Your Complete Guide To Renewing Your Professional Indemnity Cover

Earlier this year, the Personal Finance Society confirmed it had been contacted byfinancial advisers 'across the country' who have experienced 'significant' hikes in their PIpremiums.

So why is this happening? And what can you do when it comes to renewing your PI cover?

Why Renewing Your PI Insurance Is Becoming More Difficult

Sad as it is to say, in recent years financial advisers have generated more PI insurance claims than most other professions. The industry has found itself at the centre of several high-profile mis-selling scandals and now faces a new threat in the shape of DB pension transfers.

While premiums have steadily been rising in recent years, anecdotal evidence suggests that firms are now seeing their PI insurance bills rise at a previously unprecedented level. Some adviser firms that offer DB transfers have saidthey are struggling to obtain or afford the cover they need, with some quoted a 500% increase in premiums.

There are three main reasons why PI insurers have been spooked:

  1. The British Steel pension scheme scandal
  2. In April, the Financial Ombudsman Services' (FOS) limit for complaints about actions by firms on or after that date rose from £150,000 to £350,000
  3. Supervisory reviews from the FCA. Last year the regulator reviewed 13 firms and judged that fewer than 50% of DB transfer cases were clearly suitable. These concerns were reiterated in an update this summer

The Knock-On Effects In PI Insurance

The factors above, and other issues, have had several knock-on effects on advisers and planners looking to renew their PI insurance:

  • Higher premiums - a year ago one trade press reported that PI premiums had risen by 21% in the previous year. Since then, some advisers have seen their premiums increase up to four-fold
  • Restrictions - Some PI insurance providers are telling firms that they can only conduct a certain number of pension transfers in any given year
  • Higher excesses - another trade press reports that some advisers have seen DB transfer coverage excesses increase tenfold on renewal, from £10,000 to £100,000
  • Shorter renewal terms - some insurers are now offering renewals for only 12 months, rather than the previous 18-month period.

While it may seem as if getting the right cover at a fair price is impossible, don't panic.

5 Tips When It's Time To Renew Your PI Insurance Cover

  1. Prove Your Service

You'll find that it's easier to secure acceptable PI insurance terms if you can evidence that your clients are receiving the level of service and reviews that you have promised.

Keeping excellent records of your service, including review meetings etc. can show an insurer that you're doing what you say you will. If you receive a complaint in the future, you can demonstrate that you did exactly what you said you would - and you can prove it.

  1. Start The Process Early

Don't leave your PI insurance renewal until the last minute. Think about approaching insurers up to three months before the renewal date of your existing cover.

Starting the process early gives you more time to search the market and to find the right cover for your business.

  1. Improve Your Submission To PI Insurers

Insurance is all about managing risk. And, your proposal form is a representation of the quality of your business to the insurance market. So, if you can make your submission attractive to an underwriter, you will increase your chances of getting competitive terms.

Ideally, you should supply a written document that outlines your philosophy and sets out the framework within which your business operates.

For example, this could include whether your firm considers requests from existing clients only (which is likely to be a lower-risk position) or accepts wider referrals. This document may also detail your compliance process and who carries this out.

Invest some time in ensuring your submission looks professional. An underwriter will base their assessment on this document (as well as other information online, such as your website) and so if you can submit a quality presentation, you're likely to secure the best terms.

  1. Shop Around For Cover

Many firms use an insurance broker to secure their cover, with the broker searching the market to find not just the lowest premium, but also the most acceptable terms.

Alternatively, you can head online where you'll be faced with a wide choice of comparison sites and insurers offering terms - however they almost all exclude financial services firms, so using a broker tends to (currently) be the best way to reach the market.

  1. Consider Joining A Network

If you believe there is a risk that PI insurance cover may not be offered, either now or in the future, you might want to think about joining a network like Beaufort Financial (of course!) to have the security of a larger policy negotiated on your behalf.

If you need any further information, don't hesitate to get in touch. Equally, if you don't agree, I'd still love to hear from you.

