How McLaren Has created a winning forMuLa?

www.caterallen.co.uk cater allen, part of the Santander Group

STRUCTURED DEpoSiTSwill they be the ‘biG thinG’ thiS iSa SeaSon?

BoTToMS Up!all you need to know about inveStinG in wine

GET pLANNiNGwe’re talkinG marketinG and how to Get ahead

InsIghts&OppOrtunItIes

The magazine from CaTer allen PrivaTe Bank

five minutes with fernando Gasca

Latest product launches

an alternative solution for a

flexible retirement

chance to win a ViP trip to the McLaren technology centre

PLUS

DRiViNG FoRCE

SprinG 2012

How McLaren Has created a winning forMuLa

5Q What are the key areas of focus

Within the business?

A At Cater Allen, we continue to focus on offering products that are secure, safe and simple. We

believe that in the current market place, investors are still being cautious and are looking for products that are easy to understand and offer an attractive upside but fundamentally protect their initial investment. For this reason, all our products offer full capital protection at maturity. We also continue to see the importance of the FTSE 100 as our underlying index. It’s one of the best-selling UK indices for good reason – not least because it is well recognised, is easy to access, and has wide geographic diversification. Indeed, the index doesn’t really represent just the UK anymore, but rather is a really effective way of gaining access to the global markets.

Q hoW do you unWind When you’re not at Work?

A With two kids you don’t really get to relax! I enjoy driving a lot, so I often put the kids in the back of

the car for a couple of hours and take them to interesting places. I’m also learning to play the piano, which has always been a dream. I don’t know if I’m any good at it, but I am trying!

Established nearly two hundred years ago, Cater Allen Private Bank has a longstanding legacy of working in partnership with financial advisers

and intermediaries, and has established itself as one of the leading specialist banks in the UK.

Our expertise in recognising the issues and challenges met daily by intermediaries – and the exacting needs of their high-net-worth, corporate and trustee clients – has resulted in a portfolio of specialist accounts and products, consolidated by exceptional service and technical support.

Our intention for Insights & Opportunities is to provide you with information and support that can make a real difference for you and your business. This could be through developing tax-efficient solutions for your clients, addressing the broader economic landscape and how it can affect investment decisions, and even how to draw up strategies for business growth in these challenging times.

We very much welcome your feedback. If there is an area of focus from a taxation, product design or regulatory perspective that would be of particular interest, then we would be delighted to hear from you so that we can feature it.

Best regards, Stephen Stephen Kiggins Head of Marketing, Cater Allen Private Bank marketing@caterallen.co.uk

“”I enjoy desIgnIng the products and explaInIng how they behave In dIfferent sItuatIons

02 InsIghts&opportunItIes www.caterallen.co.uk

Fernando is Head of Investments at Cater Allen. Originally from San Sebastián in the north of Spain, here he tells us a little about himself and what his responsibilities are

WELCOME

Q What does your role at cater allen entail, and Which elements

do you enjoy most?

A My main role is to lead and direct the team in the development and design of different structured

deposits for the intermediary markets. From an investment point of view, that entails following different markets – not only the stock markets, but bonds, swaps, the CDS market and so on. There are lots of variables that affect the final product in order to make it attractive for financial advisers and their clients.

There are many things I like about my job, but what I really enjoy is how to position the structured deposits, to explain how they can work in a portfolio and to come up with offers for the intermediaries. I enjoy designing the products and then explaining how they behave in different situations, and how financial advisers can use them.

Q What is your career background?

A I’ve been with Santander for 11 years in total, and have spent the last four years at Cater Allen. At

Santander, I was in charge of managing ultra-high-net-worth multi-asset-class portfolios and worked both in Spain and in the UK. I moved to Cater Allen in order to specifically develop the investment offering. Before Santander, I worked in Paris and London as a fixed-income-bond portfolio manager in emerging markets.

Q What is it that makes cater allen unique?

