s shorthand for a high-quality English product. I think they must recognise the Cornish brand as something of provenance in the UK.

“It’s hugely positive that we can translate the brand internationally without having to say ‘we’re British’ first to explain to people.”

The salt produced by the company delivers more taste from less salt.

It is used by chefs including James Martin, Hugh Fearnley-Whittingstall and Rick Stein, and is a key ingredient in a range of biscuits Mr Stein has created with Furniss Biscuits. Created for Stein’s Deli, the biscuits have proved so popular that they have gone on to be stocked in Waitrose and Tesco stores.

Mr Steel was appointed managing director in May, having held management positions at Premier Foods, where he worked with Loyd Grossman on his food ranges, as well as stints at Marston’s and Weetabix.

The company has won a range of awards including Best Food & Drink Business and Entrepreneur of the Year at the O2 X Awards as well as Best Newcomer in 2009 by the Observer Food Monthly. It has also become the first English sea salt product to achieve Soil Association certified product status.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Signing up Wave Hub developers ‘a priority’

12-11-2009

By Liz Parks

THE new general manager of the £42 million Wave Hub project has spoken of the challenges that lie ahead before off-shore construction work begins next year.

Guy Lavender’s appointment has been announced today and he will take up the post, which has a salary of between £50,000 and £62,000, on January 4.

Until then, Mr Lavender, who is currently South West director for the 2012 Olympic Games, will be getting up to speed with the Wave Hub project as well as ensuring a smooth handover of his Olympics role.

“The first thing I will be doing is to meet partners and stakeholders, and I intend to start doing that before January,” he said.

“I think that’s critical for me. It’s important to get down there and look at the project delivery.”

Wave Hub is one of the South West Regional Development Agency’s flagship projects and a key plank of its renewable energy strategy.

Wave Hub will be a giant electrical “socket” on the seabed, some 10 miles offshore and connected to the National Grid, into which wave energy device developers will be able to plug their devices to convert the power of the waves into energy.

A total of four berths are available at the scheme, with just one developer – Ocean Power Technologies – signed up so far. Developers Fred Olsen and Orecon are in talks to take a berth, but have yet to sign on the dotted line.

Mr Lavender said he would be meeting prospective developers with a view to finalising the outstanding berths.

“It’s going to be critical – we want new developers signed up to the site,” he said. “We’re talking to a number of commercial developers in the UK and in the wider world.

“There is a clear need for the wave hub facilities as a full scale test of commercial designs that have not been delivered on this scale, with this level of ambition, anywhere else in the world.”

Key challenges of the project would be the technical aspects of its delivery, Mr Lavender said.

“The scale of what we’re doing is larger than has been done anywhere else. While the technology has been used in the oil and gas sector, it is a new type of project,” he said.

Mr Lavender’s military background should help him in his new role. He was a Lieutenant Colonel in the Parachute Regiment, spending a total of 17 years in the Army, which included stints working on defence procurement initiatives.

Onshore construction work on the scheme starts on Monday at Hayle. The Wave Hub will be built and the underwater cable laid next summer, with the first wave energy devices deployed in 2011.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Network of mums help grow Sophi’s business

12-11-2009

STARTING your own business is always a challenge.

But Mawgan Porth mum Sophi Rilstone has taken on a bigger challenge than most by opting to launch her own business in the midst of the worst recession since the Second World War – while looking after her two young daughters at the same time.

The former Truro College pupil decided to take the plunge into self-employment after feeling that she needed a fresh challenge after spending time at home with her daughters Maisie, aged three, and one-year-old Millie.

Sophi, 25, launched her online children and baby gift, toys and dressing up shop – www.littlemissboutique.co.uk – earlier this month after travelling to the autumn fair at Birmingham’s NEC to source suitable products.

After trawling through the 500,000-plus products on sale at the event, Sophi ordered the ones that she wanted as well as sourcing local products, and was ready to start trading.

“I had been thinking about starting my own business for some time and I just thought ‘I’m going to do it’. I wanted to do something where I was working but I could still be around to look after the children,” she said.

And Sophi said she wasn’t fazed by the idea of starting her business in a recession.

“If someone is sitting at home thinking about ways to make money, there’s no point waiting until the right time, because it might never be the right time,” she said.

“People are still going to want to buy gifts whether they have got a lot of money or not.

“I love having my own business – it’s really good fun and it’s great to be able to combine it with looking after the girls.”

Employing a mixture of traditional word of mouth marketing through the mums she knows through nearby baby groups as well as more modern approaches such as social media, Sophi is now busy raising the profile of the business.

She is also planning to return to the NEC to source new products at the spring show.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Dockyard operator reveals profits rise

11-11-2009

By Catherine Barnes

DEVONPORT Dockyard operator Babcock International has revealed “excellent profit growth” and steady revenue of £923 million, less than a fortnight after announcing 90 job cuts in Plymouth.

In its half-year report for the six months to September 30, Babcock said profit before tax had increased by 24 per cent to £71.8 million, with a “record order book, robust market positions and strong cash flows” supporting the group’s prospects.

Babcock said good revenue growth in its marine and defence sectors had mitigated a decline in its rail, engineering and plant operations.

An operating margin of 8.9 per cent was a “record” for the group. Its order book currently stands at around £6 billion with strong bid pipeline of around £3.3 billion.

Babcock chief executive Peter Rogers said: “We consider the major markets in which we operate remain both attractive and resilient and provide the group with strong long-term growth prospects.

“In addition, our order book and robust bid pipeline give us excellent long-term visibility.

“We believe that the strength of our business model and our reputation for delivering cost efficiencies for our customers will provide further opportunities for us as pressure on public spending increases.

“2009/10 continues to be another year of excellent progress for the group and we remain confident that results for the full year will be in line with our expectations.”

Over the six months, the group’s marine division saw operating profits increase by 29 per cent on 2008 figures, to £54.3 million.

Babcock said its Plymouth- based Queen Elizabeth class aircraft carrier refit project continued “to make good progress”.

The dockyard operator, which currently employs 200 agency workers was blasted by union bosses last month, after announcing it would consult on reducing its full-time workforce by 90 posts – mainly through voluntary redundancies – between December and March.

In its summary of its marine sector yesterday, Babcock referred to its ability to pass on “cost efficiencies” to clients.

Babcock also last month completed its £38 million acquisition of the United Kingdom Atomic Energy Authority.

The authority announced in September that it had agreed the sale of UKAEA Limited to the defence and energy support services group, which acquired Devonport Dockyard in 2007.

Babcock said the acquisition of UKAEA enhanced its positions within both the civil and military nuclear markets and would provide a “direct relationship” with the Nuclear Decommissioning Authority.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Awards at the double for West housebuilder

11-11-2009

A CORNISH company, which was named the UK’s Housebuilder of the Year in 2008, has won two major awards for its latest development.

Rosemullion Homes’ recently completed 15-property Trinity Watch site in St Ives has been awarded Silver Standard in the national design-led Building for Life Awards.

In a letter to Rosemullion, fashion icon and awards chairman Wayne Hemingway described the development as “an attractive scheme with architectural strengths”.

Rosemullion’s managing director, Roger Carson said: “This is another fantastic award for the team here at Rosemullion as it is further recognition of the hard work we put into creating quality housing schemes, that are sustainable and add to the local environment and economy.”

In a separate event, the build’s site manager James Smith is to attend the National House-Building Council’s UK Pride in the Job awards in the new year.

Mr Smith was recently named regional winner in the NHBC small builder category and praised for his “outstanding” site management at the development.

Mr Carson added: “James works extremely hard to ensure that his site is exceptionally well run and well managed, and its an attitude that does him credit.”

The NHBC’s regional director, Jim Lyons said: “This is a young man who has built some of the finest houses we have ever inspected.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

West dentist achieves top qualification

11-11-2009

THE dentist behind a private Tavistock practice voted top for patient care has become one of just six in the UK to achieve a ground-breaking qualification.

Dr John Patrick McVeigh has passed the inaugural Royal College of Surgeons’ Edinburgh Diploma in Implant Dentistry.

Dr McVeigh – who has run the Abbey Mead Dental Practice with his dentist wife, Ann, since 1997 – sat exams over three days in October, with written papers, case presentations and an oral examination.

Dr McVeigh has had a special interest in state-of-the-art dental implants and reconstruction for a number of years.

He was nominated Dentist of the Year 2009 for his work rebuilding the jaw of a Westcountry man who shattered 11 teeth in a helicopter accident.

The patient made regular round trips for treatment at the Tavistock surgery, following a personal recommendation.

The former Royal Marine and naval dentist said of his latest boost to the practice: “It was an extremely tough set of exams, but well worth the effort.

“The considerable financial investment, as well as the time and effort, were made possible by the tremendous support I have received from my patients, practice team and family.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Explaining quantitative easing

10-11-2009

What do you think of the introduction of a further £15billion in quantitative easing?

Ideally it would have been preferable for no more capital injection to be required.

As all this capital makes its way into the system, confidence rises and the tail of the whip becomes more and more likely to be inflation. That inflation is harder to control as the Bank of England cannot simply sell its gilts back or increase interest rates.

However, in behind all the potential for quantitative easing to create inflation are a range of deflationary pressures that are dampening any thought of hyper inflation.

Whether it’s the threat of employment levels falling (which in turn takes the UK’s wages with it), or public sector wage threats, all of this makes its way through to less buying power and lower prices.

Other deflationary pressures include a look at most major recessions since the late 1960’s where core inflation fell on average by almost 4% over the two years following the trough of a recession.(1) Ireland is currently ‘enjoying’ core inflation of -2.2% and Spain nearby. It is therefore no surprise that this has made its way through to salaries and in the UK earnings growth has been the slowest since records began.

On the flip side, emerging economies are using many more resources and this is also making its way through to prices. A weakened sterling has also increased the prices of imports although if inflation and recovery is back in the system, you might expect sterling to recover, making those same imports cheaper.

The Bank of England has just announced it would increase its quantitative easing plan by another £25b. The market responded positively to that and sterling appreciated as they were expecting £50b.

The fact the UK failed to exit recession in the third quarter will have motivated the monetary policy committee to extend quantitative easing even though there has been strong signs of positive activity form private business surveys and a house price pick up.

Personally I notice that there are more people in pubs! This is my cruder, but most accurate measure of an economy!

The Bank of England report published later this week will give a better insight into their thought process. The monetary policy committee have been particularly concerned that as households use lower interest rates to lower their debt and banks continue to self paralyse, that once interest rates rise, we could easily see the normal double dip in the economy.

My view has not changed since before we went into this recession. In October 2008 I highlighted inflation not to be a problem and said rates would plummet. I highlighted the motivation that it takes eighteen months for these changes to fully make their way into the system and that November 2008 was a key date – its eighteen months before an election.

This confidence is making its way through to the system already and the ‘support’ of the housing market will easily maintain buoyancy in confidence.

However, the support of the housing market will be short lived and with the inevitable interest rate rises, house prices will be dampened again by mid 2010 and will probably remain flat for some two to four years.

If inflation then comes into the system, investors will probably enjoy higher interest rates coupled with higher equity prices which make the property investment a less attractive return for the risk.

At the same time homeowners will now face the reality of higher costs after the current emergency rates have been lifted. It’s difficult to see how any of that can be positive for property in the short term.

Personally, I have a very strong feeling the next economic report will show we are indeed out of a recession and the economy and markets will be strong until the new government whoever they may be sits down with the task of rebalancing the books.

The next winter could then be an interesting one.

If you wish to speak to an independent financial adviser call on 0845 230 9876, e-mail info@wwfp.net

Source:

(1) www.standardlifeinvestments.com

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: Long-term care and trusts

03-11-2009

I read your article which explained that putting assets into trust was not a way to get around care costs. My will writer advised me of a ruling that says that Local Authorities cannot recover assets placed in Trust providing they were transferred more than 6 months before the claimant was placed into care. Is this true?

I can see where someone might be coming from here but they are a little outdated with that thought process. The most important advice here is to use a solicitor for advice in relation to your estate.

There is no requirement in law at present for a will writer to be legally qualified. Indeed a west midlands MP commented that she indeed had previously given will advice without qualifications and commented that indeed a convicted fraudster could set up a will writing service without any professional indemnity cover or qualifications thereby offering no protection to the consumer.(1)

As you will see the area of estate planning is highly complicated and should only be undertaken with the advice of your qualified professionals, such as your solicitor, accountant and fee based independent financial adviser.

In the comment above your will writer is referring to the HASSASSA 1983 legislation. This states that the above is true however this act cannot be relied on in isolation.

