UPDATE AS FROM: 3 JUNE 2020
Coronavirus update – These last few months have been interesting times for us all and we want to thank, from the bottom of our hearts, all of those keyworkers from all occupations and walks of life who have risked their own lives and gone to extraordinary lengths to allow the rest of us to even contemplate a return to what might be a very different ‘new normal’.
Even before the coronavirus lockdown was enforced, Pembroke determined that our IFAs and staff would not compound the national state of affairs and restricted all physical contact to reduce the possibility of spreading the virus to our clients or other professionals with whom we work.
Until we are assured that it is safe for both you and for us, we have stopped face to face client meetings, enabled remote working and are instead using all technologies available to us – email, telephone, video conferencing– to ensure that we stay in touch, both with you and within our Company, to continue to deliver the highest possible standards of financial planning advice and ongoing service to our clients.
We understand that the volatile nature of the stock market has been unnerving for you and in this unique environment, we want to ensure that you have the advice and support to help you through this period. During these uncertain times, our aim will be to continue keep you, our clients, fully updated on our thoughts and the insights of our Investment Partners, LGT Vestra LLP, and to answer any questions you will have about your investments, your pensions and other financial plans you may have.
Our staff and Advisers have reacted superbly and professionally to the evolving situation and, even when we have had to adapt our normal processes, they have improvised expertly to ensure good client outcomes.
There will be far reaching economic consequences coming from this coronavirus pandemic and we are here to ensure that your investments, pensions, mortgages and protections are well placed to both protect you and to respond to the rapidly changing global situation.
So far, our financial system has done what it is designed to do which is to allow investors to react decisively to a changing economic environment. However, volatility is likely to continue.
Assuring you of our best endeavours at all times. Stay alert and well.
How Pembroke are managing your financial affairs during lockdown.
We are living in extraordinary times.
In line with government guidance, we moved the Pembroke’s team of Advisers, Client Support and Operations over to working remotely, from home. We are working on our Return to work Risk Assessment right now with the hope that we can start to repopulate the office from its current complement of 2 in the next week or so. Clearly, staff safety is our paramount consideration and we will be constantly monitoring the local and national infections figures resulting from the various measures to relax lockdown.
We have always said that ‘our people are our greatest asset’.
Our team’s work ethic, commitment and character are the reason our clients trust us and like doing business with us, time and time again.
We have always tried to ensure that our staff have the training, support and facilities that they need to develop to their full potential in an environment that’s professional, friendly and welcoming… and now we need to keep them safe.
We are committed to safeguarding the health and wellbeing of our team, their families and you which is why, up to now, Pembroke has determined that our Independent Financial Advisers and support teams will protect themselves and therefore you, our clients and other professionals with whom we work, by ensuring that, apart from a skeleton staffing of our offices, we are all set up to stay at home and work remotely.
We are in constant contact with each other by email, phone and Microsoft Teams to ensure that our team remains informed and united in these challenging and isolating times.
Until officially deemed safe to recommence, we have stopped all face to face client meetings and will instead use all available technology – email, telephone, Skype, Zoom, Client portals, remote desktop access – to ensure that we stay in touch, both with you and within the team, to continue to deliver the highest possible standards of financial planning advice and ongoing service to you, our client.
Thank you for bearing with us on occasion over the past few months of lockdown as, whilst most financial institutions have, like us, implemented remote working, some are better than others and, on occasion, it has taken a lot longer to get you information or paperwork than in ‘normal’ times. We have had to be patient in an evolving situation and, sometimes, we have had to adapt our systems and processes whilst always being aware of our Compliance and GDPR obligations.
Marlborough House, our Shoreham office, is not closed but currently staffed every day by a couple (literally and figuratively). They have ensured that post can be both dealt with promptly and sent; that printers can remain in full use; documents can be dropped off or picked up; the server and individual PCs can be maintained as required; that an information source is available to all at Pembroke and, finally, that the Company retains its centre, despite its constituent parts being artificially but temporarily dispersed.
It has actually been business as usual!
The team are all set up to work remotely and are dealing with your calls, emails and video conferencing, exactly as we would in the office.
Existing clients have seen no tangible difference in service levels.
Personal financial advice, investment reviews, valuations, research and the administration of your accounts has and will continue as seamlessly as the current situation permits.
From the Financial Conduct Authority, our Regulator, regarding work-related travel and the responsibilities of Senior Managers.
“All firms should be clear that coronavirus (Covid-19) constitutes a public health emergency. As the regulator of the UK financial services industry, we strongly support the UK Government’s efforts to protect the public by ensuring only those workers who cannot work from home, continue to travel to and from work.