A I think it’s our commitment to our intermediary partners. The integrity of our promise to never

approach or to cross-sell to a client who’s been introduced to us is fundamental to our proposition. And everything that we design and deliver starts with the intermediary, in terms of meeting their aspirations for their client.

www.caterallen.co.uk InsIghts&opportunItIes 03

INTERVIEW

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WElCoME CoNTENTS03

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five minutes With…Fernando Gasca, Head of Investments at Cater Allen, talks business and pleasure

not just another isa seasonHow structured products could turn out to be this season’s ‘must-haves’

the road to perfectionWhy the McLaren Technology Centre is at the heart of the Formula One team’s success

structured productsThe latest product launches – Annual Locked-In Return Plan 5 and Enhanced Growth Plan 10

grape expectationsJust what can investors expect if they want to get into wine as an alternative asset class?

retirement planningHow a new approach from Cater Allen can provide an alternative to short-term annuities

get some boom for your businessThe role of a marketing plan in driving your business forward

*Terms & Conditions (for the wine competition on page 11) 1. one entry per person. 2. entry is free – no purchase necessary. 3. to enter, send an email to marketing@caterallen.co.uk with details of your name, address and phone number so that we can contact you. please include “wine prize draw” within the subject line of the email. 4. the prize is one (of three) cases of wine from berry bros & rudd comprising 12 bottles of berry’s own red, white and rose wines (four bottles each). each case is valued at £75. 5. there are no cash alternatives. the offer is subject to availability and is non-transferable. the promoter reserves the right to substitute a prize of similar value if this prize is not available for any reason. 6. entrants must be uK citizens aged 18 or over. employees of the santander group and members of their immediate family are not eligible to enter or win. 7. deadline for entry is 30 april 2012. 8. the winner will be chosen at random and will be notified by the promoter within two weeks of the deadline by telephone and in writing.9. all entrants to the prize draw should ensure that they do not breach their organisation’s anti-bribery policy. 10. the promoter reserves the right in its sole discretion to disqualify any individual who corrupts or affects the administration, security, fairness or proper conduct of this prize draw. 11. the decision of the promoter is final and no correspondence will be entered into.12. the promoter accepts no responsibility for entries lost, damaged or delayed in transit.13. promoter: cater allen limited. registered office: 2 triton square, regent’s place, london, nw1 3an. registered in england number 383032. please note that all information is correct as at March 2012 but may be subject to change.

@2012 Cater Allen. the views expressed in Insights & opportunities are not necessarily those of cater allen, unless explicitly stated. this magazine was published in March 2012 and although every effort has been made to ensure the content is accurate at the time of publication, this cannot be guaranteed. this magazine contains a range of articles, including those that are subject to industry and regulatory changes and is not intended to replace professional advice. cater allen private bank is the name used for banking services provided by cater allen limited. registered office: 2 triton square, regent’s place, london, nw1 3an. registered in england number 383032. authorised and regulated by the financial services authority, except in respect of its consumer credit products for which cater allen limited is licensed and regulated by the office of fair trading. fsa registration number 178737. cater allen limited is part of the santander group. cater allen and the flame logo are registered trademarks.

fernAndo gAsCA

MINUTES WITh...

This publication is aimed at intermediaries and investment professionals only and should not be distributed to or relied upon by retail investors.

www.caterallen.co.uk insights&OPPORtUnitiEs 5

ThoughT piece

Ss we approach the end of the tax year, it is an often-heard comment that we are about to enter ‘just another ISA season’. The

truth is, there is nothing ordinary about the coming year, just as there has been little ‘normality’ for the last decade, or at least the last five years.

The markets and the global economy are sending mixed messages and have been for quite a while – with some indicators positive and some negative. Thankfully, in the first three months of this year, those indicators tended to be the former more often than the latter.

Stock markets actually rallied in the first months of 2012, most emerging markets benefited from good growth rates and there was an increase in liquidity across the whole financial system. That said, concerns over US growth, China’s ‘soft landing’ and the spectre of the post-Greek default still loom large.

This climate puts many investors on the horns of a dilemma. Since the collapse of Lehman’s and the depths of the financial crisis, markets have risen significantly, and indeed, many investors may have lost out by not investing in the markets when they were at their low point.

Yet the reality is that, for many investors, fear still prevails. While past performance shouldn’t be used as a guide to future performance, it can also be a strong deterrent – with people afraid that what has happened before will happen again. And quite rightly so – there are absolutely no guarantees as to how things may turn out.

finding a Safe harbour The recent performance of the markets, however, has really woken people up to the opportunities they might be missing – yet this is offset by that fear of loss. Many, understandably, moved into cash in the downturn, but low interest rates and high inflation remain a concern. This has left many looking for a middle ground – access to the markets married with 100 per cent capital protection. Indeed, a recent poll of the intermediary market discovered that the one thing clients are demanding most is capital protection.

The arrival of ‘just another ISA season’ tends to exacerbate the need to make a decision – it puts pressure on some investors who feel they need to decide what they should be doing with their money. This is, of course, partly misguided, because they can put the money into their ISA in order to take advantage of the allowance, and

make the investment decisions later – providing that they don’t leave it there and fail to make those decisions.

