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QUARTER IV // 2014

The rise of an evil empire: ISIS Is the latest Ebola outbreak a call to action? What we stand to gain and lose from fracking

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22 Was Orwell right? How Nineteen Eighty-Four has become a reality

24 Is the EU on a path to destruction?

28 Protecting assets against a financial liability that occurs on death

32 The world’s fastest growing economies

34 What we stand to gain and lose from fracking

36 Macro-economic outlook

38 State Pensions: A Disappearing Act

40 deVere Autocallable Income Note Maturities

42 Our offices

INVESTOR INSIGHT // QUARTER IV // 2014 3

CONTENTS

PLEASE READ THIS DISCLAIMER CAREFULLY BEFORE YOU PROCEED

The information contained herein is proprietary to the deVere Group and/or its contents providers. This magazine is not to be disclosed to the public for consumer advertisement. The information or any part thereof, may not be copied, produced or re-distributed without the express permission of a Director of the deVere Group. The content has been collated from what we believe to be reliable sources at the date of publication. However, we do not guarantee the reliability or completeness of any information provided. The contents of this publication are not intended to, nor do they, provide any financial, investment, or professional advice and nothing on the pages of this magazine shall be regarded as an offer or provision of financial, investment or other professional advice in any way. The deVere Group, its directors, officers, managers, employees, agents, affiliates and/or subsidiaries accept no liability or responsibility for any errors, omissions, inaccuracies (including those caused by a third party) loss or risk, personal or otherwise which is incurred as a consequence directly or indirectly of the use of any information contained herein in this publication. The magazine may include facts, views, opinions and recommendations of individuals and organizations deemed of interest. deVere does not guarantee the accuracy, completeness, or otherwise endorse, these views, opinions or recommendations. Readers are responsible for their own investment decisions and we would advise that they speak to their professional advisers prior to making these decisions.

For a full list of the regulatory status of the deVere Group companies, please go to https://www.devere-group.com/footer/licensed_jurisdictions.aspx This material is for information purposes only and does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. Always seek independent financial advice before investing in any product. The information provided and contained in this brochure are believed to be reliable, but are subject to change without notice and deVere makes no representation as to the completeness or accuracy of the information or of any opinions expressed.

INVESTOR INSIGHT // QUARTER IV // 2014

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4 Note from the CEO

5 deVere News

6 Is the latest Ebola outbreak a call to action to pharmaceutical companies around the world?

10 Caliphates, secessions and central bank policy errors: protecting your savings from black swan events

14 Doctors, Nurses, Teachers, Soldiers: Time is running out

16 A new driver on the London market

18 Ask Nigel

20 The rise of an evil empire: how ISIS is building its financial fortune


FROM THE TOP

Here we are at the final and most exciting quarter of the year. Despite the world’s markets being turbulent as we go into the last quarter, we are still optimistic as a company that they will continue to slowly pick up. It is during these challenging times that the importance of having skilled and dedicated fund managers looking after your portfolio truly emerges. Here at deVere Group, we believe that we can provide you with the access you need (often exclusively) to some of the best fund managers in the world. In this edition of Investor Insight, deVere Group’s International Investment Strategist, Tom Elliott, takes a look at how geopolitical tensions affect investments. Reece Fallaize, deVere Group’s Global Technical Manager, analyses how recent UK pension changes affect public sector pensions and Goldman Sachs provides us with a macroeconomic outlook for the final quarter of 2014. I wish you a fantastic end to 2014.

Note from the CEO

Nigel GreenChief Executive OfficerdeVere Group


NEWS

deVere NewsdeVere clients to receive up to 74% as maturity generates highest ever returns

Clients who invested in the Morgan Stanley 5 year Autocallable Note on 3 Indices, enjoyed our highest ever returns, gaining 74% plus their initial capital back. We strive to seek out the very best investment opportunities for our clients. Structured notes are highly sought after due to their capital protection features and bank beating returns.

deVere USA opens San Francisco Office

We are delighted to announce the opening of our new San Francisco office. Our US operation has gone from strength to strength over the last few years, proving that people, especially in the US, need trusted, independent financial advice. Our new San Francisco office currently has a team of 5, but we expect to increase that number to 15 within the next six months.

deVere United Kingdom move office

It has been an exciting year for deVere United Kingdom. As deVere United Kingdom continues to grow, our London team has moved to a significantly larger office in the heart of the world’s financial capital – the City of London.Located on the 3rd Floor of Peek House, 20 Eastcheap, deVere United Kingdom will continue to serve our growing number of clients in London and the surrounding areas. Peek House, just two minutes from Monument tube and three minutes from Bank, is a prestigious period building providing an improved working environment for our financial advisers.

Public sector workers’ retirement planning options limited by pension reforms

According to deVere United Kingdom, Britain’s civil servants and military personnel should expect to see their retirement planning options restricted from next April. The idea was first mooted in Chancellor George Osborne’s Budget in March and has undergone a consultation period that ended on 11th June. The ban, says deVere, is likely to become law in April next year. Kevin White, deVere United Kingdom’s Head of Financial Planning, comments: “Unlike those in the private sector, NHS nurses and doctors, paramedics, teachers, fire fighters, police officers and members of our Armed Forces, amongst others, are likely to be denied the right to transfer their pensions out of the UK from next Spring. Therefore, those who wish to and who qualify to do so would not be able to take advantage of the associated benefits of a pension transfer.

deVere CEO slams plans to charge death taxes on the living

“Shocking and outrageous,” is how Nigel Green, founder and Chief Executive officer of deVere Group describes plans being considered by the government for people to pay inheritance tax (IHT) whilst they are still alive. Proposals have been put out for consultation which would allow HM Revenue & Customs to impose “accelerated payment” laws on individuals who are believed to be minimising their IHT liabilities through tax avoidance schemes.

Is the latest Ebola outbreak a call to action to pharmaceutical companies around the world?

It was in 1976 when the first ever Ebola outbreak hit. In the last 38 years, there have been 26 Ebola outbreaks in Africa. Four decades have come and gone but there is yet no cure. The latest outbreak has seen the disease spread to Europe. With borders no longer acting as the effective health barriers they once were, panic is on the rise. While the human cost of Ebola is growing to unprecedented heights, concerns are also being raised over the wider economic threat of this fatal epidemic.


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The 2014 Ebola outbreak can be traced back to December 2013. Researchers from the New England Journal of Medicine believe that the first human case of the Ebola virus disease leading to the 2014 outbreak was that of a 2-year-old boy who died on December 6th in the village of Meliandou, Guéckédou Prefecture, Guinea. His death was then followed by that of his mother, sister and grandmother, all of whom reportedly showed symptoms consistent with the Ebola virus. People infected by those victims spread the disease to other villages.

It was in March of 2014 that the Health Ministry in Guinea made the world aware that it was dealing with an outbreak of an undetermined viral hemorrhagic fever that had killed 23. Later that month, the World Health Organisation (WHO) confirmed the disease was Ebola and that there were also suspected cases in Liberia and Sierra Leone.

Shock waves spread around the world.

Ebola has managed to tap into the far recesses of human imagination where pure undiluted horror resides. The very real process of disintegration that victims of Ebola must suffer through is worse than any fictionalised nightmare. Ebola takes away the idea of a “good death” and replaces it instead with blood, bile and pain ravaging a body until it no longer even resembles one. There is no farewell. Goodbyes are replaced

by rushed disposals. That is the reality being faced.

Up until August of 2014, Ebola killed over 1,300 people and that figure continues to grow. Among them were healthcare professionals who were leading the front lines in the fight against the spread of the disease. The WHO has described this latest outbreak as being among its “most challenging” ever, adding that; “This is no longer a country-specific outbreak but a sub-regional crisis that requires firm action by governments and partners.”

Noble as this call to action from the WHO might be, it has also brought to light the grim reality of the war-ravaged healthcare systems present in the countries being effected the most by Ebola. Pervasive poverty and a decade of interlocking civil wars have reduced them to tatters.

Ironically, prior to the outbreak, the governments of Liberia and Sierra Leone were in the process of bolstering public spending to healthcare, allocating 15.5% and 15.1% of GDP respectively, the highest in Sub-Saharan Africa in 2012, WHO statistics show. However, the state of affairs still cannot be described as anything other than desperately fragile. Liberia has one doctor for every 70,000 people, while Sierra Leone has one for every 45,000. To put this into perspective, the UK has one for every 360 people.

This sharp rise in the allocation

With money being the ultimate goal, investing in a cure for a disease effecting a few thousands of people is not the way to achieve it.

Ebola was “not only a question of response ... it goes back to the issue of strengthening our health systems. Prevention is always better than cure.”

Mustapha Sidiki Kaloko African Union’s Commissioner for Social Affairs

An overview of Ebola

The origins of the Ebola Virus Disease remains unknown. However, the World Health Organisation (WHO) believes it started with people

who contracted it through close contact with infected animals, like bats. The disease spreads through contact with bodily fluids, such as blood or other secretions. The incubation period can be anywhere between two days and three weeks after contracting the virus. The eventual symptoms include fever, muscle pain and headaches, followed by vomiting, diarrhoea, rash and, in some cases, internal and external bleeding, according to the WHO. So far, there have been no recorded incidents in which the virus spread through the air in the natural environment.

Derek Gatherer, a bioinformatics researcher at Lancaster University in the United Kingdom who studies virus genetics and evolution, said that the Ebola virus makes its way through the system by attacking immune cells. This can cause the immune system to release a “storm” of inflammatory molecules, causing tiny blood vessels to burst. This blood-vessel damage, in turn, can cause blood pressure to drop, and ultimately leads to multiple-organ failure.

Methods of prevention include being wary of animals that are known to carry the disease, checking them for infection and disposing of them appropriately if the disease is discovered. Additionally, people should also consider wearing protective clothing when handling meat and cooking it properly. Protective clothing and gloves should also be worn should there be any risk of contact with infected people. The fatality rate of Ebola is of up to 90%.

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of funds to tackle Ebola, and the dire need for more, has resulted in significant pressure on already struggling regions. It doesn’t take a stretch of the imagination to come to the conclusion Moody’s credit ratings agency recently published. The report warns Ebola “could have significant economic” ramifications for a number of West African countries.But the effects are already obvious.

An assessment from the World Bank and International Monetary Fund in June predicted that GDP growth in Guinea, will fall from 4.5% to 3.5% by year’s end as a result of the epidemic. In Liberia, while economic growth was predicted at 5.9% this year, in August, Finance Minister Amara Konneh confirmed that this was no longer a realistic target due to a major slowdown in the

transport and services sectors as well as the departure of foreign workers because of Ebola. Additionally, the government had also said that Ebola-related expenses in the second quarter touched $12 million. In Sierra Leone, Agriculture Minister Joseph Sam Sesay already stated that the economy had suffered 30% deflation because of the disease.

Finding an answer to the problem is crucial at this point in time. The burning question is: if Ebola has been around as long as it has, then why, with all of the health industry’s advances, isn’t there already a vaccine ready to be disseminated?

