A catch-up with Ross

Approaching the end of his first year at AAB Wealth, we caught up with Ross White to hear how he found joining the firm remotely and how his role in Client Service Support has evolved. Ross also shares some of his highlights from the past year and goals for the coming year.

In case you missed our first blog welcoming Ross and two others to the team, here’s a brief reminder:

Name: Ross White

Where did you grow up: I grew up in Aberdeen, but I was born in Edinburgh, and I’ve always wanted to move down at some point!

Favourite hobby: I’ve always loved cycling or going on walks or hikes in the Deeside area

Experience prior to joining AAB: I worked in hospitality and studied business management online whilst on furlough.

How you heard about AAB: I’d always known about AAB locally, but when I applied for the apprenticeship programme found out about an opportunity in AAB Wealth. I had never previously considered financial planning, but I knew I wanted to be part of a young ambitious team who value their clients, so applying for the job made perfect sense.

Joining the team from home

When I started during the pandemic, I found it surprisingly easy working from home. The team were all supportive and everyone stayed in touch with regular Teams calls. WFH was extremely helpful when balancing my work and personal life, for example it meant I could get started studying as soon as I finished my day while keeping my evening free.

Taking part in the AAB CommonHealth Games as a vice-caption for the Wealth team was a highlight of my first few months at AAB Wealth. It is an event series which aims to get all the departments within the AAB group connecting, contributing and competing. It allowed me to know the team in a context outside of work, to hear what everyone enjoys doing in their free time and what new activities people were giving a go.

Having stopped a few years ago due to an injury, I got back into playing football which I hope to do again this year. The games also inspired me to learn and write new songs on my guitar with my band. Since restrictions lifted, we’ve been gigging regularly and I’ve continued to write songs, in fact we recently finished recording an album which is due to release in the next month or so. I can’t wait to show everyone!

Despite joining from home, these activities coupled with regular communication and support from the team made it really easy to melt right into the AAB Wealth family…in addition to improving my health and wellness, which is a bonus!

How my role has evolved

Although I had no prior experience in financial planning, it’s incredible to look back at how far I’ve come over the past year, but it’s also a testament to the brilliant team that has supported me every step of the way.

I love the variety of work I get to do in my role as Client Service Support, it definitely keeps you interested! I work closely with the team to provide excellent service to our clients. This can involve sitting in on meetings with the advisers to help assess clients’ needs and priorities, gather information on any existing policies a client may have, setting up plans, payments and withdrawals, and helping with any projects the team are doing. My role has evolved since I joined as I have been given more complex cases to process, more projects to work on and I have been working more with our cash flow software creating new plans for new clients or amending plans for existing clients.

I realised this was the career for me when I started to see just how much our clients value the service we provide and the impact it can have on them. From getting told they can retire earlier than expected and being given the confidence to take their dream holiday, to the safety of knowing their families will be provided for and looked after should anything happen to them. I have also loved getting to meet our clients and even more so now that we have started taking meetings back in the office, I get the chance to see clients face to face on a regular basis.

Looking to the future

It really is amazing looking back on the previous year to see how much I have learned, and it’s my hope that in another year I will be able to reflect on a whole host of new skills I have picked up as I continue taking on more responsibility in my role. I am currently studying towards my diploma in regulated financial planning, which I hope to complete in the next year, so the knowledge I pick up from this will help develop my understanding of my day-to-day tasks. I have five exams to get through, so it’ll be a lot of work, but there’s plenty of support from colleagues who are going through or have recently completed the same exams, so I couldn’t be in the better position to pass!

FAQs about Financial Planning

How long does the Financial Planning process take?

The time taken will vary depending on matters such as third-party requests (such as requesting information from pension providers) and your availability to go through the various meetings/information gathering processes. Typically, three months may be required, reinforcing our view that you should seek advice sooner rather than later.

Do you charge for an initial consultation?

