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Expat financial advice in Portugal

By Spectrum IFA - Topics: financial adviser Portugal, Financial Planning, Portugal
This article is published on: 5th January 2022

05.01.22
Expat financial advice Portugal

The Spectrum IFA Group are delighted to announce the official opening of our latest office in Portugal.

The new office is based in Almancil, which is situated in the very south of the country in the heart of an affluent area known as the ‘Golden Triangle’.

It will be run by Mark Quinn, a dual-qualified chartered financial planner and tax adviser. He brings 20 years’ experience advising individuals and businesses in the UK and Europe.

Mark has lived and worked in Portugal since 2014 and it was his interest in joining The Spectrum IFA Group that made it possible to re-open an office in Portugal.

This recent opening follows the establishment of an office in Malta in September 2021, adding to the offices already situated in France, Spain, Italy, Switzerland and Luxembourg.

Mark has over 20 years’ experience in finance and investment and is a dual qualified Tax Adviser and Chartered Financial Planner. Mark is originally from Manchester and moved to Portugal in 2014.

After obtaining a degree in Finance, he started his career in the UK as a researcher and report writer for several accountancy and advisory practices before being promoted to Independent Financial Adviser status in 2005. He has broad experience in advising individuals, companies and trusts in respect of their financial and tax issues.

In today’s world of finance one thing is clear, we all have to pay attention to and take great care of our own finances. Spectrum advisers are here to help you, our clients, with the many complex financial and tax issues you are confronted with: retirement and pension planning including QROPS, Life Assurance, efficient investing (using Insurance wrappers), succession and inheritance tax planning, currency exchange and many more.

As for most expatriates, these planning issues may exist in more than one country, and we believe working with experienced, qualified, cross border advisers who are themselves expatriates, and therefore facing similar challenges, is really important.

Throughout the group want our clients to stay involved and work with us to ensure they continue to prosper. We put an emphasis on continued financial advice and support with some of our clients having worked with their adviser for more than 15 years.

Our commitment to long term business relationships allows us to provide advice and reassurance during the inevitable changes in tax rules, movements in exchange rates and markets.

If you are thinking of moving to Portugal or are an expat currently living there, contact Mark via the form below:

Your Financial Health Check 2022

By Chris Burke - Topics: Financial Planning, Financial Review, Spain
This article is published on: 5th January 2022

05.01.22

New Year Financial Planning Resolutions

First of all, a very Merry Christmas, Happy New Year & Kings Day to all of my clients and readers! Here we are about to start another year; how fast the time passes! Although we have various challenges and uncertainties on our plate currently, the latest COVID-19 variation Omicron and the ongoing Brexit transition to name a couple, I am feeling optimistic about the year ahead.

This time of year is commonly thought of as the natural time to plan ahead. Writing our New Year’s Resolutions allows us to put down in writing what we would like to accomplish over the forthcoming 12 months, and hold ourselves accountable to this. There is a four-benefit cycle of writing New Year’s Resolutions:

  1. Motivation Increases – we will feel motivated and determined from the moment that we set our goals so that we…
  2. Take Control – we internalise that there is nothing stopping us from achieving our goals and that we have the power to ‘make it happen’. Resulting in a…
  3. Sense of Achievement – as we take control and achieve our goals, we will start to feel a sense of achievement, motivating us further…
  4. Self-Esteem/Confidence – as we crush our goals, we will see our self-esteem and confidence skyrocket!
New Year Financial Planning Resolutions - Health Check

But Chris, I hear you say, I don’t know what to include in my New Year’s Resolutions! There are lots of options, whether this is improving your fitness, learning a new skill or improving your financial situation. I specialise in financial advice, so I believe that I can add the most value assisting you with the latter!

A recent Royal London study (Royal London customer research: Feeling the benefit of financial advice, 2020) found that those who take financial advice are on average £47,000 better off over 10 years than those who do not. Furthermore, the study also highlighted that having a financial adviser not only has financial benefits. It suggested that the average person that receives regular financial advice feels more confident and in control, along with experiencing a heightened sense of ‘peace of mind’.

I am an advocate of the Five Key Financial Planning Principles, also known as the PIPSI. These principles are listed in order of importance, starting with ‘Protection’. If you do not have adequate cover in place, then should something happen, the rest of your plans will not happen, so it is generally agreed that protection is the most important.

P – Protection
I – Income Protection
P – Pension
S – Savings
I – Investment

Protection – do you have adequate life and critical illness cover? Are you paying a fair price for it? Do you have a will to protect your family? Is it up to date?
Income Protection – if something happened resulting in you being unable to work due to accident or illness, are you covered? Would your dependents be financially secure?
Pensions – will your pension plans allow you to retire comfortably? Do you have pensions from previous jobs that could be due for a review? If you have numerous pensions, could it be best to consolidate them to reduce the overall charges and to maximise their effectiveness?
Savings – are you saving money regularly? Are you getting the best interest rate on your savings? Are your savings protected against inflation?
Investments – do your investments match your attitude to risk? Are your current investment charges too high? Do your principles align with your investment choices? For example, are you investing in an ethical manner? Are they on track with your financial life goals?