Answers to that question vary. In an interview with Fox News, Derek Gatherer, a bioinformatics researcher at Lancaster University, pointed to the fact that the Ebola virus evolves fast. So even if a vaccine was developed this time round, this does not mean that we would be protected against the next outbreak, he says. The high level of danger the disease comes with also means that there are only “a handful of places in the world where you can actually do Ebola experimentation,” Gatherer said. “In addition, relatively few people have ever been infected with Ebola, and even fewer have survived, thus making it hard to study the virus in

people or examine whether there are certain biological factors that help people survive,” he concluded.

But while Ebola may be an unlikely way to die, the threat is still very much alive. According to predictions by the WHO, this epidemic could grow to effect as many as 20,000 people worldwide.

Despite the looming threat, however, very few are running to develop a cure.

Big pharmaceutical companies want to make money. Despite the figure of 20,000 sounding like a lot, the reality is that it is not. Not by a landslide. Especially when considering that killers like AIDS and cancer effect tens of millions every single year.

With money being the ultimate goal, investing in a cure for a disease effecting a few thousands of people is not the way to achieve it. This is cemented by the fact that those people affected most don’t have a lot of money to spend. Speaking to the Huffington Post, Thomas Geisbert, a professor at the University of Texas medical branch at Galveston whose lab is researching possible treatments for Ebola, noted that the number of Ebola patients at the moment is eclipsed by the number of people suffering from other diseases like malaria and cancer. “Who are they going to sell it to?” he said of an Ebola treatment.

That is why smaller biotech companies are the ones more likely to be rushing to find a cure or vaccine for Ebola. Succeeding would mean


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attaining not only government funding, but also a giant wave of positive PR and the chance to make an impact on the world, Geisbert said.

One experimental drug treatment has been used so far during this outbreak and that is ZMapp. The drug was reportedly given to the American patients with successful results even though it had so far only been tested on animals. It also didn’t have approval from the Food & Drug Administration for broad use, Bloomberg reported at the time. ZMapp was the result of a collaboration of small biotech firms, the US Army and Canadian public health research.

A tiny San Diego company called Mapp Biopharmaceutical came up with the chemical structure for the treatment. And Kentucky BioProcessing, which was acquired by tobacco giant Reynolds American earlier this year, produced the drug using tobacco plants.

CCNMoney reports that there are a few more companies working on a cure thanks to government funding. The involvement of the US government comes, however, more with national defense in mind than anything else, said Jason Kolbert, the head of health care equity research at the Maxim Group, an investment banking firm, speaking to the Huffington Post. Offering a helping hand in the treatment will ensure that the US has a cure stockpile and that the disease cannot be used against it in a bioterrorist attack, he said.

The eventual impact of the decision by big companies to sit back and let Ebola run its course at this stage in time remains to be seen. But when it comes to learning lessons the hard way, Ebola has the potential to provide a cautionary tale like no other.

Nigeria has now declared a state of emergency. It being the biggest oil producer on the continent and the twelfth-largest producer in the world, international companies like Exxon, Chevron, Shell, ENI and Total are currently operating there. A threat to the region could see these companies having to make some very tough decisions which would ultimately impact the rest of the world’s economies significantly. Shell has already sold off a cut of its oil field in the Niger Delta, while France’s Total and Italy’s Eni followed suit.

Matt Robinson, senior credit officer at Moody’s in London, who wrote the aforementioned report, warned, “If a significant outbreak emerges in the Nigerian capital of Lagos,

the consequences for the West African oil and gas industry would be considerable. Any material decline in production would quickly translate into economic and fiscal deterioration.”

African Union’s Commissioner for Social Affairs Mustapha Sidiki Kaloko said that this experience with Ebola can serve as a very stark and obvious lesson when it comes to priorities; Ebola was “not only a question of response ... it goes back to the issue of strengthening our health systems. Prevention is always better than cure.”

Further reading:

Adugbo, D. (2014). Nigeria: Ebola, Flights Cancellations and Economic Consequences. allAfrica.com.Berman, J. (2014). Why Big Pharma Probably Won’t Cure Ebola. The Huffington Post.Chandran, K. and Dye, J. (2014). Why is there no cure for Ebola?. KevinMD.com.Hamilton, R. (2014). The economic impact of Ebola. BBC News.McGrath, M. (2012). Little chance for ebola vaccine. BBC News.Rettner, R. (2014). Ebola virus: Why isn’t there a cure?. Fox News.Skwarecki, B. (2014). Why there’s no Ebola treatment or vaccine yet, in one chart - Public Health. Public Health.Sokol, D. (2014). Ethics: Resolving the Ebola dilemma. BBC News.Who.int, (2014). Ebola virus disease.


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Caliphates, secessions and central bank policy errors: protecting your savings from black swan events

Tom ElliottInternational Investment Strategist at the deVere Group

Investors began 2014 with plenty of challenges, principally of an economic policy nature. How and when will the US Federal Reserve end its ultra-loose monetary policy? Is the Eurozone crisis over? Or is it lurking in the shadows waiting for another invitation to haunt us? Will Abenomics revitalise the Japanese economy? Crucially, what will the impact of these be on global financial markets, and on our savings?

But a new collection of additional risks have evolved since January.

Geopolitical questions have taken centre stage. Some have been peaceful, such as the near-win by the Scottish National Party in September’s independence referendum. But clashes have occurred between China and its maritime neighbours as it tries to extend its sea borders. An all-out war has blown up in eastern Ukraine, and the civil wars in Syria and Iraq have become entwined thanks to the sudden emergence of ISIS and its call for a regional caliphate. Some say globalisation is under threat as multi-

Unexpected events with extreme consequences have been dubbed ‘black swans’ by the statistician Nassim Taleb.

Taleb’s work suggests that investors can protect themselves from financial black swan events - good and bad ones - by putting perhaps 90% of their savings into the safest possible government bonds, and the remaining 10%

into a large number of high-risk ventures. These may be options or direct investments, betting both for and against an asset class. The key is to bet against the prevailing complacency.

In this article, I look at how a private investor might use such an approach to defend against a growing number of economic policy and geopolitical risks.


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lateral trade agreements are criticised or flouted by populist politicians.

So far, the response of financial markets has generally been quite calm. In fact, the VIX index of implied volatility on the S&P 500 is currently at 14, much closer its historic lows than to its historic highs. However, investors must question this complacency and start to think unthinkable things in order to minimise the damage to their wealth if and when a black swan event takes place.

Two examples will help to shake us. First consider the 20% fall year-to-date of the Russian MSCI index in dollar terms. This is almost entirely due to the Ukrainian crisis that was unforeseeable a year ago. Then consider the sharp fall in sterling in the run-up to the recent Scottish independence referendum.

These events had relatively little impact on global financial markets. But more extreme events may well emerge from the current long list of possible risks.

What is a black swan event? Extreme risk events have become known as black swan events. The US-based mathematician Nassim Taleb popularised the term in a book of that name, published in 2007. While he may appear to be stating the obvious in declaring that unexpected shocks cannot be anticipated, and that they happen more frequently

than we might realise, he does offer a way of clarifying our thinking on how best to manage risk.

The term “black swan” was originally used to describe something that could not exist, since all the swans ever seen until then had been white. But the term acquired a radically different meaning from 1697 onwards, when black swans were discovered in Australia by Dutch sailors. The term came to express the idea that no theory, no matter how apparently watertight, is beyond the possibility of being proven wrong. It is a warning against intellectual complacency, with lessons for investors.

Taleb points to three elements that together make a black swan event;

First, it must be extreme and lie well beyond the expectations of the observer. Second, the impact of the event has to be considerable. Third, we absorb the event into our knowledge system and explain it as something that we should have seen coming, if only we had been looking in the right place and/or at the right data.

Examples of black swan events include geopolitical events such as the break-up of the Soviet Union, technological innovation such as the internet (not all black swan events are bad!), and financial events like the collapse of the LTCM hedge fund in 1998.

What can Taleb teach us?Taleb tells us that his response to black swans, when he was a professional investor, was to reserve a small part of his overall portfolio – perhaps 10% – investing in a large number of different options that paid out when unexpected events happened. He would buy them cheaply, when the market was complacent.

Most expired and became worthless, meaning that a small sum was lost on each. But if just one black swan event did unfold, his gains would be enormous. The remainder of his portfolio he left in the safest possible asset, core government bonds.

For instance, prior to the credit crunch, complacency in capital markets was rife. In the summer of 2007, it was reported that the top long / short hedge funds had, on average, a 60% correlation with a leading global stock market index.

Such a high correlation implies a close relationship in performance between the two, and it means that the hedge fund managers were running (almost) long-only funds. They had abandoned the tool supposedly used to protect them against volatility, which would help deliver more stable long term returns. They paid the price when Lehman Brothers collapsed, triggering the credit crunch.

A shrewd investor, one of the Nassim


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Taleb-school, may have read the report about the 60% correlation and ensured their portfolio, while remaining very defensive through the 90% allocation to bonds, could reap outsized gains through a judicious 10% investments in a variety of high-risk bets that would pay out if the prevailing consensus was wrong.

How can the private investor benefit?A private investor is unlikely to want to trade options no matter how keenly they are priced. It is not just the level of financial knowledge that is required which puts us off. Buying exposure to events that the market does not believe will happen is a tough mental discipline that few of us can apply rigorously, or afford to apply if we go through a prolonged period of no black swans and low market volatility.

However, we can still invest in a manner that avoids complacency and so avoid the worst should caliphates, successions and central bank policy errors cause havoc on the financial markets.

The answer, for an investor, is in two parts. First, ensure that perhaps 90% of the portfolio is positioned in a manner designed to minimise risk while also maximising returns.

Nassim would probably squirm if he saw such heresy, but by excluding the private investor from the possibility of large returns from options in the event of a market downturn, we have to look to compensate through gaining returns through exposure to equities.

Besides, although the past is no guide to the future, the current high prices on government bonds surely amplifies the desirability of a bias towards equities over bonds.

Using historic data, this would suggest an equal global bond and global equity split with regular rebalancing. This can be achieved through using the broadest possible long-only funds, perhaps benchmarked against the Barclays

Multiverse bond index and the MSCI IMI World equity index.

The second element is the replacement of the options and short positions, so that 10% of the portfolio is betting against market complacency.

Gold, property, specialised style funds, concentrated individual stock and bond positions, and cash in particular currency denominations, all come into play.

For instance, if the EU or China turned their back on free trade, and analysts everywhere were predicting the end of globalisation, we might go against the consensus by buying shipping stocks and logistics companies.

In such a scenario of nationalistic trade policies, we could expect local ‘national champions’ that were previously wilting under the competition of imports, to suddenly do well in their home market and their shares to stage a strong rally.

So buy multinationals.

Separately, money supply data and bank credit growth suggest there is little cause to worry about inflation.

So buy gold, as a hedge against inflation.

You may try to play geopolitical risk through buying travel and luxury retail stocks when war breaks out, and arms manufactures when the consensus is that peace will last for ever.