In March of 1995, Mrs Yule aged 81 gifted to her granddaughter for "love favour and affection" her house retaining for herself a life interest in the property. A year later Mrs Yule fell and sustained a broken arm, her health thereafter deteriorated to the extent that she was no longer able to look after herself and she was admitted to a local nursing home.(2)

When you are completing a form for assessment of financial contribution for the local authority, you are asked if you have disposed of any assets in the last six months.

Mrs Yule’s son completed this form and as there was no disposal of any assets in the previous six months he had nothing to declare. The council decided that she should not have the balance of her charges paid for her as her notional capital including her house exceeded £16,000, which was the means test at the time.

Mrs Yule argued that the house had been disposed of more than six months prior and was no longer her asset and under the 1983 Act there was no provision for any gift prior to the six month period.

Unfortunately the correct construction lies with section 87 of the social work (Scotland) act 1968 by virtue of which the 1992 regulations applied. This act provides for account to be taken of any asset that has been given away, and there is no time limit.

So, as long as it could be proven that the motivation was to deliberately deprive herself of capital, she would be treated as possessing the capital at the time of assessment, no matter when the capital was given away.

It has since been held that the deliberate deprivation test has to be carried out on a subjective basis.

So what was wrong with this case and why did it fail? Basically motivation is everything.

Why would an elderly lady of 81 have given her house away but reserved a right of residence? This will always be open to challenge and difficult to win, so any thoughts of how you might distribute your estate should clearly be talked through with a professional. If it’s reasonably obvious that you are attempting to deprive your estate of capital so as to avoid paying care costs, you will almost certainly be defeated.

I will then refer back to an article I wrote in 2007 referring to the use of nil rate bands on first death. I believed the rules were aimed at creating apathy with financial planning.

Because you are able to use two nil rate bands on second death if you had not used your spouse’s on first death you can easily automatically become the owner of all your spouse’s capital. This is all assessable by the local authority. However if a gift is made on first death this can greatly reduce the value of the estate (sometimes to nil) and not fall foul of deliberate deprivation rules.

If you have a question for Peter on long term care or estate planning call Peter on 0845 230 9876, e-mail info@wwfp.net

Birmingham Post

Elderly Client Adviser

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Firms celebrate tourism industry awards success

27-10-2009

By Ryan Hooper

BUSINESSES across Devon and Cornwall have been celebrating after the winners of dozens of industry awards were announced.

The South West Tourism Excellence Awards have heaped praise on a number of businesses across the region, with winners and finalists announced in the 16 categories.

Each category, including awards for large hotel of the year and self catering holiday of the year, is split in to a selection of winners and a smaller number of finalists.

The winners will discover if they have been awarded gold or silver status at the formal awards ceremony at the Saunton Sands Hotel, in North Devon, on November 23.

The gold winners will be put forward for VisitEngland’s National Enjoy England Awards for Excellence 2010, where seven South West businesses received nationwide recognition in April(2009), making it the overall winning region.

Among the winners announced this week are Totnes Rare Breeds Farm and Escot at Ottery St Mary – both in Devon – and Oakham Treasures in Bristol, who won the small visitor attraction of the year, sponsored by Take One Media.

The Polo on the Beach event, held at Watergate Bay in North Cornwall in June, is among the winners in the tourism event of the year category, while Cornwall’s Eden Project and Trebah Gardens are nominated for gold alongside Bristol Zoo Gardens for large visitor attraction.

Jamie Christon, VisitDevon’s acting chairman, said: “Devon businesses have historically done very well in these awards, both on a regional and national level reinforcing the county’s position as one of the UK’s favourite tourist destinations.”

Penny Woodman, interim head of VisitCornwall, said: “Winning an award on a local basis is an amazing achievement but to take it onto the next level and to be recognised among the best tourism businesses in the South West really says something about the quality of your product.”

Alistair Handyside, chairman of organisers South West Tourism, paid tribute to those winners who had triumphed despite the economic climate.

He said: “These businesses have shown that customer care, staff training and continued investment have not faltered but have grown and they are committed to exceeding visitor expectations.”

The awards allow businesses to showcase their quality to customers, and, according to organisers, help build morale amongst staff and gain recognition throughout the community.

Entrants need to demonstrate outstanding levels of customer service, plus exemplary facilities, along with a commitment to sustainability and recycling.

Category winners

Small Visitor Attraction of the Year: Oakham Treasures, Bristol; Totnes Rare Breeds Farm, Totnes, Devon; Escot, Ottery St Mary, Devon.

Bed and Breakfast of the Year: Lavender House, Bath; The Salty Monk, Sidmouth, Devon; Coswarth House, Padstow, Cornwall; Woodlands Country House, Padstow, Cornwall.

Tourism Event of the Year: Polo on the Beach, Watergate Bay, Cornwall; Tall Ships 2009, Gloucester; Salisbury International Arts Festival, Wiltshire.

Large Hotel of the Year: Bristol Marriott Royal, Bristol; Thurlestone Hotel, Devon; St Michael’s Hotel and Spa, Falmouth, Cornwall.

Tourism Information Service of the Year: Salisbury TIC, Wiltshire; Gloucester TIC, Gloucester; Yeovil TIC, Somerset.

Sustainable Tourism Award: Globe Hotel, Topsham, Devon; Bordeaux Quay, Bristol; Mazzard Farm Holiday Cottages, Ottery St Mary, Devon.

Large Visitor Attraction of the Year: Bristol Zoo Gardens, Bristol; Eden Project, St Austell, Cornwall; Trebah Gardens, Mawnan Smith, Cornwall.

Small Hotel of the Year: Eastbury Hotel, Sherborne, Dorset; The Bath Priory Hotel, Bath; Ilsington Country House Hotel, Newton Abbot, Devon.

Tourism Experience of the Year: Longleat House VIP Winter Tour, Warminster, Wiltshire; Cornwall Classic Car Hire, Bodmin, Cornwall; Global Boarders, Marazion, Cornwall.

Access for All: Atlantis Holiday Apartments, Torquay, Devon; Double Gate B and B, Wells, Somerset; Pollaughan Farm, Portscatho, Cornwall; Brunel’s SS Great Britain, Bristol.

Taste of the South West: Darts Farm, Topsham, Devon; The Cove, Maenporth, Cornwall; Victoria Inn, Perranuthnoe, Cornwall.

Business Tourism Award: Riviera International Conference Centre, Torquay, Devon; Event Exeter, Exeter, Devon; Brunel’s SS Great Britain, Bristol.

Holiday Park of the Year: Woodovis Park, Tavistock, Devon; Dornafield, Newton Abbot, Devon; Trethem Mill Touring Park, St Just in Roseland, Cornwall.

Self Catering Holiday of the Year: The Big House, Wellington, Somerset; Cossington Park, Bridgwater, Somerset; Boscrowan, Penzance, Cornwall.

Outstanding Customer Service: Simon Mansfield, Ashvale Holiday Park, Paignton, Devon; Ben Wookey, The Bristol Packet Company, Bristol; Gary Zammit, Gwel an Mor, Cornwall.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: On interest rates and sterling

27-10-2009

Will interest rates rise and will sterling continue to depreciate?

Six months ago I would have said no to both questions but it's slightly different today. Quantitative easing is probably the biggest driver for this which in turn links to inflation. News that the economy is still in recession will not assist savers as rates will need to remain lower to support the economy. The figures regarding the economy are, however, an estimate and will be revised and I suspect will be revised upwards as I believe that quantitative easing will soon kick in and provide a support to the economy.

The current very low base rate is probably only there to really support bank's reserves and is having little real effect as most banks have not passed this saving on.

Indeed it is crippling building societies who are not fixed to the Bank of England base rate. Some building societies do not have the benefit of borrowing at a base rate of 0.5% and lending at 4.5% like banks do, instead they rely on borrowing from savers and lending to borrowers and that margin is much tighter at today's levels.

However interest rates could probably rise by another 2% and it will have little or no impact on the borrower but it will squeeze the margins that banks have although I suspect by next May, in time for the election, this will not matter. Savers will be happy and in turn will have the extra 2% and borrowers will hardly notice as many of their loans are collared at a higher rate.

All in time for an election. Watch out for inflation which I suspect may surprise on the upside come Spring. This will put a higher pressure on interest rates. It’s a difficult call but I suspect inflation will pick up early next year and interest rates will rise with it, but the latter will be closer to next October.

I have noticed various products springing up with financial institutions who are offering fixed rate bonds for one to two years. This (cynically) implies to me that they take an upward view on rates, so if you are a saver, I am of the belief that fixing now may not be the most advantageous idea given the threat of inflation, so look closely at that.

Australia is already in an earlier phase with its interest rates and is tightening them.

In the UK there are deflationary pressures on wages, and unemployment is clearly one of them, but this is expected to peak mid next year.

Whilst there is fear of unemployment, consumers do not spend, and employers can depress wages (justifiably) to minimise the impact on their organisational profits.

Why do wages always have to be reviewed upwards?

As for Sterling, well I would have believed last year that it would have turned to a more positive mode but I am wrong with that. In the very short term you should be aware there are some very large short positions built up around sterling (investors have placed large bets that it will depreciate).

The weakness of Sterling or any currency is largely attributed to capital flows. Sterling and the dollar are economies that require large cash inflows but are running considerable current account deficits.

Whilst the faster growing economies are currently attracting the capital, the UK's damaged financial system is less than magnetic so sterling will be under pressure for some time to come. Once again, watch for mid-2009 post-election, as a number of factors fall into play. The UK is still a large exporter (pharmaceuticals, services etc) despite the fact that many think 'they make no cars'.

The weak sterling is probably by design and makes imports less attractive along with exports more attractive. This will be of considerable benefit to the UK economy.

However, on the flip side, Far Eastern companies have responded to this currency risk by marking down prices on their exports to retain the business which is a double whammy to the UK - bigger threat of deflation and still capital outflow to the East.

If you would like to speak to an independent financial adviser call Peter on 0845 230 9876, e-mail info@wwfp.net

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Peter McGahan: Conservatives and long-term care

20-10-2009

What do you think of the Conservative's proposals for long term care funding?

I suppose like any run up to an election, noise is catapulted beyond comprehension. We all have short memories and in practise will the proposals ever apply? Probably not. But I suppose we all want to believe the best will happen and we can rely on a government and that is why proposals are being slung around like a politician coming up to an election!

The age old problem of care is a subject that any government will want to get right as it affects every level. A family have worked for years and built up a range of assets that they want to pass onto their children, only to find that it's frittered away in costs. That is a disgrace and there is no getting away from that.

The family are caught between the rock and hard stone as they want the best care for their parents but want to keep the family home.

Andrew Lansley laid down proposals where a Conservative government would allow people to make a one-off, upfront, voluntary payment of around £8,000 at age 65. This would cover all future residential care costs and would avoid the issue of people having to sell their houses to meet fees.

It would purely be an insurance based scheme run by an insurance company but backed by the state. Currently 45,000 people per year are forced to sell their houses to pay for costs, but this does not even touch the figure for people who are actually funding out of income or who are running up the debt against a property. (1)

Insurance schemes however, have been in place for some time, so it's peculiar to think why this will be any more popular. The take-up of insurance based schemes has been so low that most insurance companies have pulled out of the market completely.

There must also be doubts over the cost of funding. There are various reports on the costs of care depending on who you speak to, but if the average is £26,000 per year and the average time in care is three and a half years, that is a total of £91,000. At a cost of £8,000 for an insurance premium, any insurance provider would be looking at only one in twelve ever claiming, otherwise the scheme would soon be bankrupt.

So doubts will remain about the viability and the debate will go on. In the meantime, consider what you can do to protect your house:

If you have savings, insurance bonds are classed as a policy of insurance and are a disregard so are excluded from your assets when assessing care fees. Look at how you can manage your estate to ensure all the correct savings and investments are held as wisely as possible.

If you own your property outright, consider what the best way is to own it. Is it as a joint tenant or as a tenant in common?

If you own it as tenants in common, your half of the tenancy is calculated by the local authority when assessing your ability to pay. Consider that your tenancy in your house is valued as if it was on the open market. What value would you pay for a tenancy in a house where the other tenancy is owned by someone else? Its valueless and local authorities have to value it as such thereby protecting your hard earned assets. Your solicitor will advise you on this.

Many people have fallen into a trap with the recent changes in Inheritance tax and may well allow for all their spouse's assets to fall to their ownership on first death. This could be a disaster.

If on first death you separate the ownership so that your spouses tenancy moves into a discretionary trust for example, your tenancy will become valueless in the eyes of the local authority whilst you are still able to continue to live in the property.