Have you included improving your finances as a part of your New Year’s Resolutions? Don’t hesitate to get in touch with Chris to talk through your situation and receive expert, factual advice. The initial consultation is free and without any obligation.

Click here to read reviews on Chris and find out more about him and his advice.

A Financial adviser in Italy

By Gareth Horsfall - Topics: financial adviser in Italy, Financial Planning, Italy
This article is published on: 2nd January 2022

02.01.22

Being an adult in the financial services business

Immediately prior to joining The Spectrum IFA Group in 2010, I was in my 30th year and wanted to take a bold new direction in life. I was working for HSBC bank in Doncaster, Northern England, at the time, and thankfully the years there were good to me.

However, some things in life seem to change the way you think, permanently. My personal experience of this was during and after my international travels (backpacking ) in 1998/99, visiting S.E. Asia, Australasia and N. America. It was an experience that just wouldn’t leave me. After having grown up in England for the first 24 years of my life, where sunshine is a rare commodity, and then spending a year and a half in sunbaked, tropical and generally sunnier climes, on my return to England I set myself a goal: within 5 years I aimed to move abroad to a sunnier/warmer country.

During those 5 years after returning I had put my time to good use. I had retrained as a fully qualified UK financial adviser, worked on the front line of a bank call centre, worked as a sales agent for an insurance company and was a successful candidate for a financial planning manager role at HSBC bank.

But now, it was about 3 months before my self-imposed 5 year deadline and I still wasn’t anywhere near meeting my objective. Then, by pure luck, by word of mouth through some family connections (sounds very Italian!) I was approached by a local UK IFA firm (also in Doncaster) to be one of their advisers and to open up their first international office in Rome.

I can tell you that I didn’t need much convincing. It would be a commission only role, which was quite frightening as there would not be a fixed regular income. However, my urge to live somewhere warmer overcame everything and I jumped at the chance.

Moving to Italy

I had never been to Italy before, didn’t speak Italian and had no idea about the culture, quality or standard of life in the country. This was never more evident that in my first month of work in July 2004.

We were expected to dress to work, as we would in the UK, i.e. suit, shirt and tie. However, as anyone who has ever been to Rome in July will know, it is no place for a UK style heavy woollen suit, shirt and tie. In addition, I had to take public transport everywhere because I didn’t have the money to take taxis.

I still remember vividly the time when I was returning from an appointment with a 1km walk to the metro station. I was sweating so much that everyone was giving me a very wide berth. I assume that they just thought I was suffering from a deadly disease. This was my introduction to life in Italy. But I was also now experiencing the sun, beaches, mountains (I started skiing for the first time), countryside and not to forget the food! (I remember saying to my now wife when I first arrived in Italy that food was just fuel for me. That attitude soon changed when she served me my first mozzarella di bufala and introduced me to her family, who mainly originate from Southern Italy).

I lived the next 5 years in a kind of expat bubble, never making an attempt to learn the language and just focusing on my work with the same company, but at the same time becoming more disillusioned with what I saw as the future of the business and their ideas.

During those first 5 years I also split with my long term partner in the UK whom I owned a home with; never an easy thing to do. But, I also met my wife (Italian, but educated in the UK), got married in Ravello on the Amalfi coast and we tried to start a family.

Unfortunately, starting a family was not as easy as we would have liked. After a few years of trying we were told that the only route would be IVF and our hearts sank! It was a heart wrenching journey, but in the end we were lucky enough to be successful after only the second attempt (further attempts never brought more children our way) and we were blessed with a baby son.

However, as is often the case with IVF children, he was premature. Our son was born a month early, severely underweight and with serious health concerns. The next few months were some of the hardest of my life, not helped by the fact that my failure to learn the language was now coming back to haunt me. During a time when your child is at the most vulnerable point in their life, you would hope that as a parent you could communicate and understand the doctors. In my case I couldn’t and had to rely on family members to translate for me. This led to me swearing that I would never be in this situation again in Italy. The following 2 years were an eternal wall of worry, but thankfully he came through. We, my wife and I, were left with some collateral damage, but my son is now healthy and a great child. I am very proud of him.

Spectrum-IFA-Group-Logo

I am not sure why, but during those 2 years, I also decided to jump ship to another company, and after 1 year with a firm which was destined to failure from the start, I ended up meeting Michael Lodhi, CEO of The Spectrum IFA Group, with a view to taking on a position in either Barcelona or Amsterdam, and travelling from Italy a few times a week.

The conversation (abbreviated here), over a meal and wine, went something like this :

ML> “Gareth, tell me about your work in Italy.”