No, we do not charge for an initial meeting. We can provide a significant amount of information to you about our service, investment proposition, costs/charges and other matters, before you are asked to commit. We want you to understand all of the costs and benefits of the service so that you are under no pressure, and accordingly would not charge for the initial discussion(s).

How can I find out more about your investment portfolios?

If you are interested in finding out more about the portfolios we use, we can provide a detailed presentation before you are asked to commit to our service. (Indeed, we recommend that clients take that time to understand how their portfolios are managed). In that, we would cover matters such as philosophy, our process, charges and historical performance.

Is there a minimum value of investment portfolio required?

We do not apply a minimum by default, as we prefer to consider, on a case-by-case basis, the value that can be exchanged by working with a client. We find, however, that the scope to provide value can be limited if the investible/flexible sums available are less than, say, £250,000.

Can you provide a one-off service?

We prefer to work with clients with whom we will have a long-term relationship, because Financial Planning should not be a fire-and-forget exercise. As such, we do not provide a one-off/transactional service.

How do I compare the costs of your service to that of my existing arrangements?

We can assist you with this process and, indeed, we would analyse it as a matter of course. If you are receiving a professionally managed service, you should ask for a ‘Total Annual Cost of Ownership & Transaction Charges’ figure for your plan/portfolio as that should include all ongoing/annual charges. Your existing adviser/investment manager should understand the request if you use that terminology.

How many clients does AAB Wealth serve?

As of January 2022, we serve over 400 families (typically a ‘family’ is a couple, but may include children), with over £450m of funds under our advice.

Do you offer face-to-face meetings?

Yes, and we have offices in Edinburgh, Aberdeen, Glasgow, Leeds and London in which to do so. We do, of course, have measures in place to account for Covid and will follow the guidance relating to that. We can, of course, also offer video call meetings, but do always prefer to meet our clients in person, if practical.

When can you afford to retire? A case study on retirement planning

Understanding how financial planning for retirement planning in theory and graphs can feel both overwhelming and confusing. So, I invite you to review a real life scenario of Derek and Julie – a couple from Edinburgh with a common dilemma – ‘When can we afford to retire?’ Here, we provide a brief run through of how we help them.

The Problem(s): When can we afford to retire and how much can we spend?

Both have had it ‘up to here’ with work and, now that their children are at university, their focus is shifting to their own retirement plans.
Julie has a final salary pension from her time working at the bank, but it is an inflexible arrangement, and she is unsure whether to incur the early retirement reduction on drawing the income now (in her late 50s). There is also a confusing option relating to drawing tax-free cash.
Derek has £700,000 spread across a variety of pension plans, from a number of roles he has had over the years. He is unsure how they operate, his options, the costs involved, or whether he is invested in the right funds.
They want to travel abroad as much as possible in the earlier years of their retirement, and support their children until they are financially independent. But they do not know what they can afford to do.

The Process: what matters most

We have in-depth discussions around their priorities and views. Every way they turn, there are opportunity costs and concerns, but we need to get to the bottom of what matters most, and to educate them as much as possible in terms of the options and risks.
We look under the bonnet of all of their arrangements and determine the optimal approach for each in terms of charges, investment performance, taxation, risk, flexibility and structure.
We model their scenarios, considering future cash flow and stress testing against historical adverse conditions (such as stock market downturns, periods of high inflation).

The Solution: clarity with confidence

We ultimately consolidate some of Derek’s pension funds, using a flexible plan, so that they may help cover their expenses in the earlier years of retirement, whilst waiting for the secure income streams (State Pension and final salary scheme) to begin.
We propose a reshaping of the investment portfolio within the pension to a more appropriate risk level.
We propose that Derek, as a higher rate taxpayer, maximise his pension contributions in what could be his final year or two of employment.
We quantify the expenditure that they could afford in retirement, considering how it will vary over the years, and stress test it so that they truly have confidence in the strategy. Only then, will they be able to truly enjoy their retirement.

What is the difference, if any, between Financial Advice and Financial Planning?

A question often asked is ‘What is the difference, if any, between Financial Advice and Financial Planning?’.