There are many methods of simply realigning ownership of your assets without deliberately deprivating your capital and homeowners and families alike should seek advice from their professionals in this matter

If you have a query on long term care call Peter on 0845 230 9876, e-mail info@wwfp.net

Source:

(1) www.ft.com

Think carefully before securing other debts against your home

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Be aware of thieves as clocks go back

20-10-2009

HOMEOWNERS across the South West are being warned that they are more likely to become the target of thieves as the clocks go back on Sunday.

As the evenings get darker earlier, regional insurance firm Cornish Mutual is reminding residents to make sure that their homes and gardens stay safe and secure this autumn and winter.

Last year the company, which serves Members across Cornwall, Devon, Somerset and Dorset, dealt with more than 135 theft claims affecting homes, gardens, vehicles, machinery and farms in the region.

“There are a few simple steps that people can take to reduce the risk of crime when the clocks go back at the end of this week,” says Mitch Portman, Cornwall Business Development Manager for Cornish Mutual.

He adds: “The South West is one of the safest regions to live in and hopefully some common-sense advice will help to keep properties secure from thieves. The good news is that we have seen the number of insurance claims relating to theft fall over the last few years, but people should not be complacent.”

Bob Bunney, Force Crime Reduction Advisor for Devon and Cornwall Constabulary says: "Many burglars are opportunistic, so make sure that you keep valuables or possessions out of sight, whether it’s in the home, workplace or your vehicle. If you are affected by a break-in, it can cause a lot of inconvenience especially with the time spent sorting things out, so it makes sense to take preventative measures. It also makes sense to ‘mark’ your property and record it to deter criminals, which also has the advantage that if you are unfortunate enough to suffer crime or loss you have a record available to assist police and your insurance company if a claim is made.”

Cornish Mutual is also urging people to ensure that they have the right level of insurance cover for their home and contents. The company believes ordinary items can be easily overlooked when renewing policies including expensive garden furniture, tools in sheds, jewellery, electrical items or new gifts. The cost of replacing items in the home like CDs, DVDs, computer games, toys, laptops or sports equipment may be underestimated and could run into thousands.

Mitch says: “Insurers will often cover these, but if you’ve got something of particular value like a painting it’s worth specifying them – some policies will have limits, so our advice is to check the small print. It’s a good idea to value your contents room-by-room, itemising the most valuable items.”

Cornish Mutual, which has offices in Exeter and Truro, will cover contents inside the home up to an agreed sum insured by working in this way they tailor their insurances to suit the individual needs of their Members.

Some common-sense advice has now been issued by Cornish Mutual to reduce the risk of crime, ahead of the end of British Summer Time:

Home

Always lock valuable items away wherever possible

Invest in extra security – lights and alarms to help deter burglars

Fit external doors with 5 lever mortise deadlocks and windows will good quality locks

Use timer switches for lights to give the impression someone is home when it’s dark outside

Check all doors and windows are secure and locked if possible

Beware of bogus callers - check photo ID and call the company to verify their identity, preferably from a landline via an official listing in a telephone directory

Your Car

Don’t leave any possessions in your car – even if the items are not valuable, they could tempt a thief

Remove any satellite navigation system and holder from the car – make sure all signs of them have been removed

Leave the glove box open if possible to show there is nothing hidden away

Park in well-lit areas or use your garage, keeping it locked if you can

Don’t leave car keys near the front door, letterbox or windows – some thieves will break into your house to steal your car.

Cornish Mutual is the only general insurer based in the South West and provides a broad range of insurance cover for home and contents, property, vehicles, farms and small businesses. The company provides insurance for Members of all descriptions, living or working throughout the region’s countryside. For more information visit www.cornishmutual.co.uk and www.devon-cornwall.police.uk

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

City team gets to work

20-10-2009

By Catherine Barnes

THE team that will focus on creating up to 42,500 jobs for Plymouth is now complete and working on its ambitious plans for the city.

News of major appointments to Plymouth City Council’s Development and Regeneration team were revealed by the Western Morning News in August, when the authority announced the appointment of Anthony Payne as team director.

The team will lead regeneration and investment in the city and focus on long-term growth, to orchestrate a “massive expansion” of jobs and skills opportunities.

It also aims to encourage up to 50,000 people to relocate to the city.

The Economic Development Service is made up of economic development, commercial property and the City Centre Company.

Director Mr Payne – who succeeded Nigel Pitt in the role – oversees the department that covers planning and regeneration, transport, strategic housing and economic development.

He said: “The new-look department will look at the long-term growth and prosperity of Plymouth and make sure it grows to meet its aspirations. This city has tremendous potential and we want to ensure that the city makes the most of it.

“Our teams play a key part in making the vision for Plymouth happen – whether through complex negotiations, advising, setting out where transport routes are needed for new homes and businesses and keeping the city on the move.

“They will also focus on attracting new business and investment, working with developers and partners to ensure the city flourishes.”

Former City Centre Company managing director David Draffan is now assistant director for economic development and has assumed responsibility for the city centre, tourism, economy, employment and commercial property teams.

Further new additions to the team include Clive Perkin, previously the council’s planning services manager, and now assistant director for transport.

Stuart Palmer, as assistant director for strategic housing, will lead the council’s ongoing bid to improve the quality of existing housing in the city and increase the supply of affordable homes.

Paul Barnard, who has become assistant director of development planning services, is leading the city’s market action recovery plan.

Cabinet member for planning, strategic housing and economic development, Coun Ted Fry, said: “This new-look team is already hitting hard for Plymouth and I know they’re passionate about the city and the potential it holds for the people who live here as well as visitors and new investors.”

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Banks saving themselves

13-10-2009

I was speaking to someone a moment ago who asked me what I did. ‘I am an independent financial adviser’. I said. ‘Ah, you are the cause of the problems in the economy then!’ He blubbered. I responded with ‘yep, every last bit of it, every last bit’.

Disarmed, he began to ask me about banks. Bored, I responded. Boy I hate it when the seating on trains is this way. So I am now typing so I don’t have to talk. He’s reading a three-letter newspaper, harmony.

And I thought about banks and about how they have treated, and how they are treating people, the quite indescribable and incomprehensible mistakes they have made, and how they provide us with pretty TV adverts now aimed at customer apathy. You need to trust banks! Really. How is it that they have been allowed to do this and get away with it?

Then I thought about how the banks' might have tried to save themselves in this current market and I laughed. Follow this bit from start to finish. Can you imagine what it was like when it was disclosed how bad the banks' situation was? Worse still they didn’t know. They couldn’t even articulate how bad the situation was because they were unaware of the bad debts due to the complex instruments they were invested into.

So their share prices collapsed and the financial system was on the brink of explosion. So can that happen? Well consider how much the UK tax authorities make from the financial system and you will realise they cannot be allowed to go pop. So what might a good strategy be to sort the situation out?

The government could have stepped in and bailed them out in full with tax payers’ money (which would have crippled them) or imagine another cuter, indiscreet method of achieving the same thing:

Firstly you ascertain exactly what the banks' scenario is; otherwise you are throwing good money after bad. Then you don’t tell anyone about that.

Then you put a block on anyone shorting bank shares (basically betting they will be going down and creating financial stress on the system).

You inject cash into banks to take a temporary control over lending practises and set the thermostat for others to follow, but effectively making the banks suitably solvent.

Then you plummet base interest rates to record lows. When you have done this you infer you will be putting pressure on banks to continue to lend and to open up doors and say you have appointed a body to ensure it happens but in practise you don’t and who can check anyway.

You apply a quantitative easing process that buys assets which become constipated in banks coffers and don’t move along like they are supposed to.

In the meantime, lending is still too slow so banks can now charge a premium for initial and exit fees along with extortionate review fees.

Finally with the base rate at 0.5% you charge money out at 4.5% to 5.5%. Easy money. And so the banks’ reserves begin to fill back up again so they are suitably solvent. Eventually they use that cash to repay the government and the government take the credit.

But who has paid for that glory?

The cycle above is simply an indirect taxation straight into the heart of the business community and the man on the street who are relining the banks coffers. Instead of the tax payer paying directly, they do so indirectly with no credit for it.

Now this theory could explode if the relevant authorities decided to apply negative interest rates on banks’ reserves. That would show they really meant business. But no. Sure it will come eventually and it will probably come at a time when the banks’ coffers are suitably relined and could take that stress.

I would suggest a good time for that might be a few months before the election, one would have thought. Interesting strategy don’t you think? I wonder if anyone else has thought of it.

If you have a business finance query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Firms report some optimism tinged with funding worries

08-10-2009

By Liz Parks

DESPITE the on-going effects of the recession, businesses in the Westcountry are remaining upbeat, with many saying that they believe that Devon and Cornwall are faring better than other parts of the UK.

In the 33rd Western Morning News Business Barometer, compiled by the Business Group at Exeter-based Michelmores, respondents seem to agree with other recent indicators which point to the recession having at least bottomed out.

Earlier this week, figures from the Nationwide showed a 0.9 per cent rise in house prices during September, the fifth successive monthly increase.

Consumer confidence figures – also released this week by the Nationwide – are at an 18-month high.

But unemployment is expected to rise further as the effects of the recession continue to work their way through supply chains. Concerns about future public spending cuts are also affecting confidence.

The latest Business Barometer findings indicate that while businesses do believe the worst is over, they are being realistic about the difficulties that inevitably lie ahead.

Respondents’ optimism is cautious, with half expecting activity levels to remain static over the next quarter.

Twice as many respondents believe that the trading outlook in Devon and Cornwall is better than the UK as a whole, rather than the other way round.

General market uncertainty and a lack of orders as a result of the recession were – understandably – the main challenges to business confidence raised by the survey’s 143 respondents.

Funding was also cited by many as an issue.

And some respondents felt frustrated by delays in public sector schemes which could mean vital contracts during these tough times.

Writing for the Western Morning News, Stephen Morse, partner and head of the Business Group at Michelmores, said: “While this remarkable survey shows that South West businesses are resilient, realistic and generally optimistic, there remains much cause for caution.

“The main concerns are in relation to the level of public borrowing and private debt, ever increasing red tape strangling entrepreneurship and wealth creation, and skill shortages in the South West.”

Adrian Vinken, chief executive of the Theatre Royal Plymouth, said the recession had not had a direct impact on audience numbers. But he said that other aspects of the business – such as catering and sponsorship had been affected.

And he warned that there could be a “lag” effect as productions tended to be commissioned around 18 months in advance and that if there was less investment around to stage big productions this could mean less high-profile shows coming to the theatre, which could then have an effect on audience numbers.

“Audiences have not reduced from what we expected them to be last year. There have been impacts on the business – in areas like catering, retailing and sponsorship,” he said.

“It would be wrong to say it has not had an impact – it has hit badly. What it says to me is that people are valuing the experience of coming to the theatre over other experiences and are willing to make sacrifices in other areas in order to keep coming to the theatre.”

Peter Child, managing director of A&P Falmouth, said the business was expecting a tough 2010 because of the nature of delayed effects of the recession.

“There’s always a 12 to 18-month lag in shipping. We’ve had a good year in 2009 with the Argus (RFA Argus which is undergoing a 10-month ship safety conversion) but we see next year being really harsh because there will be less funds available to repair ships,” he said.

Mr Child said the firm was frustrated by delays to its plans to expand and develop marine activities in Falmouth.

It needs support from SWRDA for dredging work to allow deeper vessels – including large cruise chips – access to the harbour.

And it is also waiting on a licence from the Marine and Fisheries Agency to build a marina.

“We’re ready to invest in a marina to create jobs but we’re held up waiting for permissions. There is so much bureaucracy and red tape – I’m amazed that the Government doesn’t do something to curtail it,” Mr Child said.

As ever, there are as many views on when the recession will end as there are people to ask but one thing does seem certain.

The South West’s economy is not out of the woods yet, and it is likely to take time for it to stabilise and yet more time to achieve growth.

In the meantime, Westcountry businesses will continue to do what they do best – putting their heads down and getting on with the job.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Stitching Workshop has bags of potential

08-10-2009

A DEVON upholsterer is to revive the bygone tradition of stitching canvas on Exeter’s Quay.

David Blight is not making sails, however, but colourful hold-alls and duffel bags to appeal to the contemporary yachtsman, festival-goer and yummy mummy.

Following the recent opening of his outlet on the Quay’s Kings Wharf, Mr Blight has submitted plans to relocate his workshop from Clyst St Mary so that customers will be able to see the craftsmanship that goes into every bag.

“I wanted my work to have a bit more of a public image,” said Mr Blight. “We tend to be quite hidden away in the workshop and wanted to put both sides of the business under one roof. I feel that giving customers the opportunity to see what we do will add greater value to the bags they buy, which are also made from canvas made in Britain.”

Mr Blight sources rainbow shades of canvas from a Manchester manufacturer and is currently experiencing strong demand for totes, aprons and wall tidies in en-vogue peppermint green.