Why marketing equals impact

Why Marketing Equals Impact

A few days, ago, I noticed this fascinating tweet by Carl Richards. If you don't know Carl, he's a financial planner and creator of Behavior Gap, where he makes complex financial concepts easy to understand.

As part of Carl's manifesto, his first declaration was that 'We Believe Marketing Equals Impact'. It got me thinking about how you create truly impactful marketing, and the impact that good marketing can have on your business.

As Carl says, 'people don't know that real financial advisors exist'. So, how do you use marketing to solve this problem?

You need a strategy

Think about how you deal with your clients. They come to you with a problem or challenge that they are facing. They may even have some idea of how to tackle it. However, by the time they leave you, they have a plan and will understand the importance of thinking more strategically.

It's exactly the same for businesses with a marketing 'problem'. Strategy will help you to:

  • Understand your target markets so you know what you should be doing to market your business effectively (see more below)
  • Understand your own business, so you know what your key USPs are and where you offer a point of difference. Once you're clear on what your business does, it's easy to explain it to others
  • Set out your aims and objectives
  • Measure the effectiveness of your current activity
  • Focus on the right opportunities for your business, allowing you to target your resources at the right activity (this will save you time and money)
  • Understand the ways in which you measure the effectiveness of your marketing strategy.

Know your target clients

Understanding who your target clients are is so important that I'm going to treat it separately here. If you don't understand the people you are marketing to, how will you attract them?

As a start, build up some client personas which should include information such as:

  • Age, gender, location, income and employment status
  • A summary of the concerns and problems these clients have, and what might trigger their search for advice
  • What you can do to help solve these problems and help the clients to achieve their goals
  • How these clients make decisions, and what is important to them
  • What clients' objections to taking advice might be. Why would they elect not to take advice or choose another adviser?

You'll probably know much of this information from your existing client base. If not, conduct a client survey or focus group to build up a clear idea of who you want to target.

Decide where to focus your marketing resources

Firstly, it's important to remember here that your marketing resource isn't just your spend in pounds and pence. It's also your time in monitoring the effectiveness of your campaign and making changes as appropriate.

For example, getting active on social media might actually not cost you a penny in marketing spend. However, monitoring your account, following like-minded people, scouring the web for great content to share, writing your own blogs and newsletters, and creating enticing images to accompany your posts might take a fair bit of time!

Here's another suggestion: improving your referral process could also help you to generate new leads and new business without you having to spend anything.

If you do have a marketing budget, heading online is a good place to start.

To do that, have a think about how a potential new client finds their way to you. Either they get your name from a friend or colleague or are referred to you. Their next step will probably be to type you into a search engine and see what the results show.

So, at the very minimum, you need to be visible online. Imagine, though, if you could create an amazing first impression. You'd appear high in the search results, with a fully completed Google profile that shows lots of positive reviews and links to your popular social media accounts.

When a potential customer clicks, they would then get to see your website which explains who you are, what you do and why they should choose you. Social proof such as testimonials, award wins and client videos can really help.

Of course, a potential client may be looking to solve a problem but may never have heard of you. That's when your client personas are so important, as you can carefully target potential clients by gender, age, location, and search term using Facebook, LinkedIn and Google AdWords.

It's about mapping the content to the customer journey:

Measure your success

Often, I hear clients talk about marketing to 'build their brand' or to 'raise their profile'. In theory, these are perfectly laudable objectives - but how on earth will you know when you have met them?

If you're going to implement a marketing strategy, you have got to have goals and you have to be able to measure them. Examples might be:

  • 20 new downloads of your pension guide
  • 10 completed contact/enquiry forms
  • Increasing website traffic by 20%
  • Reach 500 Twitter followers
  • Increase the number of newsletter sign-ups by 75

Of course, knowing what you want to achieve also helps you to define your marketing plan. Improving your Search Engine Optimisation or using AdWords is likely to get more traffic to your website. Creating useful and shareable content on social media will help you attract more followers.