All this involves buying and selling at the correct time, often in highly volatile markets, something that may feel wrong at the time. But turn the idea on its head and it becomes self-evident. After all, why would you want to buy into something after everyone else?

And since our powers of clairvoyance are limited, it makes sense to buy into a wide range of possible outcomes before they happen, in anticipation of one becoming a black swan event.

At STM Group, our primary goal is to secure client assets and preserve client wealth. We provide innovative, legal and compliant solutions for personal and business needs for clients with interests on a global basis.

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Our Malta QROPS benefi ts from being within the EU; and with Malta having over 70 double tax treaties in place it is likely that Malta offers the best solution for those residing within the EU or USA.

STM Group has over 20 years’ experience of providing bespoke planning for High Net Worth Individuals. We are listed on the London Stock Exchange and employ over 150 people with offi ces in Gibraltar, Jersey, Malta, Cyprus and Spain.

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FINANCIAL PLANNING

The right to transfer a UK pension scheme is sitting beneath a guillotine. For ex-civil servants, including doctors, nurses, teachers and soldiers, this right will be no more after April 6th, 2015 under new pension reforms being introduced by the UK government under a review.

This review is called freedom and choice in pensions”, supposedly working to give people with UK pensions more freedom and choice over how they access their monies in retirement. However, the title is dripping in irony. Because if the aim is to boost freedom and choice, why is the government removing all freedom and choice from individuals who have an unfunded civil service

scheme? To understand better the ramifications of the pension changes due for April 2015, let us take a deeper look into what they entail.

With much fanfare, during the 2014 Budget announcements, George Osborne said that he wanted individuals to have greater control over their hard earned pensions rather than being “bullied” by insurance companies into buying a lifetime annuity which currently provides little return. In addition, the Chancellor also announced that people could access as much as they wished from their pension scheme when they reach age 55.

Reece FallaizeGlobal Technical Manager at the deVere Group

Doctors, Nurses, Teachers, Soldiers: Time is running out

The UK pension system is under heavy scrutiny as major changes, announced during the 2014 Budget, are implemented. The pensions industry will undoubtedly be changed forever. But what do the changes mean for public sector employees? deVere Group’s Global Technical Manager Reece Fallaize believes there is trouble ahead.


FINANCIAL PLANNING

There is no denying it; at face value this sounds like excellent news. As such, the proposed changes were certainly well received by the British public. However, as the saying goes, the devil really is in the detail because what wasn’t immediately clear to the British public was what “access to all of your pension” actually meant. First off, only individuals with a defined contribution pension scheme will be able to access their pension when they reach the age of 55. Secondly, anyone accessing their pension will be required to pay UK tax of up to 45% on the amount they receive over their 25% tax free lump sum entitlement. The position gets even worse for many expats who will then be required to pay tax in the country

they live in. Many individuals who decide to cash in their pensions without fully understanding the rules could find themselves receiving a mere third of their total pension once tax has been paid.

By making these changes only available to individuals with a defined contribution scheme the government is well aware that the many millions of individuals who have a defined benefit, more commonly known as a final salary pension, will feel as if they are missing out and will want to explore the option of transferring their pension from a final salary scheme into a defined contribution scheme to take advantage of these new rules.

This is where the government’s conundrum comes in, because whilst it is comfortable for individuals with private company schemes to transfer to defined contribution schemes, it would be a disaster for the government if individuals of public sector schemes wished to transfer en masse. The reason for this is that the government currently has liabilities of £1.3 trillion within public sector pensions such as NHS, teachers and Armed Forces. These liabilities are met on an annual basis by the taxpayer who clearly wouldn’t be able to fund this liability should a mass exit occur. It is as a result of this that the government has decided to ban any transfers from public sector schemes from April 2015 which

completely goes against the grain of what the government was trying to achieve in the first place.

Once again, this government has introduced a “one rule for them, one rule for us” approach which will see over a million people lose any flexibility they once had, while getting stuck with a scheme that may not provide them with what they need in retirement. It also could potentially add to the tax burden expats face especially if they live in a country which does not have a tax treaty with the UK – which is most of the world.

One of the biggest failures by the government over these reforms is that they simply haven’t done enough to inform individuals of

what these changes are and how they affect them. I recently spoke at a conference where only six of over 120 attendees had any knowledge whatsoever of these changes. Fortunately there is still time for people to seek advice before these changes come into force. This means there is still time for people to educate themselves and find out exactly how they will be effected. In turn, this will allow them to plan effectively in advance and ensure that the pension they have is one that provides the most tax efficiency and flexibility as possible.

Doctors, Nurses, Teachers, Soldiers: Time is running out


REAL ESTATE

With no end in sight to its economic strength and ability to attract residents and businesses from across the world, London is growing with every passing year. This expansion is stretching the city’s transport infrastructure to its limits, so a range of organisations, agencies, government bodies and businesses have come together to ensure that London’s growth potential remains limitless.

At an estimated total cost of GBP15.9 billion, Crossrail is an expansive new rail line that will span the city, linking east and west to the centre more quickly and conveniently. It’s Europe’s largest current infrastructure project and one of the biggest single infrastructure investments ever taken on in the UK, and once complete it will raise the capital’s rail network capacity by 10%.

Once finished, 100 kilometres of new track will have been laid across London, which will take up to 24 trains an hour through 42 kilometres of new tunnels beneath the heart of the city. Each train will be 200 metres long and carry 1,500 passengers, which adds up to some 72,000 passengers an hour – 200 million each year. The Crossrail route will travel through 40 stations, 10 of which are brand new.

What effect will Crossrail have on the London property market?

A host of London areas are seeing very positive property market forecasts based on their location along the route of the new Crossrail line.

The impact of Crossrail is expected to be massive, and the project is anticipated to be one of the key drivers of property growth in London over the next decade.

Regeneration work has a long history of creating and driving demand on the London market, from the ambitious plans that turned the Docklands into one of the world’s leading financial services centres, to the gentrification that has seen areas such as Shoreditch and the Southbank become investor favourites over the last decade. Crossrail will deliver similar market upsides over a wide range of areas.

The undertaking and introduction of such a large infrastructure project is set to act as a catalyst for further local improvements in many of the areas it will touch, as can be seen in the regeneration efforts both planned and already underway around a number of Crossrail stations. The talk of the market right now is very much about Crossrail’s capacity to “unlock dormant value” in parts of London that have until now been considered tertiary.

Commuting distance will always be a key factor in purchase decision making. Upon the project’s completion in 2018, 40 parts of London will see their connectivity increase significantly. With travel times across London reduced by an average of 15 minutes, Crossrail’s services are going to make the

areas through which it passes more attractive to potential residents, buyers and tenants alike. This in turn will drive prices and yields.

Are we seeing any uplift in property values and activity yet?

Price growth around Crossrail stations has outpaced the citywide average since the project was announced in 2009. The sale price of homes within a mile of Crossrail stations rose 34% during this time, compared to 26% across the city.

This impressive performance isn’t entirely representative of every Crossrail station location, although investors should bear in mind that we’re still some four years away from the opening of the Crossrail service. These lower growth areas represent unexploited markets that we are confident will soon start to experience similar growth rates as other places along the Crossrail route. This is excellent news for investors who have the opportunity to maximise their returns if they act quickly to enter these markets before they take off.

In addition to property price gains, what we’ve also seen across the majority of Crossrail locations over the past year are large rises in market activity. Investors who backed our West Drayton project at the beginning of 2013 will already be aware of this, with the area seeing a

A new driver on the London market


REAL ESTATE

43% rise in transactions within 500 metres of the station site over the past year.

Markets within London Transport Zones 2 and 3 that will enjoy journey times of under 20 minutes into Central London upon the project’s completion, have seen particularly notable leaps in property activity. For example, transactions are up 140% in Stratford over the past year, while Ealing Broadway saw an increase of 66% over the same period.

Taking a broader view, the total number of transactions within 500 metres of a Crossrail station site has doubled since construction began in 2009. In 2013 alone, transactions within a mile of a Crossrail station were up 23%, a significant jump on the London-wide average of 13%.

What we believe demonstrates the project’s role as a stimulus for new investment most significantly to date is that one in ten London homes sold in 2013 were within a mile of a Crossrail station and one-in-five new-build homes sales across London since 2009 have been within a mile of a Crossrail station. The escalating impact of Crossrail should not be underestimated.

Benefits from east to west

The wide-ranging nature of the Crossrail route means it will impact areas right across the Greater London area. llford, located close to the ongoing regeneration work that surrounds the 2012 London Olympic site in Stratford, looks to be one of the major areas of interest in the east of the city, while Slough stands out in the west as a particularly interesting destination for prospective investors.

Case study I: Ilford

Located just four miles from the vast regeneration works that accompanied the London Olympics at Stratford, Ilford is expected to be one of the city’s major winners from Crossrail. New commuting times of just 17 minutes to Canary Wharf and Liverpool Street and 22 minutes to Tottenham Court Road will be enjoyed by Ilford residents in 2018. The new route will also put the town on the Underground map for the first time.

All this is already driving local residential demand. From mid-2013 to mid-2014, home sale transactions within 500 metres of the new station have risen 31%, while property prices in this zone are up 17% in the same period - one of the highest rises across Outer London.

It’s not just enhanced transportation links that are attracting investors to Ilford. As with many other areas along the Crossrail route, Ilford town centre is undergoing significant redevelopment. However, this rejuvenation scheme started earlier than those in most other areas due to the investment ripple effect from the London Olympics. A modern mixed use urban centre has already been built and improvements such as new pedestrian and cycle links and new retail and community facilities are also underway, playing a major role in the enhancement of the local economy.

Case study II: Slough

The future of Slough is very bright indeed. This traditional English town located just outside the M25, around the corner from Windsor Castle and Eton, is going through something of a twenty-first century renaissance.

Slough has been chosen as a base for the European headquarters of a number of international businesses in recent years, due to its low prices and proximity to London and Heathrow airport. With a very strong local economy worth some GBP2.5 billion, the town is now undergoing a period of heavy investment in the form of the GBP450 million Heart of Slough regeneration programme.

With new homes, expanding office space and a wide range of new community, cultural and infrastructure investment all well underway, the transformation of Slough is coming just in time for the arrival of the town’s very own Crossrail station. The project will significantly increase the speed and regularity of Slough’s fast services into Central London and Heathrow airport, as well as providing direct links to prime central commuter stations.

Price growth in Slough is at 8.4% for the year to May 2014, and the number of property transactions

within 500 metres of the new station site has risen 118% over the past 12 months. This is being driven by the benefits that the Crossrail and Heart of Slough regeneration work are bringing to the town and demonstrates a renewed confidence in the market that we believe will continue to strengthen in the years ahead.

Investing in Ilford and Slough

Our property partners, IP Global, have recently launched Carlton House, minutes from Seven Kings and Ilford, two stations that will form part of the eastern Crossrail line, as well as NOVA House, right in the heart of Slough’s town centre. If you are interested in learning more about investing in property in strong, international markets or want to learn more about these projects in particular, please speak to your deVere consultant who will advise you further.

