Meet Troy Bruce: Taking the leap from Oil & Gas to Financial Services
We are delighted to welcome Troy Bruce to the team as a Financial Planner. We caught up with Troy to find out a little more about his career up until now and what led him to joining AAB Wealth.
In my time thus far at AAB Wealth, I have been really impressed by the culture of the business. Not only from the professional side of absolutely having our clients’ best interests at heart in all the advice we provide but also from a social side. Everyone is really approachable, and the flexible working approach is great for someone like me who has two young children at home. The encouragement to continue to develop and complete more professional examinations (which we receive study leave for) is impressive and a real change from my previous role.
I always had an interest in financial services. My dad was a Chartered Accountant (now semi-retired) so I was brought up in a house where I understood money. It wasn’t until I started working and earning money that I looked at investments and budgeting – probably without realising that those are key parts of financial planning. The pandemic and uncertainty it brought gave me the push to make a career change and follow my interest in Financial Services.
Prior to pursuing a career in financial services, I worked in the oil and gas industry with various engineering roles taking me across Europe and Africa. Just as the pandemic hit, I landed a rewarding corporate role but unfortunately just five months later, I received my notice of potential redundancy. We had just found out my wife was expecting our first child and I was struggling to think how I was going to support a family – I didn’t know what I was going to do.
Crunching numbers seemed to be in my blood and I had always had an interest in investments and financial planning. After some research I applied and was accepted into the St. James’ Place Academy Career Change Programme. I then went onto do my Diploma in Regulated Financial planning. Taking on the challenge of a six-month programme with minimal income whilst studying full time was a big step which I could never have taken without the support of my wife and family. Their encouragement and belief in me combined with my forward financial planning, made the opportunity to change possible.
I came out of the Academy and worked as a self-employed Financial Planner for 10 months before joining AAB Wealth. I had always been aware of AAB having grown up in Aberdeenshire and staying in the city for 10+ years. My basic understanding was that it was an accountancy firm, but it wasn’t until I started to look at other options in financial services, I realised it was much more than that and it had a Wealth department. Ian and Andy were happy to meet with me, and things moved quickly after that.
Since joining, the key aspects of my role involve helping people to understand their circumstances. Whether they can retire now, if they need to spend more, or if they need to spend less. Many individuals can be unaware of their options until they have talked through their aspirations, which also helps us understand our clients’ goals and objectives so that I can set out a robust plan to help them achieve what they want, from leaving a legacy for their family to taking a once in a lifetime family holiday. Being a Financial Planner means to give clients reassurance, peace of mind and make sure the clients outcomes are always at the front of everything we do.
One of my previous clients came to me for retirement advice as she was looking to reduce her hours per week and wanted to know if she could start drawing on her pension. I met her for a coffee to find out more about her circumstances, what she was looking to do and talk through what I could do for her. I then conducted a full fact find with her and got all her pension information. She had paperwork for 3 or 4 plans, but not all of them. She was sure she had a plan with an old employer from around 1995 and so I encouraged her to sign some letters of authority that allowed me to gain information on her behalf to find the provider. A few weeks later, I received a response that there was in fact an existing pension worth around £70,000.
Had I not reassured her that it was worthwhile searching for, the pension it would have likely remained lost and unclaimed. Once completing a review of the pension, we decided the best course of action was to leave it as it was and ensure she had access when required. The value of advice can be easily underestimated but there are numerous reports and studies which support the benefits of seeking advice and I would encourage anyone uncertain on their financial future to do so, whether you think your need is too small or too big.
Wealth is not about having a lot of money; it is about having a lot of options and it’s my job to present those options to my clients in a way that benefits them most, no matter where they are on their financial journey. I look forward to the opportunities that being part of the AAB Wealth team will bring and following the recent arrival of our second child, I hope to continue my development and work towards further qualifications in the coming months.
AAB Wealth invites Ukrainian refugees to enjoy Aberdeen City Orchestra
Aberdeen Chamber Orchestra was founded in 1982 by a group of friends who had known each other at school and university in the city. Their aim was to promote small-scale concerts for the enjoyment of friends and relatives. Going from strength to strength and increasing significantly in numbers over the years, Aberdeen Chamber Orchestra has been relaunched as Aberdeen City Orchestra (ACO).
