Monthly Archives

August 2021

Businessman clicking on fraud prevention button

How to protect yourself against financial scams and fraud

By | Uncategorised

There continues to be an alarming rise in financial scams since the first coronavirus lockdown. Here’s what you need to know about the different types of scam, and how to defend yourself.

In an effort to get around increased security measures from banks and other financial services firms, scammers are developing increasingly clever ways to persuade people to part with their personal details and even hand over their money themselves.


Impersonation frauds

One of the most popular ways is through something called ‘push payment fraud’. This occurs when the fraudster manages to convince the victim in ‘real-time’ to make a payment or transfer money from their bank account into another account controlled by the fraudster.

Here’s how this particular scam works. You receive a friendly phone call from someone claiming to represent your bank, HMRC, or a utility provider. The caller knows personal details about you, and the number they call from appears to be genuine (it could be the number on the back of your debit card, for example). The caller will tell you there has been some suspicious activity on your bank account – which means you need to open a new account and transfer all your money into it immediately.

In most instances, the first part of the fraud has already happened. Victims might have had their post intercepted or clicked on a ‘phishing’ email that handed over some of their financial or personal details to the scammer. That’s why they already know so much about you and your finances during the phone conversation.


A cunning confidence trick

The call is designed to make you feel anxious, or that you will be in trouble if you don’t take immediate action. It’s a psychological ploy, backed up with modern technology that convinces people the call is coming from a legitimate and trustworthy source. Before you know it, you’ve willingly handed over all of your money directly into the scammer’s account.

These impersonation scams were particularly prevalent during the early months of lockdown. Perhaps people were already more vulnerable than usual, had added money worries or scammers simply had more time to phish for people’s details and follow up with the impersonation part of the scam.


Investors need to be careful too

There are other impersonation scams out there to be aware of. The Financial Conduct Authority (FCA) has been warning people about the rise of “clone firms”, where criminals copy the names, websites, and literature from established investment companies and use them to target unsuspecting victims on sponsored links on search engines and through social media. Fraudsters will also ‘cold call’ investors directly, claiming to be from a company that the victim already has an investment with. In some instances, fraudsters have even set up email addresses in the names of actual staff members at investment management firms they are pretending to represent.

The fraudster will quickly gain the confidence of the investor and persuade them to make new investments or transfer existing investments. These new investments eventually turn out to be wildly over-priced, impossible to trade or they don’t even exist. Many investors only realise they have been conned when they contact the authentic investment firm to chase payments that haven’t arrived.


Pension freedoms have opened the door to fraudsters

Pensions have also become a target for criminal scams, especially since the introduction of pension freedoms that mean people can access their pensions early. People now have far more flexibility in what they do with their pension pot. For the fraudsters, this is an opportunity to get their hands on previously untapped wealth, and to rob people of their life savings.

The FCA and The Pensions Regulator estimated that more than £30 million had been lost in pension scams since 2017. Victims of pension scams, where fraudsters have managed to persuade the pension owner to transfer their pension to a fraudulent pension scheme, have lost an average of £91,000, and some unlucky victims have been robbed of more than £1 million of their hard-earned pension.


What can you do to protect yourself?

There are some common-sense steps you can take to help defend yourself against financial scammers. Here are some of the most useful ones to remember:

  • Don’t automatically trust an unexpected communication from your bank, HMRC or a company you’ve done business with, and don’t ‘confirm’ your personal details or agree to transfer any money.
  • Pay alert to messages from your bank or other service provider that ask you to click on an email link – they could be phishing for your personal details.
  • If you’ve been called by someone claiming to be from your bank, end the call and then phone the official bank number from a different phone (scammers can keep the line open if you call back from the same phone).
  • Reject ‘out of the blue’ investment offers, and remember that if something sounds too good to be true, it usually is.
  • Be wary of cold callers trying to flatter you, pressure you, or scare you. Don’t allow yourself to feel rushed into making a financial decision.
  • Trust your instinct. If something feels suspicious, report it.
  • Always get professional financial advice between switching investments or making changes to your pension arrangements.



The Citizens Advice Bureau has repeatedly warned that the most vulnerable people are often at greater risk of being contacted by a scammer. But the reality is that these are sophisticated, ruthless criminals who go to great lengths to present themselves as genuine. It’s easy to be deceived, especially when the scammers know so much about you and are preying on your personal fears. But knowing how the fraudsters operate is an important first step to ensuring you don’t give them what they want.


You can report potential scams by calling ActionFraud on 0300 123 2040, or visiting

If you are interested in discussing the above with one of our experienced financial planners at FAS, please get in touch here.