For those investors looking for market access with capital protection and who want to make the most of their ISA allowance, structured deposits can provide the answer. In the simplest of terms, they provide the potential for an upside, if the market performs well, with no downside if the market falls from the initial level at the time of investment. In some cases, that will be a percentage (or all) of the growth in the associated index, such as the FTSE, or it may be a fixed ‘coupon’ based upon an index’s performance.

Striking the balance Take, for example, our Annual Locked-In Return Plan 5 – if the FTSE 100 Index is equal to or higher than the level at the plan’s commencement date at any of the six anniversary points over the six-year product term, the client will receive a return of 6.5 per cent gross* locked in and paid out at maturity (see page eight for more information). For ISA investors, the added bonus, of course, is that this would be free of tax if in a cash ISA. And this comes with the peace of mind that, at worst, the original investment will be returned in full at the end of the term.

Structured deposits can prove to be the perfect halfway house for conservative investors who want to be in the markets, but who want to avoid loss. So it’s not surprising that awareness is increasing about what such plans can offer. That’s not to say that there aren’t downsides – investors are generally locked in for a set period and should markets not perform well, then your client’s gain may amount to zero. And should the markets sky rocket, they might not get as big a return as if they had invested in a typical equity fund. But this is the balance to be struck and the decision needs to be made on the basis of the client’s appetite for the capital protection afforded.

With the Libor curve for sterling not pricing any interest rate rise until the end of 2013 at the earliest, and the UK Debt Management Office predicting that yields in government bonds may also stay low, investors are becoming increasingly aware that they have to act sooner rather than later. Should the stock markets continue to rally, there are gains to be made – tax-free if you use an ISA wrapper – and structured deposits may be the solution to many clients’ problems. ■ Fernando Gasca is Head of Investments at Cater Allen

A

*the gross rate is the interest rate payable before the deduction of the basic rate of income tax, currently 20%.

Many investors wanting to jump back into the markets are being deterred by a fear of loss, but there is a solution, as Fernando Gasca explains

Structured depoSitS can

prove to be the perFect halFway

houSe For conServative

inveStorS who want to be in

the marketS, but who want to avoid loSS

“”

another iSa SeaSon

Not Just

S

06 insights&OPPORtUnitiEs www.caterallen.co.uk

Perpetual innovation in the pursuit of excellence is a world-beating formula and not something achieved by chance. The environment and corporate

culture created by McLaren is a blueprint for success

The Road To

Perfection

www.caterallen.co.uk insights&OPPORtUnitiEs 07

innovaTion

“”

In 1999, McLaren, in partnership with Foster & Partners, the architectural practice of Sir Norman Foster, set about designing a centre for its R&d department. It opened in 2004 and has since become the heart of the company’s drive towards engineering pre-eminence.

as Colin Gold, the interior design expert who was brought in to add the all-important finishing touches, says: “The interior is intended to inspire all those who work there as well as to impress those who visit. a building with this amount of personality needs a great deal of interior statement.

“Every detail of the furnishing and décor was very carefully considered to create an environment that was not only perfectly in tune with McLaren’s premium brand image, but which also reflected its commitment to technological innovation, and a philosophy that emphasised the value of teamwork and put people first,” Gold explains.

Much of the furniture was designed to reflect and blend in with both the look of the building itself, as well as the landscape outside. Where the VIP client dining room looks out over the lake and the waterfall, the perimeter of the large oval dining table consists of

hand-made glass in which bubbles create the effect of running water.

What is perhaps most innovative, however, is how the building uses the natural environment to provide power and security.

“This is a very large building,” says David Nelson, head of design at Foster & Partners. “The main body of the building is broken into 18-metre wide ‘fingers’, with six-metre wide strips between them, which we call the ‘streets’. These allow daylight into the interior of the building and give everyone working inside an awareness of the outside. They also form part of the ventilation system of the building.”

Passion for Perfection outside, the MTC is surrounded by a series of artificial lakes: one formal lake directly opposite that completes the circle of the building and an additional four ‘ecology’ lakes. The water contained in these lakes is pumped through a series of heat exchangers to cool the building and to dissipate the heat produced by the wind tunnels used in testing the cars.

as well as creating the best possible technical environment, facilities for employees include a

here can be fewer more competitive environments than professional motorsport. With the margin of victory in Formula One often coming down to thousandths of a second, every team is striving for the next innovation to ensure competitive advantage.

It’s no surprise then that the primary teams have invested heavily in research and development (R&D)

– and leading the way in developing cutting-edge facilities is McLaren.

