Focus on Sterling

The hot topic of the moment continues to be sterling, and its woeful new position as doormat currency of the western world. Mervyn King seems to quite like the view from down here. There is a theory that he thinks it makes life easier for UK exporters. I don’t agree with that, and think instead he is happy just to make life more difficult for importers. Whichever it is, he’s not going to go out of his way to help talk up sterling in the foreseeable future.

So where does that leave you and me and our sterling nest-eggs back in the UK, or more likely in Jersey, Guernsey or the IOM? Actually, I’m going to withdraw smugly from this group, as I read my own forecasts and changed all my sterling for euros between 2004 and 2006 at an average of 1.4400 or thereabouts. I know those of you who didn’t don’t like to be reminded of the fact, but you were taking a big financial risk, and just now it doesn’t look too good.

For what it’s worth, my personal view is that sterling is undervalued, and it will recover. Not back to the dizzy heights of 1.5000 but possibly back to between 1.2500 and 1.3000, where I think we will eventually settle for entry into the euro in years to come. Now you all know that I think that anyone over here with any spare cash at all should be holding that cash in a tax efficient manner in France (no, I’m not going to say it). I just want to stress this week that sterling and tax efficient investing in France are not mutually exclusive. You can shelter your sterling from income tax and social charges; and you can retain the ability to choose when to convert to euros. In fact the case for doing this is so strong that I often wonder why I have to make it at all.

Financial regulators in France

A few weeks ago in my column in the Aude and Ariege Flyer I referred to a certain Mr Warren Templeton, a low-life swindler who was operating in the Dordogne region. His case seems to have sparked a great deal of interest in the regulation and monitoring of financial advisers; and so it should too. I am seeing an increasing number of clients who have come to me because they are worried about advice they have taken either before coming to France, or within a short period after their arrival here. I’m sorry to report that in a lot of cases the advice they acted upon was either born out of ignorance or ineptitude, and in some cases worse.

At Spectrum we have a clear policy; we believe that it is in the clients’ interests for us to be registered and regulated in each of the countries where we offer our services to expatriates. This has always been our policy. We have always encouraged our clients to maintain their relationship with their UK financial adviser if they continue to hold UK based investments. If that adviser is competent, he will know when his client should be talking to us.

The publicity surrounding this case has prompted some interesting and conflicting views in the national English-in-France press. One large spread advert seems to imply that the likes of Templeton are clowns; not a view that I think his victims will share. Another article claims quite openly that it is OK for expat advisers in France not to seek regulation here, because they don’t speak French well enough and may misunderstand the rules.

It’s a funny old world.

Tax Changes for Lower Paid

France financial minister announces tax breaks for lower paid workers. Anyone in the 5.5% tax bracket will get an 80% refund of their tax for 2008.

Welcome to the France Financial blog

France Financial specialises in helping English speaking expatriates currently living in France, or intending to do so in the future, to protect and enhance their finances. Our aim is to create and provide solutions by way of a broad range of products and services. We will work with you to plan your finances and make the most of the opportunities offered by the expatriate lifestyle.

I have produced this blog so that I can keep you completely up to date with the changes in legislation and circumstances that can occur and which may affect your financial arrangements in France so that you are fully informed and can take the necessary steps to truly protect or enhance your finances.

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