He has adapted a traditional rigger’s bucket to make the “Can Can”, which customers adapt for use as camping wash-bags, gardening kit holders and beer-can carriers.

“Sourcing from the UK makes more sense for a small business,” he said. “You can order smaller amounts and don’t have to wait months for a shipment from halfway across the world.”

Together with one full-time employee, Mr Blight’s Stitching Workshop can turn out between 20 and 30 bags a day. He also continues to run his upholstery business, renovating soft furnishings on camper vans, boats and planes.

“The recession has been pretty good for business,” he said. “Customers have been investing in refurbishments, rather than buy new.”

This summer, one client flew a plane from Kendal, in Cumbria, to Exeter for upholstering. Mr Blight was also commissioned to re-cover a camper van’s seats with old jeans.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

City lags behind SW’s employment recovery

08-10-2009

By Catherine Barnes

LATEST unemployment figures show Plymouth still suffering the greatest brunt of recession in the South West.

Last night, the city’s Employment Skills Board revealed in its new employment report that Plymouth’s unemployment rate of 4.2 per cent compares with the national average, but that the proportion of workers currently out of a job is “significantly higher” than across the region as a whole.

The South West saw its unemployment rate remain level between June and August at 3 per cent.

The ESB said that manufacturing remained the hardest hit of Plymouth’s sectors, accounting for 121 of the 229 job losses reported for the latest quarter.

Prominent casualties were machine shop Morris Engineering, which cut 10 jobs in August and Davis Pneumatic Systems, which entered a consultation period to lay off its 28 workers and close its Plympton plant, in July.

The ESB’s figures also take account of 83 jobs facing the axe, as hopes fade of an eleventh-hour rescue package to save Gleason Cutting tools for closing its Plymouth operation in September.

However, with Plymouth’s unemployment rate tallying overall with the national average and the August figure of 6,679 unemployed signalling a slight downturn on the preceding month, there are signs that the next quarter could herald the beginning of a renaissance for the city’s business sectors.

Tim Jones, chairman of the Devon and Cornwall Business Council and a member of Plymouth’s Employment and Skills Board, said: “Plymouth is still showing an alarming trend in terms of core manufacturing job losses. The signs are, however, that we have now reached the bottom of the market.

“Trends in terms of a slight increase in job gains and feedback from business owners now considering investment and hiring workers signal that his could be the last series of figures to look negative and employment could rally as the market begins to increase.

“But there is still a job to do in rebuilding Plymouth’s core manufacturing base. The situation is bleak compared to the 1990s, when 20 per cent of the city’s workforce was employed in manufacturing. We now need to look at how we can create a base for creating new jobs.”

In addition to job losses in the manufacturing sector, tourism also suffered a blow, with the jobs of 83 workers thrown into jeopardy at Morwellham Quay. The historic attraction went into administration last month after Devon County Council withdrew its financial backing.

Call-centre-based technical back up service Infoteam Services International also lost 20 workers in July.

Meanwhile, a total of 74 job gains were reported for the city.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Judgment time for banks

06-10-2009

We all know the banking sector is one of the biggest cash cows for the government in terms of tax. The banking sector has however really let itself down. The phrase ‘a job in the bank, is a job for life’ sits firmly along with that of ‘bricks and mortar boy, bricks and mortar’ and ‘I’d love a night in, and a fine conversation with Jordan and Peter Andre whilst watching strictly come dancing’.

The banks however, have to be protected or the impact on the UK would be immense in terms of that tax loss. This has been evident in the Bank of England’s stance it has taken on interest rates. We have been told time and time again that the reason for lower interest rates and quantitative easing is to free up money markets and force the banks to lend again.

In my meeting with the Bank of England a year ago they made it clear that Banks would be forced to lend again and a body was there for them to ensure it happened. Mmmm? Well then? Let’s look at the evidence?

Today banks have taken advantage of the situation they have caused to conveniently create an extra margin for themselves. Whilst base rate is sitting at 0.5%, my commercial department tell me that commercial lending is in the main sitting at c4-5%. Banks are creaming off a margin of 3.5% to 4.5%.

Because the banks are in control of supply and demand they have slowed lending to a virtual halt, whilst telling us all they are still ‘very active’, they have also been able to slam in other little gems. For example they are introducing not only extortionate fees to the borrower at the outset, but they are also putting extortionate exit fees on contracts.

Commercial borrowers should also be aware of the potential for a cute little line put into their offer which allows lenders to look for additional security on your other assets if the value of the property they have loaned money on falls below a certain level. What? So where is the risk to the bank? You get your interest and you can’t lose! If you can’t lose, you shouldn’t be charging a premium, it should be a discount.

Interestingly, residential borrowers have been hit just as hard. I typed in best mortgage rate to google, found moneyfacts, and there was HSBC at the top, offering 1.99% with a fee of £1199, and all this for a customer who is borrowing only 60%.(1)

What a shambles. What a complete shambles. If base is at 0.5% where does 1.99% come from, and I really hope for my £1199 I will be getting some fine wine, a meal with Rick Stein, a massage and a weekend in the Caribbean to consider my mortgage proposal.

To further cap their cheek, they place a redemption penalty for the first two years!! Redemption penalties are there to protect the bank when they have given you a special deal. Whilst this is special, it’s only special for the banks. And so what have the bank of England or FSA done about that then?

Quantitative easing is there to create money flow. The BOE buys assets back such as Gilts, the cash is then placed via the previous owner in banks and used in whatever way needed. The idea is that the bank then uses the extra cash in its balance to free up moneyflow and begin to lend, allowing the commercial world and residential world to refinance and then use that extra cash to spend in the retail world (another big win for the UK tax regime).

The cash however is now constipated firmly in the UK banks.

And so what would be the right thing to do now to the banks? Apply negative interest rates on banks reserves (you and I would call that a tax on the reserves banks are holding). Seems easy.

I was always taught that to understand someone, you should judge the action, not the individual.

Mervyn King yesterday announced he had no plans to charge negative interest rates on bank reserves!! One can only puzzle at the motivation. Judge the action.

If you have a financial query or something you would like Peter to assist with call 0845 230 9876, e-mail info@wwfp.net

Source: Moneyfacts

- The value of shares and investments can go down as well as up.

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Staying local is helping insurer to stay ahead

02-10-2009

By Liz Parks

LARGE insurance companies regret scaling back their regional presences and would like to turn the clock back to achieve a more customer-friendly approach, according to the managing director of Cornish Mutual.

The Truro-based firm says it is now the only insurer to have a base in Cornwall – something that MD Alan Goddard believes is a matter of regret for the larger operators, many of whom have off-shored much of their back room operations.

Cornish Mutual was formed in 1903 by a group of Cornish farmers. It now has between 15,000 and 18,000 members, with up to 50,000 policies and income from premiums of £15 million a year.

The firm’s head office is in Truro, where it employs 35 people. It has a satellite office in Exeter, with a team of four, with the remainder of its 65 employees field-based across the region, from Marazion to Bridgwater.

The company prides itself in thinking local, the very ethos of the Western Morning News Think Local campaign, sponsored by independent financial adviser Worldwide Financial Planning.

Formed as an agricultural insurer, agricultural policies are still the core plank of the firm’s business, although it has now broadened its portfolio to include general, motor and events cover.

This summer, the firm signed a new reinsurance deal with Gloucestershire-based specialist insurer Ecclesiastical, meaning that it can underwrite larger potential payouts – previously, it was limited to sums of up to £3 million.

Mr Goddard said the firm’s position in the region’s rural communities meant that it received much repeat business – and was seen as a very different operator to mainstream insurance companies.

“We have the thump on the table factor. There is no other insurance company in the land where people can speak to the chief executive. I’m accessible and that makes us very different.

“We have lots of members who like the fact that if anything goes wrong they can come down and talk face to face – that makes a big difference,” he said.

“No other insurance company has a physical presence in Cornwall. I think some of the proprietary companies are ruing the day they made that decision.

“It’s about distribution – we have that because we’re here. It’s a bit like a coal face – once you leave it it’s difficult to get it going again.”

Mr Goddard said the firm’s position as a mutual meant that it was able to take “the long view”, instead of having to bow to pressure from shareholders to generate short-term profits at the expense of stability.

“Mutuals are free from the shackles of always trying to make a return for shareholders – they take the long view. The mutual sector is very heavily involved in helping the Financial Services Authority spread financial understanding among schoolchildren,” he said.

“We are designed to help people appreciate that there’s an alternative to what is a faceless organisation. We have some wonderful illustrations where people have had claims settled and their neighbours are still waiting for an inspector from a large company to come out, even though they were affected by the same event.”

Mr Goddard said the firm’s strategy through the recession had been to continue as normal – despite fears about the stability of the banking sector.

“We have stuck to our knitting,” he said. “The trauma this time last year was that we, as an organisation, have lots of our members funds on deposit and we have to bank the money.

“We held our nerve. We have always been conservative – we stick to what we do.”

Workshops aimed to help shop owners survive

02-10-2009

A SERIES of free workshops designed to help rural shopkeepers overcome the challenges of the difficult economic climate were held this month.

Devon County Council teamed up with the Rural Shops Alliance to hold four events throughout September, which offered the chance to get together and discuss any problems.

Stores in isolated areas were seen as particularly susceptible to downturns which mean people are spending less.

Ken Parsons, the alliance’s chief executive, led the discussions.

He said: “These are bespoke opportunities to meet other rural shopkeepers and to listen to expert talks from people who really know the rural sector.”

The workshops echo the ethos of the the Western Morning News Think Local campaign, sponsored by independent financial adviser Worldwide Financial Planning, which encourages readers to source from their surrounding area wherever possible.

Peter McGahan: When good banks go bad

29-09-2009

Financial regulators have taken some abuse of late in relation to their monitoring of banks, yet banks have seemingly been allowed to close the door behind them on their antics of the last few years. Apathy!

But consumers and investors are now in the wonderful position of finding out if their bank is one of the bad boys or not.

The Financial Ombudsman Service has made available for the first time a range of complaints information relating to individually-named financial businesses.

Banks unfortunately do not do very well. Indeed Lloyds and its subsidiaries accounted for 15,233 complaints to the Financial Ombudsman Service (FOS) over the first six months of 2009.

This includes complaints to the FOS but not complaints direct to the firm. Complainants have to complain firstly to the firm who have a chance to put the situation right before the complainant has the choice to accept the firm’s decision and refer on to the FOS.

Lloyds and its subsidiaries accounted for more than a fifth of all complaints to the Ombudsman. Interestingly seven banks each had more than 2000 complaints, which accounted for almost half the total complaints the FOS received. The largest firm of IFAs, Sesame, had just 144. St James Place Wealth management and Santander asset management are also listed in the report. (1)

Barclays suffered almost 8300 complaints, Bank of Scotland more than 5,800, and Abbey National, HSBC, MBNA Europe and Natwest all received more than 2000. The Royal bank of Scotland received more than 1812.

It is a pretty dire report and I wonder how many people didn’t actually get to complain to the FOS at all after the banks disagreed with the initial complaint.

The regulator hopes that by shaming the biggest culprits, they will put their house in order and not only deal with complaints quicker before the FOS is involved, but also ensure customers are treated more fairly so that they do not have to complain in the first place.

It is most interesting that of the 69,841 complaints received at the FOS during the first six months of the year that just 144 were received by Sesame the largest IFA firm. It is a clear sign that Independent Financial Advice is the most trusted option but consumers should not let their guard down in this respect.

Just because an Independent Financial Adviser is classed as such, doesn’t mean under current rules that they are fully independent. Many Financial advisers are still compensated by commission and this calls into question their true independence.

If your finance adviser is only paid if you take out a product, are you likely to receive truly independent advice?

It is more than possible that the correct advice for you is actually to cease a product you have rather than start a new one, and how many advisers will be prepared to put in hours of work, if they know the outcome is that they won't be paid.

Be prepared to pay a fee and ensure your independent financial adviser offers you this option.

Under new rules that may well come into play soon, an Independent Financial adviser will only be allowed to hold this title if they do not receive commission.

All other advisers will be allowed to receive commission but will have to refer to themselves as ‘restricted’, a term that I should hope would deter even the most apathetic from using them.

One has to call into question the thought process of an adviser who would choose to limit the solutions or options for their customer. What can the benefit be to the customer? None, given that product terms change daily and furthermore, a considerable percentage of customers need advice rather than a product and would be disadvantaged by this service offering.

Of the complaints above, almost 60% were actually upheld by the FOS showing that the customers were indeed justified in their concerns. Caveat emptor remains.

