Blevins Franks Financial Tips - Why Time in the Markets Matters

When you have worked hard to build up your savings, it is not always easy to decide how best to look after them, especially if you are nearing retirement or already enjoying your retirement years. You most likely have some or all of the following objectives: 

·      Protect your capital and maintain financial security  

·      Generate an income  

·      Grow the capital, but with an acceptable level of risk 

·      Leave a healthy inheritance to children and grandchildren

You know that you need to invest to earn enough capital growth but may also be wary about taking on too much investment risk.  And if you are invested geopolitical events and market volatility can make you nervous and wonder if you should sell and sit in cash for a while.

In truth, for most people, successful investing is hard; financial markets are complicated and can be unpredictable. But by getting a better understanding of investment principles you can avoid some common pitfalls. Following these principles and working with a financial adviser will help turn your goals into reality.

The risks of trying to time the market

Successful investors are marathon runners, not sprinters. So staying invested in the markets over the long term usually gives the best returns. When you see the markets fluctuate, it can be tempting to buy and sell investments, either to chase short-term gains or because you are afraid share prices will fall.  Unfortunately, this can often result in entering or exiting the market at precisely the wrong time and making emotional investment decisions will rarely help you meet your longer-term financial goals.

For individual investors, it is extremely difficult to anticipate and deal with the wide range and speed of events and issues which can impact economies and markets. At any time, external events, investor sentiment and even rumours can have a negative or positive impact, often unexpectedly and suddenly. Reacting to current conditions is usually too late, so to be successful, you would need to foresee both the best time to buy and to sell. Even experienced investors cannot get this right all the time. 

Then there is the risk of missing out. It is surprising what a difference certain days in a market cycle can make to returns. If, for example, you are not invested because you are waiting for share prices to stabilise after a period of volatility, you could miss benefiting from rebound days if the market suddenly rallies.  

To illustrate this, if you had invested £100,000 in the FTSE All-Share index for the full ten-year period up to 31 December 2021, and stayed invested the whole time, you would have enjoyed a profit (before fees and charges), of £110,700, so  your investment would notionally have more than doubled to £210,700, including the original investment. Investors who missed the five, ten and twenty best days saw profits, before fees and charges are applied, drop to £64,090, £40,540 and £6,820 respectively. Those who missed the best 30 days saw a loss of £15,800.

While it may feel uncomfortable to stay invested when markets fluctuate, this discipline usually produces better returns over the longer term than chasing short-term gains.

The importance of diversification

Before investing, you need to ensure that your strategy is well diversified and suitable for your situation, risk appetite and goals. Even the most patient investor is unlikely to benefit from an ill-fitting portfolio that does not meet their needs or is overly concentrated in one area. 

The best strategy for minimising risk is to diversify by spreading investments across multiple, unrelated areas. This should include a range of different asset classes (shares, bonds, cash and ‘real’ assets such as property) as well as geographical regions and market sectors. Diversification gives your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing. 

Choosing an adviser who uses a dynamic ‘multi-manager’ approach can help increase diversification. By combining several carefully selected fund managers, this reduces reliance on any one manager making the right decisions in all market conditions. 

Establishing a suitable investment approach

When investing, it is crucial to carefully assess your situation, income requirements, goals and timeline alongside your appetite for risk. This is best done objectively by an experienced professional who can then build a diversified portfolio with the right balance of risk/return for your peace of mind. Your arrangements should also be structured as tax-efficiently as possible for your country of residence. 

If you have capital to invest but today’s climate makes you nervous, you could consider spreading the timing of your investments over a period by investing in tranches. The ‘pound (or euro/dollar) cost averaging’ approach can help smooth out volatility and potentially improve average returns over longer time periods. 

British expatriates may also benefit from exploring investment structures that have a multi-currency facility to minimise exchange rate risk. This would allow you to invest, for example, in sterling now and then switch to euros as you wished, and choose the currency of withdrawals. 

Ultimately, a long-term, diversified investment approach is vital to help protect and grow your capital, whatever the economic climate. While a ‘keep calm and stay invested’ approach usually gives the best overall results over time, make sure you still review your planning once a year, or sooner if your circumstances change, to realign your investments with your risk profile and continue meeting your long-term financial goals. 

These views are put forward for consideration purposes only as the suitability of any investment is dependent on individual circumstances; take individual personalised advice. The value of investments can fall as well as rise as can the income arising from them. Past performance should not be seen as an indication of future performance.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Savills Spotlight - Monaco Property Market Reaches New Highs as Principality Continues its Covid-19 Recovery

For the first time the average property price in the Principality has crossed the €50,000 per square metre threshold, firmly cementing Monaco as the most expensive location to purchase residential property globally. This is a 9% increase from 2020 and a 74% increase over the decade.

REACHING NEW HIGHS

Average prices in the Principality have topped €50,000 per square metre for the first time

As the world learns to live with Covid-19, business continues apace in Monaco. The Principality has managed the pandemic well, and at the time of writing, has begun to ease its health measures in concert with falling infection rates. This has contributed to a bumper year for the property market within the Principality, with the perceived stability boosting desirability and pushing prices to all-time highs.

For the first time the average property price in the Principality has crossed the €50,000 per square metre threshold, firmly cementing Monaco as the most expensive location to purchase residential property globally. This is a 9% increase from 2020 and a 74% increase over the decade.

Read the full report

Blevins Franks Financial Tips - How to Take Control of your Finances in an Uncertain World

The last few years have emphasised how uncertain life can be; how we never know what is around the corner.  Brexit and the pandemic have now been followed by the worrying and upsetting events in Ukraine.  Life feels more uncertain again. 

This perhaps makes it more important for us to take control where we can, as much as we can, particularly when it comes to our family’s long-term future and security.  So here we take a look at the key wealth management considerations we should review from time to time. 

Pension planning

For most of us, our pension funds are key to our long-term financial security, so great care must be taken to do what is right for you and your family.  The UK pension freedoms may no longer be ‘new’, but they can still cause uncertainty when deciding what to do with yours, and each option has pros and cons. 

If you are planning to spend your retirement years in France, you also need to establish the local tax implications and what works best for you as a France resident.

Many expatriates have chosen to transfer UK pensions to a Qualifying Recognised Overseas Pension Scheme (QROPS) for the advantages they can offer, such as income and currency flexibility. But they do not suit everyone – you may find it more beneficial, for example, to reinvest UK pension funds into French-compliant investment arrangements, or even leave your UK pension where it is.  Also, the UK has recently made changes which make transferring to QROPS more difficult. 

In any case, you should always take personalised, regulated pensions advice to ensure you take the best course of action for your particular circumstances.

Your savings and investments 

It is impossible to control what may or may not happen in the markets in future, what geopolitical events may cause volatility or prices to rise; we can’t know what interest rates will be five, ten, or twenty years from now. 

But we can take steps to build an investment portfolio that:

·      is based around our risk profile, circumstances, time horizon and objectives; and 

·      includes suitable asset allocation and diversification to control risk; and 

·      is designed to provide capital growth over the longer term to beat inflation so you can maintain your spending power through retirement. 

Geopolitical events, like those we’re seeing at the moment, can cause significant market turbulence which can be unsettling for investors, but that does not mean it’s the time for knee-jerk reactions or short-term changes.  

History has shown that ‘timing’ markets is incredibly difficult, especially where out-sized market movements are involved. And in timing, an investor needs to get it right twice – when to encash some of your investments and when to get in the market. Getting one right is rarely achieved, as the news has already arrived by the time you can look to act (so markets will already have reacted). The same also applies when markets move sharply upward as we saw after the initial covid news in 2020.  

