This collaboration combines Fairstone’s extensive client base and trusted advisory expertise with J.P. Morgan Asset Management’s global investment capabilities and proven track record, creating an effective partnership to deliver enhanced solutions for UK investors.
The partnership will see Fairstone utilise J.P. Morgan Asset Management’s global equity and global bond capabilities as core components of its new NOVA MPS (Managed Portfolio Service) range. The NOVA MPS will provide institutional-grade investment capabilities to retail clients at institutional pricing, delivering significant value at just 55 basis points.
Set to launch for new clients on 1st March, the range is designed to deliver proven investment solutions at a highly competitive price. Fairstone will seed the new range with over £500m on day one and anticipates that the exceptional quality and price of the offering will drive incremental assets into the Fairstone MPS ranges of £2bn over the next 12 months.
The strategic partnership extends beyond the NOVA MPS range, as Fairstone and J.P. Morgan Asset Management collaborate to develop further product innovations.
Speaking at the launch event, held at J.P. Morgan’s offices on London’s Embankment, Lee Hartley, CEO of Fairstone, commented: “Fairstone Investment Management was established to act as professional buyers of investment solutions, ensuring clients remain at the heart of our approach.
“The NOVA range, managed by Fairstone’s in-house investment management team, will feature segregated mandates run by J.P. Morgan Asset Management as cornerstone solutions. J.P. Morgan Asset Management was selected for their outstanding track record, with 88% of their global mutual fund assets under management outperforming their peers, and for the expertise of their team of over 1,300 global investment professionals.
“To remain the most trusted wealth management company and to continue delivering exceptional service to our 125,000 clients, we recognise the importance of partnering with leading suppliers. In J.P. Morgan Asset Management, we are confident we have found the right partner.”
Claude Kurzo, UK Country Head at J.P. Morgan Asset Management, added: “We’re excited to partner with Fairstone on launching an innovative new MPS solution that is expected to provide strong client outcomes at a very attractive price point. We also look forward to supporting Fairstone in helping their clients achieve their financial objectives, which includes leveraging our Guide to the Markets and training programs to support Fairstone’s advisers.”
Nick Stebbing, Chief Operating Officer at Fairstone, said: “This partnership delivers institutional-grade investing to retail clients, bridging a significant gap in the market. By working with J.P. Morgan Asset Management, we’re able to offer solutions that bring together robust performance and competitive pricing. This collaboration underscores our commitment to ensuring clients benefit from professional-grade strategies that were previously accessible only to large institutions.”
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Fairstone Group has published its latest annual report, highlighting a 32% year-on-year increase in revenue, reaching £154m pro forma fee income in the last quarter of 2023.
In addition, Fairstone has exceed £17bn of Funds Under Management and announced growth in every single one of its key areas – including client numbers, advisers, recurring income, gross margin, and profits.
Chancellor Jeremy Hunt positioned worker and parental tax cuts at the core of his Spring Budget 2024 in a move to bolster the economy. The most substantial change announced was a 2p reduction in the rate of Class 1 National Insurance paid by employees. This tax cut will be compensated for through tax rises in other areas, including business class airfares, short-term holiday let owners, vapes and tobacco.
By contrast, a few taxes remain unchanged, such as fuel duty and alcohol duty, thereby providing some relief to consumers. In addition, the income limit for parents to qualify for child benefits has been increased, expanding the number of families eligible for this support.
A new initiative, dubbed ‘British ISAs’, has been introduced to stimulate investment in UK companies. These ISAs grant an additional £5,000 tax-free allowance for savings invested domestically.
These moves by Mr Hunt are seen as an attempt to revitalise the economy while addressing key concerns of workers and parents. Our guide to the Spring Budget 2024 summarises the key points announced.
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THIS ARTICLE REPRESENTS THE VIEWS OF THE ADVISER AND DOES NOT CONSTITUTE AS FINANCIAL ADVICE.
Chancellor Jeremy Hunt’s commitment in the Spring Budget 2024, he said, was to support Small and Medium Enterprises (SMEs) in the UK to build an economy that fosters a balanced and thriving business ecosystem.
The Budget outlined a number of measures aimed at providing financial relief and promoting growth among these businesses. Mr Hunt announced these proposals, which reflect the government’s strategy to bolster economic growth by empowering SMEs and recognising their crucial role in the UK.