17


ASK NIGEL

Dear Nigel,I am going to retire abroad but have assets in the UK which include bank accounts and a house I rent out which I will sell when my small UK pension runs out. Can you advise me on any financial planning that I should be aware of? If you keep your UK bank account open, then any interest is likely to be subject to withholding tax at 20%. Regarding your pension, if it’s a Final Salary Scheme, then this should not run out, but you should review the retirement age and solvency of the scheme as soon as possible. Also remember that your pension will be subject to UK income tax unless you retire in a country with a tax treaty that includes pensions and allows you to claim relief. Additionally, please note that from the next tax year the UK Government intends to restrict Personal Allowance payments to UK residents only, so you will no longer receive the allowance and will pay full tax on your UK income. Finally, the sale of your house is also very likely to be subject to UK Capital Gains Tax on the growth from next year despite the fact that you are not a UK resident. Clearly, you have plenty to consider with regards to

your retirement. I would suggest you contact one of our Financial Advisers to guide you further. Dear Nigel,I am considering some UK inheritance tax planning as I have liquid assets above the UK nil rate band. However. I want to keep access to these assets for myself and also perhaps be able give away the growth. Can you advise if this is possible as the rules seem very complicated? Inheritance tax planning is a complicated area in financial planning but at deVere Group we do have the resources to help. Naturally, I will not be able to provide a full answer based on just the information given above, however, I do suggest you look into creating a trust called a Loan Trust. A Loan Trust will allow you to loan capital to your trustees in the form of an interest free loan. You can then request loan repayments when you require them. The trustees use the capital you have loaned them to invest normally using a single premium international portfolio bond due to its flexibility and tax planning opportunities. This enables you access to your original capital, while also allowing for the growth on the investment to fall outside of your estate for UK inheritance tax purposes.

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ASK NIGEL

To get an in depth review of your circumstances and more information on Loan Trusts please contact us. While this is a complex area, it is a vital part of financial planning. Dear Nigel,I have an insurance investment in Mauritius with a company called Providence Life. Could you tell me something about Mauritius and its laws? Insurance companies have existed in Mauritius since 1835. As a result, the financial services industry there is highly regulated and heavily supervised. There is no need for you to worry. To further strengthen its legal and regulatory infrastructure, Mauritius established its Financial Services Commission in 2001 and enacted the Insurance Act in 2005 with enhanced supervision also requiring capital adequacy, solvency and licensing of all insurance companies. All companies in Mauritius undergo strict audits, must have risk controls and have onsite inspections from the FSC. The country also cooperates with all the international bodies like the OECD and Financial Action Task Force. Companies like Barclays, Standard Bank, Munich Re, Deloitte & Touche and HSBC can also be found there. The World Bank placed Mauritius 17th in the

world to do business.

I can also confirm that Providence Life has a long term insurance license and GBC1 license in Mauritius. Dear Nigel,I have recently moved back to the UK to be near my children who are at university. I received an inheritance years ago and invested in an offshore single premium life policy for education planning to help pay the university fees. Can you please advise me on what the best financial planning opportunity is to release this money? Most lump sum or single premium offshore life policies will be segmented. This means they will have a series of mini policies. Your policy documents should have them listed as 1-20 or something like this. You could slice these mini-policies if you like and gift parts away each year. It is also possible to assign segments or gift ownership to your children at university so they become the legal owners. When they are ready as legal owners, they can surrender the segments and any policy gains (profits) will be subject to income tax at their marginal rate of tax. Being students, it’s highly likely they will be able to use their personal allowance to help offset any potential tax charges. This will enable them to help pay the fairly large university fees without running up large debts!!

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Ask Nigel

The rise of an evil empire:

The fearsome Islamic State (IS), formerly known as ISIS, has seen an unprecedented rise over the past two years. Its rapid advance across territories by militant fighters threw Iraq into chaos and continued to lay waste to Syria – which was already bowed down and beaten by three unrelenting years of civil war. Its harrowing tales of brutality, mercilessness and near-genocidal actions against all those who dare to defy it have sent shockwaves all around the world, leading the United States and a number of Middle Eastern governments to formally sign on to a war coalition in an attempt to staunch the group’s insidious spread.

The ubiquitous horror of IS - its barbaric strikes against opponents and its chilling threats against the West - are aided in no part by its judicious, sophisticated and well-oiled social media campaigns. The most notorious of these included the viral video of the beheading of American journalist James Foley, who was kidnapped in 2012. IS is running itself much like a corporation – and its unflinching co-ordination has played no small part in making it, by accounts from Arab and Western officials alike, one of the world’s richest terror groups and an unprecedented threat to international stability. But even the organisation famously denounced by

Al-Qaeda itself for being too brutal could not have established its power through fire and blood alone. It needed significant funds to become an established power, and it needs more in order to keep carrying out its reign of terror. So who’s bankrolling it?

In the past, it was thought that Islamic State was heavily dependent on funding from donors from the Arab Gulf, as well as donations from the broader Muslim world. Michael Stephens, director of the Royal United Services Institute in Qatar, told the BBC in a feature that Qatar, Turkey and Saudi Arabia were often held solely responsible for the existence and growing influence of the group. But although it was common practice for moneyed individuals from the Gulf to fund extremist groups in Syria, simply by taking bags of cash to Turkey and handing over millions of dollars at a time back in 2012 and 2013, this picture has since changed.

Wealthy IS supporters and even radical Sunni individuals from Saudi Arabia and Qatar funded groups that had strongly Islamist credentials, because they believed that Syrian President Bashar al-Assad would soon fall and that Sunni political Islam was a true vehicle for their political goals. Yet as IS marched on, those who could afford to sponsor


WORLD NEWS

how ISIS is building its financial fortune

the group realised that wherever the group encroached, terror spread, destabilising regions and wreaking far more havoc than they were worth. As a result, external donations have quickly dried up, and IS has become a largely self-financed operation. US State Department officials now claim that the money from outside donors “pales in comparison to their self-funding through criminal and terrorist activities”, which generate millions of dollars a month.

The recent number of kidnappings seem to indicate that the group is methodically using hostages to raise revenue. But although they make for sensational headlines, the revenue generated through kidnapping and ransom has comparatively slim margins. It is the total control of swathes of territory across Syria and Iraq that now helps IS generate most of its revenue. The group rose to the top of the al-Qaeda wealth food chain through taxation and extortion, and their strategy has been consistent and effective, ever since they started claiming territory back in 2013. Upon taking control of a town, the group quickly secures the area’s resources, centralising distribution and thereby making the local population dependent on it for survival. Those who have no choice but to live under the shadow of IS’ spreading so-called caliphate have to do so under their

established terms. In many cases, this means that any simple transaction or business comes with an added price – one which little by little, funnels vast sums of money into the terror group’s coffers.

Besides exacting tribute from a population of at least eight million, IS exports about 9,000 barrels of oil per day at prices ranging from about $25-$45. A portion is consumed by IS domestically, another goes to Kurdish middlemen up towards Turkey, while another portion goes to the Assad regime, which in turn sells weapons back to the group. The state of affairs has been described by Jamestown analyst Wladimir van Wilgenburg as “a traditional war economy”, and it has drawn comparisons to the 15-year-long Lebanese civil war, when rival factions would simultaneously fight and do business with each other.

Yet there is little quantifiable detail about the domestic activity that finances the group because it varies between areas, and tracking the information down is extremely difficult with governments bereft of the intelligence capabilities. It’s hard to gauge the proportion contributed by local fees and racketeering, not only because differentiating even between distinct fields such as oil and agriculture sales is next to impossible, but also because of the sheer

enormity of smuggling and trading networks within Syria, Iraq and the countries around them. But wherever the line is drawn, the fact that the Islamic State is now, financially speaking, standing on its own two feet, generating its revenue through a potent mix of oil trading, kidnapping and seized assets, is one of its more terrifying aspects.

The traditional image of Islamic State as a group financed by shadowy, extremely wealthy backers with their own agenda to pursue is certainly easier to stomach and to handle. It provides an understandable narrative, within our cognitive comfort zone, where the villain can be isolated and cut off at the source. But IS is not that group anymore. It cannot be singled out and frozen off because it is intimately tied into regional stability. It has positioned itself, with the same deliberation and strategy as it carries out everything from its social media onslaughts to its bloody, systematic massacres, in a way that benefits not only itself, but also the people it fights. And as time and history have proven, over and over again, knocking down a regional pillar – even a pillar of fear and violence – can have unprecedented circumstances that the world is often unprepared and ill-equipped to face.

WORLD NEWS

21INVESTOR INSIGHT // QUARTER IV // 2014

BUSINESS


“I do not believe that the kind of society I describe necessarily will arrive, but I believe (allowing of course for the fact that the book is a satire) that something resembling it could arrive.”

Was Orwell right? How Nineteen Eighty-Four has become a reality

Nineteen Eighty-Four was penned by the great George Orwell in 1949. It was a story that would take the world by storm. Its impact on those who would read it was completely and utterly unprecedented. But the moment it hit the shelves, its arrival into public consciousness was nothing short of ‘momentous’, as Lionel Trilling wrote in The New Yorker upon its release.

Orwell’s Nineteen Eighty-Four is set in a dystopian future in the fictional nation of Oceania, a would-be stand in for Britain. It is a time where war is perpetual, government surveillance is omnipresent and mind control is constant. Politics is dominated by those privileged few who hold a coveted position within the Inner Party. The public is manipulated and controlled, spied on by the Police Patrol. People are not allowed to think and have their own opinions. These ‘thoughtcrimes’ are punished with brutal force by the insidious Thought Police. This oppressive stranglehold on people is justified by the great Big Brother, the revered head of the ruling party, as the only way to protect them and keep them safe. This is the way things should be… for the greater good. The story centres on Winston Smith

who slowly breaks the mould set by Big Brother and fearfully steps out of the established traces, sensing the hypocrisy that surrounds and penetrates him, to search for truth. What he discovers is nothing but pain.

Causing major waves, the book cemented itself in major controversy as the entire world questioned Orwell’s message. Considering

the fact that Orwell was so deeply involved in contemporary politics, it is hard to see how this could have been avoided. In fact, Orwell’s publisher, Fredric Warburg, had to travel to the ailing writer’s side to take down a statement on the matter. The prevalent idea, especially in the US, was that Nineteen Eighty-Four, coming four years after Animal Farm, was intended as an attack on the Left in general and the British Labour Party in particular. His ultimate statement, in which he denied that the book was an attack on socialism, ended up being Orwell’s very last:

“I do not believe that the kind of society I describe necessarily will arrive, but I believe (allowing of course for the fact that the book is a satire) that something resembling it could arrive.”

Now, 65 years since its release, with the advances of modern technology and media, the question is: Are we already there?

In some cases, the situation is now worse than what Orwell could have imagined. In Oceania, the constant surveillance is not hidden. Total power allows the Party to function out in the open without the need

for subterfuge. It is known that all letters sent in this world were opened in transit. Today, we hold at our fingertips possibilities of surveillance, data collection and storage that surpass Orwell’s wildest dreams, but it is the underhanded methods used to employ that makes them so sinister.