G> “There is no infrastructure for foreigners living here, unlike France and Spain, no serious tax or financial planning service, people are looking for professionals but can’t find anyone. I think there is a business here but it will take a few years to build.”

ML> “Hmmmm…it seems like you know the market here in Italy. Why don’t you open, build and manage our first move into the Italian market?”

G> “Well that’s what I was really wanting – deal!”

And so that was my start with The Spectrum IFA Group. I now had an idea of what I wanted to build and how I wanted to do it and I had the support to do it the way I knew it should be done.

During that period, and much before, the English speaking community in Italy were mainly being contacted by cold call by firms that would trip in and out of the country to pick up a client here and there, but there was no permanent and serious presence. I had done cold calling myself in the past but I hated it as an approach to prospective clients. It is called COLD calling for a reason. So I decided to take a closer look at the stats behind it. I found (not surprisingly) that the success rate from cold calls to taking on a new client was about 1%, if you were good!

It wasn’t long after when someone challenged me about how I was going to build the business in Italy if I wasn’t going to cold call. I turned the question around and asked: if cold calling brings, let’s say, a 5% success rate and you focus on this as your main way to contact clients, what exactly do you do with the other 95% who refuse the call? I explained that this was where I would be focusing my energies, and I did.

I estimate it took me 2-3 years of holding conferences around Italy, meet-ups with anyone of interest, writing numerous articles for magazines and websites and continuing my own E-zine newsletter, doing drop in financial planning clinics, speaking with numerous commercialisti and lawyers and spending hours in the car covering 100,000s km. All the time making the commitment that unless I was doing a 2 or 3 day event then I would return home to my wife and son at the end of every day, no matter what time I got home.

I didn’t think much about it at the time, but when I look back, I realise just how much I achieved in a short space of time and boy oh boy I learned some lessons in the meantime. I often say to people who contact me with a view to moving to Italy, “you don’t need to worry about making loads of mistakes because I have made them all for you, and paid the price already. If you follow the necessary steps I have laid out, your chances of running into trouble with the tax authorities are very small indeed”. I paid dearly for not taking the right advice in my first years of incorporation in Italy, and not understanding clearly what professionals had told me.

But, after the personal and work struggles of those years, things started to get easier. My name was now being passed on to friends and family members, my online content was, and still is, being discovered and my commitment to staying away from cold calling and building a strong online presence started reaping rewards. I had finally built the foundations of the business that I had always wanted.

Gareth Horsfall

The following years are much like anyone else’s, I imagine, as we advance through our 30s and into our 40s. The aches after the gym visits take a little longer to go away and the now infrequent evenings out on the wine take days of detox to recover from. But the life lessons, places I have seen, people I have met, knowledge of my business and life experiences seem to, in a beautiful way, replace all those things that you can no longer do. It feels like there is a natural cycle of renewal and replacement taking place.

My life is now more Italian than I ever would have imagined. After years of making no effort to learn the language, the birth of my son and the experience with the doctors gave me the impetus to ‘get my finger out’ (as we say in Yorkshire) and learn it. Whilst I am far from fluent I can live a comfortable and enjoyable life in Italy now, and learning the language made a huge difference with building relationships and friendships.

And it goes without saying that I no longer consider ‘food as fuel’. After finding out that my wife is a terrible cook, I took on the role of cook in the house. I learnt from my Italian family and found out that I am not as bad as I had thought.

Finally, one more point is worthy of note here: the UK’s decision to leave the EU. This created a bit of an existential crisis for me. It brought into question where my heart now belonged. I had never intended to, nor ever would turn my back on the country of my birth, but the subsequent years of campaigning to protect UK citizens’ rights in Italy and the UK’s hard-line stance on exit convinced me to apply for Italian citizenship. It was awarded in 2019. I am glad I have it.

Every time I look at my passport I realise just how much I am now connected to this ‘Bel Paese’, my business and my clients who are as fortunate to also live this amazing life as I am.

Do I need a financial adviser?

By Jozef Spiteri - Topics: Financial Planning, Financial Review, Malta
This article is published on: 30th December 2021

30.12.21

What exactly does a financial adviser do?

Do you have a good idea of what a financial adviser does? Some people think we are accountants, others think we are regular bankers or even stockbrokers. Well, I can start by saying that we are none of the above and here I will briefly outline what we actually do.

A financial adviser is quite simply a professional guide and planner for your finances. We take a broad view of your personal and financial circumstances, looking at your current position together with immediate and longer-term needs and goals. During an initial consultation, we try to get to know you, to understand your priorities and plans.

Once we have a clear idea of your intentions, we then move on to examine your existing finances, including assets, liabilities, income, expenditure and how much money should be held in reserve for unforeseen expenses. Protection planning will also be addressed – do you have sufficient life insurance to protect your family and is your income safeguarded against serious injury or illness?

