Leading up to last week’s election, I made an unscientific assessment of the mood of financial advisers – at least the ones expressing an opinion on social media.
My unsurprising conclusion was that, on Brexit, advisers are just as split as everyone else.
Aside from Brexit though, there was much more consensus on who should lead the government – or rather who should not: advisers seemed to be united in hoping that it would not be Jeremy Corbyn.
I have not seen many advisers expressing keen support for Boris Johnson either – but for all his perceived lack of trustworthiness, Mr Corbyn’s radical economic ideas seemed, to most, a greater threat.
That is certainly the view of the investment markets too, which have breathed a sighof relief.
The pound has strengthened, the FTSE has risen and, we are told, international advisers regard the UK with cautiously renewed optimism.
We do not know how long sterling will be buoyed (after all, there are still many uncertainties to weather) but for the time being, there are hopes it may suppress inflation, boost wage growth and improve confidence in UK PLC.
There is also a chance that a recession may be delayed with a boost of previously delayed economic activity.
Some clients have told me that their order books are looking heathy with projects slated to go ahead only in the event the ‘Corbyn danger’ was averted.
For those of us helping individual clients with their financial planning though, what does it mean for us?
On tax, we already know about the welcome increase in the national insurance threshold.
More will be known when we see the first Budget of this new administration.
If, as claimed, austerity is over and public spending resurgent, then either increased borrowing or increased taxation is inevitable.
We already know, for example, that the proposed corporation tax reduction to 17 per cent is being scrapped.
Continuing the efforts against tax-avoidance is another area and yet another might be pension tax relief.
It is often claimed that higher rate tax relief is a tax-privilege too far and it is easy to see a change in the link between individual income tax and the tax relief given.
Remember that auto-enrolment schemes, were sold as having not ‘tax relief’, but a ‘government contribution’.
Words like this can matter because they make it easier to move goalposts later. Higher rate taxpayers intending to make large contributions might consider acting sooner rather than later.
Talking of pensions, there is a promise to review within 30 days the problems caused by the annual allowance taper; doctors in particular will be keen to see action.
On the losing side however, the hopes of the Waspi women have been dashed. Mr Corbyn made a £58bn promise on this, but Johnson spoke of being unable to “magic up the money”.
On the subject of funding social care, there is universal agreement that something needs to be done, but no agreement on what.
Given Theresa May’s earlier debacle with the ‘dementia tax’, Mr Johnson may be cagey about addressing it; but then again, the start of a five-year term with a thumping majority would be just the time for big ideas in controversial areas.
It remains to be seen whether Brexit will so overshadow other policy-making priorities that big changes are pushed aside.
If not, then an emboldened Conservative government with a huge majority might make big inroads into all sorts of areas of personal tax and financial planning.
Just about the only thing we can be sure of is that, as financial planners, we are sure to stay busy.
Scott Gallacher is director and chartered financial planner at Rowley Turton