Last year, the epic leak by Edward Snowden revealed just how pervasive security companies, such as the US’s National Security Agency, truly are. In an interview by Amy Davidson for The New Yorker, Snowden made it very clear that this effort “targets the communications of everyone. It ingests them by default.” Therefore, e-mails, text messages, or phone calls, regardless of whether they are considered to be controversial or otherwise, are open to scrutiny from up top. The idea that any form

George Orwell


BUSINESS

Payne, Michael. “Orwell’s “1984” Becoming a Reality in Modern-day America.” OpEdNews. 5 Feb. 2010. Web. http://www.dailymail.co.uk/debate/article-1192484/60-years-Orwell-wrote-1984-destroyed-book-chilling-reminder-sinister-vision-reality.htmlhttp://edition.cnn.com/2013/08/03/opinion/beale-1984-now/http://www.crisismagazine.com/2013/orwells-1984-are-we-there-yethttp://mic.com/articles/49409/4-predictions-from-orwell-s-1984-that-are-coming-true-today https://answers.yahoo.com/question/index?qid=20080102145230AAgUSLdhttp://talkwisdom.blogspot.com/2013/04/orwells-1984-becoming-reality-in-2013.htmlhttp://www.newyorker.com/books/page-turner/so-are-we-living-in-1984

Sources

of communication will be private forever is nothing short of naïve. Digital privacy is a fallacy at best. Nothing is sacred.

That being said, there is no denying that we have also become willing participants in this charade. There is a remarkable amount of nonchalant behaviour when it comes to handing over our personal information. The entire social media industry is based on people’s willingness to share almost everything. Business dealings are based on data ownership. Regular transactions have even started demanding security numbers and addresses. In essence, it makes the ever present screens described in Nineteen Eighty-Four almost redundant. Still, there is another function to the telecreens and that is to broadcast announcements, news,

and propaganda from the Party. This is the only kind of media people are allowed to consume. These features have replaced English as a language with ‘Newspeak’.

‘Newspeak’ is a tool to limit freedom of thought, and concepts that pose a threat to the regime. It could be likened to the “politically correct” language that is being used nowadays. It could be said that this kind of language hedges thought, limiting ideas by removing the vocabulary and grammar needed to express them. Just like the media nowadays is used to ensure that people can never achieve even an

approximation of the truth, the Ministry of Truth use Newspeak to paint a picture of reality to the citizens of Oceania that is in line with what the Party wants the public to believe.

Doublethink works in the same way. The Inner Party’s members exercise control over people through mental contortion that sees subjects believing two contradictory premises

questioned half as much as they should. Wars are being waged continuously all over the globe. Countries find themselves moving from one military conflict to the next in the most fluid of motions. This is so much so that they have become an economy in themselves. But there is very little question as to how it all starts, who is involved and what is being fought. This is reflective of the perpetual war that the Party in Nineteen Eighty-Four embraces as a way to eat up any economic surplus and keep people poor and under control.

This fear that the enemy will come and destroy them keeps people quiet. It stokes a twisted sense of patriotism at the same time. It allows for people to see the obvious decline in standards of living but to accept it

as a necessity. Discontent is targeted at the enemy beyond the shore, not the ones within the walls. The war is a lie, but it is treated as fact. Worst of all, not only are those who alert the public to what the reality is, (such as Wikileaks founder Julian Assange and Chelsea Manning), targeted and denounced as liars and traitors, but the climate of constantly being watched is frequently waved away with a nonchalant, “If you’ve got nothing to hide, you’ve got nothing to fear.” It all boils down to one singular question at the end of the day – how much of your freedom are you willing to hand over to governments in return for security?

simultaneously. These forms of doublethink are used in politics prolifically when politicians attempt to subvert people and intentionally lie. Sean Fitzpatrick, in his article “Orwell’s 1984: Are We There Yet?” cited the example of National Intelligence Director James Clapper. In a Senate hearing last March, when asked whether the NSA collected information on millions of Americans, he answered “No,” “Not wittingly.” Following the NSA leak, Clapper insisted he did not lie, but responded in the “least untruthful manner.”

News sources, political figures and the information provided are not


BUSINESS

Is the EU on a path to destruction?

The European Union was a grand experiment created with the noble intention of bringing together a continent ravaged by two World Wars, uniting them with a common goal of shared prosperity. But the rise of euroscepticism among member states is a clear sign that there has been a major shift in the system. The political cooperation that the entire project is based upon is crumbling as countries fail to support each other, choosing instead to point fingers. Will the European Union survive?

Nomura insists that the next European crisis will not be a financial one but a political and social crisis, both for the embattled currency and the union as a whole.

The state of the European Union and some of its hardest hit member states can be likened to that of Argentina back in 2002. Pegged to the US dollar, Argentina had its monetary and fiscal policy neutralised. The power to stimulate the economy moved to the Federal Reserve.

saw outputs decline sharply and countries’ performances suffer.

The pressure is on as the house of cards begins to unravel. Essentially, the very fabric of society is being torn apart and as the government attempts to keep people calm, the end of the road is becoming ever clearer.

The state of the European Union and some of its hardest hit member states can be likened to that of Argentina back in 2002. Pegged to the US dollar, Argentina had its monetary and fiscal policy neutralised. The power to stimulate the economy moved to the Federal Reserve but when trouble hit, the Reserve’s concern was with the US economy, not that of Argentina. Interest rates rose and the value of the dollar rose with them, causing


BUSINESS

When the financial crisis began, it was considered to be exclusive to Greece. Hence, it was dubbed the “Greek debt crisis”. Eventually, the markets realized Portugal, Italy, and Spain were in bad shape too and thus the PIGS country came to be. The shared currency linking countries together, once lauded as the one to throw the US dollar off its high perch, became a noose, stringing up one country after another. While some like the US and China could employ fiscal policy to support collapsing demand, EU member states no longer possessed such power. They could not stimulate their economies to avoid a true depression. Recession was unavoidable.

Countries became strapped for cash, with no way out. In the US, the Federal Government could extend a helping hand to struggling states by printing money, but the European Central Bank, despite having that same power, was and continues to be, precluded from doing so by the Maastricht Treaty. This document, which represents the governing framework of the European Union, prevented the bank from bailing anyone out, let alone a member state. Moreover, even if it could, the ECB’s anti-inflation mandate still keeps it from doing so no matter how dire the situation gets.

This vicious cycle has injected the Union with increasingly high levels of frustration. Protests are so common it could be argued that they are no longer the shocking headline grabbers they once were. But even so, as people continue to take to the streets of Spain and Greece, years

after the crisis, it is clear that action needs to be taken. This has recently been cemented further by the German economy’s contraction in the second quarter of 2014.

As it stands, governments are effectively caught between a rock and a hard place. The system established is based on corporate affiliations and debt business. Financial interconnection meant that one country’s problems quickly rippled out and became many countries’ problems since various banks owned each other’s debt across a variety of countries within the Union. And if those banks were bigger than the economy, darkness inevitably made its way into the country. Cyprus is a prime example of this. When it made the dire mistake

of loading up on Greek debt in 2010, it saw all of its investments wiped out in 2011, wreaking chaos on the entire population’s savings.

There was and continues to be a very restricted amount of lee way when it comes to finding solutions to the problem. Issuing increasingly harsh austerity measures was the preferred choice for most.

For a number of years, cutting back on social services and benefits, as well as public sector workers was a move made by governments across the board, but the repercussions were severe. There was a massive wave of unemployment in the public sector. The private sector has reacted in kind to the uncertainty, seeing an innumerable amount of people getting the sack. The domino effect

Argentinian exports to collapse, economic contraction and bank failures.

Argentina’s fiscal woes saw its people rally in the streets. Demonstrators clashed with law enforcement in an unprecedented scene of hostility and desperation. Blood literally flowed in

the streets. People died.

The situation become so dire that eventually, the government had no other choice; it could either watch on as society devolved into chaos, or break the peg with the dollar and bring back the peso. Argentina chose the latter and within weeks the situation improved. Banks reopened and violence dissipated. The economy rebounded and the Argentine stock market was the best performer from 2002 to 2006. Lesson learnt from the story is that the dollar peg had to break so that the country could survive. It needed to be free to pursue its own monetary and fiscal policy.

Will this be the next step for the European Union? This is the theory held by Jens Nordvig, Global Head of Currency Strategy at Nomura, in his new book The Fall of the Euro. The election victory in southern France of Eurosceptic party Front National can

be taken as evidence of this, he says.

As the US and Japan effectively monetise their debt and weaken their currency against the euro, they are getting a distinct trade advantage, leaving the union at a loss. They enjoy a temporary recovery while the suddenly too-strong euro pushes the Eurozone into a financial black hole.

Going forward, it will be a tough year for the Eurozone. Elected officials coming in to salvage jobs and boost growth will have little choice but to force the European Central Bank to ease on a grand scale. In 2013, the Bank of Japan was forced to do the same. The bank will have to give up the pretence of independence and do what its constituent countries demand. ECB governor Mario Draghi has already budged in this respect with a further cut in the ECB’s benchmark main refinancing rate, was cut from 0.15% to 0.05%, according to the Financial Times. He

Read More:

Lewitinn, L. (2014). Here’s why the euro will collapse: Nomura. [online] Yahoo Finance.

Lynn, M. (2014). When will the euro collapse? It’s already dead - MarketWatch. Marketwatch.com.

O’Brien, M. (2013). Why the Euro Is Doomed in 4 Steps. [online] The Atlantic.Rubino, J. (2014). The Eurozone’s Really Bad 2014, In Two Charts. Dollarcollapse.com.

This is Money, (2013). Top German adviser predicts euro collapse in five years as Spanish unemployment soars to record 27.2%.

Willeke, S. (2013). The Rise of the Fearmongers: Germany’s New Euroskeptic Elite - SPIEGEL ONLINE. SPIEGEL ONLINE.


also said that the ECB will take further steps should they be needed.

However, geopolitical tensions and political squabbles which are increasing in intensity also have to be considered. Political cooperation is key to the Eurozone’s success and that is now under serious threat. Nordvig says the political will to keep the Europe Union together is faltering. In fact, he proposes that the next European crisis will not be a financial one but a political and social crisis, both for the embattled currency and the union as a whole. Will there be a light at the end of the tunnel following the seemingly bleak future ahead?

Another reason to sign upfor our online services.

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RL360 Insurance Company Limited. Registered O� ce: RL360 House, Cooil Road, Douglas, Isle of Man IM2 2SP, British Isles. RL360 Insurance Company Limited is authorised by the Isle of Man Government Insurance and Pensions Authority. Registered in the Isle of Man Number 053002C. A Member of the Association of International Life O� ces.

Invest and switch your bond portfolio assets online

A good example of this is UK inheritance tax (IHT). This is a financial liability that usually occurs upon death, leaving loved ones to potentially foot the bill.

Whilst many countries impose death taxes, let’s use the UK as a working example since evidence suggests that the liability for this tax is growing.