Source:

(1) ifaonline

If you have a financial query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

- Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning independent financial advisers based in Cornwall with offices across the UK. Worldwide have won 16 awards from the Financial Times in four years and are highly respected in financial circles as being experts and specialists within their fields. Peter McGahan writes for local and national publications such as the Western Morning News, Cornish Guardian, West Briton, Financial Times, Channel 4, BBC, Tiscali Money, Yahoo Finance and various other media. If you have a financial query and wish to speak to a dedicated adviser, contact Worldwide Financial Planning on 0845 230 9876 or email info@wwfp.net

Former Pirate swaps rugby for financial industry

23-09-2009

FORMER Cornish Pirates’ star, Ed Fairhurst, has swapped the riggers of professional rugby for the cut and thrust of financial investment.

After leaving the Pirates at the end of last season, Ed returned to his native Canada and landed a job as investment adviser at the Royal Bank of Canada Dominion Securities.

The Canadian international who has a first class economics degree, had gained financial experience while in Cornwall with Pirates’ sponsors, independent financial adviser Worldwide Financial Planning.

Ed, who joined the Pirates in 2007 from Cardiff Blues, spent two years in between games and training at the Truro and Wadebridge based independent financial adviser.

There he shadowed Worldwide’s managing director, Peter McGahan and independent financial adviser, Peter Meeson.

“The experience working as an intern at Worldwide gave me a fantastic insight into the world of financial investment,” said Ed, who made 55 appearances and scored eight tries for the Pirates.

“Both Peters gave me a real opportunity to learn, which has allowed me to develop a career outside rugby.

“I am sad that I am not over in Cornwall playing for the Pirates, and I miss my after game chats with the Worldwide team.

“But at the same time I am excited for what lies ahead.”

After a rigorous interview process spanning three weeks and containing various tasks, the bank decided to offer Ed a position as an investment adviser based in Vancouver.

Peter McGahan said: “It’s a shame that we’re not going to see Ed in a Pirates shirt this season.

“But after having him shadow us for the last two years I know that he has got what it takes to carve out a successful career within the financial industry.

“The rugby world’s loss is the financial industry’s gain.”

Despite making the decision to move away from professional rugby Ed has been keeping himself in shape.

“I’ve not ruled out a return to professional rugby,” said Ed.

“So I’m keeping myself fit and just enjoying a new career. But it would be great to play for the Pirates again and add to my international caps.”

For more information on Worldwide Financial Planning please contact Peter McGahan on 01208 816667 or visit www.wwfp.net.

Peter McGahan: Mortgage advice for all

21-09-2009

Mortgage owners everywhere are being asked to seek mortgage advice on their methods of repaying their mortgage – apparently. Or so the headlines go.

When a customer takes out a new mortgage they have a choice on whether or not to take out a repayment or interest only.

What’s the difference and which is better?

A repayment mortgage consists of two parts: the interest repayable to the bank on the money you owe at that time, plus a portion of the capital repaid over the term of the loan which is typically 25 years. At the end there is no mortgage. And that is the advantage they have – a guarantee that the mortgage will be repaid.

An interest only mortgage however means that you simply pay interest to the building society and no capital. At the same time there is an expectation that you will be saving into a plan to create enough capital at the end of the term to repay the mortgage.

The risk is that the plan doesn’t have enough capital at the end to repay the mortgage.

There are a number of benefits to an interest only mortgage over a repayment that homeowners should consider:

Firstly inflation erodes away the true value of your debt. A £100,000 mortgage taken out 25 years ago would be the equivalent today of £40160 today as inflation took its toll. If you fell short of your mortgage by 10% it would only be £4,000 in today’s terms; (1)

Most people expect an inheritance and that can easily be factored into (but not relied on) an equation when considering how vital repayment plans may be.

In order to understand what is most appropriate for you, you should consider the behaviour of most mortgagees: As a mortgage is considered the most effective way to borrow, many homeowners continuously borrow and top up against their property over the term of the mortgage.

Is it therefore wise to have a repayment mortgage which you ‘sort of pay off’ then top up then pay off and so on. Each transaction is expensive with layers of extortionate fees and it seems peculiar that homeowners would force them selves through such expense when a more flexible method is available. If the mortgagee had been saving into a savings plan such as an ISA or unit trust they would simply be able to tap into the savings plan and take what they need as and when they needed it;

Furthermore let's consider flexibility.

Many people today are worried about jobs and their ability to repay the mortgage every month if they lost their job.

A customer who has saved separately into a savings plan would now have the ability to take that cash and fund themselves through a difficult period where their repayment counterpart would be at the mercy of the bank (heaven forbid) agreeing to change to interest only at best, but more likely in default if they couldn’t make all the payment. Cash flow is king. I would be happier having £10,000 in a savings plan to fund me through a hard time than having paid £10,000 off my mortgage and not be in a position to make any payments.

Business owners and buy to let owners receive tax relief on their payments so why would they want to reduce the debt if it’s so tax efficient.

An interest only mortgage allows the flexibility to make payments as and when they are suitable. Forget endowments, but the flexibility of ISAS and unit trusts allows the mortgagee to save to accumulate the fund to repay the mortgage, but also to decide to make lump sum payments back as and when there is a need.

For example, consider the well-advised homeowner who was told to stay on a standard variable rate today. They would be furious if they were making capital payments at this level. The investor in an ISA would be enjoying the stock market return but ready for the potential of super inflation and high interest rates at which point the ISA could be encashed to lower the debt. Flexibility for market conditions is everything.

If you have a financial or mortgage query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Think Local: Development firm will lift bay economy

18-09-2009

By Liz Parks

TORBAY will have a new body to drive forward investment and regeneration if plans are approved by the council next week.

Torbay Council’s cabinet has already given the green light to proposals to set up an Economic Development Company (EDC) in the bay and the plans will be debated at a full meeting of the council on September 24.

If the EDC gets the nod, it will be operational before Christmas, with a newly recruited chairman and board of directors.

It follows the establishment of similar economic development vehicles in both Plymouth and Cornwall.

The news has been welcomed by the bay’s business community, a message promoted by the Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Barry Buxton, chairman of Torquay Chamber of Commerce, said: “I think it would attract a lot of support from the business sector in just the way that the Torbay Development Agency (TDA) has. This is the next step along.”

Mr Buxton said it was important that such an economic development organisation was led by the private sector.

“I think the council officers do what they do and business people run businesses – we make things work, survive and, hopefully, prosper, and to leave that experience untapped is not sensible at all. I think the way Torbay Council is moving is admirable and I am sure it will yield benefits,” he added.

The TDA currently oversees regeneration and economic projects in the bay, led by council officers working with councillors and the private sector.

The proposals for a new EDC include a more independent company structure providing economic development services for Torbay. It will ultimately be accountable to the Torbay Local Strategic Partnership, which represents the public, private and community sectors.

If the company is set up, it will be formally separate from the council, although council staff will be seconded into the organisation. It will be commissioned to deliver specific outcomes and then allowed to determine how these are achieved.

The EDC would aim to speed up economic delivery and develop dynamic and growing businesses to create thousands of new jobs in the bay.

The company would also have a clearer mandate to work with neighbouring districts and partners within the South Devon area to address employment and skills, business growth and inward investment issues.

Its long-term goals would be to deliver 10,250 new jobs by 2024, to lower unemployment, to increase inward investment and to increase wages from 78 per cent of the national average to 88 per cent by 2020 and 93 per cent by 2024.

Its ambitious short-term goals include developing and implementing an inward investment strategy for Torbay, developing phase three of the innovation centre programme, completing phase two of the Brixham Fish Market project and delivering the Oldway and Riviera International Conference Centre projects.

Torbay Mayor Nick Bye said: “This is all about giving regeneration a renewed impetus, learning from what has worked well elsewhere and building on the good work of the TDA.

“I would call it a supercharged TDA, with more independence from political interference and greater opportunities to deliver a prosperous Torbay.”

Cabinet member for regeneration, Councillor Chris Lewis, said: “A lot of excellent work has already been carried out by the Torbay Development Agency.

“However, a formal company structure is now more widely recognised to be the most effective form of pushing forward economic regeneration and it is important that we are able to adapt accordingly.

“It is also more likely to attract increased funding as we have witnessed with other EDCs across the country.”

Peter McGahan: Avoid the retirement time bomb

15-09-2009

I read an interesting report which showed that 10 million people in the UK (a third of the working population) are not saving for retirement. That will be an interesting demographic time bomb; you can expect strong measures in terms of employer and employee compulsion into pensions to follow.

Further still, a report from Standard Life has shown that many of these people will need to work until they are 74 to 86 years old to achieve the holy grail of two thirds of their retirement income.

If we consider that the average life expectancy at birth in the UK is 78, that makes very boring reading.

As a side, Andorra has the highest life expectancy in the world at birth of 83.5. Two other ‘tax havens’ of Guernsey and Monaco are also higher at 80 and 79 pointing to the clearest evidence needed that the biggest killer is indeed tax.

Having used (twisted) the statistics to suit my argument above, the fact does remains however that those who actually make 65 years old will typically have 17.2 years in retirement (19.9 for women).The previous statistics are related to longevity at birth. Once the key ages of risk have been passed the longevity surges, so a 65 year old living today might expect to live until the ripe old age of 82 and rising.

With that in mind many retirees looking at their annuity funds today will be focusing on how exactly they can make the most from them.

What is an annuity?

You save into a pension, whilst boring, the most tax efficient way you can save – fact (at basic rate tax alone the investor into a pension receives an immediate uplift of 25%.)

The fund grows until retirement and you have a choice what you do at age 65. Take it, leave it until 75 or plan now for alternatives.

There are many factors that will sway you one way or another and you should ask these questions before deciding to take the pension.

Once you have taken your annuity there is no going back so it needs careful consideration. Is now the right time to take the pension? Will annuity rates increase in the future? Annuity rates are closely linked to gilt rates which of course will have been battered by quantitative easing (on purpose).

If quantitative easing has its desired effect there is the danger (high probability and probably good for the government as inflation erodes the cost of debt) that inflation kicks in.

If it does will interest rates rise to curb inflation? At the same time if the bank of England decides to sell back its newly purchased gilts during the quantitative easing process their price will fall and the yield will rise. If you have locked into an annuity rate today you might well be miffed.

In the meantime if quantitative easing has had its desired effect there is also the impact on your fund. If you have secured an annuity today it will be with that fund size.

Quantitative easing, along with low interest rates having the desired effect on the economy, will clearly have a positive effect on equities and in return your fund.

If your fund rises you have more money with which to purchase an annuity and also, if quantitative easing has worked, a higher rate at which to purchase. Consider a 65 year old with a £100,000 fund who buys an annuity today at 7.17%. This is considerably less than the 7.92% achieved last year.

Imagine if annuity rates, because of inflation and the positive economy only returned even to last years figures (they were near 15% in the early 1990’s). Imagine that in that same year the market returned 20% in the next year (the FTSE is up 43.7% of its 52 week low).

The retiree now has a bigger fund to take with a bigger annuity rate. In this instance the latter will earn 32.5% more over their retired life. There are a number of other factors to consider which I will cover next week.

If you would like advice on your annuity call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Web benefits the tourism and food and drink industry

15-09-2009

SOLICITORS Ashfords LLP are delighted to have helped Devon County Council and Veromar Strategic Marketing on creating a website for tourism and food and drink businesses operating in Devon.

The website, www.devonwebhelp.co.uk, is designed to help Devon businesses improve their web presence and ultimately generate more business. It focuses on assisting the tourism and food and drink sectors and provides a wealth of hints and tips on how to both set up and improve your website.

Annelie Carver, a Partner in Ashfords' Corporate and Commercial Team, provided guidance on the legal aspects which need to be considered when developing an online presence and has provided content for the ‘legal tips’ section of the website. She said: “We were delighted to be involved in this project as the leisure and tourism industry is a key area of focus for the Firm. The website offers many benefits and we hope that businesses will take advantage of it.”

She added: “There are many legal issues which need to be taken into consideration when developing a website and it is vital that businesses take all the necessary steps to ensure they have met their requirements. It is important to get these correct from the start to avoid unnecessary time and expense at a later date.”

To coincide with the website launch there will be four free ‘Website Health Check’ events for members of the Devon tourism and food and drink industry. The seminars will highlight the latest hints and tips for improving your website, look at ‘Tweets on Twitter’ and cover the 'do's and don'ts' of email marketing. Expert input will be provided by Margaret Hiles at Veromar Strategic Marketing and Peter Weeks at

Daneswood who will be giving presentations. Margaret Hiles said: "The Website Health Check programme has already helped many small tourism and food and drink businesses to take the next step with their website development with sound, easy to understand advice".