The Recovery Loan Scheme has been renamed as the Growth Guarantee Scheme and extended until the end of March 2026. The scheme offers a 70% government guarantee on loans to SMEs of up to £2 million in Great Britain, and £1 million in Northern Ireland.
HMRC has published new guidance around the tax deductibility of training costs for sole traders and the self-employed. This guidance ensures that updating existing skills, and maintaining pace with technological advancements and changes in industry practices, are allowable costs when calculating taxable profits.
The government will increase the VAT registration threshold from £85,000 to £90,000, and the deregistration threshold from £83,000 to £88,000, freezing them at these levels. These changes will apply from 1 April 2024.
The government will legislate to reinstate the previous eligibility criteria to qualify as a high net-worth or sophisticated investor. The government will carry out further work to review the scope of the exemptions.
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THIS ARTICLE REPRESENTS THE VIEWS OF THE ADVISER AND DOES NOT CONSTITUTE AS FINANCIAL ADVICE.
Chancellor Jeremy Hunt confirmed a cut in National Insurance Contributions (NICs) in the Spring Budget. The cut, widely trailed in advance of the Budget and applying from 6 April, will cost the Treasury approximately £10 billion a year.
Mr Hunt said this was a further cut worth over £10 billion a year for workers, following the government NICs cut for 29 million workers in the Autumn Statement 2023.
The government is cutting the main rate of employee Class 1 NICs by 2p from 10% to 8% from 6 April 2024. Combined with the 2p cut announced at Autumn Statement 2023, the Chancellor said this will save the average worker on £35,400 over £900 a year.
The government is also cutting a further 2p from the main rate of self-employed Class 4 NICs on top of the 1p cut announced at Autumn Statement 2023. This means that from 6 April 2024, the main rate for the self-employed will now be reduced from 9% to 6%. Combined with the abolition of the requirement to pay Class 2, the Chancellor announced that this will save an average self-employed person on £28,000 around £650 a year.
The Chancellor commented that the combined effects of these reductions to NICs also mean that a person on the average wage now has the lowest effective personal tax rate since 1975.
The Office for Budget Responsibility (OBR) forecasts that, as a result of the reductions to NICs at the Spring Budget, total hours worked will increase by the equivalent of almost 100,000 full-time workers by 2028/29. Combined with the impact of the NICs cuts announced at the Autumn Statement 2023, the OBR expects that total hours worked will increase by the equivalent of around 200,000 full-time workers by 2028/29.
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THIS ARTICLE REPRESENTS THE VIEWS OF THE ADVISER AND DOES NOT CONSTITUTE AS FINANCIAL ADVICE.
Chancellor Jeremy Hunt, in the Spring Budget 2024, laid out plans for the financial system, focusing on savings and pension funds. He announced this to support British growth and individuals in securing their financial future.
Overall, Mr Hunt said, these measures underscore the government’s commitment to promoting long-term financial wellbeing for the UK’s citizens.
The government has announced that National Savings & Investments (NS&I) will launch a product which will offer consumers a guaranteed interest rate, fixed for three years. This product will increase savings opportunities available to consumers in the UK and will be brought on sale in early April 2024.
Mr Hunt unveiled that the British ISA will come in the form of an extra £5,000 tax-efficient allowance to encourage retail investment in UK-listed companies. This is in addition to the current £20,000 that can be subscribed into an ISA. The Chancellor said those opening British ISAs would ‘benefit from the growth of the most promising UK businesses’.
The government intends to deliver a sale of part of its NatWest shareholding to retail investors. A sale would take place this summer at the earliest, subject to supportive market conditions and achieving value for money for the taxpayer. Further information will be made available on gov.uk.
The government intends to fully exit its shareholding in NatWest Group by 2025/26, subject to supportive market conditions and sales representing value for money.
The government has confirmed that it remains committed to exploring a lifetime provider model for Defined Contribution (DC) pension schemes in the long term. The government will undertake continued analysis and engagement to ensure that this would improve outcomes for pension savers, and build on the foundations of reforms already underway, including the Value for Money Framework.
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THIS ARTICLE REPRESENTS THE VIEWS OF THE ADVISER AND DOES NOT CONSTITUTE AS FINANCIAL ADVICE.