Not affected by UK IHT? Think again.

Anyone who is UK domiciled, or deemed domiciled, and has assets valued above the Nil Rate Band (currently £325,000 2014/2015) could be subject to UK IHT. The current rate of UK IHT is 40%.

When we refer to UK domicile, we mean someone who was born in the UK or has adopted a UK domicile as choice. People are deemed UK domiciles when they have been UK residents for 17 out of the last 20 years.

Nicola HoltTechnical Consultant, RL360°

UK domiciled/deemed domiciled individuals are subject to UK IHT on their worldwide assets. Non-UK domiciled individuals are subject to UK IHT on their UK assets only.

Increasing liabilities

During the last tax year (2013/2014) an estimated 26,000 estates were subject to UK IHT.

This is set to rise to approximately 35,000 estates during 2014/2015 and then leap by 55% to over 54,000 estates by 2018/2019.*

According to the UK Office of National Statistics, with the exception of cash, property is the main asset usually inherited**. With UK property prices increasing by 10.2% in the year to June 2014*** and with the Nil Rate Band (NRB) not expected to increase any time soon, it’s quite easy to see that someone with a UK property alone could be subject to UK IHT.

As Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” Depressing, but truthful nevertheless. What makes matters worse is when they go hand in hand and the result is death taxes.

Protecting assets against a financial liability that occurs on death

* Office of Budget Responsibility (20 June 2014)** Office of National Statistics Inheritance in Great Britain 2008/10 (29 October 2013)*** Source: Office of National Statistics House Price Index (19 August 2014)


FINANCIAL PLANNING

In addition to ATED, when sold, the property would attract Stamp Duty Land Tax (SDLT) and Capital Gains Tax (CGT).To avoid being subject to ATED, the UK property has to be taken out of the corporate structure and held directly. However, this then exposes the asset to UK IHT.

Can you undertake planning to counter the effects of ATED and UK IHT in general?

Yes, you could look to insure against the future liability.

A possible solution

If you were to consider insuring against a future liability, then RL360°’s LifePlan - Asset Protection Plan may be suitable.

It is a combined regular premium Whole of Life Policy and appropriate trust that is designed to fund a financial liability that occurs on death, preventing other assets from having to be sold.

Using the appropriate trust is essential to ensure the correct outcome is achieved and that’s why we’ve packaged the plan and trust together.

Property Value Annual Tax Charge (2014/2015)

£20million + £143,750

More than £10million but less than £20million £71,850



More than £1million but less than £2million £7,000 (from 1 April 2015)

More than £500,000 but less than £1million £3,500 (from 1 April 2016)

Tax bill

So, let’s look at an example. Johan lives and works in the Middle East. He owns a £900,000 property in the UK directly. As he has not undertaken any kind of planning, the value of the property that exceeds the NRB would be subject to IHT at 40%. Assuming he has no other UK assets, the tax bill could be as much as £230,000.

£900,000 less £325,000 = £575,000 x 40% = £230,000 IHT bill

In August 2014, the UK Office of National Statistics reported that the most common action for those receiving property inheritances was to sell it. In some cases, this may have been necessary to find the cash to pay the inheritance tax bill!

UK property and ATED

Some individuals may own a UK property through a non-UK resident corporate structure. Whilst this avoids UK IHT upon the death of the beneficial owner, it does attract a new type tax known as Annual Tax on Enveloped Dwellings (ATED). This is a tax that was brought in by the UK Government in April 2013 and is payable annually depending on the value of the property owned by the corporate structure. The table below shows the current thresholds and payable tax.

RL360°’s LifePlan - Asset Protection Plan is available for:

• Single or Joint Non-UK domiciles that require a lump sum on death. Critical Illness Cover (CIC) is also an option.

• Single life/applicant UK domicile, non-resident that requires a lump sum on death. CIC is also an option.

• Single or Joint UK domiciles that require a lump sum on death only.

Upon death of the life/lives assured, the benefits are payable to the Trustees (appointed at outset by the applicant) who can then distribute to the beneficiary/beneficiaries in order for them to settle the financial liability, leaving assets such as property or family heirlooms intact.

For more information on RL360°’s LifePlanAsset Protection Plan discuss with your broker or visit http://www.rl360adviser.com/aboutus/APP.htm


FINANCIAL PLANNING

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dVFX offers favourable foreign exchange rates, sound professional advice, as well as free international transfers.

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Sierra Leone is a major producer of gem-quality diamonds. Although the majority of exports from the country have been done illegally, the new UN-approved export certification system that came into place in October 2001 has seen Sierra Leone enjoying a dramatic increase in legal exports.

Foreign investment in Sierra Leone has been encouraged since independence, although the business climate remains fraught with uncertainty and a shortage of foreign exchange because of civil conflicts. However, investors are protected by an agreement that allows for arbitration under the 1965 World Bank Convention, and there is legislation in place providing for transfer of interest, dividends, and capital. As a result of tightening regulation, Sierra Leone has gone from strength to strength, expecting an 11.2% GDP increase by the end of 2014.

Sandwiched by Russia and China, this landlocked country in east central Asia is the world’s fastest growing economy. It is expected that by the end of 2014, Mongolia will have enjoyed a 15.3% GDP growth rate - almost double China’s.

Traditionally, economic activity in Mongolia was based on agriculture and livestock. However, mining and the production of cashmere are the principle industries which have fuelled Mongolia’s staggering economic growth. Mongolia has identified and learnt from its previous economic instabilities, implemented legislative reform and tightened fiscal policy promises to guide the country onwards and upwards. As a result, the most savvy foreign investors are keeping a close eye on the ‘Asian Wolf’ and its prospects for the future.

When you think about the fastest growing economies in the world, your mind is likely to spring to the two biggest economic heavyweights in the world – the United States and China. But you’d be wrong. Although the USA and China are the world’s largest economies, when it comes to exponential growth, the titans are being beaten by some surprising contenders. Starting with…

Sierra Leone 11.2% GDP Growth rate

Mongolia 15.3% GDP Growth rate

The world’s fastest growing economies


WORLD ECONOMY

Although Laos remains one of the poorest countries in Southeast Asia, its economic growth is soaring at over 8% every year. Furthermore, Laos’ government is pursuing poverty reduction and education for all children as key goals.

While agriculture, (mostly subsistence rice farming), dominates the economy, employing an estimated 85% of the population and producing 51% of GDP, tourism is the fastest growing industry in the economy and plays a vital role in the Lao economy. The government opened Laos to the world in the 1990s, and continues to be a popular destination amongst tourists.

Furthermore, a number of private enterprises have been founded and some are quite successful within a diverse range of industries. Supported by the United Nations and other member countries, the Lao National Chamber of Commerce and Industry and its provincial subdivisions aim to promote private business and investment.

As one of the world’s smallest and least developed economies, some might be surprised to see it in this list. However, with an economy that’s closely aligned with India’s roaring giant, Bhutan is on the way up. A ‘free trade’ accord between the two countries in 2008 has allowed Bhutanese imports and exports from third markets to transit India without tariffs.

Growth is forecast to strengthen further as hydropower construction expands and exports increase with the start of operations at the Dagachhu power plant. Hydropower exports to India have boosted Bhutan’s overall growth, even though GDP fell in 2008 as a result of a slowdown in India, its predominant export market. However, Bhutan needs to take to task the unnecessarily elaborate controls and uncertain policies in areas such as industrial licensing, trade, labour, and finance, as they prove to be among the biggest obstacles in attracting foreign investment.

This largely desert country in Central Asia is believed to have the fourth largest reserves of natural gas in the world along with substantial oil reserves. China is set to become the largest buyer of gas from Turkmenistan over the coming years as a pipeline linking the two countries, through Uzbekistan and Kazakhstan, reaches full capacity.

In addition to supplying Russia, China and Iran, Turkmenistan has taken concrete measures to accelerate progress in the construction of the Turkmenistan-Afghanistan-Pakistan and India pipeline (TAPI). Furthermore, it has also become a powerful player in the oil and energy field, supplying a number of Central Asian republics and to its southern neighbours.

Turkmenistan 9.2% GDP Growth rate

Bhutan 8.8% GDP Growth rate

Laos 8.5% GDP Growth rate


WORLD ECONOMY


BUSINESS

What we stand to gain and lose from fracking

Although hydraulic fracturing – the official but less catchy word term for fracking – became a high-profile topic only relatively recently, fracking has been around for longer than it seems. The first experimental use of fracking was in 1947; two years later, the first commercially successful applications of the process were carried out. It became common practice in the North Sea oil and gas fields since the late 1970s, especially during the energy crisis of that period. Since then, it has been used in about 200 onshore oil and gas wells from the early 1980s onwards.

Fracking captured the British public’s imagination again – for better or for worse - in 2007, when its use was proposed for onshore shale gas wells in 2007. A temporary moratorium was imposed in 2011, when two small seismic tremors detected near Lancashire were attributed to the exploratory fracking that was taking place at the time by Cuadrilla. The moratorium was lifted a year and a half later, but since then, vocal lobbyists have emerged on both sides of the debate – those who believe fracking will tackle all of the UK’s energy issues in one fell swoop, and those who opine that fracking

is an institutionalised environmental disaster waiting to happen.

Fracking happens to be in the right place at the right time. Energy prices over the last decade have soared, and as technology improves, the process, which was previously considered to be too expensive to be of much use, is now looking more economically viable than ever. The technique has led to a boom in oil and gas production in a number of places around the United States. With the amount of crude oil produced in the US rising by 50% over the last six years – 40% of which was down


BUSINESS

to shale oil – it’s no wonder that nations all over the world are looking across the Atlantic and wondering if fracking could do the same for them. In Britain’s case, as it turns out, it probably could.

Last year, experts from the British Geological Survey made an astounding discovery. They believed there could be up to 2,281 trillion cubic feet (tcf ) of gas in the ground underneath Lancashire – a staggeringly huge area, four times as big as the size of the main American shale field. The finding of the Lancastrian field alone would have been remarkable enough, but the experts concluded that there were several belts of shale in England, as well as smaller areas in Midlothian in Scotland and Fermanagh in Northern Ireland. Although not all of the areas highlighted would necessarily reap results, it was a formidable find with far-reaching results, and one that would certainly be worth exploring.

In an ideal world, shale gas would be embraced by both environmentalists and big businesses since it serves the interests of both. Besides lessening Britain’s dependency on foreign fuel imports, the shale gas industry creates jobs and generates billions of pounds in revenue - a recent report found that more than £30bn could be spent by the sector over the next two decades on items such as steel, cement, rigs, hydraulic fracturing equipment, water treatment and environmental monitoring services. This would support over 60,000 jobs, including in the supply chain and in service industries such as hospitality and retail. Furthermore, using natural gas to heat homes and power cars releases far fewer carbon emissions than other sources of energy, and proponents have described the growing natural gas industry as an environmentally pragmatic “bridge fuel” that will buy time until the power of wind, solar and hydro can be harnessed on a mass scale.

