More high fees and incentives at an advice firm, state pension benefits and the property cycle - here's our weekly heads-up on the financial stories that may have caught your clients' attention over the weekend…
Chase de Vere: High fees help savings advisers rake in more than FTSE bosses
Just one week after St James's Place bowed to pressure from The Times over its incentive structure has the newspaper revealed similar practices at another well-known national advice firm.
The 'paper claims advisers at Chase de Vere are earning more than FTSE bosses through their fees and have the chance to win luxury overseas trips if they prove themselves a top 10 earner.
According to The Times, league tables are circulated showing how much Chase de Vere advisers have generated compared to their colleagues. The top earners are invited on stage at the firm's annual conference where details of their fees are revealed. They and their partners will enjoy a three-day, all-expenses-paid, trip to Cannes in April.
Last year's top earner is estimated to have made £670,000 out of £1.31 million in fees. Chris Hill, the boss of Hargreaves Lansdown, was paid £648,000 last year. Andrew Croft, the head of St James's Place, was paid £533,000 in 2018.
Chase de Vere chief executive Stephen Kavanagh tells the paper: "We operate in an entirely transparent and accountable manner, ensuring that our clients are fully informed of our services and associated fees at every step."
Why you'll wait until 81 to see the benefits of delaying your state pension
Retirees will have to live until at least 81 to recoup the tax benefits from deferring their state pension, according to research cited in the The Telegraph.
Taking the state pension after retirement age lowers taxable income and boosts the amount pensioners receive through enhanced payments when they decide to draw benefits. NFU Mutual says people may need to wait until their 80s before they gain any benefit from delaying their state pension.
NFU Mutual's Martin Ansell tells The Telegraph: "Deferring the state pension is essentially a gamble on your own life expectancy."
He says it would be better to take the state pension when it is due and invest it.
Where are we on the property cycle?
The relationship between London and regional house prices appears to have changed, and the outlook is uncertain, according to this Financial Times article.
New research explores the price gap that has opened up between London and the rest of the UK, showing the property cycle is going through a pivotal stage. The FT explains that homeowners in wealthier areas of the country have seen their housing equity pile up but average house prices in less prosperous regions are still below 2007 levels.
Indeed, timing the cycle right plays a "central role" in whether property owners and investors make money when selling or buying.
The FT references a client of buying agent Henry Pryor who went through a divorce six years ago and bought a new home. Without taking advice, her house in the south of England went up for £2m, however her timing could not have been worse.
Stamp duty changes and Brexit all contributed to "spooking buyers" at the top end of the market. Discounts were unable to attract buyers for the client's property and now, six years on, she sold a second property for the same price she had paid for it.
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