This content is for information purposes only. It does not constitute investment advice or financial advice.

Female small business owner

Why smaller companies can mean big rewards for investors

By | Investments

If you are considering adding extra growth potential to your investment portfolio, it’s worth taking a look at UK smaller companies. Smaller companies offer greater potential for long-term growth than their larger counterparts, although this potential does come with greater investment risk.

A few years back, the then Prime Minister David Cameron called small companies “the lifeblood of the UK economy”. It’s not hard to see why. While large companies dominate the headlines, small businesses drive growth, create employment and encourage competition through innovation and disruption. According to the Department for Business, Innovation & Skills, small and medium-sized businesses (businesses with less than 250 employees) make up three-fifths of the employment and around half of the turnover in the UK private sector.

One of the key attractions of investing in smaller companies is their ability to adapt quickly to change. The events of the last 18 months have seen UK smaller companies stay resilient during the heightened uncertainty caused by Brexit and the Coronavirus pandemic. Even more crucially, because of their size, smaller companies are typically more innovative and agile. This means that they can rapidly adapt to new distribution methods or respond to changing customer needs. If they spot an opportunity, they can quickly capitalise on it.


The Alternative Investment Market

Of course, one of the challenges with trying to invest in smaller companies is that it is much harder to know where to find them. The London Stock Exchange is the natural location for larger, more established companies to list their shares, but if you are interested in investing in outstanding – but less well known – British smaller companies, the Alternative Investment Market (AIM) is really the best place to start.

AIM was established in 1995 as a route to market for smaller, growing companies seeking access to capital. Over the years, it has become home to a broad and diverse range of smaller companies operating in a variety of different sectors and at different stages in their own development. Today, AIM is widely recognised as the best smaller companies market in the world – home to innovative, entrepreneurial companies that are challenging their large cap competitors.


Smaller doesn’t always mean small

Despite the name, most smaller companies are probably much larger than you think. For example, companies listed on AIM include well-established household names such as Hotel Chocolat, Naked Wines, and Fever Tree. Although the regulatory requirements for AIM are less stringent than for LSE-listed companies, it is still a highly-regulated market, and companies hoping to list on AIM must meet certain strict criteria before being granted a listing.

Investing in AIM also offers exposure to lots of innovative and fast-growing sectors, including  healthcare and bioscience, media, technology, and financial services.


Are smaller companies more risky?

Because of their high-growth nature, smaller companies, including those listed on AIM, are considered at the higher end of the risk/return investment spectrum. Their shares can be more volatile, particularly during general stock market downturns, and carry a higher risk of company failure. Smaller company shares can also be harder to buy and sell, as the market for the shares is considerably smaller. Because of this, AIM is considered as a market that requires an appropriate amount of investment knowledge and equity trading experience.

So, when we talk to clients about the investment potential available from smaller companies, we tell them that investing in AIM is better suited to investors who have a longer-term investment horizon, and are prepared to have their money invested for several years. Investors also need to be mentally prepared for the likelihood that some companies will not succeed, and that they are willing to accept the higher risks associated with investing in such companies.


What else should investors know?

For those investors prepared to accept the higher risks associated with investing in AIM-listed smaller companies, there are tax benefits to consider. For example, AIM shares can be held in an Individual Savings Account (ISA), and there’s no stamp duty to pay on AIM shares, whether they are held in an ISA or not. Also, most companies on AIM benefit from a government-approved tax incentive known as Business Relief, which means that the value of the shares in these companies should become exempt from inheritance tax when the investor dies, subject to minimum holding periods. However, as we’ve noted, investors should remember these tax incentives are intended to offset some of the risks of investing in AIM-listed companies. In other words, investors should think of the tax benefits as an added bonus, not the only reason to invest.


Is now a good time to invest in UK smaller companies?

There are lots of reasons to be positive on the future for UK smaller companies. With most of the world still recovering from the pandemic, central banks and governments are still providing support for their respective economies. As a result, there’s a good chance of a stronger recovery for the rest of this year, and into 2022 and beyond.

And as we have seen over the last 18 months, the pandemic has helped to accelerate a lot of the changing trends in society, increasing the need for remote working, more efficient technology, and a greater focus on health. These are all important trends that smaller companies are arguably best placed to capitalise on. Another important aspect to consider is that lots of successful smaller companies could get ‘snapped up’ by larger competitors, which could greatly increase the value of their shares. Of course, given the higher failure rate of smaller companies, it’s a good idea to find  a dedicated portfolio manager who is able to spot those smaller companies with potential and that stand the best chance of long-term success.