The events are to be held in Okehampton on 23 September, Topsham on October 1, Bovey Tracey on October 8 and Bideford on November 25, 2009. For further information on these events, and to book a place, please contact paul.baker@devon.gov.uk

Four entrepreneurs take helm at boat firm

14-09-2009

By Phil Lockley

BUCCANEER Boats, a South West firm that manufactures glass fibre fishing boats, has been bought by four Westcountry businessmen, each being a main player in the region’s fishing industry.

The four entrepreneurs – Mike Beacham, from the family firm of marine engine distributors WaterMota Ltd, based near Newton Abbot, Gary Mitchell, the designer of the entire Buccaneer range, who lives near Mevagissey, and Andrew Lakeman and his son Edward, from the major fish buying and processing firm Ocean Fish Ltd, based near St Austell.

Situated in Camborne, Buccaneer Boats & Mouldings was re-formed under the new firm, Buccaneer Boats Ltd, and its previous owner, Paul Draper, remains active in the business and has joined the four new owners as managing director.

The new firm began trading at the start of this month.

Marine architect Mr Mitchell told the WMN that Buccaneer Boats offered an extremely comprehensive range of craft, ranging from 16 to 46 feet.

He said: “Buccaneer Boats, in my opinion has the best range of modern glass-reinforced plastic (GRP) inshore fishing boats in the United Kingdom – and in all likelihood in Europe as well.

“Paul Draper is now one of the five directors and will be in charge of – and remain actively engaged in – the hands-on boat construction.

“Paul is a top class boatbuilder and there are hundreds of boats – not only Buccaneer boats, but many of the big-name GRP boats before that – that are a result of his skills.

“So far we have six orders, comprising a B16 cove boat, a B19, two B21s, a B23 and a complete fit-out on a B46 – to be a majestic 46-foot-long ring netter to catch Cornish sardines.

“This craft will be built for local owners and have similar lines and fit-out to the B33 Resolute, a 33-foot-long Buccaneer ring netter built a few years ago for a Cornish company – a vessel that has proved successful in catching both sardines and anchovies.

“There have also been enquiries for a B21 for Ireland, a B28 for Scotland and also a B46 part-assembly trawler for a skipper in Scotland.”

Buccaneer boats are the “fullest and beefiest” inshore fishing boats on the market and are designed to have as much deck space as possible, with the hull shape bearing a French style to maintain good sea-keeping qualities – a trend for which Mr Mitchell’s designs are noted.

The firm began building its new range about 10 years and started with its 16ft cove boat (B16), progressing through the range with the 19ft B19 and its extended version, the B21, bringing considerable demand around the United Kingdom and in Ireland.

Almost all major fishing ports or regions there have at least one Buccaneer boat present.

Mr Mitchell said: “I designed the Buccaneer range as a result of demand from fishermen who simply wanted the biggest possible boat that would fit under the then new fishing restrictions – a boat which would replace the smaller proportioned boats from before. The type of fishing boats we have today – and I think that goes across the board – are designed for being the best workhorses possible within the regulations, and not built for beauty; perhaps a transit van of the seas, if you like, another way of saying a sea-kindly working platform. With the lines of today’s fishing boats you are juggling with hull volume, deck area and comfort, and the demand for the Buccaneer range shows that we have got it right.”

To build on the reputation of the existing Buccaneer range the directors say they will improve build times together with general efficiency, offering an economic service to the fishing industry.

Mr Draper will be responsible, as the managing director, for production, and will initially be assisted by Mr Mitchell on all design aspects, sales and administration. Mike Beacham will also be assisting on the sales side.

Mr Beacham said: “This is a very exciting new venture. We have every confidence in the Buccaneer range – Gary Mitchell’s best range in our opinion, and ahead of its time when it was introduced in about 2000.”

The new company shared a stand with WaterMota at the weekend’s Southampton Boat Show, where literature and information on the entire Buccaneer range was available.

Mr Mitchell can be contacted on 01726 842407.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Family businesses urged to enter Coutts awards

14-09-2009

COUTT'S & Co’s Exeter office has embarked on its search to identify contenders for the Coutts Prize for Family Business 2009/10.

The awards, now in their fifth year, represent the only regional programme in England and Wales celebrating the overall best performing medium-sized and large family businesses within three regions; Northern England and The Midlands; London & Greater London; and Southern England and Wales.

Peter Blatchford, Client Partner for Coutts in Devon, Cornwall and Somerset, said: “Up to 75 per cent of businesses in the South West are run by families and across the UK these family businesses account for a large share of UK GDP and employment. They also enter each and every one of our lives far more than we realise, from the wine we drink and the cars we drive to the offices and homes we work and live in. Yet even today, much of their work goes largely unrecognised by society and they get very little help with tackling the unique challenges they face in areas such as business succession.”

Mark Evans, Head of Wealth Institute, Coutts & Co, commented: “This year all short listed nominees benefit from a free company health check and the opportunity to receive feedback from the evaluation committee based on the information they have provided. In addition to generating national recognition, winning the Coutts Prize has also become a source of great family pride.”

The Coutts Prize for Family Business was launched to showcase and champion exceptional family businesses. As part of the process, nominations are reviewed by an independent evaluation committee made up of family business owners, academics and advisers.

To qualify for nomination for the Coutts Prize for Family Business, businesses must:

• have their headquarters in England or Wales;

• be wholly or mainly carrying on a trading activity;

• be companies or firms over which the family have significant influence;

• consider themselves to be a family business, though family members need not be involved in the management of the firm; and have been profitable in at least two of the last three years.

Within the three regions, there are two turnover categories medium £5-25m and large £25m+.

The Coutts Prize, endorsed by organisations such as the British Chambers of Commerce, Cranfield University, and the Society for Trust and Estate Practitioners recognises firms that demonstrate a combination of high standards of family governance and corporate governance, a competitive market position and consistent financial growth, and a track record of charitable giving or involvement in the local community. Entrants must be companies or firms with a minimum turnover of £5m.

More specifically, the independent evaluation committee judging the Prize will be looking for examples of best practice, such as how family values are embedded in the in the culture of the company, effective planning for succession of ownership which the family understand and sign up to, challenges that the business has faced and overcome, and an understanding of the business’s approach to strategic giving.

Juliette Johnson, senior family business adviser at Coutts said: “Increasing numbers of family businesses are recognising that their ‘familiness’ can be used as a competitive advantage, especially in today’s tough economic environment. The Coutts Prize for Family Business is a unique award for family firms to use to benchmark their performance.”

The Coutts Prize for Family Business recognises the best run family businesses in England and Wales, and compliments Coutts successful Family Business Forum that is held throughout the UK.

To reserve a nomination pack email robert.jacob@coutts.com or call 0207 649 4046.

The Western Morning News Think Local campaign is sponsored by independent financial adviser Worldwide Financial Planning.

Peter McGahan: Inheritance tax explained

08-09-2009

Inheritance tax is clearly one of the most unpopular taxes in the system and it’s about to become even more unpopular.

Inheritance tax is paid on estates where a transfer is made on death of over £325,000. There are a number of exemptions but I won’t cover them in this column.

The biggest inheritance tax ‘exemption’ is the inter spouse exemption which ‘allows’ you to give everything you have to your spouse – how delightfully kind. That’s the same money your employer paid 12.8% national insurance tax on, you paid 11% national insurance on, and then you had the joy of either 10%, 22% or 40% tax on if you earned over £34,600.

This is before the council tax, parking tax (how did they ever survive without charging me to go and see an ill person at the hospital) and the countless ‘green’ taxes, vat, and taxes on insurances coupled with road tax.

After surviving that, the lucky person who manages to save money will be clobbered with a savings tax. If they are lucky enough to make a gain they will be clobbered for capital gains tax and then they die.

The estate is then battered with an inheritance tax of 40% of its value in excess of £325,000. Where does the money go?

As if to make that worse, the government are now proposing to hike the rate of interest (sorry, that’s just another tax) at which you pay if you are unable to pay the inheritance tax after six months.

If you have a property in your estate, you can elect to pay the tax over ten years. Currently the interest charge is 0% but the revenue have increased that to 2.5% over the bank of England base rate. Whilst the base rate is at 0.5% that is no big deal, but if base rate hovers around an average of 5.5% that’s a whopping 8% per year charge on late payments.

Furthermore if quantitative easing bites and inflation occurs, base rates of far in excess of this are a distinct possibility. Quite how they believe the figure they should be charging is linked to a base rate I don’t understand.

It should therefore follow that the interest rate you receive on any refunds would be linked to 2.5% over the base rate. Ah! Now that would have been appropriate.

Interest on refunds is paid to you at a shambolic one point BELOW the base rate. Easy money!

Apparently a spokesman said this makes things ‘fairer for customers’. Furthermore this decision was made after ‘extensive consultation over the last 18 months’. Who on earth did they speak to create that solution?

The revenue expects to collect £2.2bn in Inheritance tax this year. Each year they receive £9.7 million in interest payments and make £2.2million in repayments. That’s a good day at the races. Apparently this move is likely to only make around £10m for the government but I suspect the motivation is cash flow. By increasing the rate at which they charge you, tax payers will look at whatever ways they can to come up with the capital now which will blast a hole through the governments soaring debt.

In a rising housing market where properties are selling, this is no real problem as there is always a willing buyer. An oversupply of properties coupled with low demand today means the beneficiaries will be forced to sell a property to repay the tax and the values could be under considerable pressure.

This is unfair in that the beneficiaries are not in a position to decide when someone dies and they are simply forced to pick up the pieces.

There could be further pain for many who believed the story of there now being double the nil rate band on death. This has caused considerable apathy and many holders will fall straight for that trap causing lasting financial hardship.

If you have an Inheritance tax query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Business protection - a subject worth discussion

01-09-2009

Business protection is easily one of the most passed over subjects in any company.

The business owner is too busy either making hay while the sun shines or battling in recessionary times to look at one of the key areas that can cripple even the most successful businesses.

There are three key areas of protection in a business: Succession planning post the death of the owner; protection in the event that a key person dies, and debt protection.

Let's look at the first – Succession planning post the death of the owner: Far too many businesses don’t even have a business will. A business will makes it clear what should happen to the business when the owner dies. Without a business will, a business that has built up quite a value over the years can easily become valueless.

The lack of direction after a death can cause fear within staff and customers, and competitors can soon seize that opportunity to move in. A considerable percentage of value can be wiped out in months. The key is to have the correct instructions and protection in place to avoid financial catastrophe.

For example, surviving business partners could find themselves with the spouse of the owner as their partner, a role they mightn’t be particularly hot on. Furthermore a surviving spouse who does not want to run a business that has been forced upon them, and is subsequently in a hurry to sell that business, is likely to get much less than one who is not.

Owners or shareholders should set up the correct business protection so that the surviving partners/shareholders can buy out the deceased's shares. This should also be set up with the correct legal agreement such as a double option agreement that allows either party to buy or sell the shares in the event of a death.

The value of the shares are calculated now and regularly reviewed. Each partner is insured for the value of their shares at that point and on death the insurance death benefit passes immediately to the survivors to execute the purchase of the remaining shares. It is a simple task that takes very little time to put together yet it is surprising how many businesses procrastinate on such a simple method of planning.

Be sure to use a specialist independent financial adviser however, as the legal agreements, if set up incorrectly, could mean that an inheritance tax situation is created, and furthermore the death benefits could become taxable. If set up correctly the premiums on the life insurance plan can be tax deductible.

Protection of a key man is simple. The business insures a key member of staff for any financial loss should they die. The death benefit is used by the firm to cushion the financial impact of the key person’s death on the business whilst they replace the key member of staff.

Debt protection is the third area of business protection which can be overlooked. This is normally the insurance that the bank adviser forces down your throat when you are asking for any business finance.

Ensure your debt is covered in full in the event of death (and critical illness if you can afford it) and use a fee based independent financial adviser to acquire the cover. The premiums will be much cheaper than those offered by banks’ products direct. You pay too much in excess interest and charges to banks to allow them the luxury of selling you life insurance for hefty commission.

Remember the age old practise of offering you a loan on condition of life cover is not acceptable in the eyes of the FSA, a trick far too many fall for.

On death, a bank may have the ability to foreclose on a loan, and if the business is not in a position to repay it, the banks' options are much more favourable than the business'.

If you have a business protection query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

How much life insurance do I need?

01-09-2009

Everyone needs a different amount of life insurance depending on their situation. A single person with no mortgage might arguably need no life insurance whereas a couple with a business, family and mortgage will have a considerable life insurance need.

To understand what life insurance is applicable to you, consider the origins of life insurance i.e. ‘insurable interest’.

In olden days, it was considered a reasonably good loophole to insure someone and then claim on that life insurance (by killing them) - a behaviour that may be considered socially unacceptable and unsportsmanlike today.

