BLACKTOWER VIEW - Q&A with Christina Brady
Associate Director and Financial Adviser, Christina Brady talks about Blacktower Financial Management in Spain and the work she and her team carry out on a day-to-day basis.
Blacktower – an introduction
Blacktower Financial Management has been in existence for over 32 years; thriving and expanding across the globe. And this expansion is happening at a time when some smaller firms are failing due to increased compliance and regulatory frameworks such as MiFID II.
Having worked for Blacktower for over a decade, I have seen new offices open across Spain, the Canary Islands and further afield in Europe, and we have also recently witnessed the firm's expansion into North America, with offices in New York, Miami and Grand Cayman.
How has Blacktower been affected by the tightening regulatory landscape?
As a long-established firm that has always placed a premium on client-interaction and education, we were fortunate to have the right conditions in place to deal with the numerous rules and regulations that have come into being over the past decade. Unfortunately, many smaller companies have not been able to survive in this environment. On the plus side, client-focused companies, with a good track-record and a commitment to compliance, have thrived.
Given that Blacktower is now a global firm, are its British origins still relevant?
Yes, although we serve clients of many different nationalities, the majority of our clients are British expats, and we have a real focus on their unique cross-border concerns.
This is particularly relevant at a time when there is so much uncertainty over Brexit. The fact that we still have a UK office means that, if a client returns to the UK, they can have continuity of service through our UK team.
What can the new client expect from Blacktower?
In three words: independent financial advice. This has many components; from help with retirement savings and pensions, to inheritance planning and cross-border wealth management. When any new client comes to see us, we do a full review of their portfolio. If everything is working, we are happy to leave their assets as they are, but if the client wants to achieve more growth, we can help them do that.
One major advantage of Blacktower is that we are not tied to any one investment house or product provider. This makes us impartial and means we can scan the whole market and find what is likely to work most appropriately for the client. Another advantage is that we are one of the few advisers authorised to give advice in relation to Malta-based pensions.
What is a DFM service and is using one a good idea?
A Discretionary Fund Management firm invests money on behalf of the client. Financial advisers often use DFM services because it gives them more time to ensure the client understands everything about their investments and they are able to work in their best interests. However, there have been a few horror stories in which investors have been scammed out of their savings by unscrupulous firms.
Some financial advisers have set up DFM firms and then tell their clients they need to sign their money over to the DFM because of the new regulations. The firm is then, effectively, able to do what they please with clients' assets and the client will have lost all control over their investments because there is no independence.
There are many trusted and established DFMs out there and the way Blacktower works is that we, as your financial adviser, appoint a DFM for you. Ultimately, it means that we can't influence what is being invested in. This is a much better way of operating as it allows us to focus on the important work of advising you while not being tied to products or particular investment firms.
Also, we think it's important to inform any investor who is thinking about using a DFM about all possible charges. Some firms charge high fees which can have an unhelpful effect on your assets. For instance, if a pension grows at 5% and the charges are 3% per annum, there are hardly any returns. At Blacktower we pride ourselves on being open and transparent about all fees and charges, and we make sure our clients understand all associated costs at the outset and throughout our relationships.
Is it ever a good idea to go with a pensions firm who has made unsolicited contact?
Please, watch out for emails and letters that ask you to sign on the dotted line, particularly if it is in respect to handing over your pension to a DFM because of new regulations.
Your pension is your future. Unscrupulous firms are likely to advise a pension transfer when it is not in your best interests and you could find your hard earned money is either scammed away from you or the investment you were told would be your key to a prosperous future is worth nothing.
At Blacktower, we never go for the hard sell. If we think your pension is best left where it is, we will tell you. Our priority is to ensure that you know your options and that you know what you are doing. We will explain everything without jargon and give you complete control. You can say NO.
If an adviser or a firm contacts you and there is a hard sell, just put the phone down, put the email in your junk folder or the letter in the bin and then walk away. If you lose your pension at 70, you lose everything. We believe in doing our utmost to make sure you protect your hard earned pension so you can enjoy your retirement.
If I hear that a particular asset/equity fund is doing well, should I invest everything?
Never put all or most of your money in one asset class. For example, if you put it in property, this is not a very liquid asset and you could be left short if the housing market suffers a downturn.
Woodford Equity Fund is a recent example of a cautionary tale – it was a "hot" equity fund that, ultimately, has caused its investors no end of trouble. Neil Woodford used to be fund manager and set up Woodford Equity Fund. Initially, the fund performed very well and attracted a lot of investors, including Kent County Council, which invested a nine-figure sum. However, when it attempted to withdraw its money, Woodford froze the fund.
You might think that the FCA was able to intervene but even though it asked him to stop charging fees Woodford refused and, at the time of writing (5 Dec 2019), investors remain unable to access their cash. Given that the fund was promoted by Hargreaves and many other influential players in the financial services market, it shows that even the most legitimate funds can be problematic.
This is why diversification is key: it is far better to invest in a well-diversified DFM portfolio or put your money into a diversified wrapper, than to have all your eggs in one basket and run the risk of losing the lot. If something seems too good to be true, then it probably is.
Answering your questions directly
No question is silly or inconsequential when it comes to protecting your financial future and we believe our clients should be able to ask about any financial issue or query they may have.
It is one of the most important issues for Blacktower that clients don't get cheated out of their savings or make unwise choices based on scam information, so please contact us by phone, by email, online contact form or even by dropping in to your local office, and we will be happy to discuss your questions and offer the information and guidance you need.
Disclaimer: The provision of information in this communication is not based on your individual circumstances and does not constitute investment advice. Blacktower makes no recommendation as to the suitability of any of the products or transactions mentioned.