We then consider how much should be set aside for long-term investment and retirement, whilst exploring the most suitable solutions for your circumstances. As part of this exercise we complete a questionnaire which helps determine your investment objectives and attitude to risk, allowing us to propose an appropriate investment strategy. This might focus on capital growth, wealth preservation, generating a regular income, or a combination of all three.

The final step is implementing the financial plan by completing application paperwork and arranging transfer of funds to the institution(s) responsible for managing your investments.
Beyond this initial advice we arrange regular updates and review meetings, providing ongoing service to ensure that our original recommendations are always aligned with, or where appropriate adapted to, changes in your circumstances.

This is a short summary of our advice process. Quite straightforward, right?

Jozef Spiteri the Spectrum IFA Group

We believe in building long-term client relationships and have been doing so since our business was established in 2003. An initial meeting with a Spectrum adviser is free of charge and without obligation. Please get in touch to learn more about what we do and how we can help you.

Top three financial tips for expats living in Spain

By Chris Burke - Topics: Financial Planning, Inflation, Pensions, Spain, Tax in Spain
This article is published on: 22nd July 2021

22.07.21
Chris Burke | Spectrum IFA Barcelona

Hola

This month we are covering the following Hot Topics:

  • UK financial advisers are not legally able to advise EU based clients anymore
  • The important ‘rule of 72’ for investing
  • Spanish state pension inflation worry

UK investments & pension law changes
Many UK based financial advisers can no longer legally look after anyone resident in Spain or the EU due to Brexit legislation, most having already written to their clients informing them of this. However, it’s not all bad news; most UK based investments including ISAs are not tax efficient in Spain/EU, with many having to be declared annually and tax paid on any gains, EVEN if you don’t access the money. This does depend completely on your circumstances and I help people analyse their personal situation, managing their UK assets or arranging for them to become Spanish compliant moving forward.

For those with UK private pensions in drawdown, every few years to receive this money you must have a UK accountant rubber stamp this to continue. So again, you will need to find someone locally to do this for you, which we can help with.

If you have any questions or need help in respect of UK based assets, please get in touch for a free, no obligation chat/review of your situation.

Tax in Spain and the UK

The rule of 72 and poor performing investments
Implementing an investment strategy is not where your investment plan finishes; it is where it begins. Without regular reviews and maintenance there is a strong risk you will finish up with much less than you should have had. Many financial advisors here in Spain are mainly remunerated when taking on a new client, not on the performance of their investment. This is where I/Spectrum differ.

One of the many key aspects of investing is to keep a keen eye on the ‘rule of 72’, which is knowing how long before your money should double in its value. To work out the ‘rule of 72’ for your investment you use the following simple formula: divide the number 72 by the average annual interest you are receiving/likely to receive and it will tell you how many years it would take for you to double your money. So, for example, if you were averaging 4% interest per year it would take around 18 years (72/4 = 18 years), at 5% around 14 years and 6% around 12 years. To put that into a real-life scenario, if we use a starting point of €100,000 and invested over a 25 year period this amount of money would give you:

  • 4% €266,583
  • 5% €338,635
  • 6% €429,187

To put that into context, historically inflation makes your costs double every 24 years, so if your money is not well ahead of that, in real terms your monies are just keeping their present value.

Therefore, it’s imperative you really are seeing your investments growing and working for you. If they are not, I suggest you seek a second opinion and find out how you can have these optimised, because it will make a big difference to you further down the line. The main reasons for investments failing are high maintenance costs and investments that give the financial adviser a ‘kickback’. Many people don’t always understand why their investment funds are growing but their portfolio isn’t as much, and this is usually a starting point to look at.

I work in a different way, making sure it also works for the client by not using this method, but on a transparent fee basis using the best investments & platforms for the clients; not using investment funds that give the adviser more commissions, in essence.

inflation

Spanish state pension inflation worry
Back in 2011, Spain used to have a surplus state pension fund of €66 billion. This could be looked at as ‘well, at least they had a surplus; most countries have never had one’. Just before Covid started in 2019, it was €16 billion in debt. Now the state pension system, like many others, works on the principle that current workers pay for those who are retired now. The key point here is, from a percentage perspective, Spain, compared to others in the EU, has one of the highest proportions of its GDP (total country income) contributed to its state pension, at around 12%. The average ‘replacement rate’, which is the percentage of workers final salary income that they receive in retirement, was at 72% in 2019*, whereas the average in Europe is 45%. They receive, as a percentage, much more on average for their state pension compared to their earnings than their European counterparts. This is great on one hand, however this really is a great burden on Spain to provide that level of state pension to the people.

The only way Spain can carry on providing state pensions is to “increase the retirement age even higher and decrease the amount people receive” says Concepcion Patxot Cardoner, a University of Barcelona professor, as quoted by Bloomberg. That and start to move people towards saving into their own private pensions. However, this last option and the main plan moving forward is going to be difficult to achieve in a culture where only around 26% currently save into a private pension. Compare that to the UK where the latest survey showed 65% of people contribute.