Investing is a marathon not a sprint, so being patient and sticking with the plan can pay off. 

Estate planning

While we cannot avoid death, with good estate planning we can control who receives our assets and when. Is your legacy on track to go to your chosen heirs according to your wishes and with minimal taxation? Take care to understand the succession laws and inheritance tax in France and anywhere else you have assets and heirs, as well as the pros and cons of using the EU succession regulation ‘Brussels IV’ to override local ‘forced heirship’ rules.

You need a strategy that achieves your wishes while making the process straightforward and tax-efficient for your heirs. And don’t forget your own needs; consider the tax implications to find the optimum solution for your wealth during your lifetime too.  

Tax planning

The way you structure your assets and wealth can make a significant difference to your tax bill. You need to make sure your arrangements are structured appropriately for your life in France as well as your particular aims, circumstance, goals and risk appetite.

Are you taking advantage of tax-efficient structures available in France? Besides tax savings, these may offer additional benefits such as currency and income flexibility and estate planning advantages. 

Ultimately, cross-border tax and financial planning is complex. While you can do some groundwork yourself, you will benefit from talking to a specialist adviser with in-depth knowledge of the French tax regime and its interaction with UK rules. They can help you take advantage of available tax, investment, pensions, and estate planning opportunities to ensure you do what works best for you and your family, today, tomorrow and the future. 

By Rob Kay, Senior Partner, Blevins Franks 
Link to Rob Kay profile / contact page

You can find other financial advisory articles by visiting our website here

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

Corporate Partner Landmass Brings London Design to Monaco Partnered with Red White Design

Imagine if you could have a luxurious apartment and home designed to your bespoke taste and style. Imagine you could have a carefully select- ed and vetted team of trusted design experts and project managers on hand whilst receiving a beautifully designed home. Imagine you could have the best of both worlds – a Monaco home with a London design. With Landmass and Red White Design, you can.

With Landmass and Red White Design you get the perfect partnership, a fusion of award-winning design coupled with expert project management. Along with the combination of a Monaco based project team and a London designteam, you get the added benefit of local knowledge and expertise coupled with London design and dynamism. You will have the unique advantage of having a Monaco home designed by a London designer and tailored to your taste, style, and budget.

Landmass

Landmass London are award-winning designers based in Soho and have recently attained their Monaco interior design licence to bring London design to Monaco. We have designed over 40 properties and are recognised as pioneers in design. We pride ourselves on our luxurious, understated, timeless designs, maximising space and light to create breath-taking homes for our clients.

Red White Design

Red White Design are an established and experienced project management team based in Monaco with a reputation for being young and dynamic. We are project management experts and have a vast local knowledge of the Monaco area. Well-practiced and skilled, we have delivered numerous projects in Monaco, ensuring they are on time, budget and achieve the highest standards.

Monaco Interior Design & Development by Landmass & Red White . pdf download
For a private consultation, please contact client relations

Blevins Franks Financial Tips - Protecting your Financial Security Through Retirement

Retirement can last 30 years or more. To help us enjoy these well-earned years and have peace of mind, we all need to plan ahead, build up our savings and then protect them for our long-term future.  While the earlier we start doing this in our careers the better, it gets more important the closer we get to retirement.  And we need to continue taking steps to protect our retirement savings even after we’ve started drawing our pensions, regularly reviewing our arrangements to ensure we continue meeting our retirement goals. 

Before retirement
As retirement begins to get closer, it’s time to start planning how you want to spend your golden years and ensure you are on the right track financially. There may be steps you can take today to help make your retirement goal a reality.

 Questions to ask yourself include:

·      Will I be able to afford to retire when I want to?

·      What is the best strategy for withdrawing from my business or employment?

·      What options do I have for my pensions? Are they likely to change?

·      Will I be able to retain my existing wealth and assets?

·      Do I want to spend some or all of my retirement abroad?

Let’s say that you plan to retire within the next few years and move permanently to France. You may have concerns about whether you can afford your preferred lifestyle without having to sell existing assets. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a retirement nest egg. Then there are the complex residence and tax implications of living in a different country.

 Professional financial advice can prove invaluable here, especially with an adviser who understands France and can provide cross-border advice covering both countries. A good adviser will take a holistic view of what you have – your savings, investments, assets, pensions – together with what you want – your income requirements, estate planning wishes – and an objective assessment of who you are – your circumstances, timeline, goals, risk appetite – to design a personalised retirement plan for you. 

After retirement 

Being retired doesn’t mean you can forget about retirement planning. 

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It enables you to keep up with the ever-changing tax and pensions landscape, including new opportunities that could work in your favour.  

 You also need to keep protecting your savings and retirement income from inflation. As the cost of living rising, the value of your money falls, so that in the long-term you could have considerably less spending power than you have today. 

 Your pension options

 Pensions are usually the foundation of retirement, so deciding what to do here may be one of life’s most important financial decisions. Pensions are complex, and with so much choice available, you must take great care.

 You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income, but first establish what would be the most tax-efficient approach for a France resident. Receiving pension income in sterling also exposes you to conversion costs and exchange rate risk.

 Many British expatriates have chosen to transfer their UK pensions to a Qualifying Overseas Pension Scheme (QROPS) which have provided flexibility to take income in euros, more freedom to pass benefits to chosen heirs, and protection from further UK lifetime allowance charges.  But pension rules frequently change so you need to keep up-to-date, and in any case always take regulated, specialist advice before making pension decisions to protect your benefits and establish the best option for you.

 Keep an eye on the UK’s lifetime allowance (LTA). The UK caps how much you can hold in combined pension benefits (excluding State Pension) without paying extra tax. Once your funds exceed the limit, you pay a tax charge whenever you access your money – 55% for lump sums or 25% for income or transfers to an overseas pension.  This also applies to non-UK residents.

Retiring in France

If you plan to retire in France, review your retirement strategy early. You need to consider your residence status and cross-border tax implications and adapt your estate planning to suit France’s different succession rules. 

Careful planning is the key to minimising taxation and maximising the available opportunities so you can enjoy your dream retirement for as long as you need. For the best results, take specialist, cross-border advice.

All advice received from any Blevins Franks firm is personalised and provided in writing. This article however, should not be construed as providing any personalised taxation and/or investment advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

 You can find other financial advisory articles by visiting our website here

The Dynamic House Boat Market Now Enters the Next Level with the German Company Stern Hausboot Massively Scaling Up House Boat Production in Denmark

Club Vivanova Corporate Partner Contrarian GmbH, advisor of Stern Hausboot, shares interesting news about the house boat market after achieving a first big milestone, the fundraising for the world’s first large scale house boat factory.

As there is a natural limitation of space for living along the coastlines, house boats are becoming more and more popular. Being overloaded with orders, Stern Hausboot decided to become the No1 house boat builder. Their knowledge about German and Danish marina opportunities like old military, industry and fishing marinas made the decision easy. One of the owners was previously long term CEO of Europes largest holiday house rental company NOVASOL and brings all the market-knowledge for the growth.

Contrarian was deeply involved in various fields, such as strategic business plan, successful pitch for Danish government funds and the factory planning. This way, Stern Hausboot managed to get hold of an existing large factory site in Orehoved Havn, Denmark, that is suitable for house boats and allows the massive scale up immediately.

