Helping Entrepreneurs through the Recovery; Wealth ManageMent
Entrepreneurs are still nervous of the economic conditions. They realise that the strong temptation to capture market share while competitors are fainting and failing about them must be moderated by the continuing constraints on human capital and working capital within their business.
Post-recession recovery holds as many dangers for entrepreneurs as recession itself. However, the past 18 months have changed their personal wealth strategy in a number of ways. It reminds them that exit strategies are fragile, and that injecting every penny of their personal wealth into a business may not be the wisest move.
Furthermore, I have found entrepreneurs much more willing to consider utilising spare cash balances across the wealth management spectrum, investing in balanced portfolios and hedge funds, as well as investment property (buy-to-let), business angel investing and more esoteric investment opportunities. This is driven by three themes: the poor cash rates available, the sense that markets are a reasonable medium-term bet, and a desire to diversify their personal wealth.
They are bored with having deposits sitting with five to 10 retail banks - and irritated that they had to undertake such a time-wasting endeavour. They are looking to consolidate and are in search of someone they trust.
Three particular themes seem evident. Entrepreneurs have been reminded of the mortality of enterprise and are therefore more willing to spend some of their precious time thinking how they protect their family. Updating wills, thinking about business protection and personal insurance, considering how they might build a pension pot for their spouse (through employing them in the business) and inheritance tax planning have moved higher up their agenda. …