April 2015 brings us a new dawn in the way we look at pensions.
Under the new rules those over this age threshold will have total freedom to access their pensions when reaching retirement. It is now possible to take pension benefits from personal pensions without buying an annuity.
This means that retirees will be able to withdraw capital from their personal pension and have greater control on how their hard-earned cash benefits them in the future. Now is the time to think hard about the future and be honest about what you want your pension pot to deliver and of course consult a financial adviser.
It is best to think about your goals. Short, medium and long term, and of course your commitments.
Investors are wise to diversify to minimise risk and enhance returns and a rounded portfolio will include traditional investments including equity-based products along with alternative assets and in particular tangible ones with a strong growth performance such as fine wine.
Remember that the Fine Wine market has a track record of providing average compound returns of more than 10% per annum in the medium to long term.
It also has many other benefits like the tax efficiency, which is particularly important for pension investors and generally resistant to the effects of inflation.
Fine wine is now considered by financial advisors as a means to diversify and strengthen investment portfolios.
A recent article published by Knight Frank (Wealth Report 2015) canvased the opinions of 500 wealth managers and the investment practices of their Ultra High Net Worth Clients. The report states that 6.1% of this total investment is in tangible assets including fine wine. They stated that “In our experience UNHWIs are becoming concerned about paper assets such as bonds and equities and are increasingly looking for tangible alternatives. The scarcity of luxury assets and their historic ability to hedge against inflation makes them an appealing investment proposition – it is always possible to commission a new yacht, but nobody can paint another Monet or build a classic Ferrari.” Saeed Patel,Investment Analyst Schroders
In the same respect, no-one can recreate a Lafite 1982 which at release was priced at 25.9 euros a bottle in 1983 en primeur, and at its peak reached £84,300 (1 x12-bottle case) at auction.
There is a finite amount of investment-grade wine globally and the opportunity to acquire wines from super vintages become even rarer over time. This scarcity increases again as wines reach their drinking windows.
For the new pension investor the timing could not be better to enter the fine wine market. The current price trend in Bordeaux offers superb opportunities for long term growth. The market is perfect positioned to adopt the old adage of buy at the bottom and plan to exit at the top.
For more information on the opportunities available right now contact our team on 0800 980 4509 and catch up with news and views in our free newsletter.
Following ten options will guarantee you’re well placed to maximize your investment potential and agile enough to change tact if required.
Very few people look at fine wine as a good type of investment. That’s probably because the industry is only packed with professionals. Before spending any money on wine, you should understand and get a “feel” of the market. Start small and stick to wines with a proven track record, such s Bordeaux, Burgundy or Mouton Rothschild. Rather than take unnecessary risks and be sorry later on, it’s best to play it safe. There will be plenty of time for taking risks down the road.
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Furthermore, a 68% growth in sales during the festival was recorded.
Visitors were offered tastings and pairings as well as the chance to attend seminars organised by The Wine Society of Macau. The Wine School was a new feature of this year’s show and held 16 classes over four days.
The president of the Macau wine society, Filipe Cunha Santos, said: ‘’Despite the weather, we managed to have a successful event, attracting more visitors than last year. We accomplished the objectives established and we’re confident that the festival is here to stay.”
Speaking yesterday at a press conference in London, Martin said that he was “looking forward to covering the 14s”, as he takes over the tasting of Bordeaux in barrel from Robert Parker, a development you can read more about here.
“You are only as good as the next thing you write,” said Martin, noting that he was relishing the opportunity to bring subscribers of The Wine Advocate (erobertparker.com) a report on this year’s primeurs.
He then warned those present at yesterday evening’s press conference in London’s Landmark Hotel that his vintage account “may be a bit more funky than in the past… wine writing should always be enjoyable to read as well as informative”.
Parker commented that he had taken on Martin because he wanted a different style of wine writing for The Wine Advocate to attract a more youthful audience.
“I hired Neal because I wanted a younger voice… we are always trying to reach younger demographics, it’s necessary for survival, and Neal was much hipper than me – I knew that his way of writing about wine was very different from my style.”