Often the terms are used interchangeably and, of course, that is fine for everyday language, but in practice there is a significant difference between the two.

In this context, Financial Advice relates to a specific recommendation. An example of this could be ‘make a £20,000 gross pension contribution to a new Standard Life personal pension to reduce your income tax liability for this year’. Such recommendations may not need to consider your full financial situation, and may be transactional/one-off in nature.

If Financial Advice relates to the tactics of the matter, then Financial Planning relates to the strategy, because the latter is intended to consider your whole financial position (not one isolated part) and determine the best approach to achieving your objectives.

So, for example, while the advice to make a £20,000 pension contribution may well be appropriate, it does not help you understand your position in relation to your objective such as ‘I wish to retire in five years’ time’. To do this, we must consider all of your assets, income streams and liabilities/expenses, determine suitable tactics (Financial Advice) for each element, model them to determine your projected position, and assess the ‘what if?’ scenarios and trade-offs involved.

There is also a third aspect to consider, being ‘Coaching’. This is more important for some than others, but it is crucial that you understand the proposed tactics and strategy, and believe in them, for you to truly have the confidence to enjoy your retirement.

And this can be particularly important where you are relying on investments throughout your retirement, such as a stock market portfolio. If you do not have a reasonable understanding of how the stock market works, how your portfolio is designed, the risks involved and the decision-making process used, you are unlikely to be comfortable with it. There is, of course, nothing wrong with taking a cautious approach to investing – but that should be a conscious and educated decision, and not one based purely upon a lack of understanding as a result of poor communication from your adviser/investment manager.

It should be important to understand these distinctions when approaching a firm or an advisor to assist with your affairs, and to check that they will, in fact, be providing the service that you need. This, I consider, is the only way to be sure, because even firms describing their service as ‘Financial Planning’ may only be providing Financial Advice. If you would benefit from the wider service described above, you may feel short-changed because it may be no cheaper than a full Advice/Planning/Coaching service.

Uncertainty abounds – it always does.

Today, it certainly feels like the world is in a very uncertain place. Authoritarian states are flexing their muscles, with Russia violating Ukraine’s sovereignty and China’s ongoing subjugation of Hong Kong with the new National Security Law alongside its apparent support for Russia, being cases in point.

The West continues to struggle with what is hopefully the back end of the Covid crisis as populations gather immunity through vaccination and infection, and as new drugs and treatments come online almost daily. Economically, the greatest challenge is soaring inflation, hitting levels not seen for several decades. As a consequence, interest rates and yields on bonds have started to rise and global equity markets have started the year down. That can all feel both gloomy and unsettling.

It is always easy to feel that the present is more uncertain than the past. We have all but forgotten the Armageddon scenarios of events such as the Y2K software bug issues of 2000 (planes expected to fall out of the sky, nuclear power stations potentially out of control etc.), the emotional and geopolitical impact of 9/11, or the fear many felt in 2008 when Lehman Brothers failed, and the meltdown of the financial system was a real risk.

The chart below illustrates that over the mid- to longer-term the markets absorb the consequences of such events and power forwards as capitalism drives the relentless pursuit of profit opportunities.

Figure 1: Material global events are ever present

Data source: Vanguard Global Stock Index ACC, 4/8/1998 to 14/2/2022 in GBP used as proxy for the performance of global equities. Its use in this chart does not constitute any form of recommendation and is provided for educational purposes only.

Being shaken out of markets based on today’s news is about the worst mistake any long-term investor can make.

What is to be done about the Ukraine situation?

The short answer is ‘not much’. As ever, all the news that we see and worry about – including the invasion of Ukraine by Russia – is already reflected in market prices. New news, as it develops, will have an influence on those prices, but by its very definition this is a random process that is hard to benefit from unless you own a crystal ball. It is likely that markets will be volatile as events develop. The US market actually rose on the day Russia invaded.

