Opinion  

Letters: 'Cliff-edge' threshold of £50,000 earnings unjustifiable

Financial Adviser Letters

Financial Adviser Letters

This week...

Industry underperformance

Regarding your opinion article ‘We should be proud of our fund industry’ (Oct 7).

How can we be proud of a fund management industry that consistently achieves the distinction of failing miserably to beat various global indices?

Two-thirds (68 per cent) of fund managers have underperformed the UK benchmark and 81 per cent the US S&P 500 over the past 10 years, for which investors have been paying, in some cases, extortionate fees.

Further, it seems extraordinary that the fund management industry is very much in the sights of the regulator if we should all be so proud of it and its achievements.

Charles Lane-Petter

Charles Lane-Petter Investments

 

Holes in support terms

Regarding your article ‘Govt boosts support for self-employed during lockdown’ (Nov 3).

I run my own business as a sole director/shareholder and employee, which is considered employed in some situations and self-employed in others.  

I suspect there are many financial advisers who use the same structure.

If I were officially a self-employed individual I would now be looking to take my third grant from the government. 

Yes, I would be required to pay tax and national insurance on that, but I would not be expected to pay it back.

As a limited company I made an application for a bounce-back loan as soon as they were available and my bank was incredibly efficient. I had the funds within days.  

When I realised the lockdown was continuing for longer and my income was still being drastically affected, I applied for a second BBL, or an increase in the first to the maximum amount allowed based on my previous year’s profits. 

The bank initially said I could do that, but then on checking further advised it was not an option, as it was not allowed under the regulations.  

The bank then proceeded to provide me with an overdraft for a fee, on which they charge me interest.  

Additionally they required a personal guarantee. In other words they were willing to lend, so accepted I was a viable company.  

However, each aspect of the lending is at odds with the government requirements for coronavirus support – costs, interest and a personal guarantee are all specifically excluded.

My company is paying fees and charges on the second tranche of borrowing.  

It is my error, but I don’t think it will be an uncommon one – I claimed what I thought was sufficient.  

I didn’t expect the first lockdown to go on for so long. Now I am faced with a further lockdown and further reducing income and no access to government support.

I am certain this is an unintended consequence of the BBL terms, as the government has extended provision for everyone else.