Whatever you do, make sure you measure it - otherwise, you'll never know what has worked, and what hasn't.

Getting your marketing right

In the past, I've looked at why it's important that you understand the areas in which you add value, and delegate everything else.

According to a Cerulli Quantitative Update, financial advisers spend up to 41% of their time on admin and office management tasks. You will, no doubt, be responsible for tasks which aren't in your main field of expertise, or that you don't enjoy. Examples of such tasks include:

  • Compliance
  • Case reviews
  • Training and competence
  • Marketing
  • Investment management

While all these tasks are crucial to your business, there might be people better placed to undertake them. That's where we come in. We understand that you sometimes need to delegate your marketing to the experts, and that's why we provide an outsourced solution for all the above.


Simon Goldthorpe

Executive Chairman, The Beaufort Group


Interest rates rise above 0.5% for the first time in a decade

The Bank of England (BoE) has increased interest rates above 0.5% for the first time since 2009.

Today, the Monetary Policy Committee (MPC) voted unanimously to push up the base rate by 0.25% to 0.75%.

That's not a massive increase; savers aren't going to suddenly start seeing real returns on most of their bank or building society accounts and it won't cause significant pain to most mortgage holders.

However, coupled with the 0.25% increase in November last year, it is another warning shot that interest rates aren't going to stay at record lows forever and that those with debt should prepare for further increases.

So, how will today's rise affect you?

If you are a saver…

You will hopefully see the increase passed on in the form of higher interest rates.

Nevertheless, it's probably too soon to get over excited. With inflation (as measured by the Consumer Prices Index) currently at 2.3%, you would currently have to tie up your savings for at least five years to get a 'real', above-inflation return. However, tying up capital for that amount of time isn't without risk and is something to think carefully about doing, before making a commitment.

However, we expect savers will welcome any increase in interest rates with a small cheer, even if they aren't breaking out the bunting just yet!

If you are a borrower…

How you're affected by a base rate rise will depend on how you are borrowing money.

If you have a tracker mortgage, where the interest rate is pegged to the BoE base rate you can expect your monthly mortgage payment to rise almost immediately. The same is almost certainly true if your mortgage is arranged on your lender's Standard Variable Rate (SVR). If you have a fixed-rate mortgage, you won't see any immediate change to your monthly payments, because as the name implies, your interest rate is fixed and won't change for the duration of the product you selected when you took the mortgage out. However, the pain may only be delayed until your fixed rate ends, at which point your payments may rise due to the increase in interest rates which occurred during the period of your fixed rate.

Whether you are immediately affected or won't be until the end of your fixed rate, all mortgage borrowers should start to prepare for further interest rate rises.

There are three key things to do here:

Check your mortgage deal: Use comparison tools or ask your financial adviser or planner to help you to work out whether you are currently receiving the most competitive rates available on the market. This may mean considering a fixed rate, which will protect you from further interest rate rises for a period.

Review your household expenditure: This will help you to understand whether there are any items you can cut back on to create surplus income which could be allocated to higher mortgage payments should rates rise again. Then, you can begin to benefit from making those cutbacks straight away, potentially using the extra income for your emergency fund.

Build and maintain your emergency fund: If you don't already have one in place, now is the time to take steps to build up an emergency fund. This could help you to recover as and when further interest rate rises take effect, or, as the name suggests, bail you out in a financial emergency.

Should we expect further rate rises?

The BoE Governor, Mark Carney, signalled that three further rate rises will be needed to avoid the rate of inflation remaining above 2% over the next three years.

The report released following the announcement clarifies this: "The Committee also judges that, were the economy to continue to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the 2 per cent target at a conventional horizon.

"Any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent."

Communicating the benefits of advice: Why there's still more to do

In my experience, most advisers and planners communicate, and demonstrate, the value of advice very effectively in their one-to-one client interactions.

Furthermore, we all know that high-quality financial planning adds far more value to the client than the fees they pay. Indeed, there are times, particularly as people move from the world of work to one of retirement, when financial planning is genuinely life changing.