Located in the Surrey countryside, the McLaren Technology Centre (MTC) represents more than 10 years of development and is fundamental in securing McLaren’s place at the top of motorsport. The building’s 57,000 square metres of office space is home

to the majority of the McLaren group’s 900 employees. It’s a major facility that

required the expertise of a team of scientists and architects to bring it to fruition.

T

A building with this Amount of

personAlity needs A greAt deAl of

interior stAtement

innovaTion

WIN!a ViP tour of the Mtcif you want to be in with a chance of seeing what goes on behind the scenes at one of motorsport’s most innovative companies, all you have to do is answer the following question:

Who is the current team Principal of the Vodafone McLaren Mercedes team? a Ross Brawn B Martin Whitmarsh c Adrian newey D Christian horner

go to www.caterallen.co.uk/mclaren, tell us your answer and you could win a ViP day out at the MtC later this year, which includes an in-depth tour and some special mementoes of your visit.Terms and conditions apply and can be found on the website.

700-seat restaurant, a juice and coffee bar, a swimming pool and a fitness centre. The MTC has become one of the most coveted postings for anyone in the motorsport industry. It also acts as an emblem for the company’s commitment to innovation.

And it’s not just the MTC that reflects McLaren’s passion for perfection. Santander, a long-standing corporate sponsor of the Vodaphone McLaren Mercedes team and its drivers appreciates the synergies between environment, corporate culture and building a winning proposition. “What’s evident when one visits this incredible facility is that the organisation and each and every individual within it, irrespective of their role, is striving for perfection on a daily basis,” says Stephen Kiggins, head of Marketing at Cater allen.

It’s that exacting attention to detail and pursuit of nothing short of the optimum result in every facet of what the organisation does that has engendered a winning ethos, and the vast trophy cabinet and the row of legendary title-winning cars that you pass in the main ‘boulevard’ of this stunning building stand testament to this. ■

8 insights&OPPORtUnitiEs www.caterallen.co.uk www.caterallen.co.uk insights&OPPORtUnitiEs 9

product summary

Cater Allen aims to offer a range of simple, safe and secure structured products. This summary table gives further details on the products featured opposite.

For more information, please visit www.caterallen.co.uk

AnnuAl locked-In RetuRn PlAn 5

enhAnced GRowth PlAn 10

UK tax resident Yes Yes

Overseas resident no no

Early bird interest no Yes, 0.50% AER (fixed)

IFA rebate to client (not available for cash ISA or ISA transfer monies) Yes, 0.50% increments Yes, 0.50% increments

Minimum depositFor applications made on or before 5 April 2012 - £5,340. For applications made on or after 6 April 2012 - £5,640

£5,640

Term 6 years 6 years

Offer period dates 23/02/2012 - 19/04/2012 10/04/2012 – 05/06/2012

Commencement date 18/05/2012 03/07/2012

Maturity date 22/05/2018 05/07/2018

Underlying FtsE 100 index FtsE 100 index

Payoff

6 Year plan that locks in a gross return of 6.50% each year that the FtsE 100 index is at or above the initial index Level. Original investment and locked-in returns paid at maturity (Max 39%)

An amount equal to 400% of any growth in the FtsE 100 index between the initial index Level at the commencement date and the Final index Level at maturity, subject to 40% cap

Averaging none Monthly over final year

Is this a “Capital at Risk” payoff? no no

IFA commission 3% 3%

FSCS protection Up to £85,000 of total holdings with Cater Allen Up to £85,000 of total holdings with Cater Allen

Protection level 100% at Maturity 100% at Maturity

Potential for loss of capital from a banking default Yes Yes

Income no no

Minimum return no no

Vehicle Deposit Deposit

Tax income tax income tax

ISA/SIPP/SSAS Cash isA/Cash isA transfer/siPP/ssAs Cash isA/Cash isA transfer/siPP/ssAs

Tax-efficiency using offshore bond Yes Yes

Instant access to capital no no

How often are Early redemptions processed? Weekly Weekly

Early exit fee £50 + VAt £50 + VAt

Option to add to investment no no

Moneyfacts rating

External counterparty risk no, all done in-house within santander UK plc

structured products

An opportunity to maximise your clients’ cash ISA allowance with the potential to lock-in six annual returns of 6.5 per cent gross* Savers are under greater pressure than ever to find ways of avoiding erosion of the value of their deposits in real terms. The Annual Locked-In Return Plan 5 (ALIRP5)could provide an attractive solution. It combines the potential to lock-in annual returns of 6.5 per cent gross* with the peace of mind provided by capital protection. As a structured deposit, it also provides eligible depositors with the same level of FSCS1 cover as a savings account. In addition, the ALIRP5 is available within a cash ISA for your clients’ 2012/13 ISA allowance, and transfers of previous years’ allowances.