If you also take into account Spain’s tourist industry (before Covid), which is the second largest in the world employing about 2 million people and accounting for about 11 percent of the country’s GDP, you can see that things are going to need to change drastically to balance the books given the current crisis.

What does all this mean? Well, to you and I, it’s even more important that we have a plan in place, whatever that is, to make sure we have provision in retirement. I am here to talk through this with you, using professional analytics tools to help take one of the most important planning aspects of your life and break it down, step by step, making it:

  • Specific to you
  • Measurable
  • Achievable
  • Realistic
  • Targeted

If you would like to talk through your situation with someone consultative and knowledgeable, don’t hesitate to get in touch.

Why do I need a Financial Adviser?

By Philip Oxley - Topics: Financial Planning, Financial Review, France, Occitanie
This article is published on: 21st April 2021

21.04.21

Top 10 reasons!

As 2021 progresses and hopes of a better year than the last increase, I thought I would write about a question that arises for me occasionally in social situations. From time to time, I am asked, “Why do I need a financial adviser?”, or sometimes it’s simply an assertion, “I don’t see the point of having a financial adviser”. My usual response is to give a brief overview of what I do, however, depending on the circumstances, I don’t always offer a thorough response and then subsequently regret not having taken the opportunity to fully outline the benefits offered from the work my peers and I do.

I appreciate that in terms of popularity and reputation, my industry is not at the top of the pile – sometimes being undermined by the disturbing stories of people being scammed (particularly in the field of pensions), and also a small minority of advisers who are exposed as either not qualified/licensed to operate, or who fail to act in the interests of their clients.

However, I know from the feedback that my colleagues and I receive from many of our clients that the work we do is appreciated and valued by many – sometimes for quite different reasons. So, I thought I would outline the benefits of why, if you do not currently have an adviser, you might want to consider exploring whether your finances could benefit from professional advice and ongoing support.

This list is not meant to be exhaustive and I have tried to avoid a generic list, instead drawing upon feedback and anecdotal evidence from individuals – some clients, some not…yet! Hopefully, my list provides a selection of reasons why I believe the work we do can be of significant value to many.

1. Saving money/growing money

The fundamental purpose of my role is to help my clients save money, and to grow and protect the money they already have. Such savings can be made through lower fees, reduced currency exchange risk, tax-efficient investment structures, and ensuring the best pension scheme for the client is selected. These same actions can also have a positive effect on the growth and protection of a client’s money. By choosing the right investment, an impact can be made on reducing inheritance tax liability for loved ones. Furthermore, if the worst happens to you, by selecting the best pension structure, you can ensure that your loved ones can be beneficiaries of your entire pension, in accordance with your wishes.

2. Greater choice of options

Of the financial solutions that I can offer my clients, few (if any), are available through banks or insurance companies – schemes offered directly through these organisations are usually the company’s own in-house products. I am not suggesting that these options are not suitable, but the advantage of using a financial adviser is the breadth of choice and the ability to select the best available products that most accurately suit the individual. Also, whilst some financial products are available directly to the consumer, many are not and can only be provided in conjunction with professional advice.

3. Sounding board

Sometimes in life, it is nice to have someone to discuss important matters with. People often turn first to their spouse or partner, friends, and sometimes work colleagues. I often speak to people who believe that they have their financial affairs in good order, but they value having a professional and independent “financial health check” to confirm that they are on track, or to provide an objective perspective on some of the areas that might need some attention.

4. Acting as your better conscience (or encouraging people to do what they know is right!)

Let’s be honest, most people enjoy spending their money – whether it’s on their home (often, but not always, a good investment), clothes, food, entertainment, cars (virtually guaranteed to be money-losing, unless classic/vintage cars are your thing!), and holidays.

It is not always easy to take a portion of your regular income and set it aside for the medium to long term, and of course, not everyone has the luxury of having a surplus at the end of each month.

However, a good comprehensive financial review doesn’t just analyse your assets (e.g., pensions, investments, savings, property), and liabilities (e.g., mortgage, credit card debts, car, and business loans), but also reviews your income/expenditure and your long-term wants/needs, to help assess whether there is the capacity to save, and how much.

A good financial adviser will encourage you to think about the long term and help you to take the right steps towards financial security.

Do I need financial advice

5. “I have no money to invest” / “I can’t afford to use a Financial Adviser”

This is a response I occasionally hear, however, irrespective of financial situation – whether the individual’s money is invested in their business or home, or they live on a low income – I am always happy to conduct a financial review. I can usually share some valuable insights, even if the person does not subsequently become a client. Do not let these reasons put you off speaking to an adviser – my confidential financial reviews are free of charge, and there is no obligation to accept my advice (although, I am pleased to say, most people do!).

