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Client Newsmail – Christmas 2020

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This newsmail comes with our Christmas greetings and best wishes for 2021. Our sympathies go to those of you who have experienced losses and illness over the last months and we are thankful for those who have remained safe and well. At the end of what can only be described as a tumultuous year for so many people in so many different ways, we are once again grateful to you, our clients, for placing your trust in us.

Covid-19 forced us all to adapt to a new way of working and living this year which has impacted on us all to some degree.  Who would have thought this time last year that we would face huge challenges to our health, economy and communities?  We have seen governments and scientists around the world discussing, waiting, acting, analysing all with the aim of beating a deadly virus.  Not in recent history have we seen as great an intervention financially into our economy and we can only imagine the final debt that our country will have to repay in years to come.

As we have often stated in these communications, economic uncertainty is certain and our finances will always be exposed to degrees of volatility.  At Flowers McEwan, we are well equipped to help you navigate your way through these uncertain times and our portfolios continue to do their job; providing safety through diversification for your capital whilst providing the returns you need for your future.

And there is hope for 2021!  As we write to you, vaccines are being rolled out to the most vulnerable in our society.  We all know that we are not out of the woods yet, but we can see the light at the end of the tunnel.  The possibility of a Covid-free future is one step nearer, but this is far from certain!  So, through the uncertainty, we continue to walk with you in your financial planning, our aim always to help you make good decisions which bring peace of mind.

Property Funds

During the pandemic trading in many commercial Property funds was suspended – such as those held by our clients within their portfolios.  This was because valuing commercial property during this period was extremely difficult, as the market slowed to a stop and surveyors were unable to access and value buildings.

We have been continuing to keep this under close review.  The funds are now gradually re-opening. As far as our investment portfolios go, we are not unduly concerned at this time, particularly where your investment horizons stretch beyond the next 5 years or so. This is because:

  • This asset class (Property) forms a relatively small part of your investment. Property consists of about 10% of the “Growth” component of the portfolios and the Growth component is, in turn, only a portion of those portfolios. For example, an average portfolio will have 50% in Growth which means that it would be exposed to just 5% in Property);
  • Property continues to provide a good, stable level of income;
  • Real Property (investment in bricks and mortar) performs differently to shares and bonds (it is not correlated). So UK commercial property is still a compelling asset class to have as part of a well-diversified portfolio.

The downside to Property investment is that it is not always easy or quick to turn it into cash (anyone who has tried to sell a house is likely to know all about that). Certain extreme market conditions such as we have experienced this year may give rise to illiquidity which can force a suspension in buying and selling shares.

If you would prefer not to invest in a fund which can restrict access, or if you expect to need the funds fairly soon, please let us know. We may then recommend that you switch this proportion of your portfolio into other funds.

News about Flowers McEwan

As you may remember, Jared Bowers left the firm earlier this year (having also married Sophie – a busy year for him!). He had served us and our clients excellently over the 18 years he was with us and we wish him the very best for the future.

Jared’s departure gave us the opportunity to re-think our structure and strategy. We concluded that we would seek to continue to provide the close, person-to-person style of financial planning along with our particular strength in the area of ethical, sustainable and impact investing. So Murray remains as our (highly-qualified and experienced) adviser but with enhanced support. As part of that adjustment we have also added Robin Thomson to the team. We have known Robin for many years and we have enjoyed working together before.

In fact we have all known each other and worked with David (on and off) in various capacities since the late 90s! This brings familiarity, solidity and commitment to you, our clients, and to one another.

We head into 2021 with a full “book” of business which means that, although we are privileged to have potential clients referred to us on a regular basis, we are taking on new work only very carefully – ensuring that we can deliver on our service standards and manage the workload really well. We have great optimism and confidence in what the future holds and in being able to continue serving you well.

Like many others we have re-organised our working lives to work from home, making use of video conferencing and other online tools. We retain Pickering House as our base and continue to use it as and when permitted by government guidelines.

We hope that you and your family can experience peace this Christmas. Over the festive period we will be closing our office and taking some much needed rest!  From 12pm on Christmas Eve until 9am until Monday 4th January we will only check emails and phone messages from time to time.  This means that we will be unable to act on any instructions until Tuesday 5th January.

Thank you for being our client(s).  We wish you a very happy and peaceful Christmas and a hopeful new year.

David & Murray

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