The ALIRP5 offers clients the opportunity to lock-in a return each year that the FTSE 100 Index is at or above the level of the Index recorded on the commencement date of the plan. At maturity, the client’s original investment will be repaid2 irrespective of the performance of the Index along with any cumulative locked-in returns.

In addition, the plan pays three per cent adviser commission, with the option to partially or fully rebate3 this to your client if you should wish to do so. The rebate would provide the potential to increase the maximum possible gross* return at maturity from 39 per cent of the client’s original investment (equivalent to 5.64 per cent AER*) to 43.17 per cent (which would be equivalent to 6.16 per cent AER*).

The plan can be opened via a cash ISA (or cash ISA transfer), or within an offshore bond, SIPP or SSAS, adding tax efficiency4 to its other benefits. The plan is only open for a limited time and is a limited offer, so your clients will need to apply before 12 April 2012 for cash ISA transfer applications, and 19 April 2012 for 2012/13 cash ISA applications. ■

Get your clients off to the best possible start this ISA season and in the new tax year with two new structured deposits from Cater Allen

A FlyIng STARTthe AnnuAl locked-In RetuRn PlAn 5

the enhAnced GRowth PlAn 10

chooSe fRom the beSt

Your clients could enjoy 400 per cent of potential ftSe 100 Index growth up to a maximum of 40 per centUnsurprisingly, given the uncertain economic outlook, many clients are wary of investment in equities or equity-based funds. But what if there was a deposit-based product that enabled your more cautious clients to benefit from potential stock market growth, without the risk normally associated with investing in equities?

The Cater Allen Enhanced Growth Plan 10 (EGP10) offers your clients the opportunity to realise a return equivalent to four times any FTSE 100 Index growth at the maturity of the six-year term (subject to averaging and up to a maximum 40 per cent gross* [equivalent to 5.77 per

1 For further information about the Financial services Compensation scheme, please refer to the FsCs website www.FsCs.org.uk2 the capital protection is provided by santander UK plc and depends on its continued solvency.3 Rebates will not be accepted on cash isA or isA transfer monies.4 the tax treatment depends upon your client’s individual circumstances and may change in the future.* gross is the rate before the deduction of the basic rate of income tax, currently 20%. AER stands for Annual Equivalent Rate and this shows what the interest rate would be if we paid interest and added it to your client’s Plan each year. Unless your client’s return is the maximum [of 39% for ALiRP5 or 40% for EgP10], the equivalent AER at maturity is variable and will depend upon the performance of the FtsE 100 index.

For more information about either of these plans and for copies of the Product guides, term sheets and sales Aids, please go to www.caterallen.co.uk/structured-products or call us on 0500 009462.

Cater Allen won Best structured Products service Provider 2011 in the annual investments, Life & Pensions

Moneyfacts Awards. these recognise companies who, in the opinion of professional advisers and in combination with analysis by Moneyfacts, have consistently offered ‘the most competitive products, the best levels of service and shown the greatest innovation’ during the last twelve months.

Advisor voting for the 2012 iLP Moneyfacts Awards is now open. if you like the products we offer at Cater Allen or have been happy with the service you’ve received, then please vote for us at www.moneyfactsgroup.co.uk/Awards/llp/2012.

cent AER*]). As a deposit-based product, the plan provides eligible depositors with the same level of FSCS1 cover as a savings account, and full capital protection2 to ensure the return of the client’s initial capital at maturity, regardless of how the Index performs. It could be just what your clients are looking for – rate analysts Moneyfacts seem to think so, awarding it the maximum five stars.

In addition, the plan pays three per cent adviser commission, with the option to partially or fully rebate3 this to your client, and is available within an offshore bond, SIPP or SSAS, cash ISA or cash ISA transfer for tax efficiency4. The plan launches on 10 April 2012 and is only open for a limited time, so your clients will need to apply before 29 May 2012 for cash ISA transfer applications, or 5 June 2012 for all other applications. ■

10 insights&OPPORtUnitiEs www.caterallen.co.uk

ALTERNATIVE INVESTMENTS

Wine investment has moved from the preserve of

Wine nerds to a Widely accepted

investment prospect

“”

Fine wine is starting to be taken seriously as an alternative asset class, but how can investors get a piece of the action? rebecca Gibb reveals all

GRAPE EXPECTATIONS

ALTERNATIVE INVESTMENTS

ven though stock markets have risen in recent months to levels that we haven’t seen since 2008, there is still some uncertainty as to

which way they are headed. It’s at such times that we always hear about investors looking at ‘alternative investments’, and it seems that wine is always top of the list. This then begs the question: is wine really worth considering?