On the other hand, a great deal of the opposition towards fracking

stems from another environmental concern - the method of extraction. High volume, or massive fracturing often involves more than 100,000 gallons of water, leading to concerns about possible freshwater depletion. Furthermore, companies are not required to disclose the chemicals they use to release oil and gas from low-permeability rocks, or the formula of the mixture in the process, making it difficult for local residents, or first responders, to prepare for an accident or emergency, and harder for scientists to accurately gauge the threat posed by the chemicals. In a few cases in the US, the method has been linked to the contamination of groundwater supplies.

Another problem that campaigners often flag up with regards to fracking is the effect that the process can have on the immediate population. The epicenter of the US shale boom was North Dakota, which is one of the largest of the 51 states, but one of the least densely populated. Fracking in Britain would be a different story, due to the high population density. Many home and landowners would be wary of exposing themselves to a potential slew of health problems brought about by exposure to the chemicals involved in the process; not to mention the myriad air, noise and light pollution problems that could follow.

National Grid, which looks after the pipes and pylons in England and Wales, believes a third of Britain’s gas could come from its own shale by the early 2030s if appropriate government strategies are put in place – and as the likelihood of the ‘fracking revolution’ increases, the best course of action would be to strike a compromise. Britain’s shale reserves could, given enough time and strategically sustainable policies, transform it into a major player in the world energy markets. However, the right balance has to be struck between boosting the UK’s energy industry and easing its reliance from foreign sources, and protecting and safeguarding the health, well-being and quality of life of its residents.

Source: Global Portfolio Solutions. Asset class views as of 30-July-2014. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Asset class views are relative to the GPS Model Strategic Portfolio.

Less Atractive

More Atractive

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Commodities

High Yield Corporate Bonds

Japanese Equity

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Investment Grade Corporate Bonds

European Equity

European ex-Germany Gov’t Fixed Income

Emerging Markets Debt

Emerging Markets Debt Local

US Equity

Public Real Estate

US Gov’t Fixed Income

Growth Markets Equity

Asset Class Views: Multi-Asset Class Portfolios1 Year View

We expect a continued acceleration in global growth, offset by some volatility from geopolitical risk which presents potential upside for energy prices. As a result, we expect most risk assets to climb higher for the remainder of the year. As growth improves, diverging central bank policy will present both opportunities and hazards for investors. In the US, we see some factors that could spur rates higher which are not yet priced into markets. As a result, we remain underweight government bonds, as we feel current price levels don’t provide sufficient compensation for inflation and interest rate risk. In Europe, we believe the recovery whilst fragile, remains intact and valuations provide potential for upside. The existence of a number of political and macro-economic risks leads to a wide range of possible outcomes. Expectation of continued support from the European Central Bank means we are focused on investing in countries and sectors which may benefit from liquidity injections and a potentially depreciating currency. We remain overweight credit risk but monitor this closely, as we hold concerns about liquidity in the case of a sell off. However, we do not expect a surge in volatility or defaults in the near future and it was notable how quickly the volatility around the end of July subsided.

Goldman Sachs Asset Management (GSAM)Macro-economic outlook

We continue to expect a recovery in Emerging Markets due to accelerating demand from Developed Markets and expectations of a stabilisation of Chinese growth. We remain neutral on broad Emerging Markets in the short term in recognition of some vulnerability which remains as a result of rising interest rates in the US, especially in those countries which are running large current account deficits or whose markets are at

stretched valuations. With growth improving and downside risk abating, correlations and volatility have fallen from elevated levels. If we have indeed returned to ‘normal’ market conditions, we believe active management in asset allocation and stock selection will be critical for investors seeking above-average returns.


FINANCIAL PLANNING

1 There is no guarantee that these objectives will be met. 2 Data as June 2014.

The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk. In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Confidentiality No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient. ©2014 Goldman Sachs. All rights reserved. 137149.GPS.OTU

At Goldman Sachs Asset Management, we understand that investors have different goals when it comes to investing their money, while also needing to remain nimble in order to capitalise on opportunities and build wealth.

Whether investors are looking to preserve, enhance or create wealth; we believe our Multi-Asset Wealthbuilder Portfolios can help achieve these goals1.

A single investment in one of the funds allows investors to access a broad team of investment professionals, focussed on delivering these goals. From the 60 person dedicated Multi-Asset team looking at the overall asset allocation decisions, to the 1,900 investment professionals, based in 32 locations around the world2, which support the team with local market expertise and selecting securities, once you define your goals, we’ll do the rest.

Building Wealth: Define your goals, we’ll do the rest

For more information, please contact us on [email protected].


FINANCIAL PLANNING

People’s reliance on the state as well as their employers need to end, says pensions expert Ros Altmann.

People work, pay their taxes and get contributions paid into their pension pot. Then when the time comes and they retire, they withdraw their savings and get state payments coming in every month, reaping the reward of their hard work. That is the way baby boomers did it. That is the way most older people prepared for their retirement. That was a time when having your own savings was a luxury. People relied on the state for support in their old age. After years of societal contribution, this was considered to be a given.

In the UK, during the 60s and 70s, the government pushed responsibility on employers, demanding that companies operating throughout the country make employee benefits a priority. Firms were encouraged to put their staff’s needs first and were incentivised to do so via tax breaks

State Pensions: A Disappearing Act

The advancements of technology and modern medicine has bestowed upon the human race the gift of a longer life. But the bolstered lifespan comes at a price. Living comfortably for a long time means more funds are needed and in a world where vast amounts of debt are leading governments from one cost cutting policy to another, people are having to come to terms with the fact that state support is dwindling. This pressing concern has been heightened by the effects of the financial crisis of 2007, leading many to question: How long will it be until pensions are snuffed out?

on contributions and dividends received from investments. That is why firms considered looking after an employee’s long-term interests as their duty. Today, though? Things have changed.

People have no illusions. Even as far back as 2008, a study by the Department of Work and Pensions (DWP) revealed that only about half of the people surveyed believed they would be eligible for a state pension when it would be their turn to hang up the hat. 44% of respondents anticipated that such pension schemes will no longer exist by the time they finish work.

Most twenty-somethings have never and will probably never sniff the sweet security provided by a state pension plan. They’re practically already becoming the stuff of legend

and lore. Why this is happening is an essential concern of today’s young people.

The anxiousness around pensions is far from unfounded. In the report entitled “Can the UK Afford to Pay for Pensions?”, Intergenerational Foundation’s David Kingman questioned 50 expert economists to answer the very question, including Jim O’Neill, Chairman of Goldman Sachs Asset Management, and George Buckley, Chief UK economist from Deutsche Bank.

To put things into perspective, the report outlined how currently, the UK’s national debt stands at £1,377 billion, 88.1% of the country’s total GDP. Add to this the current level of pension liabilities which the government has towards its former employees as well as retired


FINANCIAL PLANNING

members of the general public through the state pension, reaching a total of £5.04 trillion, and the problem is nothing short of blatant. All of those responsibilities combined mean that the financial burden which future generations will have to pay off through their taxes is astronomical. Feasibility is certainly an issue.

Because in the UK three-quarters of public sector pensions are unfunded, when asked the question whether or not future generations will have their pensions paid in full, 75% of the respondents said they thought that the UK’s public sector pension liabilities would not be.

Similarly, in Illinois in the US, pension woes are so deep it has already been made clear that huge cutbacks ordered by the Illinois General Assembly will not be enough to save the state’s pension systems. Money will inevitably run out and promised benefits will not be paid. According to estimates by the state’s five retirement systems, the shortfall

is of about $100 billion, however, this number could be much higher, says Nobel Prize Winner Eugene Fama, speaking to Chicago.

At this stage in time, there is a simmering resentment forming between the older generation and the younger one as the latter is paying out in support of the former, knowing full well that the favour will not be returned. While the obvious preparation would be to save up a separate pension pot and set aside as much as possible for the future is the obvious solution, the unfairness of it all is causing a heavy stir. Countries like the UK have recognised and acknowledged the problem, pointing to mistakes such as Gordon Brown’s 1997 removal of ACT relief costing the nation £36 billion, as well as the Conservatives’ passivity and complex regulations. Understanding that employers also made mistakes with over optimistic investments has also been crucial. But with there being only 5% of GDP allocated to public spending, which is staying

that way until 2050, it could be argued that the message is not yet hitting home. Most other European countries expect public spending to rise sharply to around 12% of GDP by then. With spending so low, people will be living in poverty unless they have their own personal funds to rely on. Essentially, this is already the case in the UK, but there is plenty of room for the situation to worsen.

People’s reliance on the state as well as their employers needs to end, says pensions expert Ros Altmann. Recognition that we are directly responsible for our savings will empower people not undercut them. Gradual and flexible retirement will be essential to improve living standards at older ages, and will also improve growth prospects for the economy as a whole, she adds. The pension problems will not go away and much needs to be done to sustain a secure future for the older members of our society. The hope, Altmann says, is that policymakers realise it soon.

Hinz, G. (2012, November 14). State pensions are doomed regardless of fixes: Report.

Kingman, D. (2013, March 1). Can the UK Afford to Pay for Pensions?

Phipps, J. (2011, April 14). Are public sector pensions broken?

Creative Benefits. 44% ‘think state pensions will be extinct when they retire’ (2008, August 4).

Altmann, R. (n.d.). Why UK Final Salary Schemes Will Move to DC.

Fenner, E. (2013, December 10). 12 Questions for Nobel Prize Winner Eugene Fama.

Read more

2014 Maturities

# Note Coupons Maturity Date Duration ISIN - GBP ISIN - USD ISIN - EUR ISIN - CHF

1 MS 5y Autocallable on 3 Indices 10.25% 21/01/14 6 Months XS0947710645 XS0947710488

2 MS 5y Autocallable on 3 Indices 15.00% 03/02/14 12 Months XS0873109812 XS0873108251 XS0873109739

3 GS US, Europe and HK Autocallable T7 10.00% 18/02/14 6 Months XS0839379632 XS0839379558

4 MS 5yr GBP Auto on 3 Indices 54.00% 19/02/14 48 Months XS0478100943 XS0478100786 XS0480454999


6 GS US, Europe and HK Autocallable 8 10.25% 06/03/14 6 Months XS0899518285 XS0899518103

7 MS 5 Year Autocallable on 3 Indices 12.75% 02/04/14 12 Months XS0899309362 XS0899309958 XS0899316227

8 RBS Auto 1 64.00% 02/04/14 48 Months XS0490844395 XS0490844478 XS0491000948

9 RBS Auto Special Edition 48.00% 24/04/14 36 Months XS0514504777 XS0514505071 XS0514504934

10 GS Developed Markets Auto T1 12.00% 28/04/14 12 Months XS0839296695 XS0839296422

11 GS Developed Markets Autocallable T2 11.75% 27/05/14 12 Months XS0839315073 XS0839314936

12 RBS Multi Index Autocallable Note 10 48.00% 03/06/14 36 Months XS0514495257 XS0514495687 XS0514501161

13 RBS Multi Index Autocallable Note 11 45.00% 03/06/14 36 Months XS0514501591 XS0514501245 XS0514495844

14 GS Developed Markets Autocallable 3 13.25% 23/06/14 12 Months XS0839343281 XS0839343018

15 MS 5 Year Autocallable Income Note 31.00% 23/06/14 24 Months XS0788183449 XS0788183878

16 GS EM Autocallable Income T5 14.00% 07/07/14 12 Months XS0839351466 XS0839351540

17 RBS Auto Note 12 48.00% 08/07/14 36 Months XS0514502565 XS0514502649 XS0514496818

18 RBS Auto Note 13 46.50% 08/07/14 36 Months XS0514496149 XS0514502482 XS0514502300

19 MS 5 Year Autocallable on 5 EM 29.50% 23/07/14 24 Months XS0798987169 XS0798987243


21 MS 5yr Auto on 3 Indices 74.00% 28/07/14 48 Months XS0522567980 XS0522568368 XS0523069572


23 Nomura US, UK and Hong Kong Note 57.50% 11/08/14 60 Months XS0443150171

24 GS Developed Markets Autocallable T4 13.00% 18/08/14 12 Months XS0839379475 XS0839379392

25 MS 5 Year Autocallable Income on 5 EM 26.50% 26/08/14 24 Months XS0811184851 XS0811184935






Our exclusive Autocallable income notes continue to pay bank beating returns to our clients around the world. Below you will find all the maturities our clients enjoyed in 2013, and current maturities in 2014 so far. These notes are exclusive to deVere Group and are not readily available anywhere else.