6. Protection and risk

Many people associate financial advisers with pensions or investing/growing wealth. However, a crucial part of good financial planning is about protecting any wealth that you already have, and making contingency plans for all possible disruptive events that might come your way. When conducting a confidential financial review, I always ask if such matters have been considered, and whether arrangements are in place to provide financial protection in all eventualities. Life insurance is not always necessary, but a will is essential – I can put people in touch with English-speaking professionals in France who can assist in both these areas.

7. No time

For those whose lives are extremely busy (I think many of us can relate to this category!), they simply do not have the time (and/or inclination – see point 9!) to look after their financial affairs. Often people know they should be devoting at least some attention to their long-term financial security, but just never seem to get around to taking action. Sometimes, these people are well-informed and know very clearly what their financial objectives are, but do not have time to implement their plans and would rather a professional undertake this work on their behalf.

8. Retirement planning

In this area, the work we do is not just about advising individuals on the importance of saving for the future or selecting the best scheme for their individual needs.

For British nationals living in France who have private pension schemes in the UK, a proper analysis should be conducted to decide if it is best to leave their pension schemes where they are, move them to a UK-based SIPP, or possibly offshore into a QROPS. There is no one correct answer and I am not going to get into the detail of this now – it was the subject of my last article!

The second critical element of this work is to forecast what level of income someone will require in their retirement once other sources of income reduce or cease, and to then plan how that need will be met through rigorous financial planning.

retire

9. No interest in financial affairs

Of course, this is one that I struggle to understand! I have a relative, who will remain anonymous, who encapsulates the example perfectly. This is someone who is financially comfortable, but genuinely finds the subject of savings/investments (or anything to do with managing their money), of absolutely no interest – to quote, “Boring”!

As long as their money is secure and providing some growth, then they will quite happily entrust as much of the decision making as possible to their financial adviser. The key to this working is to get to know the individual very well, understand their risk profile, and be clear on the circumstances of when they wish to, or must, be consulted on decisions.

10. Knowledge/expertise

The final reason to use a Financial Adviser (and I accept this is obvious, but I needed a tenth!), is for the knowledge and expertise they can offer on available products (relevant to the country in which they work). The good ones will ensure that they thoroughly understand their clients, establish solutions that align with the individual’s aspirations, risk profile, and ethical stance. It is important that your adviser is permanently based in France, works for a French company, and is properly licensed with the relevant regulatory authorities. Above all, make sure they are someone you feel a connection with, who understands you, and who you feel confident in establishing a long-term working relationship with to support your financial goals.

In conclusion, last year was incredibly challenging for many people – both financially and emotionally – and whilst some of the restrictions we have all lived within have eased, realistically, it will be some time before life resumes with some sense of normality. Whilst everyone’s health – physical and mental – must always take priority, I honestly believe that knowing that your money is protected and growing tax efficiently, and that you have taken the necessary steps towards your long-term financial security, is one less thing for you to worry about and makes a small but important contribution towards peace of mind.

Financial and Retirement Planning – Cash flow Modelling

By Chris Burke - Topics: Cash Flow Planning, Financial Planning, Pensions, Saving, Spain
This article is published on: 2nd February 2021

02.02.21

Many people seek financial advice, or financial planning, but if you asked them what they would like to get out of it, most people would probably say clarity on their finances, planning how to make their monies work and to have what they need in retirement, or partial retirement. Only 45% of people in Spain save into private pensions, and now with the government reducing the amount you can save that way tax efficiently, retirement planning is even more important.

Most financial advisers will look at your assets, see what you are doing, talk through why, then recommend a product to improve what you are doing. There is nothing wrong with that, in fact that is part of what we do, however this isn’t really giving people what they hoped to get out of the meetings/talks.

A key part of helping people with their finances, as well as making their monies work, is real life planning of what they have now, what their goals are and showing them how to get there. People take in and understand much more visually, as most of us know; in fact 65% of us are visual learners. That’s why it’s important that when planning your finances you consider using a visual modelling system that shows your monies, what they are doing, future monies potentially coming in, and if you save ‘X’ amount into a pension/property/investment this will be the outcome. For example, which of the below would you prefer to see as your advice?

‘We recommend you place your €50,000 with ‘X’ company, and over the years achieving ‘X’ % return. Also, save ‘X’ a month in a savings program and both of these at retirement will give you ‘X’

OR TRY THIS…

Cash Flow Chris Burke
Cash Flow Chris Burke

What it really comes down to is the expertise of the planning, the knowledge of the financial adviser with whom you are working, and how much is actually put into planning your finances, rather than just making what monies you have work.

This is just one example why I/we at Spectrum stand out as excellent professional financial advisers and planners, if you would like to seriously start planning your retirement and investments or review what you are doing now, don’t hesitate to get in touch, or sign up to my Newsletter below to keep well informed.