First focussing on Germany and Denmark, Stern Hausboot are already observing Europe and contacting companies that are involved in touristic developments like holiday camps and marina restoration. For the first time, a sufficient house boat supply will be available, as other house boat builders are small scale companies, very often building one or two large and design driven one-off boats, or may be five mid-range boats per year. Stern Hausboot targets 90 per year. A further production in South Europe is in the scope as well.

Images courtesy of Stern Ferienhausboot Holding GmbH

Blevins Franks Financial Tips - How Does Inflation Impact Your Retirement Savings?

With inflation surging in both the EU and the UK, now is the time to review your savings and investments to establish if they are suitably structured to provide protection from this threat. Even low levels of inflation can erode your spending power over time and retirees need to plan for this.  

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair”. 

This quote by American author and humorist Sam Ewing may make you smile, but it is a good example of the impact of inflation over the passage of time and underlines a serious threat to our long-term financial security.

Ronald Reagan used a more hard-hitting description: 
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man”.  

Many people do not realise how damaging inflation is to their wealth over the longer term; it is easy to become complacent after years of low levels. But it is surging in many countries, causing concern among savers and retirees. In fact, you should always take inflation seriously as even low levels impact your wealth and retirement income over time – you may not notice the effects each year until it is too late.  

The impact of inflation 

You cannot just consider inflation rates on their own, you need to compare them to your earnings. If your savings generate a lower return than inflation, the real value of your money is falling and your income will buy less than it used to. 

Put very simply, and ignoring the impact of compounding, if your bank account pays 1% interest but inflation is 2%, after 10 years you will have 10% more money, but the goods and services you purchase will cost 20% more. In real terms you’ll effectively be 10% poorer.  The more time passes, the more damaging it is. 

Official Consumer Price Index (CPI) figures are based on a basket of goods containing a representative selection of items for people across all ages and incomes. It rarely reflects our own personal inflation rate.  As an illustration, a personal annual rate of 4% would reduce the spending power of 100,000 (Euros or Pounds) to around 67,000 after 10 years.  After 20 years it will have lost around 55% of its value and after 30 years your 100,000 would have the purchasing power of around 30,000 today.  

Inflation in Eurozone and France 

Across the Eurozone, the annual inflation rate reached a record 5.0% in December 2021, up from 4.9% in November. A year earlier, the rate was -0.3%. For the EU as a whole it was 5.3%.  The highest contribution to the annual euro area inflation rate came from energy, followed by services, non-energy industrial goods and food, alcohol & tobacco.

France tends to have lower inflation than the EU average and was 3.4% in December 2021.  A year previously it was 0%, but it first hit over 2% in August and has been slowly climbing since, with its Harmonised Index of Consumer Prices reaching 3.4% in November 2021 and maintaining the same rate in December. 

The biggest culprits were energy and petroleum products, but food prices have also seen a sharp increase year on year. 

UK inflation

In the UK CPI reached 5.4% in December 2021, the highest rate for almost 30 years. A year previously it was 0.3%.

In comparison, the Bank of England’s main interest rate was just 0.25% in December, an increase from November’s 0.1%.  It has been below 1% since March 2009.

Will inflation remain high?

Many of the factors behind the current surge are related to the pandemic and expected to be temporary. 

As economies opened unevenly after lockdowns, companies have been struggling to keep up with rapidly rising demand as they rebuild their supply chains.  Shortages of many goods like computer chips and building materials have pushed prices up. 

In addition, electricity prices rose sharply, hitting us both directly and indirectly as businesses pass on costs to customers. 

The Bank of England expects inflation could reach about 6% by spring 2022, but then start to come down. It warns, however, that some prices may remain higher than in the past. 

The European Central Bank also expects inflation to reduce over 2022 as supply gradually catches up with demand, but warns that as the pandemic is unprecedented in modern times this recovery may be different.

One particular uncertainty is wages. Prices and wages influence each other - if wages rise to compensate for higher costs of living, companies may recoup this expense by putting their prices up, so this an area to watch.

Protecting your retirement savings

Hopefully inflation will soon fall back to comfortable levels but, as mentioned earlier, even low levels will affect you by eroding your spending power year after year.  You always need to plan to protect your savings from inflation.

To generate returns that outstrip inflation, you need to invest in assets that historically generate returns in excess of inflation over time. Reduce risk to your capital by working with a wealth management adviser to follow a disciplined investment process:

·      Establish your goals and time horizon.

·      Determine your attitude to risk – your adviser should take you through a suitability process to calculate this objectively.

·      Construct a suitable, well-diversified portfolio to achieve your investment plan and objectives. 

·      Use quality investment managers.

·      Review your portfolio annually to keep it on track.

·      Be patient and stick with your plan – it is time in the market, not timing the market, that is likely to help you achieve your longer-term goals.

If you already have investments but without a carefully designed strategy tailored to your particular situation and appetite for risk, or have not reviewed them recently, look at your financial affairs to confirm if they are suitably structured to provide protection from potential future threats like inflation and taxation.

You need a tax informed investment strategy with the potential to provide capital growth higher than inflation and where your money is legitimately protected from unnecessary taxation. This can be achieved with a diversified investment portfolio, based on your objectives, circumstances and risk profile, held within a tax-efficient arrangement which is compliant in France.

CPI data is based on figures available on 20 January 2022. All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice.

You can find other financial advisory articles by visiting our website here

The Winter Ski Edit: The Luxury Ski Chalets of Villa Almellina Estates in Limone

Located in the Italian Alps in the renowned ski resort of Limone, the luxury ski chalets of Villa Almellina Estates is an exclusive new build residential development project comprised of 10 beautiful new build ski chalets and a luxury boutique hotel. 

Villa Almellina Estates is situated at only a 5-minute walk to the village of Limone and ski slopes. These large luxury chalets boast stunning views of the surrounding mountains and come with private gardens and terraces to enjoy year-round. 

Built by and designed in partnership with renowned Italian builders Fantino Costruzioni, the chalets offer a traditional chalet inspiration with an exposed timber structure and are luxuriously balanced with contemporary style, finishes, and equipment.

All of the chalets offer complete private indoor SPA upgrades, heated ski lockers, wine storage, double car lockout garages, and home automation, which makes these beautiful chalets one of a kind in the Limone real estate market. 

Current Sales:
There are 3 chalets that are still available for sale, Holiday Home Grand Chalet no.2, Holiday Home Chalet no. 6, and Holiday Home Chalet no.2. Holiday Home Chalet no.2  is finished with our Premium Specifications and is sold fully furnished and equipped. 

Recently sold in the last part of 2021 were Chalet no. 3 and no. 4. The completion and delivery of Chalet no. 3 are scheduled for March, weather permitting. 

For Chalet no.4, we are approaching the building of the upper part of the chalet. Chalet no. 4 will be the first chalet in Villa Almellina Estates to feature an indoor swimming pool to accompany all the amenities of the private SPA area. 

Grand Chalet 1  was recently completed and delivered this past fall. This chalet featured a stunning private luxury indoor spa with a cold plunge tub, jacuzzi, steam room, sauna, and shower. After a day of skiing, this spa is pure heaven for soothing tired muscles and offers a wonderful and peaceful place to relax in the comfort of your own chalet.  

For further sales information or to schedule a private viewing in Limone or meeting in Monaco, please contact Luca Catalano.

Website

Le Marquis St Tropez Offers The Blue Monkey for Rental - Located in the Heart of St Tropez

The Blue Monkey. An elegant apartment with dining terrace, overlooking the Marina and bay, situated in one of the most convenient parts of the St Tropez peninsula.