The fine wine market showed relentless growth through to early 2011 – the industry’s benchmark index, the Liv-ex 100, which charts the fortunes of the 100 most sought after wines, rose almost 200 per cent in the five years to February 2011. Only gold outperformed wine as an asset class in this period, while the FTSE 100 and the S&P 500 barely moved. As these figures demonstrate, wine investment has moved from the preserve of wine nerds to a widely accepted investment prospect.

INvESTING IN kNOwlEdGE A year later, many wine investors are licking their wounds after prices took a tumble in the latter half of 2011. The Greek debt crisis and continued global economic uncertainty didn’t help matters, but the fall – like the seemingly unstoppable rise – was dictated by thirsty Chinese buyers. Having only had eyes for Château Lafite Rothschild, collectors in the Far East have since broadened their buying to include a wider spectrum of fine Bordeaux wines. However, the Liv-ex index is largely based on Bordeaux first growths, and weak demand for these wines weighed heavily on the fine wine market. In the year to February 2012, the index was down 16 per cent.

However, the Chinese thirst for fine wines has not been satiated and, in the past three months, the market has shown signs of recovery. In addition, the index statistics don’t tell the whole picture. Those who have invested wisely and looked beyond the first growths to better value Bordeaux wines are all rubbing their hands with glee, as prices hit new highs. Sixty-seven world records were set at an Acker Merrall auction in New York

Ethere is growing demand for their services.

A note of caution, however. All wine funds charge management fees, insurance and a performance fee when you exit, generally after a period of three to five years. And most deduct 20 per cent from the net asset value of the fund before you get your share of the pie. There may also be tax implications when investing in wine. So keep all of this in mind when doing your due diligence.

Like any asset class, it helps to know what you’re doing when investing in fine wine. Buy the right thing at the right price and the right time, and there are impressive returns to be made. However, like equities, it can be a calculated gamble. The Chinese wine bubble has not burst but it has shifted – buy wisely and you may have something to toast. ■

Rebecca Gibb was the Louis Roederer Emerging Wine Writer of 2010.

in March this year, including a US$73,200 (£46,700) price tag for a jeroboam (three litres) of 1999 Domaine de la Romanée-Conti.

The reality, of course, is that investing in wine requires a minimum level of knowledge. If you want to start a wine cellar as an investor, you’ll need to swot up. A good starting point for your research is a fine wine magazine such as Decanter. You can also find lots of information free on the Liv-ex blog, as well as fine wine merchants’ blogs like Berry Bros. & Rudd and Bordeaux Index.

In truth, however, selecting wines is probably not an option for any but the most ardent wine fans with time on their hands. As a result, many investors choose to save themselves the hassle of studying the fine wine market and let someone else do the hard work instead. Unfortunately, the image of wine funds has been tarnished by a number of scams as the sector is, as yet, unregulated.

Andrew Davison of The Vintage Wine Fund admits that there are “plenty of cowboys – some have been suspended, others continue to bring bad press to our sector.” However, there are a number of highly professional companies including The Vintage Wine Fund, Wine Asset Managers and The Wine Investment Fund, whose directors have been authorised by the UK Financial Services Authority.

CAlCulATING ThE GAmblE The average annualised returns for all paid out tranches of The Wine Investment Fund after all charges since 2003 is 14.7 per cent (at 31 January 2012). However, that figure drops to a 6.9 per cent average annualised return for all tranches, including those that have not yet reached maturity. And although past performance is not a guide to future performance, some would argue that in the current environment, this is a more-than-acceptable return.

While it is difficult to ascertain if more people are investing in wine funds, the proliferation of funds across the globe, and their entry into mainland China, suggests

WIN!A CASE Of wINE!We have three cases of wine from Berry Bros. & Rudd up for grabs. Each case (12 bottles) contains four bottles each of Berry’s own red, white and rose wines. to be in with a chance of winning, email marketing@caterallen.co.uk with ‘wine competition’ in the subject line and we will pick three winners at random.For terms and conditions, please see page 2.

www.caterallen.co.uk insights&OPPORtUnitiEs 11

12 insights&OPPORtUnitiEs www.caterallen.co.uk

RetiRement planning

a cash management solution from Cater allen could provide a simple and effective alternative for clients considering a short-term annuity

more flexible

RetiRement planning

or people looking to take retirement income from their pension or SIPP, one of the biggest concerns is finding a way to maximise that income

while keeping the effect of volatile markets and economic uncertainty to a minimum. It’s not surprising, then, that short-term annuities are an increasingly popular choice with many individuals – taking this route allows them to keep their long-term options open in the event that annuity rates or their circumstances change.