Chris Burke newsletter

Top 3 Financial questions after BREXIT

By Andrea Glover - Topics: Assurance Vie, BREXIT, Financial Planning, Financial Review, France, QROPS
This article is published on: 1st February 2021

01.02.21

We asked Andrea Glover & Tony Delvalle – What are the current top three ‘hot topics’ with clients, particularly affecting retirees?

UK State Pensions
Andrea commented, “The withdrawal of the UK from the EU has obviously been an area of concern regarding UK State pensions. Now the Withdrawal Agreement has come into force, it is reassuring that those covered by the agreement will continue to benefit from aggregation of periods worked in the UK and EU, and those not yet retired will have the same benefits as current claimants.”

Tony went on to say, “UK State Pensions will be uprated every year whilst residing in France. This will happen even if you start claiming your pension after 1 January 2021, as long as you meet qualifying conditions.”

UK Properties
Many people coming to live in France often decide not to sell their UK home, instead renting the property out to supplement their pension income. Tony explained, “We are frequently asked if this is sensible as a form of investment. Whilst there is often an emotional tie to a former home, or perhaps a client wants to keep the option of returning to their UK home, there can be punitive tax consequences to such a decision, should they then decide to sell the property as a French tax resident.”

Tony continued, “The sale of a UK property has to be declared in both the UK and France. Although under the UK/France double tax treaty you receive a credit in France for any UK tax paid, French residents can also pay social charges on gains arising on the disposal of a UK property. There are also new rules effective from April 2020 in the UK, making such a decision even less attractive.”

Andrea summarised by saying “It really is important to speak to a Financial Adviser, particularly if you haven’t yet made the final move to France. Dependent on personal circumstances, it may be more beneficial to sell their property and invest in a more tax efficient investment vehicle such as an Assurance Vie.”

qrops

Qualifying Recognised Overseas Pension Schemes (QROPS)
Tony told us that many of their clients have taken advantage of a
QROPS, which enables consolidation of UK pension policies and which has attractive tax and inheritance tax advantages for French tax residents. QROPS can also offer multi-currency flexibility.

Andrea commented, “Many clients currently considering moving their pensions are querying if there are to be any changes in QROPS legislation, in view of Brexit. Our stance on this is that we believe it is highly likely that the UK Government will, after the transition period, impose a 25% tax charge on future transfers to a QROPS, making them less desirable. So, although they may not be suitable for everyone, don’t risk leaving it too late or you may face the 25% charge.”

As featured in BUZZ

Comment prendre sa retraite à 50 ans?

By Cedric Privat - Topics: Barcelona, Financial Planning, Pensions, Retire in Spain, Retirement, Spain
This article is published on: 30th September 2020

30.09.20

Qui n’a pas rêvé un jour de pouvoir arrêter de travailler avant l’âge légal de la retraite? 50, 40, 30 ans? Et si ce rêve était réalisable?

La question peut faire sourire, surtout si vous résidez comme moi en Espagne à Barcelone, avec un prix de l’immobilier exorbitant et des salaires souvent moins élevés qu’en France.
Pourtant, de plus en plus de personnes y arrivent, alors pourquoi pas vous?

Le Frugalisme :
Le mouvement FIRE (Financial Independance, Retire Early), né aux Etats-Unis dans les années 2000, défend le principe de vivre simplement et de faire fructifier son argent pour pouvoir vivre de ses rentes.
Il s’inscrit dans un mouvement économiste du Frugalisme “Qui se nourrit de peu, qui vit d’une manière simple.” (Larousse)
Pourquoi ne pas s’en inspirer?

Comment?
• Économiser : s’acquitter de toute dette (surtout celle de votre bien immobilier), réduire son train de vie, éliminer les frais superflus, supprimer certains loisirs, épargner davantage dès le 1er du mois.
• Définir un budget : il sera indispensable de bien calculer vos besoins mensuels afin de définir votre patrimoine retraite et ainsi fixer votre objectif.
• Investir : en plus de votre résidence principale vous devrez investir judicieusement l’argent épargné dans des placements financiers, des actions ou de l’immobilier.

Les frugalistes suivent une « règle d’or » dite des 4% : disposer d’un patrimoine au moins 25 fois supérieurs au montant de ses dépenses annuelles. Si elles s’élèvent à 2.000 euros par mois, il faudra par exemple un patrimoine de 600.000 euros, permettant de vivre des 4% de rendement généré.

State pension systems

Quand commencer?
Bien évidemment, le plus tôt possible. Une retraite anticipée deviendra vite un rêve oublié si on débute trop tard, mais tout dépendra également de votre implication à la cause.
Les nouvelles générations se soucient de plus en plus tôt de leur retraite et pour cause; les prévisions des pensions publiques de retraite sont à la baisse et l’âge légal de départ à la retraite ne fait qu’augmenter.
Le frugalisme demandera une forte réduction de vos dépenses, il est souvent accompagné par une conscience écologique afin de se tourner vers un mode de vie décent et responsable.
Nos sociétés capitalistes amènent de plus en plus les individus à se poser des questions sur le rapport qu’ils ont à l’argent et au travail.