This is a luminous recently refurbished apartment with spectacular views of the marina, and through to the bay of St Tropez, with easy access to St Tropez, to Pampelonne Beach, and to the villages of Ramatuelle, Gassin and Grimaud.

Situated on the first floor with lift access, the entrance opens onto an open plan living room with doors to the terrace, a covered dining terrace with olive tree. Fully equipped open plan kitchen with breakfast bar: oven, micro wave, dishwasher and DeLonghi capuccino and espresso machine. Separate WC. Shower with double basin, and clothes washing machine. Double bedroom with small terrace. With its proximity to the water, and with terraces at both sides the apartment stays cool even on the hottest days.

Also possible to reach St Tropez by Bateau Verts to save parking problems on market days: 20 minutes across the bay, every half an hour in the summer. The apartments in the marina are protected by 24 hour security service, and have access to tennis courts, swimming pool and beach, all at walking distance from the apartment. Restaurants, shops and supermarket are all a few minutes walk, as well as a Covid test centre.

Original paintings from local artist, Annick Mckenzie, “Les Tois de St Tropez” by Dominique dall’Agnoll ” and limited edition Louis Icart prints and Cannes Film Festival posters adorn the walls. The “Amsterdam” leather chair in the living room is the same chair design that was featured in James Bond’s London  apartment in the film “Spectre”, and comes from the same designer.

Link to more information

Blevins Franks Financial Tips - Resolve to Review Your Financial Planning for 2022

Take time to check your tax planning, investments, pensions and estate planning are all on track to protect your family’s long-term wealth. 

The New Year is a time when most of us take stock of our situation and set goals to improve our health, happiness, lifestyle and wealth. This year, make it one of your resolutions to check your financial planning is on track to meet your needs and protect your family’s long-term financial security.

Why regular reviews are important 

Regular reviews help keep your financial affairs compliant and up to date. Tax rules or financial regulations can change at any time, which may affect the tax efficiency – or even legality – of your existing arrangements. There may also be new opportunities that you could find beneficial… but only if you know about them. And with Brexit still relatively new, and more potential changes on the way, it is important to keep ahead of any developments that may affect you, for better or worse. 

You also need to consider if any changes in your personal and family circumstances mean you should adjust your arrangements. Did you welcome any new family members or are there any upcoming major life events – such as retirement, relocation or divorce – that may warrant a rethink of your plans? 

For a truly effective review, and to ensure it is suitable for your life in France, consider how your tax planning, investments, pensions and estate planning work together. 

Tax planning

You should first make sure you know where you are resident for tax purposes, especially if you are new to France or spend time in both countries. You then want to structure your investments and wealth in the most suitable way to minimise taxation – in France, the UK and wherever you have financial interests – while still meeting your obligations. 

In today’s world of ‘automatic exchange of information’, it is more important than ever to get it right. Your local tax office receives financial information about your offshore assets without having to even ask for it. 

Cross-border tax planning is complex, so take specialist advice to achieve peace of mind and potentially secure significant tax savings.

Savings and investments

If you do not already have a financial plan in place for France, you need to take a fresh look at your savings and investments. Are they actually better suited to a UK resident? Do they meet your risk/reward appetite? Are you taking advantage of suitable tax-efficient opportunities in France?

Successful investing is about having a strategy specifically based around your personal circumstances, time horizon, needs, aims and risk tolerance. You should ensure you have adequate diversification to avoid over-exposure to any given country (including the UK), asset type, sector or company. Explore investment structures that allow multi-currency flexibility to help minimise exchange rate risk.  

Pensions

For most people, their pension is key to their financial security through retirement, so deciding what to do with yours could be one of the most important financial decisions you make.  

So take the time to explore all the available options, weighing the pros and cons and considering the tax implications and potential benefits in France. 

Make sure you take regulated advice to protect your retirement benefits from pension scams and do what is right for your personal circumstances and aims. 

Estate planning  

It is vital to review your estate planning when living in France.  Here in France both succession law and tax work very differently to the UK. 

Are you aware, for example, that France’s ‘forced heirship’ rules could automatically pass a significant proportion of your worldwide estate to your direct family, whatever your intentions? You can specify in your will for the EU regulation ‘Brussels IV’ to apply relevant British law to your estate instead, but take care to understand your options and any tax implications. 

Your estate plan should be set up to achieve your wishes in the most tax-efficient way possible. 

To bring all these complex elements together and ensure you have not missed out on any suitable opportunities, take expert, cross-border advice. Spending time on a financial health-check now can secure peace of mind that you and your family are in the best position to enjoy a prosperous 2022 and beyond.    

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Savills Monaco Property Blog - The Tiny City-State of Monaco is Expanding

The tiny city-state of Monaco is expanding – at least in terms of the choice of luxury homes on offer in this prestigious principality by the Mediterranean Sea. There are now more new residential schemes being constructed here than ever before and, in a buoyant market that remained relatively stable during the pandemic, we are seeing demand from a new kind of buyer.

With eyes firmly focused on new build, these buyers want to live in a modern building that offers exclusive services. Below are five developments that will be completing over the coming years.

Mareterra
Neighbourhood: Larvotto

The most requested new development is the eagerly anticipated Mareterra land extension. This exciting project will have 110 apartments and 10 luxury villas, some of which will be front line to the sea with uninterrupted views over the Mediterranean. Environmental factors are central to the design. There will be green parkland and open spaces allowing residents and visitors to feel connected with nature. Eco-friendly features include a rainwater recovery system and photovoltaic energy panels. Find out more

Bay House Monaco
Neighbourhood: Larvotto

Bay House is a new development in the ultra-exclusive Larvotto district of Monaco, an area that saw an average price per square metre in 2020 of €65,000. This development delivers on the new wave of high expectations for modern and luxurious services. Benefits for residents include outstanding sea views, a luxurious pool and wellness centre, concierge, dry cleaning, valet and more. Find out more

L’Exotique
Neighbourhood: Jardin Exotique

L’Exotique takes its name from the district Jardin Exotique located in the heights of the west side of Monaco, and has been designed by award-winning French architect/engineer Rudy Ricciotti, famous for the MUCEM museum in Marseille. It’s designed to be consistent with the natural Mediterranean backdrop, incorporating stone and wood throughout. Jardin Exotique has some of the best views in the principality and the building will also have a wellness centre, a heated swimming pool and plenty of underground parking. Find out more

Villa Palazzino
Neighbourhood: Monte-Carlo

Villa Palazzino is a new development coming soon to the famous beating heart of Monaco - Monte-Carlo, an area famous for world class shopping, hotels, restaurants and casinos. The building, which stays true to the beautiful bourgeoisie architecture found throughout the principality, comprises 19 luxury apartments and four town houses. Residents will benefit from a 24/7 concierge and security. The two penthouses will have access to an exclusive rooftop swimming pool. Find out more

Villa Portofino
Neighbourhood: Condamine

Villa Portofino, a name that conjures up Italian glamour, elegance and excellence, will offer exactly that to potential buyers in Monaco. The development has a fantastic location in the vibrant Condamine district which runs parallel to the dynamic Port Hercules and is ideally located for Monte-Carlo and Fontvieille. Emmanuel Deverini is the architect who has been instructed to create a timeless, chic new development that will fit in seamlessly with the area’s architectural backdrop. Find out more

Blevins Franks Financial Tips - Investing Responsibly - Earning Returns While Helping the Environment and Society

The news was dominated recently by the COP26 meeting in Glasgow and the environmental issues affecting the planet and our daily lives.  It came at a time when many of us were already thinking about what changes we can make to play our part in improving the situation. The topic of ‘ESG investing’ – Environmental, Social, Governance – was highlighted over the fortnight and it is something many investors are keen to explore. 