However, research from YouGov*, commissioned by Beaufort Financial to coincide with the third anniversary of Pension Freedoms, has shown that the wider public awareness of the value of advice is lower than we might have hoped.

Only one in 3 expect to seek advice

The introduction of Pension Freedoms (more of that in a moment), coupled with heightened interest in Defined Benefit and Final Salary pensions, mean that most advisers and planners I speak to are incredibly busy.

Despite that, our survey found that the 'value of advice' message isn't getting through to most people; only 32.08% of the over 50s who have not yet retired expect to seek financial advice about their retirement in the future.

Unsurprisingly, the likelihood of taking advice increases as people get closer to more traditional retirement ages. Even so, millions will retire without seeking any form of financial advice.

Perhaps the lure of early retirement might convince more people to seek advice? Sadly not. Only one in 10 (11.97%) of people who had not already retired, said they were more likely to seek financial advice if it meant they could retire early.

Millions in the dark?

Pension Freedoms represent the single largest change to retirement planning during my financial services career. Used correctly they can help people retire more flexibly, moulding an income to their lifestyle and potentially leaving a financial legacy when they are gone.

Conversely, there's no doubt Pension Freedoms also present a threat if poorly thought through decisions are made.

Pleasingly, among 50-64-year olds 63.84% of people are aware of the rules. However, that leaves approximately 4.5 million** adults potentially in the dark about Pension Freedoms; if they don't know about them, how do they take advantage of the opportunities and avoid the threats?

Gender gap

At a time when many companies are reporting large gender pay gaps, our research revealed that women are 24.91% less likely to take financial advice about retirement than men.

Equally worryingly, significantly more women (50.76%) are unaware of Pension Freedoms compared to men (30.25%). While 60.35% of men are aware that Pension Freedoms could help them retire early, compared to just 39.23% of women.

Where next?

The natural temptation would be to focus on the here and now. After all, most advisers and planners are incredibly busy advising clients and developing their business.

In my view, that would be a mistake.


Two reasons. Firstly, there's a huge need for advice, eloquently demonstrated by the FCA's 2017 Financial Lives survey, which found that:

  • 53% have not reviewed how much their pension pots are worth in the last 12 months: Advice will help these people understand what their pension is worth and more importantly, whether it will provide the retirement they want, and if not, what they can do about it.
  • Seven out of 10 (71%) of UK adults with a Defined Contribution scheme were not aware of any charges on their pension: Excessive charges eat into the future income retirees can expect. It often takes an adviser or planner to make clients aware of what they are paying and the effect it will have on their retirement income.
  • 17% of consumers who have accessed a pension pot report fully withdrawing their pension pot in the last two years: An adviser will help their clients withdraw money tax-efficiently, taking only what is necessary to meet their needs and helping avoid emotionally driven decisions.

Secondly, when I finally put my feet up and look back on my career, I want to feel that I have contributed to building an enduring and sustainable profession.

I hope you feel the same.

To do that we need to engage with the people who don't plan to take advice. Sure, it will look different:

  • More advice will be delivered through the workplace
  • Guidance may become more common
  • We'll need to innovate to develop propositions attractive to Generations X and Y

However, the prize is worth it. Not only will we create opportunity for those who chose to make financial services their profession, but ensure future generations build a more secure financial future.

I firmly believe the profession I love, and am proud to be a member of, is up to the task.

Finding the right fit; looking for the right DFM

Discretionary fund managers (DFMs) now play an important part in advice firms' propositions. Click here to read the New Model Adviser Outsourcing Roundtable supplement, in association with Beaufort Investment.

Beaufort Analysis 275 - Tension Ascension

Geopolitical developments took a potential turn for the worse at the end of the week as tensions heightened between the US and Russia in the wake of the US-led missile strikes on Syria and the latest round of US sanctions. President Trump had warned the Assad regime and its allies earlier in the week that they would pay a 'big price' following the suspected chemical attack in Syria which left over 70 people dead. Russia, which had already seen its main index fell 11% following the US' sanctions on oligarchs and companies linked to Vladimir Putin, urged the US to avoid military action. The rising tensions lifted the price of oil to over US$70/barrel; a 50% increase from last June and a level not seen for three years.