In terms of direct portfolio exposure it is worth noting that Russia represents around 0.35% of global equity markets, and that is before this is diluted down in any portfolio by bond holdings. To put this in perspective, the global market weight of Apple is over 4%! In fact, Apple’s cash reserves alone are of a broadly similar magnitude to Russia’s entire market capitalisation.

No-one has any real idea as to the wider impact of a Russian invasion, but even if markets fall, you need to ask yourself the following questions:

Do you understand that equity markets can go down – sometimes materially – as part of their journey to delivering positive longer-term returns after inflation? If this is a surprise to you, then you need to speak with (or possibly fire!) your adviser.
Have your financial and personal circumstances changed recently to such an extent that you need immediate liquidity from your equity positions? That is most unlikely. Feeling uncertain about markets is not a valid reason for seeking to get out of markets.
Do you remember that your high-quality bonds provide several valuable attributes?
They provide more stable values, supporting a portfolio against equity market falls; liquidity to meet any liabilities without having to sell equities when they are down; and the dry powder to rebalance the portfolio and buy more equities when they have fallen to get the portfolio back up to the right level of risk.

One piece of advice would be to try not to look at the news too much. It can feel unsettling and is increasingly full of sensationalist speculation and hyperbole. Instead, perhaps take a look at a news site that tries to balance out the regular news with positive news stories which tend to be underreported www.goodnewsnetwork.org/category/news/

Risk warnings

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.

Bonds – between a rock and a hard place

Sometimes as an investor we come face to face with a stark reality. Today, that is the case with the bonds held in portfolios. By and large, most long-term investors own bonds because they do not have the emotional or financial capacity to suffer material falls in the value of their portfolio. By and large, high quality bonds have done the job asked of them delivering protection from the large equity market falls in 2000-2003, 2007-2009 and Q1 2020. The return penalty of giving up equities to own bonds has been softened to some extent by positive returns in the past.

In December 1981 the yield on 5 year UK gilts stood at 15.5%. What would investors give today for such yields! The next 40 years proved to be good for bond holders as governments around the world got a grip on inflation and yields fell, delivering capital gains (bond prices rise as yields fall and vice versa) on top of the income delivered in the form of bond coupons (interest payments). Gilt yields fell from these lofty heights to a low of -0.06% in December 2020. Today, 5 year gilts yields have risen to around 1% (before inflation), which has resulted in small capital losses.

With current levels of inflation being well above the Bank of England’s target rate of 2%, bond (and bank deposit) holders face the real risk of the erosion of their purchasing power. In the presence of low yields well below inflation, and with the risk of rising yields – although no-one knows where yields will go from here – bonds seem unattractive from a return perspective going forwards.

So, what’s to be done?

Investors have to ask themselves a tough question: ‘If I cannot cope emotionally or financially with suffering large equity market falls, what could I own instead if I abandon my high quality bonds’.

Some investors have chased bonds with higher yields such as those issued by weak companies (high yield bonds) or those of emerging economies (including Russia), but this simply adds equity-like risk into the portfolio and dramatically reduces the defensive qualities of owning bonds. During the equity market falls of the Credit Crisis of 2007-2009 global high yield bonds fell by around 20% and during the Covid-induced fall in Q1 2020 they fell by around 15%[1].

High cost, opaque and highly complex, absolute return strategies, relying on manager skill alone, have hardly lived up to their name. Their sector average return during the equity market fall of Q1 2020 was down 8% or so[2].

The stark reality is that there are no easy answers, but there are a few useful points to remember:

The return give-up of owning high quality bonds over equities should be thought of as an insurance premium. Today that premium is high. That is how the market is pricing it. Pay the premium or surrender the policy.
Own bonds in your portfolio to a level that satisfies your emotional and financial ability to suffer equity market falls and no more. This is something that your adviser can talk you through. How much insurance cover do you need?
High-quality bonds still have the ability to provide down-side protection and portfolio liquidity; two qualities not to be sniffed at.
Accept slim pickings from bonds given such low yields and in the face of inflation. There is nothing you can do about it.
Accept that there are no easy alternatives. All carry material trade-offs and risks.
Think of your investment pot in its entirety and avoid the trap of focusing in on one line on your portfolio valuation and pointing an accusing finger at your bonds.
Don’t get caught up with trying to second guess whether high quality, short-dated bonds or cash are likely to be the better option over the short or longer term. No-one knows and, when compared to the high volatility that equity markets exhibit, the two are pretty similar.

