Archive for March, 2022

Frank – the newest member of the Five Wealth team

Posted on: March 31st, 2022 by fwAdmin

We would like to welcome the newest member of the (extended) Five Wealth team – Frank!

As you know our charity of the year is Support Dogs UK, this national charity is dedicated to increasing the independence and quality of life for people with various medical conditions. They provide, train and support specialist assistance dogs to achieve this. The charity specializes in autism assistance dogs, seizure alert dogs for people with epilepsy and disability assistance dogs. Support Dogs are very close to our hearts at Five Wealth – they have provided a autism support dog (Thunda) for Franklin who is the son of one of our directors, Steve Jordan.

It costs £20,000 to train a support dog and £36,000 to fund its entire career, so far through a number of events and our own donations we have raised in excess of £36,000! Support Dogs have therefore asked us to name one of their puppies in training, a fox red Labrador. We did a poll across the office and the favourite was – Frank!

We now see him as a firm part of the Five Wealth team, we hope to be able to provide updates throughout his training and are looking forward to his first visit to Manchester to see us – when he’s a little bit older.

Diversification in Financial Planning

Posted on: March 14th, 2022 by fwAdmin

Diversification in Financial Planning


Diversification is at the heart of good long term financial planning, both in the products you use and the investments you make. In this blog post I look at the benefits of combining different financial products to meet your long-term objectives in a tax efficient way.

Typically, the main objective of your investment portfolio is to achieve the highest possible return in line with your attitude to risk. Tax will always have an impact on this return. Using the principle of diversification when structuring your investment portfolio means you can take advantage of any tax allowances you are entitled to. This means you can maximise the returns of your investment portfolio.

Each year there are various tax allowances and exemptions that you can use to make your investment portfolio more tax efficient. Used consistently over a long period of time, you can save substantial amounts of tax.

Your investments can be wrapped or unwrapped. A tax wrapper (which is a vehicle that can be wrapped around a portfolio of assets) determines how the gains and returns of the investments are treated for tax purposes. An ISA and a pension are both examples of a tax wrapper.

As financial planners, we look to make use of your available tax allowances and exemptions each year to reduce your current and future tax liabilities. In the following examples, I show how using the ISA and pension tax wrappers, and unwrapped investments can achieve this:

If you are over the age of 16 (or 18 for a Stocks & Shares ISA), you can contribute up to £20,000 into an ISA in the 2021/22 tax year. If you have children under the age of 18 you can also contribute up to £9,000 into a Junior ISA. Once in the ISA, any growth, dividends or interest is tax-free. Withdrawals from the ISA are also tax free.

Each year we look to make use of our clients’ ISA allowances, and when taking into account investment growth you can build up substantial funds within your ISA. Funds held in an ISA can then be used to supplement income in later life in a tax efficient way, or they can be used for one off expenses.

Depending on your earnings, the annual allowance for a pension in the 2021/22 tax year is up to £40,000 gross. Once in the pension wrapper, any growth, dividends or interest is tax-free.

Not only are funds within a pension held in a tax-free environment, but contributions are also subject to tax relief as well, at an individual’s highest marginal rate of income tax (20%/40%/45%). A pension can be a very effective retirement savings vehicle.

While pension funds are not accessible until age 55 (57 depending on your date of birth), throughout your life you can build up a substantial fund to draw on in retirement. Or alternatively, if you have also built-up funds across a range of investment products, you may not need to draw from your pension and you can pass it on to the next generation without it being assessed for inheritance tax.

There is no limit to how much you can put into an investment account. Income from the assets held in the investment account may be subject to dividend or income tax. Any growth in the value of the assets held may be subject to capital gains tax once sold.

In the case of an investment account, you can use the allowances as follows:

The examples above show how splitting your money between different investment products can reduce your tax liability both now and in the future. Structuring your investment portfolio using both wrapped and unwrapped investments also gives you flexibility when you come to draw an income from your funds in retirement.

As financial planners, we see a broad range of client circumstances and there is no one size fits all approach, but generally making use of your available tax allowances and exemptions where possible in each tax year is a sensible starting point for most clients.