This Saturday, 25th June, at the Music Hall, the ACO will be celebrating their 40th anniversary by performing a concert with favourite prom’s music including Star Wars, Nimrod, Jupiter and The Blue Danube. They will be sharing the 40th anniversary of ET and will also be playing Crown Imperial to celebrate Her Majesty, the Queen’s Platinum Jubilee. The ACO will also be proudly playing the Ukrainian National Anthem and Plyve Kacha featuring Ukrainian musician, Nataliia Naismith.
At AAB Wealth we are always looking for ways to support the communities and we are delighted to be able to play a small part in supporting the Aberdeen City Orchestra to bring this performance to a wider audience.
Shona Owen from Aberdeen City Orchestra said:
“We wouldn’t have been able to invite over 90 refugees and their sponsors to attend this concert without the fantastic support from AAB Wealth. It has been 6 years since we last performed at the Music Hall so it will be a truly special night for the 100 strong orchestra to be back performing.”
Andrew Dines from AAB Wealth added:
“We are delighted to support this event to enable more people to enjoy the performance who may have not been able to attend otherwise. The connection from Ukrainian violinist Nataliia is particularly fitting, and we know everyone attending will be in for a fantastic evening from these wonderful musicians.”
There are still tickets available for the 40th anniversary concert, find out more here.
Investment and Market Update
The news today can feel a little bit unsettling. There is no doubt that these are tough emotional times for investors. Russia’s invasion, and brutal war in Ukraine, is unsettling on both a human and an economic level. The plight of the people of Ukraine and the broader pitting of Western values against totalitarian oppression weigh heavily. The impact of the war on energy, fertiliser, commodity, and food prices, combined with global supply bottle necks and continuing Covid lockdowns in China are exacerbated by the growth in money supply from quantitative easing and financial support measures taken during the pandemic. This has led to a rapid rise in inflation globally to levels not seen for several decades. That can feel uncomfortable.
From an investment perspective, the impact has been more varied than the news might suggest so far this year. Global equity markets have handed back some of the, perhaps, unexpected gains of 2020-2021, but not in a uniform manner. Of note, high-growth stocks with poor or non-existent profits have been particularly hard hit, impacting the US broad market (down 18%) and the tech-oriented Nasdaq (down 28%). Yet, global markets, in GBP terms, are down only 10% or so. Sterling’s recent fall against the dollar has helped, as overseas assets now buy more Pounds. The UK equity market is more or less flat. It is worthy of note that a well-constructed exposure to global value stocks has delivered gains of nearly 4% so far this year, from which diversified investors will have benefited. A similar value outcome has been seen in emerging markets.
Over the longer time horizon that most investors face, equity assets should provide inflation-plus returns to protect the value of wealth. Unfortunately, there are no certain inflation hedges.
The fears of inflation have pushed bond yields higher, with resultant falls in bond prices. Shorter-dated, higher-quality bonds – favoured in client portfolios – have been impacted to a lesser degree than long-dated bonds. As an example, short-dated UK gilts are down 1.5%, whereas a portfolio of all UK Gilts is down a little over 10%. The positive is that – going forward – bonds are now yielding materially more than a year ago.
All in all, a well-diversified global equity portfolio, with exposure to value stocks and holding shorter-dated high quality bonds, has probably been more solid that the news might suggest, and performance certainly sits well within the bounds of expectation.
Here are some tips to help keep things in perspective at this challenging emotional time:
Tips for unsettling times
- Accept the uncertainty of markets – a well-diversified portfolio protects you from any one area of the markets suffering particular pressures. Your portfolio will probably be performing better than the headlines suggest.
- Don’t measure your portfolio’s performance from the previous top of the market, but over a longer and more sensible timeframe, and from where you started. The last few years have been really good to investors. Giving a little back is part of any investing journey.
- Try not to look at your portfolio too often. Get on with more important things in your life. Once a year is more than enough, but that takes some will power!
- Accept that you cannot time when to be in and out of markets – it is simply not possible. If you resign yourself to this fact, investing feels much less stressful.
- If markets have fallen, remember that you still own everything you did before i.e. the same number of shares in the same companies, and the same bonds holdings.
- Most crucially, a fall does not turn into a loss unless you sell your investments at the wrong time. If you don’t need the money, why would you sell?
- The balance between your growth (equity) assets and defensive (high-quality bond) assets was established by us to make sure that you can withstand temporary falls in the value of your portfolio, both emotionally and financially. A recent fall in the markets does not change this.
- Be confident that your (boring) defensive assets will come into their own, protecting your portfolio from some of the pain of material equity market falls, if they occur.