Figure 1: Compared to equities, high quality short-dated bonds and cash are quite similar

Data source: IA Standard Money Market sector average – IA, iShares
Core MSCI World UCITS ETF Acc. GBP in GB, iShares UK Gilts 0-5yr UCITS ETF 0 5 GBP
TR in GB – iShares.

It is never comfortable confronting a tough reality but understanding that reality and recognising that the alternatives are limited, can help you to deal with it in a rational way.

Risk warnings

Past performance is not indicative of future results and no representation is made that the stated results will be replicated.

[1] IA Global High Yield Bond sector average

[2] IA Targeted Absolute Return sector average.

Kirsty’s career journey: from hospitality to Client Service Support

My student years at RGU

I grew up in a very small village called Fintry, near Stirling. I originally went to Robert Gordon University in Aberdeen to study Events Management but switched to International Business Management (IBM) in my second year. Whilst I was still interested in events management, I wasn’t set on what I wanted to do and so decided that a degree with a broader variety of study would make more sense. The IBM course also involved studying abroad for either a semester in your second year or a full year in third year. I chose to do the semester in second year and went to the USA to study at Oklahoma State University. This was the highlight of my time at university, and I made friends from all over the world, many of which I’m still in touch with.

From hospitality to financial services

During and after university, I worked in the hospitality industry and reached a supervisory position. After working full-time for two years, I decided that the lifestyle and unsociable hours weren’t for me. I came across the Client Service Support (CSS) job advertisement online and decided to apply. I hadn’t heard of AAB Wealth before applying for the role but when I researched AAB Wealth online, I was initially attracted by the firm’s charitable initiative, AABi, and the work that they were doing to support the local community. The application and interview process were very straightforward and the interview itself felt more like a conversation. After learning more about the different aspects of the role and the opportunity for development, I came away from the interview even more interested and hopeful that I would get the job…and I’m delighted I did!

My role as Client Service Support

As I was new to the industry when I joined, I didn’t have a lot of preconceived ideas. However, I was pleasantly surprised by the levels of independence and responsibility that every team member was given, as well as the opportunities for training and development.

I’ve now been part of the Client Service Support (CSS) team for a few years. The key aspects of my role include supporting advisers and paraplanners in meeting the needs of our clients, from ensuring that we have all of the relevant information from the outset of the client journey, to submitting and monitoring new business. I had always enjoyed the customer-facing side of my previous job roles, and this has continued through my role at AAB Wealth. Through my day to day work I get to experience the difference that we make to our clients. It’s extremely rewarding to see first-hand how we can help our clients and build long-lasting relationships. I also enjoy how the industry is ever evolving and how we as a team are adapting to meet these changes.

Over the past year, my role has progressed and I now train newer members of the team and take on more complex tasks. I’ve recently really enjoyed getting started with paraplanning and believe that my role in CSS has given me a strong foundation for it. I have two more exams to sit to receive my diploma and hope to have this completed over the next few months.

Studying and moving cities with hybrid working

The flexibility that hybrid working allows has definitely improved my work life balance and aided my ability to study. I’ve found that busier periods have been easier to manage, and I can focus better in a quieter environment, meaning that I tend to be more efficient working from home. It is also useful to be able to pop into the office for training sessions or meetings that work better in person. Hybrid working has also allowed me to move cities and offices surprisingly smoothly. I’ve lived in Aberdeen for eight years, but plan to move to Glasgow next month and be based out of our Glasgow office. It will be a big change but I’m excited to live in a bigger city with all the things that Glasgow has to offer. I’m particularly looking forward to going to Trnsmt festival this summer. I’ll also be a lot closer to where my family live, which will be helpful for dog-sitting!