Global trade grew at its fastest rate for 6 years in 2017, according to the World Trade Organisation (WTO), and the outlook is positive, but only if tensions between major economies do not escalate into a full-blown trade war. The tariffs imposed by Donald Trump on aluminum and steel from China kicked off a chain of retaliatory measures leading to China recently responding with its own tariffs on 128 US imports, which included soybeans, pork and fruits, aimed at crippling the US agricultural sector. In an attempt to put pressure on China, the President is now considering rejoining the Trans-Pacific Partnership (TPP), the organisation he withdrew from when he came to office, which resulted in US farmers being deprived of preferential duty rates with other members. The 11 members of the TPP would welcome back the US but only on their terms. In the meantime, analysts believe that China could use monetary policy to devalue its currency, thus making Chinese exports cheaper for Americans and mitigating the effect of the tariffs.

Needless to say, markets have seen continued volatility over the last few days but ended the week more than 1% higher. So far this year, the S&P 500 Index has either risen or fallen more than 1% in one day no less than 28 times. There were just eight similar sessions during the whole of 2017. The last time such volatility was witnessed at this point of the year was in 2009. The FTSE 100 Index has already recorded 15 daily movements of more than 1% compared to a total of 16 for 2017. Contributing to the weaker performance of the FTSE 100 has been the strength of sterling to the US dollar which currently stands at its highest level since the result of the EU referendum.

Beaufort Analysis 274 - "Seeing The Wood For The Trees"

The S&P 500 took a small hit at the end of last week, following China's refusal to negotiate with the US to try to ease trade tensions. There are currently 1,500 items on a list that could be affected by the tariffs, including soybeans and cars. Soybeans are particularly important to worldwide agriculture, as they are crushed and used as livestock feed; but the global supply is not enough without the US, so China would struggle without this crucial import. Whilst the movements in the markets are small, the continuing bickering between the US and China could escalate leading to increased volatility. China's President, Xi Jinping, is expected to deliver a speech this week at the Bo'ao Forum for Asia regarding economic reforms in his country.


The US and North Korea have been holding talks in preparation for a summit to converse about the possible denuclearisation of the isolated nation. However, North Korea does have a history of backtracking and it is not clear what The Democratic People's Republic aims to achieve with the denuclearisation and talks with the US; and neither has a date or location been set for the discussion.


Last week was the deadline for companies with over 250 employees to publish their wage data for all staff, to show the difference in hourly pay between men and women. The average UK pay gap for these 10,000 companies that reported their pay data is 9.7%, with the worst industries including construction, finance and education. The data shows, at a top-level view, that there are more men in the workplace, and those men tend to be paid more often because of their more senior roles at work.


Despite the negativity around the media reports on the above, these events offer the opportunity for green shoots of growth and development globally.

Beaufort Analysis 273 - Too big to fail?

The book written by Andrew Ross Sorkin, Too Big To Fail, in 2010 and later adapted for a film of the same name, was the inside story of how Wall Street and Washington fought to save the financial system during the Global Financial Crisis. One of the lessons from the Crisis was that some banks proved too big to fail and the fears of systemic collapse pushed both regulators and governments into bailing out hundreds of failing financial institutions.

Not quite the same, but still in the mindset of too big to fail, we have Big Tech. Technology companies were the darlings of the stock market last year, with the FANGs* in the US and the BATs** in Asia, commanding the largest share of global returns. Some of these companies have become so large that investors have become fearful of a growing political backlash, with threats of increased regulation and taxes, which until now, did not seem to have a meaningful catalyst. Until now.

The trigger for the backlash that has spread through the leading tech stocks and been firmly laid at the feet of the trade tantrum between the US and China, leaving investors facing an uncomfortable, albeit familiar story: nothing is forever and the invincibility of Big Tech can no longer be taken for granted.