Final thought

Investing in smaller companies is a great way to add a dash of excitement and high-growth potential to an investment portfolio. Within the smaller companies universe, especially on the Alternative Investment Market, there are lots of outstanding companies – and entrepreneurs –that are on an exciting growth journey, and would welcome further investment to realise their ambitions. But it’s important to recognise the risks, and to appreciate that not all these great British companies will prove to be great investments. When it comes to smaller companies, finding the right companies is an art in itself.

If you are interested in discussing investments with one of our experienced financial planners at FAS, please get in touch here.

This content is for information purposes only. It does not constitute investment advice or financial advice.

investment portfolio

Reducing the capital gains tax liability in an investment portfolio

By | Tax Planning

You don’t know what you’ve got till it’s gone, and investors would be wise to make use of their annual capital gains tax allowances while they’re still available.

Making a good return on investments is one of the reasons why people come to us for help with their finances. But while choosing the right investments is an essential part of the process, it is just as important to make use of any tax allowances that are available. One particular allowance worth taking advantage of is the capital gains tax annual allowance.


What is capital gains tax?

Capital gains tax (CGT) is the tax that can be charged on the profit or gain made when selling, gifting, transferring, exchanging or disposing of an asset. CGT doesn’t apply in all cases, such as selling your home or any personal belongings worth less than £6,000, which are not subject to CGT. However, ‘chargeable assets’ – which includes shares, investment funds, and second properties – that generate a capital gain when they are sold will generally be liable for CGT.


What’s the CGT annual allowance?

When selling investments, basic rate taxpayers will be required to pay CGT at a rate of 10% on gains made on chargeable assets, and higher and additional rate taxpayers can expect to pay 20%. But the good news is that everyone has their own personal CGT allowance available every tax year (6 April to 5 April), which can be used to reduce or eliminate a CGT liability. For the current tax year, the CGT annual allowance is £12,300. This means you can make a profit or capital gain on chargeable assets up to that amount before any CGT is due, and you will then pay CGT at your tax rate on the remaining gain over that amount. Of course, if you have made several gains over the course of the tax year, the CGT liability will be calculated based on the total gain made in the year, with any losses crystallised offsetting the gains made.


How can people end up with a surprise CGT bill?

Although current CGT rates are historically low (CGT was as high as 40% in recent years) and most individuals will never pay it, it does catch investors out from time to time. In our role as financial advisers, we are often asked by new clients to review their existing investment portfolio arrangements.

Where investments have been held for many years, we often discover portfolios laden with investments that carry significant capital gains, that have accrued over a long period of time. Often investors haven’t made use of the CGT annual allowance in past years, and with CGT, it is a case of using the allowance each year or losing it, as unused allowances cannot be carried forward to be used in future years.

So, one of the first things we do is to make sure that the client’s investments are being managed wisely, and with due consideration to the tax implications that come with it. Careful management at key times in the tax year mean we can limit the gains payable on an investment portfolio, ensuring that gains are realised each year to use up the CGT allowance. In most cases, carrying out this practice of limiting the gains payable on an investment portfolio can have a significant positive long-term impact on the total return on the investment.

Will CGT rules be changing soon?

Towards the end of last year, Chancellor Rishi Sunak commissioned the Office of Tax Simplification to look at simplifying the CGT rules, and also asked it to consider specific areas where the existing rules distort people’s behaviour. In response, the Office of Tax Simplification published a report that recommended the annual CGT exemption should be reduced from the current level of £12,300 to between £2,000 and £4,000. Their report also suggested realigning CGT rates to income tax, which would take them from 10% and 20% on investments (for basic and higher rate taxpayers) to 20% and 40% respectively.

Should these proposals be adopted, this would mean lots of people would suddenly face considerable CGT bills. For example, under the new proposals, a higher rate taxpayer who made a capital gain of £12,300 (which is currently exempt from CGT) would find themselves stuck with a CGT bill of somewhere between £3,320 and £4,120. That’s clearly a significant tax hike for anyone to pay.

At present, there’s no indication that the recommendations published by the Office of Tax Simplification will be implemented. But given the unprecedented levels of government support offered during the pandemic, there is a good chance that changes to CGT will arrive in some form. For now though, it’s a good idea to take a look at your investment portfolio and make sure that your annual CGT exemption is being used to the fullest extent.


If you are interested in having a conversation about your investment portfolio with one of our experienced financial planners at FAS, please get in touch here.

This content is for information purposes only. It does not constitute investment advice or financial advice.