In my spare time, I love walking my dog and spending a lot of my weekends out and about with him. Last summer, I did a lot of hiking around Aberdeenshire and The Cairngorms and I’m looking forward to doing more of this around the central belt. I also enjoy visiting bars and restaurants and socialising with my friends, as well as going to see live music. All of which Glasgow has a good reputation for!

Goals for the future

My main goal for the next year is to get my diploma. I also hope to develop my skills and knowledge further as I move into the paraplanner role.

ESG is here to stay. Here’s how we’re planning for it

It’s increasingly difficult to ignore that where we put our money has a direct impact on the world around us.

How a firm uses (or abuses) the environment, how it treats its employees, whether it’s managed well, or cuts corners.

These factors are almost as integral to decision-making as whether a company makes good on its financial targets.

I was pleased to have the chance to speak more about this on the Scotsman’s Sustainable Scotland podcast last month. In a useful discussion, we tackled the trend of ESG (environmental, social and governance) investing, the pitfalls and opportunities it presents, and the vital role it will play in the future of investing.

For me, it’s as simple as this. In the future, I believe we won’t talk about sustainable investing. Not because it’s not important, but because it will just be a normal state of affairs.

We can’t change the world with one fund – but it’s a start

Most of us, in our heart of hearts, know that we all need to do better at balancing the claims on the world and its resources, against the claims of future generations. This week the Intergovernmental Panel on Climate Change released a report that warned of the ‘irreversible’ effects of global warming. It’s something we can’t ignore.

Over the last year or two at AAB Wealth, we’ve had many more conversations on this subject with our clients, as we look at ways we can make their investment portfolios more sustainability focused. As part of the ongoing governance, our Investment Policy Committee meets every six months to review our portfolios and the underlying funds we use.

We recently introduced the Dimensional Global Sustainability Core Equity Fund, replacing the Dimensional Global Core Equity Fund, and the Dimensional Global Sustainability Short-Dated Fixed Income Fund, replacing the Dimensional Global Short-Dated Bond Fund.

One thing we’ve been very clear on is that we believe the best way forward is a rational, pragmatic approach. Just as one person can’t save the planet purely by recycling more, you can’t change the world with one investment fund.

But the small steps that we do
take? They can help to make a real difference.

Taking a ‘real world’ approach

So how does it work? In an ideal world, we’d have rigorous, standardised data that give us an accurate reflection of the sustainability for every company we look at. This would then make it a straightforward decision on what makes a sensible investment.

Unfortunately, there’s still a big gap between that perfect vision and reality. There’s mountains of data and information – and jargon – to sift through. We have to be cautious of ‘greenwashing’ (companies that try to gloss over non-environmentally friendly practices) and ‘greenwishing’ (kidding ourselves that a firm’s sustainability efforts can achieve more than is possible).

Our focus is a ‘lighter green’ approach – not an all-or-nothing ‘dark green’.

So, we make pragmatic trade-offs when necessary. That means we can ensure there’s no big increase in risk, performance charges or expectations in your portfolio.

For example, taking a more hard-line ‘dark green’ view, might mean avoiding all energy companies, or airline stocks, as their large carbon footprints mean they have a more severe environmental impact. Our response is more measured. The reality is that these companies are still important parts of their sectors – for now, the industries are too big to ignore completely.

What it comes down to is this, our investment portfolios are based on sound investment principles – they’re evidence based and research backed. Sustainability gives us an added layer of scrutiny that helps us judge whether investments will be successful in the future.

We look for diversified, broad market returns, without higher levels of risk. If that can be achieved in a more sustainable way, then all the better.

“Have you gone woke?!”

Last month we wrote to all our clients to let them how we’re starting to make their portfolios more sustainable.

One of the cheekier responses was “Whatever, swampy!” Another asked, “Are you going woke?!”