The November COP26 (26th Conference of the Parties) was a global United Nations summit about climate change and how countries can bring it under control.  Large companies also need to play their part to reduce their impact on the environment, and this is where investors can be selective over which companies to buy shares in.

Interest in ESG investment has been growing noticeably over recent years. Investors are placing greater emphasis on the environmental and social impact of their investments, wanting to make sure the firms benefiting from their capital do not contribute to problems like climate change, inequality etc. They are increasingly seeking to manage to exposure to ESG factors, while generating sustainable long-term returns – responsible investing and performance can be complementary.  

It is estimated that around 20% of global investors have some ESG investments and almost 50% say they are interested. 

ESG investing 

This type of responsible investing prioritises financial returns alongside a company’s impact on the environment, its stakeholders and society.  Here are some simple definitions:

·      Environmental – The impact of a company’s activities on the environment: carbon footprint, greenhouse gas emissions, renewable energy usage, using a sustainable supply chain etc. Positive outcomes include managing resources and executing environmental reporting/disclosure, or avoiding/minimising environmental liabilities such as climate impact or pollution.

·      Social – A company’s impact on its employees, customers, consumers, suppliers and the local community: how employees are treated, racial diversity among staff and executives, LGBTQ+ equality, inclusion programmes etc.  Positive outcomes include increasing health, productivity, and morale, or reducing negative outcomes such as high turnover and absenteeism.

·      Governance – The way companies are run: how does the management drive positive change?  What are its business ethics?  Positive outcomes include aligning interests of shareowners and management, improving diversity and accountability, and avoiding unpleasant financial surprises, such as excessive executive remuneration.

In summary, ESG investing considers how a company serves its staff, communities, customers, stakeholders and the environment. 

These days, most public companies, as well as many private ones, are evaluated and rated on their ESG performance by various third-party providers of reports and ratings. These include Bloomberg, S&P Dow Jones Indices and MSCI.   

Institutional investors, asset managers, financial institutions and other stakeholders are increasingly relying on these reports and ratings to assess and measure companies’ ESG performance compared to peers.

ESG performance 

Investing responsibly does not mean you have to accept lower returns.  

ESG investing is building up a good track record, with noteworthy performance over the pandemic. During the market turbulence and uncertainty, many companies with strong ESG track records showed lower volatility than others  and investors turned to ESG for increased resiliency.   According to US financial services firm Morningstar, the last quarter of 2020 saw record sales of $152 billion and total assets invested worldwide reached $1.6 trillion. 

Analysis by Morningstar also found that, over a decade, 80% of equity funds investing in sustainability outperform traditional funds. ESG funds also show longevity – 77% of ESG funds that existed 10 years ago survived, compared to 46% of traditional funds.  

Investment planning 

You do not need to spend hours researching a company’s ESG track record and scores, or comparing its share price with other companies to try and work out which ones to invest in.   As with other capital investments, you can buy funds which invest in highly rated companies. This also reduces risk as it provides much more diversification.  

Apply the same investment principles with ESG investing as with all other capital investments: 

1.     Establish your objectives and time horizon.

2.     Obtain an objective analysis of your appetite for risk. 

3.     Have a mix of assets and sectors in your portfolio to reduce the risk of one area performing badly.  

4.     When considering a new investment, analyse how it fits in with the rest of your portfolio and impacts its risk weighting. 

5.     Conduct regular reviews, around once a year.  

 You can choose to use a financial advisory company that incorporates responsible investing within its advisory services. Some companies now look at ESG considerations, as well as traditional assessments, as a part of the overall investment considerations when assessing suitability of investments for clients.  

So responsible investing does not have to involve more work on your part, and you can invest as you normally would, without compromising returns or your risk weightings – but with the difference being which companies benefit from your investment capital.  You don’t need to focus all your portfolio on ESG funds – indeed, you need a good spread of assets to reduce risk – but it is one step you can take to help protect our environment and society. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised investment advice.  The value of investments can fall as well as rise, as can the income arising from them. Past performance should not be seen as an indication of future performance.

You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - UK Based Financial Advice and Services Post Brexit - Four Important Considerations

As we move towards the end of 2021,Brexit is no longer a novelty, but we are still learning exactly how we are or may be affected.  While in many ways day-to-day life hasn’t changed for British expatriates, there are some inconveniences – some minor, some not so minor. 

One Brexit consequence that is causing concern and difficulties for many UK nationals in France, is financial advice and services – we are receiving a lot of questions about it. 

The Brexit trade deal did not cover financial services, which meant the previous ‘passporting’ regime came to an end on 31 December 2020.   While post-Brexit negotiations could change things in the future, you do need to establish if your financial planning – and adviser – will stand up to the challenges that Brexit brings today. Here are four key considerations.

1.     The end of passporting

If you have a good relationship with your UK-based financial adviser, you may understandably wish to continue using them, despite now living in a different country. However, you need to make sure they can legally continue to advise you now that the UK is no longer an EU member state. 

Until the end of 2020, UK-based financial businesses could ‘passport’ out of the UK and into Europe – but since 1 January 2021, this no longer applies.  

‘Passporting’ enables cross-border transactions between EU member states through shared financial regulation. It was previously possible because the UK Financial Conduct Authority (FCA) was bound by the same rules and standards as other regulators in the EU. Now the UK has left the EU, the regulation of financial activity and consumer protection no longer lines up on both sides. So, unless a mutual deal is agreed on financial services in future, the EU no longer permits ongoing passporting arrangements for UK financial businesses and advisers.

Some UK financial firms have put arrangements in place to be able to continue working in an EU country post-Brexit, but others have not. Many expatriates with EU residential addresses have received letters from UK banks, financial advisers and investment institutions advising that they can no longer support them.   

2.     The limits of UK advice

If you still retain UK investments, a UK-based adviser may be able to continue supporting you there. But if you hold savings and investments with an EU-based institution, they may no longer accept instructions, such as top-ups, from a UK adviser. The financial regulator in France, for example, had confirmed it would be illegal for French banks and insurance firms to do business with a provider who is not authorised in the country post-Brexit. Similarly, while the Central Bank of Ireland enabled a three-year grace period for servicing existing insurance contracts, it will not allow unregulated entities to renew or create new policies from 2021.

We can expect similar positions to be taken by other EU regulators seeking to protect consumers in their country, so this could limit the planning opportunities for expatriates using UK-based advisers.

Also, check if there are any practical challenges to keeping a UK-based adviser. Do you have to travel to the UK for meetings and paperwork requirements? Consider how this would work in situations where you need funds quickly or are unable to travel through illness or travel restrictions.

3.     The advantages of local knowledge

As well as the legal and practical implications, consider whether an adviser based in a different country is best placed to help you take advantage of opportunities available to you in France. For example:

·      Do they fully understand the intricacies of the French tax regime and how it interacts with UK taxation?

·      Do they have in-depth knowledge of the French residence, domicile, tax, succession law and reporting rules?

·      Do they know about – and have access to – tax-efficient solutions that offer significant benefits to France residents?

·      Who will pay the bill or face the consequences if they get things wrong?