As we eagerly anticipate Chancellor Jeremy Hunt’s impending announcement of the Spring Budget on Wednesday, the economic landscape paints a cautious picture. With a rise in gilt yields and a challenging economic outlook, the scope for significant giveaways appears limited. However, despite this constraint, there’s still anticipation surrounding potential measures that could shape fiscal policy.
Independent financial adviser, Matt Jeffery, shares his thoughts on what we can expect
It’s widely speculated that the Chancellor may reserve the most ambitious and costly measures for later in the year, possibly aligning them with an Autumn Statement or an election manifesto. Key areas of focus include national insurance and inheritance tax, which are under scrutiny as we approach the Budget announcement.
Compliance with fiscal rules remains paramount for the government, with a set of self-imposed guidelines dictating limits on debt and government borrowing as a proportion of GDP over a five-year horizon. While the Chancellor is expected to meet these rules, there persists a level of scepticism among economists regarding the true health of UK public finances.
Analysts note that the Chancellor is navigating with a significantly reduced fiscal headroom compared to his predecessors. Despite an estimated £15bn of headroom against fiscal rules, this pales in comparison to the historical average, indicating a tighter fiscal environment. Forecasts suggest that even a modest £10bn giveaway could offer a marginal lift to economic growth, albeit with potential inflationary implications.
Regarding potential changes, attention is drawn to income tax and National Insurance. While there’s room to manoeuvre, any significant reductions in income tax would pose substantial costs. Instead, the government is reportedly considering a reduction in employee national insurance, balancing fiscal constraints with targeted relief.
Inheritance tax reform remains a contentious issue, with speculation abound regarding potential abolishment or adjustments to thresholds. However, given its relatively modest contribution to the tax revenue and its limited impact on a minority of estates, significant changes may be deferred to a later date.
Discussions also revolve around potential Isa changes, including the introduction of a ‘British Isa’ and reforms to the Lifetime Isa. Additionally, housing market dynamics could feature prominently, with considerations for stamp duty cuts and the possibility of a 99 percent mortgage scheme to stimulate home buying.
In summary, while the Chancellor faces fiscal constraints, there remains a degree of flexibility to enact targeted measures aimed at navigating the economic challenges ahead. As we await the Budget announcement, it’s essential to stay attuned to developments that may shape the financial landscape in the coming year.
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THIS ARTICLE REPRESENTS THE VIEWS OF THE ADVISER AND DOES NOT CONSTITUTE AS FINANCIAL ADVICE.
The base rate, set by the Bank of England’s Monetary Policy Committee, is the rate they charge other banks and lenders when they borrow money. It is the main driver of rates on mortgages and savings products in the UK and any changes are likely to impact the cost of mortgages and the return on savings. Generally, a higher base rate means banks and building societies are likely to increase the cost of mortgages, whilst savers can expect a slightly higher rate of interest on their savings. However, this isn’t always the case.
Fixed-rate mortgages currently account for four out of five mortgages in the UK. If you have this type of mortgage, the change will not affect your payments immediately, but could do when the fixed period ends.
For those on a tracker mortgage, which directly follows the Bank of England base rate, your rate is likely to increase by 0.50% immediately and payments will go up from next month.
For those on a discounted rate, or standard variable rate mortgage, your lender may decide to pass all, some, or none of the increase in rates on to you. They will write to you in advance of any increase in payments.
For UK borrowers on a fixed rate, this change won’t immediately impact monthly payments. For those approaching the end of their existing mortgage deal, looking to purchase a property with a new mortgage, or already on a standard variable rate, it is likely that rates will increase. However, this rate rise has been well forecasted, and many lenders already factored the increase into new mortgage deals. Some lenders however will withdraw mortgage rates and launch new products with higher rates.
Despite the recent increases, the base rate still remains low compared to historic levels.
Clients with existing mortgage offers will not see rates increase for as long as the mortgage offer remains valid.
Getting in touch with a mortgage adviser can help you understand how the increase in base rate might impact you, explore your options for remortgaging or switching rates, and help you access support if you think you may encounter difficulties in paying your mortgage.
For more information about the base rate changes, and what they could mean for you, get in touch with an adviser today.
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The findings come as part of a new survey by Fairstone, one of the UK’s largest Chartered financial planning firms, which revealed that over two thirds (70%) of respondents said the expertise of their financial adviser was the thing they valued most.
Over half (52%) regarded peace of mind as their top benefit and 85% said they are committed to a long-term plan and investment strategy, demonstrating they value the lasting impact of financial advice.