The current political climate has not helped matters: there are fears of a White House personal vendetta against Amazon, and a massive leak of personal data from Facebook, has led to Big Tech being on the receiving end of huge losses. Amazon tumbled almost 6% on the back of the latest Trump tweet, this time focusing on their agreement with the US Postal Service and threatening to level the playing the field with an increase in tariffs. Why pick on Amazon? Jeff Bezos, the president and founder of Amazon also owns the Washington Post, which has led much of the reporting about the recent chaos in the White House.

Another FANG member, Facebook, has seen its value drop almost $75 billion as a result of the data of 50 million users being leaked to a data analysis firm, which was allegedly used to help the Trump presidential campaign. This has created a wave of annoyance among investors, peers and politicians, with other Big Tech companies distancing themselves from the Zuckerberg brand. In particular, Apple's chief executive was openly critical of Facebook's monetisation of its customers and Google's artificial intelligence expert, François Chollet, tweeted about their use of digital information as a psychological control vector and totalitarian panopticon. In plain English, he sees Facebook as 'Big Brother' in the way they capture and manipulate personal data.

Outside of the FANGs we have an even more sobering story. Tesla is being investigated for a fatal crash involving one of its self-driving cars and their share price dropped more than 7% when markets opened in the US yesterday. March has been the worst month for Tesla in 7 years, with continued negative headlines around its finances and now the news of a fatal crash seeing the company fall more than 30% from last year's high; that translates to over $22 billion wiped from Tesla's value. In what many have seen as brash and offensive, chief executive Elon Musk posted an April Fool's joke, posing for a photograph with Bankwupt! scrolled on a piece of torn cardboard. Not what we would expect from someone who relies on investors to believe in the company's expansion plan without profits in the short-term; Tesla posted a loss of almost $2 billion last year.

This tide of bad news for the Big Tech is good news for short sellers, investors who sell shares they do not own (a form of derivative usage) in the hope that prices will fall, from which they profit. It can be a risky investment strategy, but that has not stopped the FANGs now appearing in the top ten of most shorted US stocks.

It is unnerving to see the market fall this fast on what seems to be news that is not going to change the global economic outlook. It is an example of having to hold your breath while the short-term sentiment passes, if your long-term view on the economy has not changed.

*Facebook, Amazon, Netflix and Google.

**Baidu, Alibaba and Tencent.

Six things you need to grow your financial planning practice

Can you write a piece about business development? they said.

Sure, no problem.

If you could focus on the most important things you need to grow a financial planning business that would be great they said.


That's not as easy as it sounds.

Six things you need to grow your financial planning practice

Can you write a piece about business development? they said.

Sure, no problem.

If you could focus on the most important things you need to grow a financial planning business that would be great they said.


That's not as easy as it sounds.

As the saying goes; there's more than one way to skin a cat, despite that we seem to live in an era where gurus and 'experts' insist there's only one way to accomplish your aim; theirs. Consequently, I'm instinctively nervous about telling experienced professionals how to build a successful practice.

What's more, how does one define success?

For some it could be a purely monetary measurement; the bottom line, a level of assets under management or the margin your business is making. For others it might be a more nebulous but nevertheless important concept, such as work / life balance.

That said, my years have taught me that there are several key components. If all, or most, are in place, you will increase the chances of your business being successful:

1. Define success: We all want different things from our business; there's no right or wrong answer, just what's right for you and those close to you; both personally and professionally.

Nevertheless, it is essential to define what success looks like. Everything else, strategy, tactics and the motivation to continue when times are tough, flows from there.

2. Agree a strategy: Strategy doesn't necessarily have to be complicated; it might just be a series of steps to take you toward a goal. Yet without that strategy in place, the chances of you achieving your desired outcome is significantly diminished. To put it another way: success (however you define it) won't happen by accident.