The question is, however, whether this is the right choice to make and whether there are other options available.

To start with, it’s worth taking a look at an illustration of how a typical short-term annuity works. Using a five-year term as an example, with a fund of £100,000 and an income of £5,000 per annum, an individual might expect the following outcome:

Cater Allen can, however, offer an alternative cash management solution which would provide the same flexibility but also provide a larger balance for the client or their dependents at maturity. Here is an illustration of this simple, transparent solution:

With the monies from which the income payments will be made held in a call account, such as the Cater Allen Reserve Account for Pensions, and the balance of the monies (the ‘residual’) held in a Cater Allen Term Deposit Account, the client has a fund at the end of five years of £107,735.49 instead of the £94,483.46 that would have been provided by the short-term annuity.

Additionally, in the event of the client’s death prior to the end of the five-year term, their surviving spouse or dependents could access the monies (with interest paid on the deposit up to the date of the client’s death) in accordance with the terms and conditions governing Cater Allen Term Deposit Accounts.

With many individuals looking for greater flexibility and security in their retirement options, we believe that taking this route can help them achieve just that.

find out more

www.caterallen.co.uk insights&OPPORtUnitiEs 13

1 Based upon MetLife Freedom income Plan illustration (26 March 2012). the MetLife Freedom income Plan is a guaranteed insurance product restricted to 55 to 85-year-olds offering terms from 3 to 25 years. the minimum amount to set up the plan is £20,000 and it is classified as an insurance product for the purposes of FsCs cover. the plan offers 100% Value Protection, Dependents Benefits and a Freedom Clause facilitating access to the pension fund in the event that the client should become ill during the term of the plan. Factors such as the age and sex of the client and whether the case is single life or joint life will impact the annuity guaranteed maturity value.

2 Based upon Cater Allen Reserve Account for Pensions call account and Cater Allen term Deposit account. the Cater Allen Reserve Account for Pensions offers tiered rates of interest with interest credited quarterly, up to 30 transactions per month with no cost and requires a minimum deposit of £5,000.

the Cater Allen term Deposit account offers an interest rate of 4.00% gross p.a./AER* (fixed) for a five-year term. Rates for other terms are available at www.caterallen.co.uk/interest-rates or by calling 0800 092 5500. A minimum deposit of £50,000 is required. interest can be paid at maturity or annually. For further details, please refer to the Cater Allen Reserve Account for Pensions and term Deposit account fact sheets which are available to download at www.caterallen.co.uk. Correct as at 26 March 2012.

* gross is the rate before the deduction of the basic rate of income tax, currently 20%. AER stands for Annual Equivalent Rate and this shows what the interest rate would be if we paid interest and added it to your client’s account each year.

Making retirement

For further information and Cater Allen interest rates, please go to our website at www.caterallen.co.uk or call 0500 009 462.

F

typical short-term annuity 1

Fund/annuity purchase price – £115,943.92income payments to be made over five years – £27,393.20 (5 x £5,478.64)Annuity guaranteed maturity – £94,483.46

cater allen solution 2

Fund – £115,943.92income payments to be made from Cater Allen Reserve Account for Pensions over five years – £27,393.20 (5x £5,478.64)Residual amount – £88,550.72Cater Allen term Deposit value at maturity (4.00% gross p.a./AER* (fixed)) – £107,735.49

14 insights&OPPORtUnitiEs www.caterallen.co.uk www.caterallen.co.uk insights&OPPORtUnitiEs 15

building your business

WITHOUT SETTING OBJECTIVES, IT’S

IMPOSSIBLE TO GIVE YOUR BUSINESS A

DIRECTION FOR THE FUTURE

“”

do you feel like your business is standing still or not moving in the direction you want it to? Then maybe it’s time to take stock and create a new

marketing plan to really help raise your game

get some

BOOM fOr yOur Business

building your business

t’s very easy to get so wrapped up in the day-to-day running of a business that you lose sight of where you are going. If you find that

this is happening to you, it’s possible that the time has come to sit down and rethink your business strategy – and the best place to start is with a marketing plan.

