Macroeconomic update and Investment Opportunities in Sustainability

By | Financial Planning, Investment News, Latest News

Our latest webinar, delivered on 11th November, was focused on both Macroeconomic updates and Investment opportunities within our Sustainability portfolio.  It was in fact our first webinar hosted jointly by both businesses, as we benefit from a highly experienced investment analyst team who advise across the group.

The speed of the recovery in markets earlier this year was discussed, noting this was in contrast to previous crashes, being driven partly by  tech giants such as Apple, Amazon, Facebook etc who have seen their shares soar.   Monetary policy has pumped money into the economy alongside huge fiscal measures taken by the Government to support the UK, a move echoed by many other countries as the world rallied to battle the pandemic and support economies.

Our message throughout these last few months has been not to panic.  It’s important to stay invested during these times, as long term investors need to see through short term market volatility and we’ve seen that the markets have indeed recovered.

So what does the new normal look like?  The US elections have not caused any major changes so far, and markets have historically performed well under both Republicans and Democrats.  Brexit is looming on the horizon causing some peaks and troughs, however EU deals could see a rally in markets.  China is seemingly recovering following one of the strictest lockdowns as the pandemic unfolded.  And closer to home, there’s no doubt that cash use is falling and e-commerce is booming with sustainability becoming a far higher priority for many investors.

We provided an overview of actions we took within the last few months, which you can watch in our video, but our investment team have liaised with over 200 fund managers since the pandemic began and will continue to do so as the rest of the year runs its course.

We then discussed the case for Sustainable Investing, noting that this is one of our portfolios that has grown considerably.  Our climate is facing several challenges including plastic pollution and waste, where it is estimated more plastic will be in our oceans than fish by 2050 – a shocking statistic.  Temperatures are rising and our consumption is accelerating sharply, causing significant rises in diabetes.  Whilst investment was at already reasonable levels within healthcare, the pandemic has raised its own challenges with even more money being pumped into this sector.  This in turn drives opportunities to invest in healthcare markets.  Digitally speaking the transformation of tech use was stated as “two years’ worth of digital transformation in two months” by the CEO of Microsoft earlier this year.  Microsoft in fact, forms a foundational holding within our sustainability portfolio which incorporates 4 themes – sustainable innovations, secular trends, quality fundamentals and ESG (environment, society, government) ethos.

We believe sustainable Investing is resilient in terms of outperforming during downturns and we went on to cover how our Sustainable portfolio is broken down.  We also demonstrated how this portfolio kept up with the markets and held its nerve during the initial downturn in March.  We do believe there are positive opportunities ahead for investors within all our portfolios across both businesses, to fund positive change whilst providing attractive returns through a diversified approach and controlled risk – always within our safe hands approach.

The video of the full webinar can be viewed at https://youtu.be/ADTRerWFBrE

Should you write your life policy into Trust? by Chad Atwal

By | Financial Planning, Investment News, Latest News

As part of our client review process, we review existing life insurance arrangements and often note that such policies are not subject to a Trust.

Putting a life insurance policy into trust has many benefits, in particular, protecting any pay out from inheritance tax.

I provide a brief overview of Trusts below.  If you would like to find out more about writing a Life policy into trust, please contact one of our Financial Planners, who can help you.

What is a Trust? 

A Trust is a standalone legal arrangement.

The owner of a Life policy (the Settlor) can arrange a Trust and apply it to their new or existing protection policy.  Once applied, the proceeds of any future claim will be paid into the Trust, rather than to the beneficiaries of the estate directly.

The Settlor can select Trustees, and in the event of a claim, the Trustees will distribute any proceeds to beneficiaries either immediately or at a later date.

How do I arrange a Trust for my life policy?

This is straightforward.  Most insurers can provide trust arrangements for their policies and we can advise on which Trust is most appropriate.  We can help you with the paperwork and outline the main considerations, such as appointing suitable trustees and beneficiaries.

In certain instances, it may be appropriate for a solicitor to arrange a Trust for you.

Why would I want to put my policy into a Trust?

  • To avoid inheritance tax.  If the policy is not placed in trust, it is possible that the proceeds will be subject to inheritance tax.   The proceeds from a policy held in trust should not form part of a deceased person’s estate for inheritance tax purposes and there may be a significant inheritance tax saving.
  • To avoid Probate.  If a policy is not placed in trust, the proceeds will not be distributed to beneficiaries until Probate has been granted, which can take time.   If the proceeds are paid into trust, probate is not required and proceeds can be distributed to beneficiaries much sooner.
  • Keeping control. If a policy is not subject to trust, the proceeds may not be distributed in accordance with the wishes of the policyowner.  A Trust arrangement means that after a claim, the trustees can consider what the best options are in terms of distribution and can distribute proceeds accordingly.

What types of Trusts are there?

The two main types of life insurance trust are Absolute and Discretionary:

Absolute Trust:  You will select beneficiaries at outset and you cannot usually make any changes to the beneficiaries or their share, once the Trust is in force.

Discretionary Trust:  these are more flexible.  You do not need to nominate beneficiaries and their share at outset.

I wish to review my existing life policy and Trust arrangements?

If you would like us to carry out a review or just have a general chat around estate planning and protection, please do not hesitate to contact one of our Financial Planners.

NLP Financial Management Limited is authorised and regulated by the Financial Conduct Authority – FCA.  The FCA does not regulate trust advice.