We published a statement to make it clear how firms should prioritise who should need to travel to the office. Each firm’s designated Senior Manager or equivalent person is responsible for identifying which of their employees are unable to perform their jobs from home, and have to travel to the office or business continuity site. We expect the total number of roles requiring an ongoing physical presence in the office or business continuity site to be far smaller than the number of workers needed to ensure all a firm’s business activities continue to function on a business as usual basis.
The UK Government has made clear that employers and employees should discuss their working arrangements, and employers should take every possible step to facilitate their employees working from home, including providing suitable IT and equipment to enable remote working.”
» A lot of businesses have been financially devastated by the impact of lockdown – how are Pembroke coping?
We are holding up well and looking forward to coming out of this stronger and well placed to continue our growth plans for the next 5 to 10 years. Specifically:
- Unlike many firms in Financial Services, both locally and nationally, Pembroke haven’t had to release or furlough any staff. Indeed, as you may know, against the run of play we actually employed a very experienced IFA, David Brunning, who started on 1st April (no joke) and who is already playing an integral role in our objective to make Pembroke the ‘go to’ Independent Financial Advisers for individual clients, professional introducers, Trustees and Corporate clients in Sussex.
- If your IFA were to fall ill, we have a total complement of 8 regulated Advisers and a specialist Mortgage adviser here to help.
- We are financially sound and profitable based on any metric you care to measure us by. Monthly, Zoom enabled, Board Meetings bring accountability for income and expenditure keeping us all on our toes.
- We have always, and will continue to, maintain cash reserves well in excess of the Regulatory required amounts.
- Our Regulatory required Disaster Recovery plan is not only documented but now clearly in action!
- Despite the difficulty of completing any transaction in the current circumstances, Pembroke still completed the acquisition of Future Financial Solutions, a two-partner local IFA practice, both looking to retire and find a trusted home for about 120 clients. Many IFA ‘Consolidators’ put a freeze on their acquisitions with the difference being that we want to work with them to ensure great client outcomes – that’s the way we will become the best IFA practice in Sussex.
- Since January 2020 Pembroke have enjoyed the additional financial security which came out of the private investment into the Company from Cow Corner Investing. Here are a couple of pointers from their own website which reflect their philosophy and commitment to their business partners:
- We invest in family or entrepreneurial businesses that have already established themselves. We are not trying to build world-beaters or conquer markets, we just want to invest in and help to build, strong and profitable local businesses.
- We like to invest alongside people. That is not to say that we will not buy a business outright, but we prefer to be in partnership with a management team or founder.
- We only invest our own personal money in our investments. Managing other peoples’ money is an exceedingly good way of making a living (heads I win, tails you lose), and we are lucky to have benefited from it historically. But we think our partnerships with entrepreneurs will always be stronger when we are as personally invested as they are. Because we are only investing our own money, we are never under any pressure to sell.
Unlike many other IFA firms, we are of a size in terms of IFA and staff numbers, recurring income and in-house capital resources that we can cope with pretty much any situation thrown at us – many IFAs haven’t invested in their businesses in the past in terms of people, technology, governance, process and systems and their lack of forward planning is being exposed in times like these.
Clearly many things have changed – and may well continue to change – but here are a few we’ve noticed:
- The Post Office staff have worked heroically at a time when many still rely on the physical rather than the electronic. Inevitably the post is a bit slower than normal – don’t expect even first class, or registered mail, to arrive either with us, or from us, the next day. Shoreham post office now closes at 4pm and the Sorting office is closed on Wednesdays for collections.
- Processes such as taking tax-free cash from your pension, cash withdrawals from your investment portfolio; setting up or stopping regular contributions and new lump sum payments into Investments or Pensions might take longer now than in more ‘normal’ times. You will need to be mindful of this especially if you have ‘date specific’ events, such as pension funding for Company Year Ends – Please don’t leave any event like this to the last minute!
- Our IFAs are tasked with reassuring you about your investments and savings and financial plans at this, uncertain and unnerving, time. They are constantly calling clients throughout the day and so might not be able to speak to you straight away. Please bear with them – they will get back to you as soon as they can.
- With increased reliance on emails and scanned documents, we totally acknowledge difficulties where financial providers need ‘wet’ signatures. Please refer to us for guidance where signatures need to be witnessed (several law firms have issued guidance on this).
- Communication, secure emails and document transfer – we are working with our Back-office software provider, Intelliflo, to implement the roll out of the Intelligent Office Client Portal to improve our clients’ access to information on their investments and also to speed communication. If this is something which you feel you would like to hear more about and might consider using, please talk to your Pembroke IFA.