While UK-based advisers may be experts on the ins and outs of the UK system for residents there, it is unlikely that they have the same in-depth knowledge for another country. 

4.     The suitability of UK planning

Remember: financial planning that is tailored for a UK resident is unlikely to remain suitable once you become resident elsewhere. If you have not yet moved to France, review your arrangements before you do to minimise taxation when changing residency and make the most of tax-efficient opportunities in France.

If you are holding on to UK savings and investments, beware that they can lose their tax benefits once you are living abroad. And once they cease to be EU/EEA assets and you are no longer a UK resident, they could potentially attract a higher tax bill, in either or even both countries. 

Meanwhile, France residents have access to locally-compliant alternatives that can offer other advantages besides tax-efficiency – such as multi-currency and estate planning flexibility – so explore your options. Depending on your circumstances, many British expatriates in France have found that reviewing and adjusting how and where they hold their capital has significantly improved their tax position. 

It has never been more important to ensure your financial affairs are both compliant and suitable for your life in France. Secure financial peace of mind by talking to an experienced, locally-based adviser.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Blevins Franks Group Financial Advice - French Succession Law – New Forced Heirship Rules

In August, France approved changes to succession law  which will affect the forced heirship rules applied on French assets. It will allow children to contest a will, even if you opted for UK law to apply to your estate. This could affect the succession planning you set up over recent years.

France’s long-standing Napoleonic code was created to protect the bloodline. Children are protected heirs and must inherit 50-75% of an estate (depending on the number of children).  These rules apply to your worldwide estate if you die as a habitual resident of France, and a will, even a foreign one, will be ignored if it attempts to override these reserved heirship rights. 

Brussels IV
In 2015 there a welcome development for British expatriates who wish to avoid French succession laws.  The European succession regulations (‘Brussels IV’) allow foreign nationals to elect for the law of their country of nationality to apply to their assets on their death, rather than that of their country of residence. Provided this election is made in their will, nationals of many common law countries (such as the UK and US) can avoid forced heirship rules and potentially choose to leave children out of a will.    

France’s new succession rules for French assets 
On 13 August 2021, the French Constitutional Council approved new legislation which will affect the forced heirship rules applied on French assets.

Under the new legislation, if French assets pass according to the provisions of a country which does not impose forced heirship rules – as is the case in England and Wales – the protected heirs (biological and adopted children) can make a claim for the share they would be entitled to under the French rules. 

This means children could challenge the parent’s will and seek for compensation. This would even apply to estranged children who have had no contact with the parent for decades. The compensation mechanism, however, only applies to French assets. 

In summary, the new rules apply where:

·      the deceased individual was either habitually resident in an EU country or a national of an EU country; or

·      the children were habitually resident in an EU country or nationals of an EU country; and

·      the law applied in the will of the deceased individual does not include any forced heirship / protected share for his/her children.

 The new legislation is likely to come into force before the end of 2021 (three months after the publication of the law) and only succession after the relevant date will be affected. 

 At first glance, this new legislation seems contrary to the European succession regulations which override the domestic French legislation. Therefore, there is a strong chance it will be challenged in the European Courts. 

There are also outstanding questions on how the rules would apply. For example, when an election is made to apply the law of Scotland which has forced heirship rules but enables parents to disown children in some circumstances. 

Does this impact you?
Many British expatriates have used Brussel’s IV to avoid France’s forced heirship rules.  Now, under the new rules, if you die as a French resident and have elected, for example, to use English law, if you do not leave your biological children a share of your estate equal to what they would be entitled to under French rules, they can potentially make a claim for their protected share of your French assets.

If you wish to retain flexibility of disposition of assets at death, it is now more important to minimise the value of the assets held in France.  If the new rules are applied on a strict basis (ignoring the European regulations), it will be more difficult to pass your French assets according to your wishes.

This should be considered very carefully when drafting wills in France. French may now not be willing to include the election to use the law of a country with no forced heirship rules. 

The interaction with the Brussels IV rules is not yet clear, and it is likely to take some time to establish how the new rules are applied in practice.

Estate planning for France
Even before this development, we always recommend you should take specialist advice before using Brussels IV as electing for UK law may have consequences you are not aware of.  You also need to watch out for high succession tax rates (up to 60%) if you leave assets to distant or non-relatives.

In any case, there are steps you can take to avoid some of these problems created by France’s succession regime. If you have not yet bought French property, take personal advice before you do as matters may be sorted by simply reviewing how the property should be held. And even what some people think of as obvious answers, such as putting property in their children’s name to avoid taxes on death can have unexpected effects, including actually increasing the tax liability.

Estate planning in France is complex, with the succession law and tax regimes very different to the UK’s. But professional advice and advance planning will make things easier and give you peace of mind, and help ensure the right money goes to the right hands at the right time.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Edmond de Rothschild (Monaco) Outlook & Convictions - Are We Headed for a Paradigm Shift?

We are pleased to share with the third edition of Outlook & Convictions, a publication from our Private Banking Investment team. 

Content:

-       editorial by Lars Kalbreier, Global CIO Private Banking
-       Macro forecasts by Mathilde Lemoine, Group Chief Economist, 
-       a presentation of our “5 CE” methodology for selecting high-potential and low risk stocks 
-       our main convictions on asset classes, with a focus on China
-       our megatrends, key growth themes in 2021, including regionalisation.

READ THE PUBLICATION

The past 18 months have been truly extraordinary. The global pandemic has disrupted our lives to an extent which is unprecedented in recent history. Notions such as curfews had last been used during WWII and had all but disappeared from our vocab- ulary. Moreover, civil liberties that we had taken for granted, such as the right to assemble, were se- verely curtailed at the height of the lockdown. Dai- ly activities like going to the office, taking a plane, going on holiday or eating in a restaurant, all be- came much more difficult if not impossible.

The pandemic will most certainly cause some pro- found changes to several aspects of our lives. For instance, the way we work is likely to be different, with more flexible employment models that com- bine both a physical and virtual presence becom- ing mainstream. We might also trade more busi- ness trips for video conferences, etc.

There is another paradigm which the pandemic has affected: global supply chains. Covid has shown how fragile these supply chains can be. For dec- ades, the key trend for companies was to produce goods in low-cost countries, i.e. emerging markets. This meant that parts or finished products had to be shipped across the globe in order to reach their customers. Ever since the pace of the vaccination campaigns accelerated in developed markets with life returning to normal, many manufacturers have faced supply shortages that have exposed the fra- gility of global production chains. Voices speaking out in favour of more localised and regional supply chains so that production can take place closer to the end-consumer are getting louder. In addition, increased scrutiny of the carbon footprint of the goods produced no longer only includes the CO2 emissions from their production, but also their transport. Shipping cheap goods halfway across the globe will no longer be socially acceptable.

In the meantime, significant progress has been made in the manufacturing industry with the help

of new automation processes, robotics and 3D printing, thus significantly reducing the costs of production in locations with higher labour costs. We are convinced this trend will intensify as com- panies and governments are pursuing greater re- gionalisation with increased control over their sup- ply chains. This will provide a boost for investments in manufacturing technologies and the creation of regional champions (page 14).

From a more macro-economic standpoint, govern- ments and central banks have provided extraordi- nary support to the economy and financial markets during the pandemic. This took the form of large government stimulus programmes as well as very accommodative monetary policies as central banks provided abundant liquidity and maintained record low interest rates.