3. Know your numbers: We all remember the SMART acronym. However, it's not only the end goal that should be measurable. The steps along the way must be too.
For example, if your goal is to take on 10 new clients in the next 12 months, as a minimum you need to know:

• The type of clients you want to attract; you can then measure the enquiries you receive against the 'ideal' client
• Your conversion rate; allowing you to understand the number of new enquiries needed to retain the 10 clients
• The current number of enquiries you are receiving; which will tell you whether you are already receiving sufficient new enquiry numbers, or you need to increase your marketing efforts
• Finally, the number of new clients retained
While the last number represents the headline goal, each element represents an essential component and therefore should be reported against.

4. Get the right people around you: If I've learnt one thing over the years, it's the importance of having the right team around me.

Finding those people is only part of the job though. You must invest in them. That might mean giving them your time or arranging specific training. It also means empowering every member and trusting them to get on with the job.

Let go and let others get on with their job, so you can get on with yours.

5. Get your marketing right: If you don't have clients you don't have a business.

Obvious, yes.
Harsh, perhaps.
True, certainly.

I've often wondered what separates the most financially successful advisory firms from the rest.

There's a long list of factors, however I'd place the ability to generate new clients right at the top of that list. If you don't have that ability, or can't outsource it, the likelihood of hitting your goals will be significantly reduced.

6. Persistence: In the list of factors separating those who achieve success and those who don't, persistence is key.

The ability to continue working towards your goal, in the face of everything life throws at you, is usually the difference between success and failure.

As Winston Churchill said: "Success is not final, failure is not fatal. It is the courage to continue that counts." In other words, as he was also apparently fond of saying, it's the ability to keep buggering on which really counts.

It's not for me to tell you how to be successful, or even how to define it. However, in my experience, it's these six things which increase the chances of your success; whatever that means for you.

Beaufort Analysis 272 - Two Tribes

Having briefly reached the once elusive height of 7000 for the first time in the spring of 2015, the FTSE 100 Index remained above that level for the whole of 2017 as the bull market entered its 9th year. The index peaked at 7778 on 12th January but in a matter of only ten weeks has dropped 11%; 3.5% of the fall coming during last week, alone.

There are two main reasons for the current market volatility. Firstly, and probably most damaging, is the trade war which has now developed between the US and China. Further to Donald Trump's imposed tariffs on steel and aluminium imports, the President has now ordered new 25% tariffs on $50bn of Chinese imports, following an investigation in to intellectual property theft; a long-standing bone of contention. The US also plans to impose new investment restrictions and take action against China at the World Trade Organisation. In response, China has imposed tariffs on just $3bn worth of US imports, but has vowed to fight to the end and not recoil from a trade war.

Secondly, both the Federal Open Market Committee (FOMC) in the US and the Monetary Policy Committee (MPC) in the UK made decisions on interest rates. The US central bank raised the federal funds rate by 0.25% to a range of 1.5-1.75% due to the rapidly improving economy, low unemployment and a predicted rise in inflation. GDP growth for this year and next has been revised upwards with it moderating after 2020. The committee announced there would be two more rate rises this year, and a further three in 2019. The MPC kept UK interest rates at 0.5%, although two members of the committee backed an increase. However, with British workers' pay rising at its fastest pace in more than two years, the expectation is for a rate rise in May with a likely further increase before the end of 2018; this is despite inflation falling to a seven-month low of 2.7% in February, down from 3% in the previous two months.

EU leaders have approved guidelines for the negotiation of future relations with the UK, post-Brexit, clearing the way for the next phase of Brexit talks. Britain has also secured a 21-month transition period to take place from March 2019, when the UK officially leaves, until the end of 2020; this should lessen the impact of Brexit for exporters.

Elsewhere, Facebook came under pressure to explain how data collected on 50 million users was exploited for political gain, following claims that consultancy firm, Cambridge Analytica, used the leaked information to help Donald Trump win his presidency. Facebook CEO, Mark Zuckerberg, admitted that the company had made mistakes and has been summoned to appear before US Congress.