Where a client’s circumstances become more complex, there are a broad range of additional product wrappers that we can use. These include, but are not limited to, onshore bonds, offshore bonds, Venture Capital Trusts, Enterprise Investments Schemes and Seed Enterprise Investment Schemes. The suitability of each of these products depend on a client’s circumstances, objectives and appetite for risk. These products are not suitable for the majority of investors and are considered high risk, they can invest in relatively new startup companies and may be subject to time constraints to benefit from tax. However, when used appropriately, they can help to diversify a client’s portfolio in a tax efficient way and help them achieve their financial planning objectives.

If you would like further information on anything covered in this article, please get in touch.


This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation which is subject to change. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Tax Advice.

Geopolitical Uncertainty: Russia & Ukraine

Posted on: March 4th, 2022 by fwAdmin

Events unfolding in the last few days with the Russian invasion of Ukraine have been very unsettling for all of us. It is important for us to also consider the impact of this situation from an investment perspective on behalf of our clients. Markets have unsurprisingly reacted to the situation globally. Whilst we recognise that investors may be feeling very nervous about the backdrop of rising inflation and heightened geopolitical threats, we don’t think this is a time to take unconsidered investment decisions. Russia’s invasion of Ukraine has undoubtedly shaken markets which have already been in a period of higher volatility since the beginning of the year. As equity markets have sold off, some investors may consider selling their investments, but with a highly unpredictable course ahead, it would be difficult to take such action with a level of confidence in the outcome. As a firm, we have always believed that “timing the markets” is fraught with danger and can sometimes cause more harm than good. In the short term, you would be crystallising losses based on market momentum. This is not something we would recommend.


All clients are likely to see some level of short-term impact in their investment portfolios. However, this might not be in a way they might expect on reading the dramatic headlines which focus primarily on the main equity market index falls. Importantly, we aim to build diversified portfolios for our clients and in doing so, provide a balance of risk to macroeconomic or geopolitical events. There will be some companies, sectors, geographies, and asset classes which will face a direct negative impact from this war. Others will be more insulated from the effects of this situation. For obvious reasons, Russia’s stock market has fallen dramatically since the 24th of February. Broader global equity markets have also felt the impact of a “flight to safety” in the wake of Russia’s actions.


Oil/energy prices have risen sharply. As a key exporter of oil & gas but also agricultural commodities, sanctions against Russia will have a knock-on effect on a number of industries. As would any retaliatory action to disrupt supplies of essential commodities from Russia. Some countries are more reliant on these exports than others. The web of globalisation is complex, and the initial momentum driven trades made at the start of this crisis do not reflect the difficulties which would face far reaching parts of the global economy in a protracted war.


Fixed income markets have had a tough period in recent months, as markets adjust to higher inflation and the prospect of higher interest rates. The yields on sovereign bonds have reversed in recent days, as this asset class reasserts its role as a “safe haven” investment. With the prospect of higher energy costs feeding inflation in the coming months, the threat of higher interest rates remains on the table, but the pace of those rises may now change to accommodate the risk of an economic slowdown. In any case, it would not be surprising to see yields climb again in the coming weeks or months. Other “safe haven” assets which include gold and the US dollar have risen in recent days.


Against this backdrop we are in contact with the managers of the investment funds in your portfolios and there has been a strong level of communication across the board. The message we are receiving is consistent and reassuring. They are not making “knee-jerk decisions”. They are reviewing their portfolios and revisiting the investment case for underlying holdings. They remain focused on their investment process, discipline and delivering their long-term objectives.


We expect volatility across asset classes to continue until the military and political situation stabilises. Our client portfolios will reflect the risk tolerance and appetite of the individual client and therefore, there will be varying degrees of exposure to numerous assets classes and geographic regions. The most important factor in building our client portfolios is diversification and balance of risk and this is something that we will continue to focus on regardless of the geopolitical or macroeconomic backdrop. The importance of this strategy can sometimes be best demonstrated in these times of market stress. If you would like to discuss the positioning of your own portfolio, please contact a member of the team to discuss this in more detail.