It’s fair to say that many of us will have differing views on the role they want ESG to play in their portfolios, but, by and large, most are in favour our rational ‘real world’ approach to sustainable investing. That’s because, more and more, investors are waking up to the idea that ESG isn’t a flash in the pan. It’s here to stay.

Get in touch if you want to find out more about our approach to sustainability.

How to keep your investments flexible in a new era of investing

Hello to a new generation of investors

This time last year the investing world was in a frenzy over GameStop.

For a brief time, shares in the struggling video game retailer soared. Its market capitalisation (the total value of all its shares) was more than US$20 billion – up from less than US$1 billion only a few months before. The company’s shares were so in demand that GameStop unseated Tesla as the year’s most searched-for stock.

GameStop is the most famous example of a ‘meme stock’ – so called because tips are hyped up and shared on social media forums, particularly Reddit. They’re powered by easy-to-use online trading platforms and even come with their own brand of slang (such as a YOLO trade).

They also have a reputation for wild swings in share prices.

The market is still catching its breath. But what can we all learn from the surge – and subsequent fall – in GameStop’s shares?

Yes, meme stocks are volatile, but they’re also evidence of a new generation of amateur investors challenging the accepted norms of financial services.

Don’t get caught out! Why you need to stay flexible

First of all, for us, the meme stock saga is a good reminder why it’s a good idea to consider a flexible investing approach.

In the end GameStop’s rise was short-lived. Its market capitalisation is now down to nearly a third of what it was back in January 2021. Its shares rose sharply and fell back just as quickly, and with higher levels of volatility, there’s always the risk investors could lose out.

But examples like these have the potential to impact you even if you had no interest in speculating on a ‘risky’ stock.

Here’s why.

Many investors choose funds that track an index as a ‘hands-off’ way to benefit from rises in the equity market. But a sudden and meteoric rise from a meme stock – in GameStop’s case going from a small company to a large one practically overnight – can really skew the index.

Over the quarter, while index providers catch up to recalibrate, investors can get stuck with the ups and downs of a more volatile stock. In these circumstances, index investing can prove to be a fairly inflexible solution and end up harming your financial returns.

That’s why the index
funds we offer at AAB Wealth are actively managed, allowing us the option to buy or sell stocks if they no longer, in our view, meet the fund’s criteria.

Flexibility is important in other markets too…

We also take our flexible approach into other asset classes.

Many investors look towards the bond market (fixed income) for returns that are lower risk and more stable than equities.

But even here, in recent times we’ve seen volatility in this market. That’s why the funds we offer look to maintain flexibility. For example, the managers of the solutions we offer can change the fund’s term and credit allocation to match the evolving environment.

The value of getting financial advice

So are there positives from this new era of investing? We could be seeing the rise of a new generation of investors.

Robinhood, the online trading platform behind the surge in meme stocks, says its aim is to ‘democratise finance’. That’s one of the reasons so many amateur investors have taken to it – they’re attracted to the idea that investing isn’t just the preserve of the incredibly wealthy.

Coinciding with this, we’re seeing evidence that investors are getting younger. According to investment platform Hargreaves Lansdown, the average age of its users fell by seven years between 2012 and 2020. Any evidence that people are considering how they save their money earlier in life is welcome news.

But this new environment isn’t for everyone

Someone with decades to go until they retire won’t have the same attitude to risk as someone who’s only a few years away, and protecting a six-figure sum.

Whatever stage you’re at, you can benefit from a financial planner to guide you through the process.

They can talk you through the risks involved and advise you on the potential impact your decisions could have for the long term.

Want to know more? Get in touch with us today.

Welcome back Claire Marston

At AAB Wealth we recognise and support that our team members have their own goals and aspirations, which is why we are delighted to welcome Claire Marston back to the AAB Wealth team.

Claire decided to scratch her itch and try something new in March last year. We caught up with Claire to find out what skills she developed while working in the emergency services, why she chose to return to AAB Wealth and what her new role as Client Service Support entails.