Now that many economies are on the road to re- covery, governments and central banks will need to bring their stimulus measures to an end. This should lead to more volatile financial market condi- tions and slower growth as economies start to nor- malise after experiencing a strong post-pandemic rebound. Investors will need to be more discerning to find sources of yield. Our Megatrends aim to identify these investment opportunities in secular growth themes (page 20).

In this context, selecting equities that provide a good balance between risk and return has become even more crucial for portfolios. Our “5 CE” invest- ment methodology based on the “5 Criteria of Ex- cellence” allows for such a selection. See the main components and the process of this methodology on page 8.

I hope you enjoy reading this edition of Outlook & Convictions.

Lars Kalbreier, CFA

Blevins Franks Financial Advice - Tax Efficient Investing in France - the Benefits of Assurance-Vie

When you look at the headline rates of tax in France, you can understand why many people consider France to be an expensive country to live in, tax-wise.  What they often do not realise, however, is that they may be able to take advantage of compliant opportunities to protect their assets from various French taxes – so much so they may even end up paying less tax in France than in countries like the UK.  With the right structures in place, you could significantly lower your tax bill.  

What was tax efficient in the UK is generally not tax efficient in France.  For example, ISAs and Premium Bonds are taxable in France. 

One very useful arrangement for lowering French tax on your investment income is the assurance-vie.  This specialised form of life assurance allows you to hold a wide range of investment assets and is highly tax efficient for residents of France, especially if you hold your policy for over eight years.  

Both French nationals and expatriates find assurance-vie to be very valuable for providing tax-efficient income (particularly useful in retirement) while also protecting their wealth for their loved ones. 

French tax benefits of assurance-vie

1.     Income and gains can roll up tax-free within the policy

2.     Withdrawals are taxed very favourably

3.     Substantial allowance from year 9

4.     Succession tax savings for your heirs 

5.     Wide range of investment options 

6.     Consolidation of investments in one policy

7.     Estate planning benefits

1) Income and gains

 If you do not take any withdrawals, there is no income or capital gains tax to pay, regardless of how much the capital has grown or how much interest has been earned within the policy. 
 

2) How withdrawals are taxed

When you take withdrawals, they are taxed very favourably.  Only the growth element is taxed, rather than the whole withdrawal.  For example, if the whole portfolio of assets within your assurance-vie has grown by 7%, and you are taking a withdrawal of €25,000, you only pay tax on €1,750 and €23,250 is tax free!   

For new policies set up after 27 September 2017, the tax rate on withdrawals is 30% (the standard tax rate on investment income).  This includes both 12.8% income tax and 17.2% social charges.  The income tax rate is lowered to 7.5% for income from contracts which are more than eight years old and relate to contributions not exceeding €150,000. You can also elect to pay the scale rates of income tax instead, which can work out cheaper even with social charges.  

Note that the 30% fixed rate only applies if your policy is approved for French tax purposes. If you have a non-EU assurance-vie you will pay the scale rates of income tax plus 17.2% social charges, regardless of your premium.  Policies from companies in the Isle of Man, Channel Islands – and now also the UK – are therefore at a disadvantage. 

3) Annual €4,600 tax-free allowance

Once you have owned your policy for over eight years, your first €4,600 –  €9,200 for a married couple – of growth withdrawn every year can be tax-free. This doesn’t apply to social charges but is still a very favourable tax break.  

4) Reducing succession tax

An assurance-vie could also help lower your succession tax liability.  

In particular, considerable tax savings can be made if the policy was established with lives assured under age 70.  Each individual beneficiary will receive a €152,500 exemption, after which they pay a flat tax rate of 20% (when the taxable part of the assurance-vie is under €700,000) and 31.25% on any excess over €700,000. 

If you are over 70 when you set up your policy, your heirs are still better off with your assurance-vie as, although they pay the usual succession tax rates, they receive a €30,500 allowance. 

5-7) Other assurance-vie benefits

 Depending on your policy, you can usually hold a wide range of investment options within your assurance-vie, with flexible currency options. 

You can bring many different investments together under one roof making it easier to manage, and combine your tax and investment planning in one exercise.  

Purchases and sales within the policy are normally transacted at little or no cost, so you can change your investments as your circumstances change without incurring extra costs.  

Investments within an assurance-vie can also be easier to distribute to your nominated heirs on your death, making their life easier. 

It is important to note that there are different types of assurance-vie policies available, and you need to make sure you choose the one that will provide the advantages you are looking for.  Tax rules and rates in France also change frequently so your adviser needs to be up-to-date on the latest regulations in France and what actually works for British expatriates living here.  

Finally, your tax and investment planning should be based around your situation, objectives and estate plans, so it is essential to take personalised advice.

The tax rates, scope and reliefs may change.  Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change.  Tax information has been summarised; an individual must seek personalised advice.  

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - Key Elements for Successful Investing – Creating and Protecting Wealth

What do you need to think about when it comes to creating and protecting your wealth as a French resident?

Drawing the analogy between investment planning and gardening may bring a clearer understanding of the important factors to consider, particularly when you have moved from the UK to France – not everything you have previously planted is the best for current circumstances.  

Investment through the various stages of your life has seasons, as does gardening.   What you successfully planted and grew in the UK may be entirely wrong for France. You have to consider your new, often very different conditions if you are to get your plants to flourish and achieve the results you are looking for.  You then need to carry out regular ‘weeding’ to ensure the long-term growth of the plants you wish to develop and sustain for the future.  

This is all a careful process and often involves professional guidance. A locally based adviser who understands and has years of experience dealing with the local conditions will give you the best results. 

In our view, these are the key aspects that you need to address to ensure you obtain the optimum investment portfolio to suit your particular situation:

Tax and succession considerations - choosing the right tax-efficient structure

A tax-efficient structure, such as an ISA or pension plan in the UK, can keep most of your investments in one place and help you legitimately avoid paying too much tax. You want to ensure as much of your hard-earned wealth as possible is placed in the most suitable structure to limit your tax liabilities. At the same time, consider your estate planning wishes so your investment capital can be passed to your chosen heirs as easily and tax efficiently as possible. 

That was perhaps easier to achieve in the UK where we are accustomed to the rules, but here in France with its complex tax and succession regimes and various reforms over the years, it is sensible to take advice from someone who is well-versed in the nuances of the French systems and how they impact your wealth. 

In France, UK ISA accounts are not tax-efficient and the income and gains generated are fully taxable here as investment income – you will currently pay 30% which covers both income tax and social charges. 

There are, however, compliant arrangements available in France, for example, assurance vie, that provide significant tax advantages as well as estate planning benefits.  There are various assurance vie available though, so you need to choose the most suitable for your circumstances and objectives. 

Establishing your risk profile and optimum portfolio

Most of us recognise that for some of our assets, exposure to market movements gives us a better chance of outperforming inflation and producing real returns over the medium to long term. 

However, the starting point has to be to obtain a clear and objective assessment of your appetite for risk. These days there are some very sophisticated ways of evaluating your risk appetite, involving a combination of psychometric assessments and consideration of your investment aims and other assets.  Since this is an emotional issue, you will benefit from third party professional, objective guidance here.

The key is then ensuring your investment portfolio matches your attitude to risk.  Without such a sound assessment being then matched to the optimum blend of investments, you could find yourself with a portfolio that is too risky or too cautious for you.

Another important initial step in ensuring your portfolio is suitable for you is to establish your objectives. Are you looking for income, growth or a combination of the two? What is your investment time horizon?  Your adviser should help you build a portfolio based on both your risk profile and objectives.