And so it developed that communities grouped together to create a ‘pot’ of money that the needy in the community could claim on. Time went by, commercialism got a hold of it, and this is what is known today as life insurance.

Let's look at a few scenarios:

A couple with a mortgage or loan should protect that mortgage/debt in the event of death. If your mortgage is a repayment type, consider mortgage protection. With this version, the life insurance cover drops with the debt. It is cheaper than the level life insurance used to cover an interest only mortgage. Typically the amount of cover should cover the outstanding debt as well as any fees and cost of disruption to finances. Speak to an independent mortgage broker for more information.

If you have a family consider the loss of income if a parent died. If a parent is not working, don’t assume there is no need to insure them. Consider what would happen if a housewife/husband died. It is likely the loss to the family is the same.

There are a number of choices as to how you can insure each person, but I’ll just cover the most popular:

Firstly consider family income benefit. This will probably be the cheapest option. This form of life insurance simply replaces the income lost over a set period of time. So a family with a youngest dependent aged 4 might insure for the next 14 years to replace that income. It's relatively simple in that a survivor has little to think about on first death.

Secondly you can use a straight forward level life insurance which covers you for a set amount for a set period of time. This is more complicated in that you somehow have to calculate now using assumptions that may not be applicable on death how to convert that income into a lump sum.

A rule of thumb often used is to multiply your income loss by twenty and insure yourself for that amount. As crude as this is, it’s the most common method used to calculate how much cover an individual should have. The theory behind it is that the lump sum will provide an income which invested in the building society at 5% will provide a return equal to the income lost.

In practice the money isn’t invested into the building society as investors look for a better return, and this method is riddled with complications the survivor has to deal with.

For example: there will probably be an inheritance tax created from the proceeds of the life cover; who will invest the money to guarantee the income needed and will the stress of this be too much for the survivor; what if the stock market is volatile and interest rates are as they are now, leaving 5% as nothing more than a dream; what if inflation is running high, will the income need be greater?

It is easy to see why family income benefit is a more favourable option as all this can be taken care of now leaving both parents with peace of mind knowing that post death there will be little financial stress.

Parents who have not completed their family will not know how long they will need cover for, but the normal approach is to add on a few years to the term of the plan to ensure that the youngest (new arrival) will benefit from the life insurance protection until age 18.

Next week I will cover business protection.

For advice on investment call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Excellent gains in property investment

01-09-2009

It seems more than peculiar that for four years to be calling property investment a no entry zone that I find myself writing about it as a potential for some excellent investment gains over the coming six to twelve months.

Remember with all investments in property, hindsight and 'present day sight' have no value. It is only foresight that allows you to make informed investment decisions.

There are a couple of early triggers to look for: Investment Volumes is one, and derivative pricing is another, and there is an improvement in both.

Derivatives is the future price being placed on property investments. It is normal to call a high in the property investment market whenever everyone is saying 'you can't go wrong', and a low when everyone is saying 'you can't go right'. The masses unfortunately don’t always think that way but I suppose that’s how markets are created.

Seeing through the noise is always key. In 2005 I looked at the yield on property investment versus a risk free asset. It showed that property was not a worthwhile investment and the more it rose, the more it showed that it was a bigger bubble. Today the yield (rental investment return) margin on property over government bonds is one of the earliest signs that property investment is close to recovery.

A ten year Gilt is the normal benchmark and this is because it is often a proxy for the rate at which we can borrow i.e. the risk free rate. If you assess the spread between the two yields, this is another measure if an investment in property is likely to turn out to be a wise choice.

The aim of Quantitative easing was to lower medium and long term gilt yields. Because commercial property has plummeted in value the rent when compared to the value has effectively increased. Currently the yield spread between the two is sitting at 4%, a clear signal that commercial property investment is offering an excellent yield for investors.

There is no doubt that interest rates remain artificially low because of quantitative easing, coupled with the bank of England interest rate policy, but we are in unchartered territories here as never before have these measures been taken.

Signs that eastern banks are already moving in to lend in the UK will be welcomed along with the thriving European lending. All we need is the cumbersome sleepy UK banks to break from their coma, and this will allow investors and property owners alike the opportunity to restructure.

CBRE has announced that rental yield have indeed hardened since the 4th quarter of 2006(1).

Furthermore the highly regarded west end teams of real estate investment trusts (REITs) will look to target distressed assets with their huge amounts of built up cash. Remember that many of these REITs have raised considerable cash over the last six months and one, London and Stamford, was more than twice oversubscribed. They did this after their earlier investment at the beginning of 2009 increased in value even though the market declined.

Unlike other types of investment, REITs often trade at a discount to their net asset value. What does that mean? Imagine ten commercial properties have fallen in value and are now worth £200,000 each and are owned by a REIT. So there is £2m worth of properties even after the fall. A REIT is an investment trust (a company) that can trade at a discount or premium to the net asset value of what it is invested into. So if you were to buy all the shares today in a company that owned the aforementioned £2m, you might buy the shares at a discount which in today's terms might be as much as half.

Discounts widen or narrow based on confidence. If the market turns confident, the discount narrows even if the assets remain flat in value. For some, that discount narrowing could be an immediate 100% uplift.

Much of the uplift in this sector will probably come via investment in equities as the colossal stockpiles of cash look for a home for quality yields. Once this has taken shape the fixed asset itself will be right behind it.

Ask peter a question in relation to property investment or for general investment advice on 0845 230 9876, e-mail info@wwfp.net

Source (1): premier asset management

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Short selling of hedge funds

01-09-2009

Can you explain what short selling is and how hedge funds use them? I have heard they are highly risky and I also know of concerns that exist about some of their ethical standards.

Unlike the simple buying of shares where an investor buys them hoping that they will rise, short selling is a tactic used to make money when a share price goes down. If the price does fall the person who has shorted them gains and vice versa.

So is there a problem? Well, many hedge funds operate at an ethical value I am sure. Personally I don't use anything unless it is fully transparent. If I can't see why an investment will go up or down I don't make the investment. If I make a decision that later turns out to be wrong, I want to be able to still say that I would still have made that decision at the time I invested. I don't want to be kicking myself because I believed noise and because I made an investment without knowing the details back to front.

Unlike the investment in shares, shorting is much less regulated. An investor investing in a share wants it to go up and everyone investing in such shares will want it to go up. This is good for the economy and the strongest shares do well but shorting is a negative approach which has a negative outcome.

It is easy to see why the Alliance for investment transparency (AIT) exists in the U.S. This coalition of publicly traded companies promotes transparency in the market place. Hedge funds are wall street's largest customers controlling over $1.5 trillion in assets.(1) The AIT is firmly of the view that despite attempts by the securities and exchange commission to initiate regulation of these funds, that the market remains highly vulnerable to illegal market manipulation schemes.

Their view has been offered to the Senate that such schemes involve collusion between hedge funds and so called 'independent stock analysts' providing research on a stock. (1) They believe they create that data and send it out into the market which in turn drives it down or up, depending on what the need of the investor is. It's what I often refer to in this column as noise.

If you think about it, it makes sense. If you have enough clout and the ear of enough of the media, you talk a share up and then short it, easy money. Alternatively you could also talk it down then buy it.

There is also the ability to buy a contract for difference which effectively means investors have to put much less down to participate. Like spread betting, investors are investing on margin (i.e. to have an investment of $1000 you might only have to put down $90 for example). If you think about this carefully, a gain will be multiplied upwards by this margin and a loss would be multiplied downwards. And so to make a decision where you believe the market will definitely go your way means you have to be pretty sure. How might you be pretty sure? It's therefore easy to see why the AIT is driving for this opacity to be dealt with.

A former investigator for the U.S. Securities and Exchange Commission gave a testimony to the U.S senate judiciary committee

"The potential harm that hedge funds can inflict on other market participants has no real limits. Hedge fund trading now dominates the nation's capital markets." (1)

Whilst most hedge funds I am sure are perfectly fine, my reasons for not using hedge funds relates to the opacity. In twenty years of advising investors I have analysed countless predictions on where the market or a stock will rise to. Invariably the prediction is complete twaddle. So if they do not know if a market or share can rise, how can they predict if it will fall and in any event, get paid any.

If you would like to chat to Peter for investment advice please call on 0845 230 9876 or e-mail info@wwfp.net

Source: (1) AIT

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

The bottom for the UK housing market?

01-09-2009

Is there really stability in house prices or is it actually just the higher level houses that are supporting the market?

It was only a matter of time before house prices eventually would be supported by quantitative easing and lower interest rates. The Bank of England have not made the same mistake as last time and were aggressive in their monetary policy which has clearly had an impact on the confidence levels of the homeowner.

The news that across the UK house prices have found a support level will be welcomed. This will allow lenders to begin increasing the level at which they lend and to relax the extortionate rates they are charging for homeowners with higher loan to values.

Despite what most people might think, the prices are not being supported at the higher end. In fact it's quite the reverse. Detached and semi detached properties reported a fall in the most recent figures and it was the properties most attractive to first time buyers that proved the winners. In fact the properties in categories such as flats and maisonettes were indeed the biggest winners rising near 1% in June alone. I suspect these numbers matched our enthusiasm in this column in May when we could see that confidence was making its way through to the enquiry levels for new mortgages which we reported as the highest level in history, in fact higher than the peak of the housing market.

Much of this would have been a surprise given what house prices should get to. At the peak of the market I said house prices would fall, and fall to the first point I stated house prices were expensive, and that was 2003. Quantitative easing and amazingly low interest rates look to have halted the house price just before then with prices now turning at April 2004 levels.(1)

Will it be sustained? There are two key factors: First time buyers in rented accommodation and investors.

The fact is many first time buyers and investors will be looking at today's interest rates and realising they are potentially missing an opportunity. The cost of rent is considerably more than the cost of a mortgage and many first time buyers will seek this opportunity to dive into the market at 2004 levels. This is just as evident in the

mortgage enquiry levels reported for June.

Investors who like property will try to 'time the market' but at the same time will be mindful their capital in the building society is returning nothing. There is never a bell rung at the bottom of the market but if ever there was a noise just like it, it is there now.

The Bank of England's policy appears to be working. If you also remember back to my column in November 2008 where I explained that fiscal policy takes eighteen months to fully make its way through, everything appears to be going according to plan. Mr Brown is eight months into this campaign and in ten months he will have an election! Work it out.

One of the greatest benefits of investing into property is the ability to use someone else's money to invest. Unlike cash investments such as equities, an investor can gear into a property by borrowing from a lender, something only really available to a sophisticated investor in shares.

If this confidence bites after the summer lull, we could easily see May 2009 as the low point in the housing market.

In the meantime we would encourage readers to approach their mortgage broker to consider the benefits of fixing their mortgage considering the considerable hike in the cost of fixed money and the drive in mortgage enquiries. A support for house prices will support confidence, which in turn will make its way through to increased spending and good old inflation. It might be a strong decision to fix now when you are on a low standard variable but if quantitative easing has its true effect; higher interest rates will be on their way.

For a list of the best mortgage rates call Peter on 0845 230 9876, e-mail info@wwfp.net

Source: Land Registry (1)

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Structured products revisted

01-09-2009

I made two statements ten years ago on structured products: 'These investment products are for financial advisers who do not know how to explain investment risk and investment reward to their customers'; I also said I would never write on them again. Well one is still true. This week alone I have had five plans thrown at me to decipher. Three were an easy knock back but here is an explanation of the other two. I have realised now I will be reviewing these every month!!

Firstly these 'protected' products are normally marketed by selling to you:

'In uncertain times like these, the instability of markets leaves investors uneasy'.

That's a standard opener of the investment literature. Let's remember one key point: If times were certain and never unstable, markets would rise in a horizontal line and you would never make money as there would never be a cheap point and an expensive point.

Such economic conditions are the opportunity to purchase cheap. Understanding that an investment is not good or bad, but that it is cheap and likely to become more expensive, is the key to making your money grow.

Barclays are hot on these so I will pick out two recent plans. Barclays have a 'defined' return plan. There are options for investing for less than five years and I won't even discuss that seeing as the very basics for investing is for five years. Risk is propelled beyond belief for such arrangements if you are investing for less than five years.

The five year plan refers to 100% protection. There is not a 100% protection. If Barclays fails, there isn't even the protection of the financial services compensation scheme (FSCS) as the large company rule applies and you could get nothing at all.

In most other investments at least you have the FSCS to rely on to get your original capital back in full or in part. Also the scheme offers 43% return over the five years if the market is up at all.

However it doesn't matter how much it's up by you would only ever receive the maximum 43% back. AAAh!

With these schemes you miss out on the dividends of the FTSE 100. If the dividends were say 3.5% per year that's 18.8% return over the five years. The market only needs to move 25% for you to hammer the returns these schemes will offer. On March 3rd 2009 the FTSE100 stood at 3512. (1) At the time of writing it is at 4559, a full 29.8% higher. If the market soars you will be limited to just 43% return.