A marketing plan can be a powerful tool to help your business grow and become more profitable. It asks where you are now, where you want to be and, most importantly, how you are going to get there. A true marketing plan gives you focus and can help you identify opportunities, maximise your resources and give you the control to move your business forward.

so let’s get started...

Where are yOu nOW? The first section of the plan is to understand where your business is now. You need to figure out who your customers really are, what competition you’re up against, and any internal or external factors that have an impact on what you do.

First up, identify your target market – consider factors such as age, profession, income, educational level, and residential location. At the start of the plan, summarise everything you know about them. that way you can make sure that all of your marketing effort is focused on the right kind of people.

secondly, understand your competition – the more you know about them the better. Start a file on your five main competitors, identifying their strengths and weaknesses. What do they do well that you can learn from, and what do they do badly that might be an opportunity for you? You should monitor how they promote their products and services, and how they price them.

Finally, do a sWot analysis – this will highlight your internal strengths and Weaknesses, and external opportunities and threats. the internal factors might include things like your current profile, the kind of

I

efficient and effective as possible. so how do you tell customers about your

services in an effective and meaningful way? From advertising to email, seminars to newsletters, there are many ways you can promote yourself. You want to use a medium that gets to as many of your potential customers as possible, at the right time and with as little wastage as possible. one important thing to remember is to always talk about your products and services in terms of customer benefits not product features.

Whether it’s changing the way you deliver your services, or developing a promotional campaign, you need to write down the key action points of your marketing plan and their associated timings and costs. that way you can get a full picture of what you need to do, by when, and what budget you’ll need. the chances are you won’t have enough money or time to do all the things you want to do, so the next step is to prioritise. Do a few things each month, and before long you’ll have a full suite of marketing activity up and running.

Finally, all your activity should have a direct ‘call to action’, so you can measure response. there may be external factors that skew your results (competitor activity for example), but it should give you a good indication if an activity is worth repeating or not, or potentially scaling up in the future. ■

staff you have and the location of your office. external factors can usually be grouped under one of four headings – political, economic, social and technological – that might have an impact on how you market to customers. For example, is there about to be a change in legislation that will make a particular financial product particularly attractive for people?

Now that you have a clear picture of where your business is now, you can start to look at where you want it to be in the future.

Where dO yOu Want tO Be? Without setting objectives, it’s impossible to give your business a direction for the future. However, many firms set objectives that are either too vague or impossible to achieve. the key to setting objectives is to make them smARt. they should be:• Specific – Define exactly what you want to achieve.• Measurable – You need to be able to know when you have achieved your objective. • Achievable – The objectives need to be things that really are attainable.• Realistic – Do you have the resources you need to meet your objectives?• Time based – When do you want to achieve your objectives by?

make sure your objectives meet all of these criteria. hOW are yOu gOing tO get there? things like your products and services, how you deliver them, and the communications you use all form part of your ‘marketing mix’. You can control each of these elements to make sure that you are delivering it as effectively as possible for your customers and potential customers.

What products and services you decide to actively promote as part of your marketing plan depends on your customers’ needs and wants, what your competition is doing, and your sWot analysis. giving some thought to your product and service delivery will allow you to ensure that your key touchpoints are as

SOMETIMES ThE SIMplEST ThIngS arE ThE STrOngEST.Cater Allen's structured deposits provide full capital protection at

maturity, straightforward structures, and transparent returns – which

make them easy to understand. They are also backed by the strength

of Santander UK plc.* To find out more, call our Financial Adviser support team on 0500 009 462 or visit us at www.caterallen.co.uk

BEauTIfully BuIlT STrucTurEd SOluTIOnS

Aimed at intermediaries and investment professionals only and should not be distributed to or relied upon by retail investors. *Credit Ratings Agency Fitch rates Santander UK plc ‘A+’ with a ‘stable’ long-term rating outlook as at 27th March 2012 (source: Bloomberg). Cater Allen Private Bank is the name used for banking services provided by Cater Allen Limited. Registered Office: 2 Triton Square, Regent’s Place, London, NW1 3AN. Registered in England number 383032. Authorised and regulated by the Financial Services Authority, except in respect of its consumer credit products for which Cater Allen Limited is licensed and regulated by the Office of Fair Trading. FSA registration number 178737. Cater Allen Limited is part of the Santander group. Cater Allen and the flame logo are registered trademarks. All deposits held with Cater Allen Private Bank are fully and unconditionally guaranteed by Santander UK plc. Calls may be recorded or monitored. www.caterallen.co.uk Telephone 0800 028 1200.

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