- If you are taking an income from your portfolio, remember that if equities have fallen in value, you will be taking your income from your bonds, not selling equities when they are down.
- We are here – at any time – to support you. We are a source of fortitude, patience, and discipline on which you can draw.
These are unsettling times, but your best defence is to keep to your plan, remaining invested in a well-diversified, robust portfolio and leaning on us if necessary.
‘This too shall pass!’ as the legendary investor and founder of Vanguard, Jack Bogle, used to say.
This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy, or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.
Past performance is not indicative of future results and no representation is made that the stated results will be replicated.
World equities (developed)
|iShares Core MSCI World ETF USD Acc|
|Emerging markets value||Dimensional Emerging Mkts Val A USD Acc|
|Emerging markets||Vanguard Em Mkts Stk Idx £ Acc|
|Global Value||Dimensional Global Value GBP Acc|
|US broad Market||Fidelity Index US P Acc|
|Tech stocks (NASDAQ)||Invesco QQQ ETF|
|Short-dated Gilts||iShares UK Gilts 0-5yr ETF GBP Dist|
|All Gilts||iShares UK Gilts All Stks Idx (UK) H Inc|
Market data used in this article represent the returns from funds capturing these specific market risks. They are provided for informational purposes only. All performance in GBP terms, except for US markets (USD).
 Data used in this paragraph uses market returns from funds capturing these specific market risks, as examples. See endnote for details.
What to do when volatility comes knocking
The word on many investors’ lips right now is market volatility.
We’re living in uncertain times. Even as the threat of the pandemic begins to subside, war in Ukraine and an escalating cost-of-living crisis are adding fuel to the fire. All this makes investment markets much more volatile – that is, share prices are likely to jump around much more frequently.
The VIX, sometimes referred to as Wall Street’s ‘fear gauge’, has moved higher and higher since the start of the year – an indication that more volatility is creeping into the market. Meanwhile, CNN’s Fear & Greed Index, which looks at the emotions driving investors, has its setting turned to ‘extreme fear’.
It’s understandable that many people are feeling worried. But it’s also true to say that when you’re looking at a long-term investment plan, such as setting money aside for retirement, volatility is a fact of life. The best course of action is to stick to the plan and remain patient.
However, this is sometimes easier said than done! So here are some useful thoughts to bear in mind to make sure uncertainty doesn’t derail your finances:
Spread out your risk
To protect yourself in periods of uncertainty, you need to make sure your wealth strategy is diverse enough to see you safely through any environment. That means faring well in the boom periods, but also holding their own during recessions.
In the past few months, one of the themes we’ve seen is big falls in share prices for some of the ‘darlings’ of the lockdown era. These were companies that benefited from more people staying indoors, shopping online and working from home.
Zoom, for example, was so popular at peak pandemic that it’s now become the preferred term for video calling. Its share price rose more than 700% at its highest point. Now though it has sunk back down to pre-Covid levels.
Investors have also lost interest in other companies that had seen big gains. Peloton suffered after it warned rising subscription prices for its exclusive fitness bikes could mean users cancelling their monthly memberships. And Netflix’s share price has also taken a hit due to stern competition from other services like Disney+.
Strategies that relied too heavily on the capturing the zeitgeist – holding onto too many technology stocks, for example, will have seen bigger falls than others that have avoided a particular bias. Spreading the risk should make a financial plan more evergreen and limit losses in tougher times.
Focus on the evidence – not the speculation
We’ve mentioned previously about the investor frenzy over video game retailer GameStop. Social media hype led to a huge rise in its share price. But a share fall followed. How many times have we seen a company’s stock surge as investors pile in, wanting to catch the ‘next big thing’, only to find that reality doesn’t match their expectations?
The crucial difference between investing and speculating, is evidence.
Adopting a more rigorous, systematic, evidence-based approach can help protect investors from overreaching – latching onto a stock where the company’s fundamentals don’t match up to the hype. It can also stop you discarding a stock that has good prospects because of stock market jitters.
Don’t panic. Make a plan and stick to it.
These periods of uncertainty remind us why it’s important to have a financial plan.
It may sound strange, but to a certain extent, the markets don’t matter. Whether your fund is slightly up or down a few percentage points from day to day isn’t the objective. Instead, the focus should be on whether you have the money you need available when you want it, that enables you to pay for your desired lifestyle.
Having a plan in place means you’ve got something that you can routinely check in on to see if you’re on track. Has anything changed for you? If not, then you can rest easy.
