I am hosting a panel discussion as we all come back to work this September. It’s loosely titled: Planning your finances in the new normal.
I hate the words ‘new normal’ but it’s better than post-pandemic, particularly as we don’t feel anywhere close to being in the ‘post’ bit of that expression.
There are clearly many things to chew over, ranging from low yields and volatility to diversification.
For what it’s worth, I think there is much more volatility to come as we’re currently sitting in the lovely, summery weather of what is actually the eye of a terrible storm going on around us – a symptom of which is the sunshiney buoyancy of the property market and rising asset prices.
When the clouds come over then we’ll see what devastation has been heaped on the economy.
While there are these questions to ponder, the core elements of the discussion do not really change much, and I suspect that is reflected in the conversations advisers are having with clients.
In that respect, the new normal is much the same as the old normal in that everyone still wants the same thing: they want to find the best way to grow their savings; they want to be diversified for global growth so that they have minimised overall exposure to any one market; and they want to know how to do the best for their retirement and their family.
What I am intrigued about is the ethics of all this, because that is a growing part of conversations now.
The chief executive of a private bank told me that when wealthy families sit down together and talk about inherited wealth, increasingly the younger generation want to know the provenance of how money was made and how it can be best put to good use for sustainable sources.
(To which I suspect many parents might just utter: ‘Do you want the money or not?’)
The two big moral issues are taxation and environmental, social and governance factors but, clearly, neither of those are easy to answer. For example, where does anyone stand on investing in BP and Shell who are, on one hand, major producers of carbon fuels, and on the other, major investors in sustainable energy – so much so that their billions by far outweigh anything a smaller, 100 per cent ethical producer could do?
And what about the US? Many may object to investing in anything that is backed by Donald Trump, but on the other hand, does that mean you rule out putting money into US government gilts? That would be lunacy.
Then there is tax. Good financial planning means taking maximum advantage of the tax allowances you are given, particularly for those with top-end rates of taxation.