Qui peut appliquer cette méthode ?
Bien évidemment, toute retraite anticipée sera plus facilement accessible aux classes moyennes et supérieures. Pour beaucoup, il est déjà suffisamment compliqué de mettre un peu d’argent de côté.
Une recherche Google rapide vous permettra de lire les expériences de nombreux “jeunes retraités” à travers le globe.
Les méthodes divergent, mais la discipline est de rigueur. Certains retournent vivre chez leurs parents quelques années et économisent 70 % de leur salaire, d’autres travaillent pendant 10 ou 15 ans à un rythme à la limite du soutenable, certains vont compter des années chaque centime possible et enfin les plus privilégiés qui reçoivent un salaire confortable vont tout simplement faire plus attention, s’organiser et investir malin.

Cette méthode vous intéresse mais vous vous posez des questions ?

N’hésitez pas à prendre conseil auprès de professionnels à votre écoute.

Le groupe Spectrum à Barcelone vous propose d’effectuer un audit sans frais ni engagement afin de mieux vous organiser dans la préparation de votre retraite, anticipée ou non.

Nous vous aiderons ensuite à comparer et choisir le placement financier le mieux adapté à votre situation et préférence.

Who wants to be a millionaire?

By Victoria Lewis - Topics: Financial Planning, France, Investments, wealth management
This article is published on: 3rd June 2020

03.06.20

Some people are prepared to cheat in order to become a millionaire. Charles Ingram famously cheated on the UK television game show ‘Who wants to be a millionaire’ and was subsequently found guilty along with his wife and friend who coughed during the programme to indicate the correct answers.

Frank Sinatra and Celeste Holm sung ‘Who wants to be a millionaire’ in the film High Society. Frank Sinatra was certainly a multi-millionaire even though he sang that he didn’t want to be!

Incidentally, the word millionaire was apparently first used in French in 1719 to describe speculators in the Mississippi Bubble who earned millions of livres in weeks before the bubble burst.

You may already be a millionaire or you may be planning to become one in the future through hard work, inheritance or good luck. Whatever your current financial situation, it is interesting to consider the millionaire ‘secrets’ of how you can become one.

Of course, millionaires aren’t privy to knowledge and information that no one else has access to. The ‘secrets’ are simply sensible financial habits which we can all use.

Click the headings below to find out more:

  • Decide what you want in the future, set a target and stick to it

    Have you calculated when and how much money you need to retire? Perhaps you want your children/grandchildren to have a university education – have you calculated how much this will cost?
  • Shift your focus from spending to investing

    Most millionaires take advice from investment professionals – tax advisers, lawyers, financial planners and asset managers. Don’t be afraid of them; use them.
  • The 24-hour rule

    If you can’t resist spending, apply this rule that many millionaires use. Even if you can afford an expensive purchase, give it a day’s time before actually making the decision. Impulsive shopping occurs from an emotional trigger and is often unnecessary. Do you want it or do you need it?
  • Set a budget (yes, even the rich have a budget!)

    Look at your monthly bank statement and categorise everything into the following groups:
    Essentials, Personal and Savings. Generally speaking, the split should be 50%, 30% and 20%.

    Living essentials – allocate 50% for monthly expenses such as mortgage/rent, transport, utilities, food etc.

    Personal spending – allocate 30% of your income for holidays, entertainment, shopping, hobbies – anything that makes you happy.

    Savings – 20% of your earned income should go straight into an investment or savings account.

    If your own allocations are different, analyse why and consider how changes could be made.

  • Cash over credit

    We are living in a near cashless society and credit cards are easy to come by, but this environment is not advisable for people who struggle to keep within their budget. Many millionaires prefer cash over a card for this reason.
  • Control

    People who are good at saving and investing are generally also good at controlling their urge to spend. Many people have completed a Dry January or a Meat Free Monday, how about trying a regular ‘no spending’ day – call it Frugal Friday!
  • Bills first, the rest later

    Most banks offer the facility to choose the date you want your regular standing orders to be paid. Choose the day after your income/pension is paid in, so you know exactly how much is left for everything else.
  • Invest in something that makes you happy

    This could be a classic car, a piece of art, perhaps you have a hobby that you enjoy investing in. Happiness can also be found in the investment arena, as more and more investors are choosing ethical or socially responsible funds. These are funds that have positive social impacts or are involved in climate change solutions. You can now express your values in the financial world.
  • Invest in services that save you time

    Many millionaires don’t hesitate in paying for services that save their time – food deliveries and laundry services for example. The same can be said for investment research – a financial advisory firm will do that for you.

For more detailed information on these financial habits, please contact me on
M: 06 62 50 70 21 or email Victoria.lewis@spectrum-ifa.com