- As mentioned earlier most financial institutions such as Wrap platforms, Insurance Companies and Pension providers have, like us, implemented remote working. Some have been more successful at this transition than others and sometimes it might take a lot longer to get you information or paperwork than in ‘normal’ times.
Clearly for Life cover, Critical Illness, Health cover or Impaired Life/Enhanced Annuity business access to medical records is, at best, difficult. There is likely to be a delay if you, the client, have to provide written confirmation and we have to get that to the insurance provider.
» What about my investments? How has Pembroke’s Investment Committee and the partnership with LGT Vestra LLP worked over the crisis period?
Our partnership with LGT Vestra gives us additional market ‘nous’ and crucially, the ability to act immediately as we test any investment strategies against historic stressed market events – both factors clearly help us to moderate unintended risks.
Central to the partnership proposition are LGT Vestra’s discretionary investment powers. We firmly believe that one of the crucial advantages of the improved Committee’s discretionary powers is the ability to react far more quickly to economic, market and fund management changes.
During March, despite lockdown, the joint Pembroke / LGT Vestra Investment Committee moved our meeting frequency from quarterly to a weekly teleconference in order to regularly assess the impact of coronavirus on markets. Markets seem to have settled from a wildly volatile mid-February to mid-March period to a thankfully less tempestuous few months and our next scheduled Investment Committee meeting will take place on Thursday August 13th.
Our 10 model portfolios – 5 risk graded, 2 specialist and 3 Better World (ethical) – are widely diversified across all asset classes – not only UK and Global Equities but Cash, Bonds, Property and Alternative return strategies. Diversity affords better risk management – and the secret is in the ‘mix’. Our ‘generalised’ investing principles have remained resolute and are:
- Don’t panic – volatility in the stock markets is normal and markets often rebound quickly once immediate issues are resolved.
- When investing in the stock market you should be thinking in terms of five years or more, rather than weeks or months, and that is the context through which to view the turbulence. For this reason, don’t be tempted to look at your investments daily – you will end up talking yourself out of a good long-term investment unnecessarily. Indeed, had you have cashed out from our Prestige Balanced Portfolio on 23rd March you would have missed out on a rebound of 19.1% net of fund charges ( source: FE Analytics 02/06/2020) – if you had placed the encashment value onto cash deposits you would have received 0.24% interest over the self-same period. Even taking into account the full effect of the pandemic crash, if you go back over a year to 2nd June 2019, our Prestige Balanced risk portfolio has returned +1.27% after fund charges versus cash at +1.12%. Accepted, different risk profiles but it proves the point of long-term investing riding out the short-term peaks and troughs of market volatility.
- It is still our recommendation that if you are drawing a regular ‘income’ from your investments and you don’t really need that income, please consider either stopping or reducing the income draw – perhaps only for a short while and subject to a review in a month or so. Taking the pressure off the capital values of your ISA or SIPP is no bad thing in volatile times.
- It does not make sense to try to time things perfectly, because it is impossible. No one knows if it will get worse before it gets better. It’s all about time in the markets, not timing the markets.
- Keep investing through the cycle. You don’t have to be a hero, throwing all your spare cash into the market in an attempt to catch the bottom. In fact, you shouldn’t. It is possible that this is not the bottom of the market but if you continue to drip money into the market (via regular monthly investments to ISA or Pension say), this does not matter. You will be building positions at depressed levels which in the long run will serve you well.
- Don’t miss out on the new tax year’s ISA and Pension allowances. The generous tax advantages are ‘use it or lose it’ and the earlier you invest in the tax year the better.
Please don’t hesitate to call us to chat things over – it is as much our job to be there for you in difficult, turbulent times as is it is when everything is going well – perhaps even more so.
As part of the LGT Group, LGT Vestra LLP are well protected in the event of negative economic developments. LGT Bank’s liquidity is well above the legally required minimum liquidity ratios, due to the bank’s solid refinancing and asset base. LGT Bank Ltd. is one of the few private banks that has had its creditworthiness checked regularly for many years by both Moody’s and Standard & Poor’s, consistently achieving very high ratings (Moody’s: Aa2; Standard & Poors: A+). The creditworthiness of LGT Bank’s parent company, LGT Group Foundation, is an important factor for the rating. The first-class credit ratings are attributable to LGT’s strong balance sheet, conservative lending strategy and earnings power, the latter based on over CHF (Swiss Franc) 200BN of Assets under Management, as at March 2020.
We very much hope this document helps answer any questions you may have in these ever changing and challenging times. Thank you for being understanding so far and we all here wish you, and your families, health and security throughout the coming months.
All the very best
Pembroke Financial Services