Parker then stressed that it would “just” be Martin who would be reviewing Bordeaux 2014 for The Wine Advocate this year, and joked, “he is the new Sheriff of Nottingham”.
He also said that he had appointed Martin in 2006 because he believed that the UK-based wine writer had the experience and ability to take on the role of covering en primeur Bordeaux.
“When I hired Neal this was part of the plan, that one day I would back away from en primeurs, and the time is perfect for me to hand over these responsibilities,” he said.
Noting that Martin has 18 years experience tasting en primeur Bordeaux, Parker stressed that his replacement’s experience was far greater than his own when he started reviewing Bordeaux for The Wine Advocate.
“Neal has 18 years’ experience, but I thought I was good enough to do the job with no experience,” he said, referring to his first en primeur report on the 1978 vintage in Bordeaux.
“He is probably the second most experienced guy to do it,” he stated.
Nevertheless, he described the en primeur report as “a huge responsibility”, and said it “was an exhausting job”.
Continuing, he said that “the Bordelais this year have more pressure than ever, with three unsold vintages in their cellars.”
He also recorded that as a result of high prices for recent lesser vintages, Bordeaux has ‘lost a big share of the American market, the wines are disappearing from restaurants, and a lot of that is their [the Bordelais] fault – they have not been realistic with prices on 2011s, 12s or the 13s.”
While Martin will be covering Bordeaux in barrel, Parker will continue to cover the region’s wines in bottle, and Parker will be going to Bordeaux in March to rate the 2012s, while he will be doing a retrospective assessment of 2005 Bordeaux in April.
Martin has been working for The Wine Advocate since 2006 and is based in Guildford. He has been covering Burgundy for the publication, and since last year Oregon too, while he also reports on the wines from South Africa, which he described yesterday as “one of the most exciting New World countries”.
He also said that he does “a bit on Tokaji and Madeira because I love the wines”.
Referring to his seven reporters (listed below), who were all present in London yesterday, Parker said, “The common theme of this group is that they are all very independent minded, very knowledgeable, and very gifted at what they do.”
The following advice has been issued by Operation Sterling in conjunction with our partners at the Wine and Spirits Trade Association. Similar principles apply to other commodity investments.
Fine wines can make a good, relatively low risk long-term investment. However as with all types of business, there are rogue wine traders who are intent on conning people out of their money. Whether you are a wine enthusiast starting your own fine wine collection or someone looking to build up an investment portfolio, this guide provides some tips on how to protect yourself from becoming a victim of wine fraud.
Before you commit to an investment, make sure you are dealing with an honest, reputable business with a successful track record in the trade. When buying wine before it is bottled and released to the market- referred to as en primeur - it is especially important to deal with a reputable company. Given en primeur wine is usually delivered 2-3 years after the vintage, it can be particularly open to exploitation by fraudsters.
Trading history and expertise. Find out if the business is profitable, well-established, who the directors are and what experience they have in fine wines. Established UK companies will be registered with Companies House, where you can also check their balance sheet.
Contact details. Ensure that the company has a valid head office address. Consider using Google street view to check its location. Be wary of PO Box addresses and mobile contact numbers only.
Unsolicited offers. Honest as well as fraudulent businesses can use cold calling or direct mail-outs to reach new customers. However take particular care to check the credentials of companies who approach you with unsolicited offers.
Before parting with your money, you need to understand exactly what wine you are purchasing and that you are making a sound investment. Remember only specific wines will tend to accrue value and these wines tend to be expensive.
Do your research. Make sure that you are buying the right wines at the correct, competitive prices. The internet is a good way of comparing prices. If necessary, seek another opinion on whether you are making a sound investment.
Provenance and quality. This is crucial to the value of your investment. Make sure you know the provenance of the wine you are buying- that it comes from a reliable origin.
Condition. Gather details about anything which may affect the value of your purchase. For example, fine wine should be in unmixed, sealed cases in the original wooden box. It should not have been repackaged in any way .
En primeur prices. Do not buy en primeur in advance of the prices being published. Reliable traders will not try to sell you en primeur before the producers have announced their release prices.
Availability. Ask whether the merchant has the wine already in stock or whether it will have to be ordered from the producer. Be clear about when your wine will be delivered or transferred into your account.