Diversify, diversify, diversify

The higher your concentration in one particular investment type or area, the greater the risk. By spreading across different asset types (such as equities, bonds, property, cash) and then across sectors, geographical regions and companies, you give your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing.

You can take diversification further by utilising a 'multi-manager' approach to spread your investments out among several carefully-selected fund managers. This reduces your reliance on any one manager making the right decisions in all market conditions.

Regular reviews 

You should then review your portfolio, usually once a year.  As asset values rise and fall, your portfolio can shift away from the one designed to match your risk profile and objectives.  You may need to make adjustments to re-establish your weightings. With today’s challenging and changing climate, reviews are even more important to help control risk and encourage a positive effect on portfolio performance. 

You also need to consider any changes in your personal circumstances, as well as to tax and succession regulations – particularly in France where the annual budgets can introduce significant tax reforms.

Your investment adviser

Choosing your adviser is another key element of successful wealth management. If you are still using a UK-based adviser there are two issues to consider.

Are your financial arrangements tailored for your life in France or are they actually better suited to a UK resident? 

Brexit dissolved automatic ‘passporting’ rights for UK financial services in the EU, so unless they have made other arrangements, UK advisers, banks and financial providers may no longer able to legally service French residents. If you have UK bank accounts or investments, you may be restricted from making changes, such as moving funds or applying for new services, or they may be closed altogether. 

To bring all these guidelines together, take personalised, quality advice from a regulated, locally-based adviser. With the right strategy in place for your life in France, you can help protect and grow your wealth in real terms – not only during your lifetime but for the next generations to enjoy.

This article should not be construed as providing any personalised investment or taxation advice. Summarised tax information is based upon our understanding of current laws and practices which may change. Individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Edmond de Rothschild Investment Convictions July 2021 - Reflection On The Year So Far – From Gloom To Boom!

“As we are entering the second half of the year, it is time to pause and reflect on the year so far. Since January, we witnessed a slow but accelerating roll-out of vaccines. As more people were vaccinated and economies re-opened we saw an acceleration of global economic growth. This in turn provided a boost to company earnings and lifted equity markets and other risky assets.”

The second half of the year is likely to be more challenging. Indeed, positive news about the reopening of the economies are now largely priced in and analysts have already revised up company earnings. Moreover central banks will start thinking about reducing their supportive policies now that the economies are re- covering from the pandemic. Read more at the link..

INVESTMENT CONVICTIONS July 2021 (pdf download)

Investment Tips with Corporate Partner Blevins Frank - Why Chasing Star Performers Won’t Guarantee Investment Success

While it may be tempting to choose investments based on past performance, this tactic rarely works in the long term. So how can you put your best foot forward as an investor?

Reading about investing, you will usually find the disclaimer ‘past performance is no indicator of future performance’. While this may seem like a standard get-out clause inserted by lawyers, it serves as an important reminder that nothing is certain in the world of investment.

There is a reason we aren’t all making millions on the stock markets! Financial markets are complicated and unpredictable, with no formula you can follow to ensure you will strike big, or even get out more than you put in. It is important for private investors to carefully manage risk, as investment success often comes down to the sheer luck of being in the right place at the right time.

Given this element of chance, it is important not to get swayed by the latest trend and chase good performance. History repeatedly shows that the best performer one year could be amongst the worst the following year. 

Asset class performance

There have been many examples of ‘star’ assets that have soared before dramatically crashing back to earth. The dot.com bubble famously saw US technology stocks in the Nasdaq Index rise five-fold in the late 1990s before falling 77% in 2002, wiping out billions of dollars. Just recently we have witnessed the less dramatic, but nonetheless volatile, fortunes of bitcoin and other cryptocurrencies change rapidly. 

Essentially, there is little long-term benefit in only picking the latest top-performing asset. If you look at which asset type generated the most returns during a year, you would likely see a different star each month. Take 2019 – the year started with North American equities leading the way, only to move over for UK stocks the next month, then European shares before property took the spotlight. May saw Japanese equities ahead, followed by emerging markets, then Asia-Pacific stocks. UK bonds in varying forms took over for the next four months, before the year ended with cash in the lead. 

Over the ten-year period from 2010, no two years followed the same pattern, and one asset class rarely spent more than one month at the top. Without a crystal ball or a time machine, you could not have picked the right winners every time.    

Fund manager performance 

The same is true of ‘star’ fund managers. With hundreds of funds available from different managers, it can be difficult to know where to turn. While many of them seem to offer similar investment opportunities, the difference in performance can be significant… but often temporary.

Let’s say you had invested £10,000 in a UK-listed shares fund over the ten-year period starting 1 January 2010. If you happened to be in the best performing fund over that period, you would have made a net profit of 440%. Meanwhile, investing in the lowest performing fund would have brought a much reduced profit of 49%. Similarly, the best-performing property fund over that period would have returned profits of 227% versus 72% from the lowest.

On the face of it, it looks like you should just pick the best performing fund. But again, choosing a previously successful fund manager is no way to guarantee ongoing top performance. Statistics illustrate how the performance of the top 25% of fund managers tends to weaken over time. Of the 56 managers in the top quarter of performers in 2015, for instance, only four remained the next year. 

A sensible investment approach

So how can you improve your chances of investment success? There are some key principles you can follow to help manage risk and reach your financial goals.

Diversification is crucial. Spreading your investments across multiple areas is the optimal strategy for minimising risk. This should include a range of different asset classes (shares, bonds, cash, property) as well as geographical regions and market sectors. Diversifying in this way gives your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing. You can diversify further using a dynamic ‘multi-manager’ approach, which reduces reliance on any one manager making the right decisions in all market conditions.

It is also important to think long term and have patience when investing. As we have seen, chasing good, quick returns rarely succeeds in the long run. Likewise, exiting a market when it dips would lock in your losses and make you miss any rebounds when markets recover. Research shows that ‘time in’ the market – staying fully invested – is a more successful strategy for investors than trying to ‘time’ the market.

Ultimately, of course, you need to make sure your portfolio is matched to your personal situation, income requirements, goals and timeline, alongside your appetite for risk. This is best assessed objectively by an experienced professional who can then build a diversified portfolio with the right balance of risk/return for your peace of mind. 

For the best results, talk to a locally based adviser with cross-border experience who can bring all the principles together while ensuring your arrangements are structured as tax-efficiently as possible for your life in France. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice. 

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

Our New Platinum Partner Edmond de Rothschild (Monaco) is a Conviction-Driven Investment House Founded on the Belief that Wealth Should be Harnessed to Build the World of Tomorrow

EDMOND DE ROTHSCHILD (MONACO)

We welcome Edmond de Rothschild (Monaco) - a conviction-driven investment house founded on the belief that wealth should be harnessed to build the world of tomorrow.

“As a family-owned Group, our independence enables us to take the long view, to invest alongside our clients and to create brand new financial solutions.

This approach has helped us become a key international player in private banking and asset management as well as corporate finance, real estate and private equity.

Our conviction-driven investment house is also one of the pillars of a wider ecosystem of entrepreneurial, philanthropic and sporting activities that make our mission to be bold builders of the future an authentic one.

Our Group is growing and will continue to grow while preserving the values of our family, which has always staked its name on the service we provide to each and every client.”

Ariane and Benjamin de Rothschild

View the 2021 Group Brochure

EDMOND DE ROTHSCHILD (MONACO)
Les Terrasses
2 avenue de Monte Carlo
BP 317
98006 Monaco Cedex
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