How many people were sold such schemes and are now locked into them with no further upside. In any event you have no protection from the fluctuations in the investment during the plan at all. If you need access to your cash you will receive back what its worth with no protection and no dividends. It is only on the day of maturity that the protection will apply!! What's the point!

There is also a fixed income plan offering 5% per year for five years. On the face of it, 5% looks quite good, but as with all these arrangements the devil is in the detail. A cash saver is risk averse, i.e. capital security is everything so these arrangements should not be considered in the same league or light as a deposit based investor.

Although Barclay's literature states this is not a deposit based investment, its one line in a big document and everything else in the document looks like a deposit based investment.

Two key risks to consider: As above, there is no protection under FSCS if Barclays folds and if you try to encash before the maturity date you will receive the value of the investments they are invested into.

Unlike cash your investment will be in medium term notes (debt instruments) such as bonds, and the capital value has very different risks attached to them than cash do.

So there!

If you have a plan you wish to have reviewed or require investment advice call Peter on 0845 230 9876 or email info@wwfp.net

Source (1) Google finance

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

What is the cost of investing money?

01-09-2009

For many investors the costs of investing money have been hidden within the plan. Investment bonds are a real example where the set up costs can easily exceed 10%. On the second page of an illustration you will see the cost of the product if you encashed the day after investing so be sure to read that.

Other investments can have large up front costs such as ISAs and unit trusts but many investors are missing a trick here as they don't have to pay these costs of typically 5.25%.

Using a discount broker is not an option for many as there is no protection for the advice as you will often be offered the plan with no advice.

Knowing which funds to be invested into is key to making sure your money is managed carefully.

For example the best fund in the active managed sector returned 40% over the last five years and the worst returned -22%. The difference in risk between the two is also amazing with the worst fund being 81% more risky then the best.(1)

And so receiving bespoke fund advice is essential but it doesn't have to cost the earth. A fee based independent financial adviser will separate the cost of the plan and buy at the cheapest possible rate. Today I can buy most funds at no up front cost.

This is also true of customers who would be switching funds. In many instances when a customer has an annual review they would be switching from one fund to another and would incur the same up front fee of c5.25%. Whilst some fund supermarkets etc have this discounted down to c2% once again there is no need to pay the fee at all.

This is particularly worrying for lower risk funds as their return is likely to be lower and so that fixed cost is crippling.

Another hidden charge is within 'guaranteed' or 'protected/structured' investments.

They are marketed as having 'no explicit charge' which of course to most people means there is no charge at all. This is highly misleading. These arrangements are created using very complex financial instruments and sold as simple plans but are far from that.

When the provider is creating the plan they decide what margin they take at the beginning by offering you a lower participation in the upside of the growth of the plan. Furthermore in order to create an extra margin for themselves they provide the 'protection' or 'guarantee' by moving down the quality of the company providing that guarantee.

So for example if the protection was being offered by the government that would come at a greater cost than that offered by one of our many 'in trouble' financial institutions that are used to provide the 'guarantee'. Its no surprise that banks regularly come up with these arrangements on quarter by quarter basis as their profit is immense.

The same is true of pensions although their costs have plummeted over the years. Within a pension you will be offered access to a range of funds and the above costs can easily apply.

Beware cheap imitations of the well known investment funds. Mirror funds are a copy of the real fund with an extra charge layered in. A recent article that I did showed that a customer was 36% worse off over three years by investing into what they thought was a Fidelity Special situations fund but was actually a 'mirror' version.

You will find these typically inside investment bonds and pensions so be careful. One of the easiest ways to identify them is the fact they normally have the providers name in front of it. So Fidelity special situations will be AIG Fidelity special situations for example. These costs are dramatic but disguised so be careful.

Source (1) Lipper

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Tracker funds? So how do they add value?

01-09-2009

I remember back when Virgin money hopped on the tracker bandwagon years ago with the line that active investment managers rarely performed well and indeed charged heavily for it.

Trackers claim to be cheaper entries into the investment market and typically appeal to an investor through cost but many investors are paying way through the nose for such a scheme. Fidelity international for example cut their costs to 0.1% per year (a tenth of the cost of most competitors) back in 2005. Many investors in tracker funds have been caught by that apathy and still pay the extra fee unnecessarily.

Remember that not all tracker funds are the same. Some will aim to track the FTSE 100, some will aim to track the FTSE allshare and others track a percentage of the aforementioned. Believe it or not a small handful of providers still charge up to 5.5% for fees to enter their trackers which must be close to Criminal given how little they do.

Some investors are of the view that trackers are lower risk but this is far from the case. They are simply tracking the UK stock market with no diversification into any other investment assets.

Furthermore the UK index can easily become overly exposed and if you held a tracker you could do nothing about that.

Take a tracker following the FTSE100 for example. In this column we told investors back in 2006 that banks were too expensive and heading for a fall. We also called the peak of oil price last year and told everyone to get out. Had you taken that advice you would be much more content than an investor in a tracker today.

If you had held a tracker you would have simply watched the index fall and your money with it. An active manager who knew what they were doing could easily have dumped their exposure to banks and other cyclical assets such as oil and mining.

Indeed a stock that plummets in value too much could disappear out of the index and the tracker would then have to sell it. If that was the case the stock may fall from grace for some time until it began to perform more profitably. Unfortunately for you the investor, you will catch it no-where near the bottom and will only start to benefit from its gain when it re-enters the FTSE100 again. Puzzling thought process to wait until it's more expensive before you buy!

Notwithstanding that, many funds that are so called 'actively managed' are far from that. In most cases you are paying for a manager to buy stocks and hold them for long periods of time as opposed to your expectation which would simply be to maximise return and minimise risk.

You may also be surprised to know that many funds are designed not to make the best returns and minimise risk but simply to outperform the 'benchmark' of other funds in their sector. So their motivation if the funds are falling is not to stop the capital falling but to fall less than the rest. Splendid!

An exchange traded fund (ETF) is typically a more favourable option than a tracker in any event and in most cases is cheaper. The introduction of ETFs was probably the biggest pressure on price for trackers which had the monopoly on 'cheap' funds. An ETF is simply an investment into the price movement of a basket of stocks and has the ability for you to buy exactly what you want exposed to in a cost effective way.

Finally, be careful when building your portfolio. I studied the active management sector last week. The best fund had returned just over 40% over the five years, the worst had fallen over 21% and the average had returned 10.27%. Not every fund is the same. The best fund was also over 130% less risky than the worst!! (1) Choosing the best funds is an art and skill.

For investment advice call Peter McGahan on 0845 230 9876 or e-mail info@wwfp.net

Source(1) Lipper

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Bank share prices face new pressure

01-09-2009

I am sure you are all focused on the retail distribution review (RDR) but in case you missed it, its more than a little interesting and as a consumer you should take careful note of its contents for a number of reasons.

Firstly the regulator (FSA) has identified that the 'victim', sorry customer, looking for financial advice is faced with a range of possibilities to acquire that advice that do not suit. Interesting!

You can go to banks who just sell their products, to banks that sell lots of products, to banks that are supposedly independent, or to banks that are independent and charge you a fee. Alternatively you can avoid all that and see an independent financial adviser who charges a fee so you are guaranteed independent advice irrespective of a product. (You should be bored and confused by now but keep with it).

Naturally such confusion is just fodder for the unscrupulous and many advisers have taken advantage of this. The FSA have taken the opportunity to do a full review to see how customers can be better placed to receive appropriate advice in a way that's less confusing. For you, the consumer, the news is excellent and much of what I have 'harped on about' in my columns for over ten years is covered in the report.

Under the terms, anyone who claims to be independent has to charge a fee and also cannot receive a commission. Most, if not all quality advisers will go that way.

All this takes away any bias for commissions and as such consumers can now rely on the fact that the adviser is acting in their best interests.

The article I wrote last week highlighted that many advisers use 'extra allocation' to hide extortionate charges. This is banned under RDR which was published two days after the column. This is a common ploy where you are believing that 105% of your money is invested when its not, and is typical of an investment bond.

The greatest benefit of RDR is the ruling that anyone who does not offer fully independent advice has to call themselves 'restricted'. Whilst I am sure they will put a spin on this to say they have 'restricted themselves to ensure you get the best advice' the reality is they are offering you substandard service and advice because they are not independent.

Where does this leave us? Well consider the most oversold investment in the UK – the investment bond. As one of the largest firms of Independent financial advisers in the UK you might expect our business levels of any product to be the same as others. We do not make it into double digits in terms of the amount of sales of investment bonds yet the industry has a different view with annual premium equivalent of new sales rising every year from 2002 from £1.6bn to £4bn in 2007.(1)

With commission out of the way there is virtually no need for these highly tax inefficient and expensive products to be used at all.

It is therefore quite interesting why the FSA has extended indefinitely the disclosure regime on shorting on financial stocks. Does it know how much pressure these institutions will be under?

Such products bring in amazing revenue and have been the subject of considerable disgust for independent financial advisers who might charge a fee representing a quarter of what the new 'restricted' firms get in commission, they are not providing independent financial advice.

In the new regime customers make a decision at the outset if they want to use a restricted adviser (why would they do that) or seek independent financial advice.

The adviser will then have to offer crystal clear advice irrespective of the product and you can make a clear decision.

The share prices of these institutions will clearly be under pressure but those fund management groups who should be receiving the money now; due to offering more tax and charge efficient products will be looking forward to the next few years as the capital is redirected.

For advice on investment call Peter on 0845 230 9876 or e-mail info@wwfp.net

Source: (1) Datamonitor

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Investment illustrations explained

01-09-2009

When my financial adviser prepares an illustration for me on my investments I find them virtually impossible to understand. How useful are they?

The basic description of the word illustration is to 'remove obscurity'. Hardly.

The FSA sought to reduce commission bias with products and create a fair and open illustration so you, the consumer, could directly compare what you were paying, and also so advisers who were being paid obscene commission would be under pressure to reduce that commission.

It has had a benefit in that commissions on many products have been slashed and the consumer is considerably better off. For example commission on a pension that was once £1000 is now near £100.

It has not been fully successful however, and whilst this is a complex column you should consider its contents carefully if you are considering a financial product, particularly if it's an investment bond or a structured product.

Firstly structured products: These are the arrangements you see highlighted in windows with 'x % growth over six years and 100% capital protection at maturity'. Or alternatively - 'y% income over the same period'. They are sold as simple risk efficient plans that offer you capital security and a positive return, and more often than not are described as not having 'any up front or explicit charges'. What a bucket of nonsense that is.

Their complex nature is such that the charges are hidden into the profit at outset so the profit is wielded off to the product provider before you see it. The commission for the adviser is also hidden in there. So you, as a consumer invest and believe you have had your advice for free. Not at all, and the complexity of these arrangements is such that you will never know how much you have actually been charged. A great way to be sure to avoid such an arrangement is to use an independent financial adviser who charges a fee, that way there is no bias to use a commission wielding product.

Next, the obscurity of investment bond illustrations, probably the most oversold investment since toxic assets became 'all the rage'. When advisers illustrate an investment they show growth at 4%, 6% and 8%, basically to highlight what will happen to your money if you had returned these levels and the impact of charges. Most of you don't get to this point anyway because it all looks like a pile of spaghetti numbers, but continue to do so at your peril for it will cost you a fortune. For example a few pages in you will see that the cost of investing 'could bring the investment growth down from 6% to 3.4%' - quite a typical illustration on a bond - or 43% over five years as I prefer to put it.

The unscrupulous will know you won't make it to those pages but even if you do it's still misleading. The FSA recently made it clear to all providers that the correct growth rate assumptions must be used for funds and to use a lower growth rate assumption where the expectation of return may be lower. For example when building a portfolio of higher grade fixed interests (lower risk and lower potential return) is it really appropriate to illustrate at 4%, 6% and 8%?

I asked a number of providers recently to provide illustrations for me. Only Standard life illustrated correctly by using the appropriate growth rates for illustrative purposes for the correct funds. Because fixed interests potentially return less, they should be illustrated at a lower figure. Whereas Standard life illustrated a fixed interest fund at 2.25%, 4% and 5.75%, other providers illustrated at the full growth rate, an amazing 78% higher thereby making the whole illustration process a complete fiasco.

Whilst these providers are all under pressure to correct this, they haven't done so. And so, the next time you are being 'sold' an investment such as the above, present the adviser with this illustration and sit back and enjoy.

If you have an investment query call Peter on 0845 230 9876, e-mail info@wwfp.net

- The value of shares and investments can go down as well as up.

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change

Business protection - a subject worth discussion