Quarter 1 and 2 of 2020 have proven to be massive turning points in the world of finance, commerce, and retail. Traditional routes of commerce have been flipped on their heads. Cash in its exact form is inherently losing its appeal, where do things go from here?
WHAT EXACTLY IS HAPPENING?
In answering that question, we need to look at it in a little more detail.
The Covid-19 Pandemic has given the worlds economies an irreversible push to digitalisation of many different sectors, and in turn has caused various governments to either introduce schemes to incentivise business and consumers, or provide essential training for “old school businesses.”
The introduction of app-based banking in society has attracted a younger generation, with investors piling in the capital for the development of these banks.
However, as this becomes more mainstream news, more and more investors are reading between the lines and noticing the decline of the inherent value of cash in its entirety, with a younger generation focused on what is easiest, and not necessarily the best.
This all points to a major shift in how wealth in its entirety is controlled, and how privacy and security of capital is falling.
SO, WHY IS THIS HAPPENING?
There are a multitude of reasons that analysts and the like can attribute to the gradual decline in the value of cash. But one major factor that can be attributed to this is the increase in the use of online banking, with the National Banking Association predicting over 89% of the UK adult population using online banking rather than going into branch in 2019.
This is where app-based banks come into play. Since early 2015, so called challenger banks came onto the scene with new one stop shops for all their clients needs. According to Challenger Weekly, nearly 60% of new introduced funding into banks were to app-based banks such as Starling and Monzo.
WHAT DOES THIS MEAN FOR INVESTORS?
There are various repercussions for savers and investors, but the worrying factors include the perceived lack of privacy over client funds, with apps vulnerable to hackers, and even foreign governments. The ‘online’ environment has created numerous good opportunities from big fund warehouses, share dealing and more exotic alternatives such as CFD’s. The truth is these all carry technological risk and security issues as well as investor expertise.
Along side this undoubted movement we are seeing an increasing shift to real alternative investments, ones that do not rely on political, high-end decision making from unaccountable individuals.
Perhaps better is where the investment has a fixed asset that underpins it. This of course could be the case with property, art, prestige cars or other assets such as yachts. Berkeley House case offer this type of product through ‘The Yacht Bond’. As always, entering any form of ‘investment’ requires due diligence.
It seems this again points to the benefits of utilising the services of a boutique regulated alternative asset managers who specialise in these types of opportunities, effectively providing some degree of increased assurance that investments, whilst not removing all the risk, are managed correctly. Berkeley House Capital is one such boutique Company.
If you are a Wealth Manager, IFA, Family Office or Finance Professional and would like to know more about our investment products and/or services, send us and email to arrange a convenient time to discuss.
If you would like to discuss any aspect of this note please feel free to email: charlotte@berkeleyhousecapital.co.uk and one of the team will be very happy to arrange call with you.
www.berkeleyhousecapital.co.uk
12 Hay Hill, Mayfair,
London. W1J 8NR
United Kingdom
+44 (0) 207 863 7507
1. Berkeley House Capital is an Appointed Representative of Alternative Asset Management Ltd which is authorised and regulated by the Financial Conduct Authority (No. 450404). Not all of our activities are regulated by the FCA, further details are available from us on request.
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