How you store and manage your wine investment is crucial to its future value. Whilst you can keep fine wines in your own cellar, wine bought for investment is usually stored professionally, either in your own warehouse account or in a merchant’s customer reserves.
'Duty paid' or 'in bond'. Wine for investment is usually held 'in bond', meaning that it is free from UK excise duty and VAT while it remains there. Only when the wine is removed from bond are these taxes paid.
Access. Wine held in your own account gives you complete control over it. If you are storing wine in a merchant’s customer reserves, ensure these are clearly identified, stored separately from the company’s own stock and will not be moved without your agreement.
Insurance. Your wine should be insured to at least to the value of the original purchase price. Be clear as to whether you will get a refund from your merchant if a producer fails to supply the wine as arranged.
Correct storage facilities. Your wine must be stored in a secure warehouse with appropriate temperature and humidity levels.
Understand the small print
Make sure you are clear what commission, charges and additional taxes you will have to pay on your fine wine investment.
Tax. Profits from wine investment are not necessarily tax free. For Inheritance Tax purposes, wine will be valued at the current open market value. Depending on circumstances, fine wines may also attract Capital Gains Tax. You may need to consider taking expert tax advice.
Commission. Know what commission will be charged by the wine merchant, including any portfolio management fees. You may still be charged commission to sell your wine, even if the company you bought
Storage and handling fees. To store your wine in a bonded warehouse, you will usually be charged an annual fee. You may also be charged shipping and handling fees. Paperwork. Understand what invoices, regular statements and stock certificates you will receive from the company, to ensure that you can prove your entitlement to the wine that you have paid for.
Valuations. Make sure you have the option of having your wine valued at a future date. Independent valuations can be obtained from a number of sources.
Don’t fall for hard sales tactics Beware of companies that use aggressive sales tactics or make unrealistic-sounding claims about the returns you could expect to see on your wines. As always, if an offer seems too good to be true, it usually is.
Guaranteed profit. A reputable wine merchant will not make claims of guaranteed returns. Like all forms of investment, the value of your wine can go down as well as up.
Fast returns. Be wary of claims of fast returns on your purchase. You should usually view fine wine as a medium to long-term investment.
Take your time. Do not let yourself be rushed into making a commitment. A genuine offer is unlikely to require an instant decision.
Do they have a good reputation?
How long have they been in business?
Where are they based?
Are their prices competitive?
What is the provenance of the wine?
How much are commission, storage or delivery charges?
Will your wine be stored separately from the company’s wine?
What documents will you get to provide proof of purchase?
Is your wine insured?
Fine Wine is always been a desirable product. See the link below on how a huge seizure in Thailand has turned over individual 20,000 items including rare Fine Wines including Chateau Petrus worth $4,000. Many people are asking how much Fine Wine is hidden away across the world, simply being used as a means of holding funds outside of the usual means of banking and other investments. Other Items included Rolex watches, Fine Art and a large collection of cars.
Source: ABC News
An article today covering the every growing problem in China on fake Fine wine. This is an ever growing problem and a key reason why most of the western world buyers refrain from buying wine that has a provenance track that has any hint of China.
We have seen story upon story, tale upon tale about bottles of wine like the Lafite 1982 being opened to discover it had a 1981 cork..... Alarm bells start ringing straight away.
An preferred method for Intercontinental Wines is to use the fantastic services offered by companies like London City Bond. It.is no surprise with a skill set and experience stretching a century, and with established storage sites across the country, they are the perfect choice to store your wine.
Being held under bond your wine stay in a privately owed account under your own name, and while stored in the account remains exempt from VAT and import duty.
Sites like London City Bonds Vinotheque are able to offer a premium service, even offering online access to your asset. Here you can transfer, track and review your portfolio at the click of a button. So if have just a few cases or like many people have a vast portfolio stretching through the decades, the Bonded Warehouse is there to give you and the future buyer of your wine peace of mind.
Read more here about problems in China
If you would like to find out more about setting up a bonded warehouse account, or to start a portfolio then contact the Intercontinental Wines team today on +44 (0)800 980 4509