I joined AAB wealth as an intern in the summer of 2017. After completing my business management degree at the University of Glasgow, I returned as a graduate in August 2018, making me the third year of graduates that AAB Wealth had welcomed. I had not always known what I wanted to do, but when I was looking for internships, AAB Wealth stood out.

During the application and interview process, the main thing that really attracted me to AAB Wealth was their organisational culture. The internship gave me an even better feel for the business and cemented my view. Everyone was lovely and I had a great gut feeling about AAB Wealth. So, when I was asked to come back as a graduate, it was an easy decision! It felt more as if I’d come across it by surprise because everything just fell into place very naturally.

During the first two years working at AAB Wealth, I achieved my Diploma in Regulated Financial Planning. It really is a great place to build your career. But early last year that niggling feeling of not knowing exactly what I wanted to do as a career came back, so I made the decision to try something new, and moved to a new job in the emergency services. I left the business in March 2021 but remained a close friend of the firm, kept up to date with colleagues and of course had one eye on how the business was growing and progressing.

That’s the thing about AAB Wealth, the team genuinely are different. Everyone just wants the best for their clients and for each other. It’s because of these genuine relationships that it felt really natural to approach the team about returning to the business late last year.

I am glad that I went to try something new, rather than always wonder ‘what if’, but I am so grateful for the support of AAB Wealth and I am delighted to be back. Of course, I was a bit nervous, but leaving on good terms removed any fears and I felt confident enough to just get in touch directly and explore the possibility of returning to the business.

Returning to AAB Wealth was a very different experience compared to when I first joined. Like a lot of other things in AAB, Covid, while it’s been disruptive, has also streamlined a lot of processes. I expected it to be a bit more clunky, but honestly within a couple of days, I felt reintegrated again. It was really easy.

I was hired back to train as a paraplanner, and this will ‘officially’ kick off in April. Until then, I’m supporting the Client Services Support team. This means I’m essentially a point of contact for clients and support the advisors and paraplanners with any information that they may need to make sure that all processes run smoothly while focusing on making sure the clients have the best possible experience and making it as easy as possible for them. The client facing side of the role has always been my favourite part of the job, so I’m looking forward to being able to be back in the office and get more in person meetings arranged.

Working within the emergency services over the last year developed my experience in dealing with the public, having difficult discussions with people, conflict resolution and coping well under pressure. All skills that feed into my role at AAB Wealth.

I’m really excited for the new challenge that my new role will bring and when the time comes, getting back to exams as well. But I think more so than anything else, it’s just nice to be back within the culture and to see the team again, as everything still feels very friendly and familiar, and I don’t feel like that has changed even with covid and people working from home, so that’s lovely.

Although AAB Wealth’s culture has remained the same, there are also some notable differences, even from when I left last year. The team is so much bigger and there’s a lot of new faces, which is great. In addition to their growth, AAB Wealth have utilised the challenges that covid presented to really advance the technology side of the company. I think these improvements have provided a lot more flexibility. Certainly, when it comes to meetings with clients, but also with how we work. In terms of being able to choose where we work and when we work. This flexibility has allowed me to prioritise and balance my work and personal life, giving me time to do the things that I love, including hillwalking and spending time in the kitchen cooking.

My journey from intern to trainee paraplanner hasn’t been as conventional as others, but I wouldn’t change a thing. As an intern, I didn’t really know what I wanted to do, but now, I am sure and taking a chance on a new opportunity helped cement that. AAB Wealth wouldn’t encourage everyone to follow the same path as me, but they do recognise that as individuals we have our own goals and aspirations and it’s great that they support this. It’s this culture that has attracted so many new starts to join AAB Wealth since I left, 5 to be exact.

So much has changed since I was first introduced to the business back in 2017, but to me it still stands out as a great place to work – whether that’s as an individual, a client or a business partner. We are truly focused on all playing our part to do the best for the team and everyone within it, and that extends to how we deliver for clients. with so much exciting change and growth achieved across the business I am excited to see what 2022 has in store, and I’m delighted to be part of it.