Fairstone clients also rated the comfort of an experienced financial adviser as significantly more important than the time (12%) or costs (14%) saved by managing their wealth themselves.
The results form part of Fairstone’s latest annual client survey, where more than 2,000 respondents aired their opinions on a range of financial issues, from what factors are the most important in financial planning and what prompted the decision to first take financial advice, to what issues could keep consumers awake at night.
Other survey highlights include:
Fairstone CEO Lee Hartley said: “Talking regularly to our clients is an essential part of our approach as it helps us to recognise what they think about financial services, giving us a unique insight into their thoughts, patterns, and behaviour and what shapes their decisions around investing, retirement and financial planning.
“In our latest client survey it was particularly encouraging to see that clients placed a great importance on the value of financial advice during times of economic uncertainty; the role of financial advice is absolutely pivotal during such periods, which underpins our commitment to maintaining close contact with our clients to provide reassurance, support and first-rate advice.
“This builds the foundation for us to build trusted lifelong relationships with our clients and their families across all of life’s cycles.”
As part of the new survey findings, Fairstone also published its Annual Client Index, highlighting three tangible outputs: an overall client satisfaction rating of 98%, a repeat advice rate of 93%, and £5.3 million of annual investment cost savings which have been passed directly through to clients.
Unlock valuable insights and download the infographic version of our client survey results today.
Download infographicProperty wealth can play an important role in a retirement strategy, providing a source of income and capital growth, and this has been highlighted in new research which has revealed the increasing importance of the role of property wealth in retirement planning[1].
The research looked into levels of spending, saving and attitudes towards funding retirement in the over-45s, and follows a similar survey run in 2016[2]. The study also looked at property, and whether the thriving market has affected people’s attitudes towards their property wealth, as well as whether there has been more mobility driven by the ability to capitalise on increasing property wealth.
Compared with six years ago, there has been a decrease in property ownership, either outright or with a mortgage, particularly in the younger age groups in this sample. In 2016, nearly a quarter (23%) of 45-54-year-olds owned their property outright, and that has fallen to 16% in 2022. For 55-64-year-olds, the respective numbers were 48% and 45%.
Overall, this indicates that mortgages are being paid off later than they were six years ago. As people get older, more own outright – in 2016, 13% of 65-74-year-olds owned with a mortgage, compared with 9% in this age group this year.
Length of tenure in the same property has remained more or less constant over the last six years, at just under 20 years, compared with 21 years in 2016. In 2002, when people bought their house, the average house price in the UK was £101,000, so this age group have seen a significant increase in the value of their property assets.
Those who own outright have typically been in their property longer – 22 years, compared with 16 years for people who own with a mortgage – so the mortgage-free have also benefitted from an additional six years of property price rises, building up the equity in their home.
Average house prices have gone up for this age group, and now stands at £287,000, from £264,000 in 2016 – an increase of 8% – and is continuing to rise[3]. The effect of housing price rises is even more marked for the older age groups, particularly for those who bought their current property before the housing market boom of the late 1990s.
The average house value of the 75+ age group in the survey is £310,000 and the average length of time they have lived there is 28 years. In 1994, when they bought their property, the average house in the UK cost £54,623, which represents a five-fold increase in equity.
The picture is also positive for the 65-74-year-olds – their average tenure is 24 years, buying their current house in 1998 when the average cost of property was £66,231. Today, this age group’s property is worth, on average, £302,000. This accumulated property wealth, resulting from the growing housing market in the UK, will for most far outstrip the resources they have in savings and investments.
Taking into account the average outstanding mortgage still owing, the research highlighted the amount of equity people typically have in their property is just under £195,000. This compares with the average held in savings and investments, of £52,000 and shows the importance of considering all sources of wealth when planning later life finances.
It’s likely that people have accumulated more wealth in their property assets than they realise, and looking at ways of utilising this in planning for retirement could have a significant impact for them. It’s an important factor to consider when looking to plan for a comfortable retirement.
The right mortgage looks different to everyone – that’s why we discuss the different mortgage types and rates that are right for you. Ready to talk?
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[1]Aviva research conducted by Censuswide April 2002 – 1507 general consumers aged 45+
[2] Aviva Real Retirement Report conducted by ICM Unlimited April 2016 – 1506 general consumers aged 45+
[3] HMLR’s UK House Price Index