The main thing to remember is not to panic. Often when you look back on periods of crisis in the market – such as the last financial crash – the long-term investors who stayed the distance, who didn’t hit the sell button too early, have tended to be the ones who were rewarded.
Get in touch to find out more about our evidence-based approach to finding you the right financial plan. We can help you find the strategy that suits you best.
Why we should all be listening to women investors
Taking on the gender investment gap
The world of finance and investing still has something of an image problem.
All too often, it’s the same story. It’s seen as being largely for those who are: ‘male, pale and stale’.
Women make up a much smaller proportion of investors. It’s true that on average they earn less than their male counterparts – and they’re also more likely to lose out on potential earnings from career breaks (the so-called ‘motherhood penalty’).
No surprise then that there’s still a big ‘gender investment gap’. Women aged between 21 and 53 are thought to have half the amount set aside of men in the same age group.
But change is coming.
Research has shown that since the pandemic, women are changing their approach to investing*. Women want to diversify their investible assets – looking further than cash savings. They’re also getting wealthier, expected to control 60% of the UK’s wealth by 2052. This makes it more important than ever that we as a profession pay more attention to one of the most under-served groups of investors.
Do women and men invest differently?
As financial planners it’s important we understand something about the psychology of investing, because this helps us ensure all our clients reach the best decisions for their long-term finances.
Everyone feels differently about planning their finances. All of us are prone to various types of biases that colour our perception of what makes a good investment. And research certainly backs up the case that there are often big differences in the way men and women behave when thinking about money.
Men are seen as the big risk takers, more likely to look for investments that promise big returns (but also carry greater uncertainty). Women, on the other hand, are more likely to opt for the safer option. Lower returns but more chance of a positive outcome.
Confident or cautious investor?
Of course, in practice, it isn’t always this clear cut. But, according to Fidelity International’s Global Women and Money Survey, women are more likely to describe themselves as cautious investors – and less likely than men to describe themselves as confident or ambitious.
Investment approach by men and women
Source: Fidelity Global women and money study 2021
(survey of 12,038 adults in UK, Taiwan, Japan, Germany, China and Hong Kong)
Can being more risk-averse impact returns? Research from Hargreaves Lansdown showed women are more likely to keep their money in cash rather than investing in stocks and shares. This might seem like the safer option, but also puts returns at risk of being eroded by inflation.
What’s the reason for this added caution? One theory is that women can feel forced onto the sidelines by a male-dominated industry. One investment survey from Kantar found many even believe they are less competent at investing: “put off by an aggressively masculine approach to what can be complex and daunting transactions.”
Patience not panic
However, caution is also a good thing. Too much confidence (over-estimating your abilities and ignoring risk factors) might harm your investments. Some studies highlighted men’s tendency towards overconfidence. For example, one research paper found that overconfidence in men led to ‘overtrading’ – buying and selling too frequently on investment accounts. This cost their net returns by about 2.65% per year.
Similarly, studies have shown women to be more patient investors – less prone to panic in tough time – a tendency that’s generally more suited to long-term investing. Figures from Boring Money suggesting women hold funds for 10.7 years on average, compared with 8.3 years for a man.
Patient investing is particularly relevant when it comes to turbulent periods in markets. When stock prices fall quickly, we often see panic-selling from investors, but this can be the more damaging in the long run. Downturns are only temporary, so staying calm (and invested) tends to be better for long-term returns.
Values are important
One especially interesting way in which women appear to differ is a marked interest in sustainability. Research shows that decision-making for women investors young and old isn’t just influenced by how big the final investment pot is. They’re more likely to take into account the world around them and want their portfolios to include environmental, social and governance (ESG) factors.
A UBS Sentiment Survey found seven out of 10 women investors said they took sustainability into account (compared with 58% of men). This makes women an incredibly influential socially conscious group of investors for the future.
Read more about our approach to ESG here.
Undervaluing women’s voices in investing is a big mistake. Otherwise, the wealth management industry is just alienating half its potential clients.
As financial planners, we have a responsibility to all our clients to help ensure they everything they need to make informed decisions.
That means it’s absolutely essential that the advice we give and the products we discuss with you reflect your needs and give you the confidence to know that whatever step you take is the right one for you.
 Irrational Behaviour and Stock Investment Decision. Does Gender Matter? M. Siraji, M. C. Abdul Nazar, M. S. Ishar Ali