MATURITIES

deVere Autocallable Income Note Maturities

2013 Maturities

# Note Coupons Maturity Date Duration ISIN - GBP ISIN - USD ISIN - EUR ISIN - CHF

1 RBS Autocallable 31 15.00% 07/01/13 6 Months XS0762854205 XS0762854114

2 MS EM Autocallable 16.00% 23/01/13 6 Months XS0798954318 XS0798954409



5 MS EM Autocallable 20.00% 13/02/13 12 Months XS0730651782 XS0730651600



8 MS Autocallable 16.75% 11/03/13 12 Months XS0747107943 XS0747108081 XS0747107786


10 MS Autocallable 19.00% 15/04/13 12 Months XS0757414569 XS0757414486 XS0757414643


12 Morgan Stanley Autocallable Note 18.75% 13/05/13 12 Months XS0773980585 XS0773980239 XS0773980312

13 Morgan Stanley EM Autocallable Note 11.00% 16/05/13 6 Months XS0848938972 XS0848938899



16 Morgan Stanley Autocallable Income Note 13.25% 28/05/13 6 Months XS0779252526 XS0779252369



19 MS 5 Year Autocallable on 3 EM 21.50% 08/07/13 12 Months XS0793515122 XS0793515551 XS0793515635



22 RBS Autocallable 4 52.50% 13/09/13 36 Months XS0531316627 XS0531316890 XS0531316973

23 Morgan Stanley 17.75% Autocallable Note 17.75% 30/09/13 12 Months XS0825712309 XS0825712135 XS0825712481

24 Goldman Sachs – US / Europe / HK Auto Note (3) 10.75% 02/10/13 6 Months XS0800880519 XS0800880600




28 RBS Autocallable 05 48.00% 08/11/13 36 Months XS0545444647

29 GS EM Auto Income 11.00% 18/11/13 12 Months XS0687742410 XS0687742337



32 GS Asia / US Autocallable 14.00% 25/11/13 12 Months XS0687739978 XS0687739895


34 MS 5yr Auto on 3 Indices Rate 15% 60.00% 27/11/13 48 Months XS0459574546 XS0459574629







MATURITIES

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Indonesia

deVere Indonesia PTKunti Plaza (shop No.4), Jalan Kunti 119 Seminyak Kuta Badung Bali, 80361 Indonesia [email protected]

deVere Indonesia PTUnit A 22nd Floor, Alamanda Office Tower Jl. TB Simatupang Kav 23-24 Cilandak Baret Jakarta, 12430 Indonesia [email protected]

Japan

deVere Group Tokyo K.K.Azabu East Building 4th Floor 1-25-5 Higashi Azabu Minato-ku Tokyo, 106-0044 Japan [email protected]

Malaysia

deVere and Partners (L) Ltd.Suite 29-01 29th Floor Menara Keck Seng 203, Jalan Bukit Bintang Kuala Lumpur, 55100 Malaysia [email protected]

Philippines

deVere Philippines Limited IncSuite 2106 21st Floor, Zuellig Building Makati Avenue Corner, Paseo de Roxas, Makati City Manila Philippines [email protected] Thailand

deVere & Partners (Thailand) Limited Pattaya branch Mooks Residence M Floor 222/99 Moo 9 Nongprue, Banglamung Chonburi, 20150 Thailand [email protected]

deVere & Partners (Thailand) LimitedSuite 2001-1, 20th Floor Exchange Tower 388 Sukhumvit Road Klongtoey Bangkok, 10110 Thailand [email protected]

Broadgate Investment Advisory Securities (Thailand) Limited1-7 8th Floor, Room 0842, N Sin Lik House Building, Thanon Silom, Silom Ilom Khet Bang Rak Bangkok Thailand

Vietnam

deVere and Partners (Thailand) Ltd. - Hanoi OfficeUnit 08B 3rd Floor, International Centre 17 Ngo Quyen Street Hanoi Vietnam [email protected]

The Representative Office of deVere & Partners (Thailand) LtdSuite 4 21st Floor 2 Hai Trieu Street District 1 Ho Chi Minh City Vietnam [email protected]


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EUROPECzech Republic

deVere and Partners Prague s.r.o.4th Floor No. 19 V·clavskÈ n·mestÌ, Praha 1 Prague, 110.00 Czech Republic [email protected]

France

deVere France S.a.r.l.29 Rue Taitbout 6’eme Etage Paris, 75009 France [email protected]

deVere France S.a.r.l.455 Promenade des Anglais Porte de l’Arenas Hall C, Floor No 6 Nice, 06299 France [email protected]

deVere France S.a.r.l.17 Avenue Didier Daurat BP 10051 Immeuble Socrate, Blagnac Toulouse, 31702 France [email protected]

Germany

deVere Germany GmbHSchillerstrasse 14 Frankfurt am Main Frankfurt,60313 Germany [email protected]

deVere Germany GmbHNo. 38 Ballingamm Hamburg, 20095 Germany [email protected]

Hungary

deVere & Partners Hungary Tanacsado Kft.Andr·ssy ˙t 3., Loft number 2 Budapest, 1061 Hungary [email protected]

Italy

deVere Italia Via Domenico Scarlatti 30 Milan, 20124 Italy [email protected]

Poland

deVere & Partners Poland SpÛlka Z OgraniczonaOffice 214, Atrium International Business Center Al Jana Pawla II 23 I. Warsaw, 00-854 Poland [email protected]

Russia

deVere Group MoscowMokhovaya UL7 Moscow, 125009 Russia [email protected]

Spain

deVere Spain S.L.Edificio Oficampus, Calle Marques de Campo No 46 Planta 5 Oficina 8 and 9, Denia Alicante, C.P. 003700 Spain [email protected]

deVere Spain S.L.Calle Miguel de Cervantes 13 Local 5 Costa den Blanes Calvia Mallorca, 7181 Spain [email protected]

deVere Spain S.L.Edificio MS208 Parque Miramar 2nd Floor Avda Sanz de Tejada s/n, Mijas Costa Malaga, 29649 Spain [email protected]

deVere Spain S.L.Passeig de Gràcia 56 7th Floor Barcelona, 08007 Spain [email protected]

deVere Spain S.L.Calle Serrano 32 2∞E Interior Madrid, 28001 Spain [email protected]

Switzerland

deVere & Partners Switzerland SA Branch Office BaselSteinentorstasse 11 Basel, 4051 Switzerland [email protected]

deVere & Partners Switzerland SA succursale de MeyrinWorld Trade Center I Route de l’Aeroport 10, Case postale 171 Geneva, 1215 Switzerland [email protected]

deVere and Partners Switzerland SASeeWurfel Nr. 2 Geschoss 4 Seefeldstrasse 281 Zurich, 8008 Switzerland [email protected]

United Kingdom

deVere and Partners (UK) Limited3rd Floor Peek House 20 Eastcheap London EC3M 1EB United Kingdom [email protected]

deVere and Partners (UK) Ltd. Unit 3 Ground Floor Sherwood Oaks Close Sherwood Oaks Business Park Mansfield, NG18 4TB United Kingdom [email protected]

MIDDLE EASTIndia

deVere Group India Investment Advisors Private Ltd.German Centre for Industry and Trade Delhi Private Limited Building No. 9 Tower B Level 12, DLF Cyber City Phase III, Haryana Gurgaon, 122 002 India [email protected]

deVere Group India Investment Advisors Private Ltd.Equinox Business Park, Tower 3 Ground Floor, Off Bandra Kurla Complex LBS Marg, Kurla West Mumbai, 71 India [email protected]

Kuwait

deVere Group Kuwait10th Floor, Al Shorouq Tower Jaber Al Mubraaqq Street, PO Box 22522 Sharq, 13086 [email protected]

Qatar

deVere Group Doha W.L.L.Office 3404, Palm Tower B Majlis Al-Tawoon Street, Westbay Doha Qatar [email protected]

Oman

International Alliance Muscat (L.L.C)Villa 263 Way 3304 Madinat Qaboos PO Box 810 PC 115 Muscat Sultanate of Oman [email protected]

United Arab Emirates

Acuma Insurance Brokers L.L.C. Abu Dhabi Branch Al Niyadi Bld l Cnr Offices 601 & 602 Airport Road and Delma, PO Box 63665 Abu Dhabi United Arab Emirates [email protected]

Acuma Insurance Brokers L.L.C / Acuma L.L.C.35th Floor H Hotel Office Complex 1 Sheikh Zayed Road Dubai United Arab Emirates [email protected]

Professional Investment Consultants CompanyPalm Court Hilton Hotel P.O. Box 1333 Al Ain United Arab Emirates [email protected]

Professional Investment Consultants CompanyEtihad Tower 3, Ras al Alkhda, Plot 4, Sector 32 Abu Dhabi United Arab Emirates [email protected]

Professional Investment Consultants CompanyOffice 301 Al Qubassi Building Hamdan Street, P.O. BOX 6315 Abu Dhabi United Arab Emirates [email protected]

Professional Investment Consultants Company 2201 Marina Plaza, Emaar Drive Dubai Marina, PO Box 75464 Dubai United Arab Emirates [email protected]

USAdeVere USA Inc. 40 SW 13th Street Office 505 Miami Florida, 33130 United States of America [email protected]

deVere USA Inc.6th Floor 767 Third Avenue New York, 10017 United States of America [email protected]

deVere USA Inc. 388 Market Street Suite 1300 San Francisco 94111 United States of America [email protected]

Cayman IslandsdeVere Group Caymans Ltd802 West Bay Road George Town Grand Cayman Cayman Islands [email protected]


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