Speaker Simon Flather - Learn how to make a fortune!

Simon Flather is the proprietor of Independent Financial Publications a stock market tip sheet and also runs the Ilkley office of stockbrokers Redmayne Bentley.

First Simon gave us a bit of history of the English Stock Exchange from it's early days in the coffee houses of London where Joint Stock Companies searched for capital for their ventures to the formation of the London Stock Exchange in 1773. He then went on to the formation of the FTSE 100 in 1984 and big bang in 1986 to explain how pretty much all dealing was done these days electronically although he does still occaisionally telephone the Market Makers when needing to do a deal in a smaller lightly traded company.

He then told us how much of his life is now spent filling in forms to meet the requirements of the Financial Services Authority (FSA) in order to meet their requirements that clients are properly vetted before being given advice. He said that this is one of the reason many firms now prefer to act as execution only brokers who would not give advice. His own firm is a full service broker so they will operate on three primary levels: -

1.  Execution Only here the broker buys and sells shares on the instructions of clients but offers no advice about what to buy and sell.

2. Advisory - here the broker will contact the client to suggest changes in the composition of the portfolio, but does not have authority to trade on a completely discretionary basis. Simon prefers not to operate on this basis as these days the market moves too fast to be able to keep effectively in contact wirth such clients.So if he is dealing with clients who might require this he prefers to suggest:-

3. Discretionary. Here a full analysis is made of the client's requirements, wealth and risk profile and then the broker actually makes the decision on behalf of the client concerning what to invest in and when to buy and sell without getting prior approval from the client.

He said that his firm now do a lot of investment planning around AIM companies as these can be very efficient vehicles from an Inferitance tax point of view as long as the shares are held for a minimum of two years. They will, however, only do such work on a Discretionary basis.

A more general discussion then ensued with members discussing the general volatility of the markets today and we touched on such subjects as Crispin Odey's recent comments, Oil and other commodity price fluctuations, Interest Rates and the uncertainty created by the upcoming General Election.