Tim Govaerts is Associate Director and Regional Manager for Blacktower Financial Management Group on the Costa del Sol.Tim has been working in the Financial Services Sector as an International Financial Adviser here in Spain since 2008. Tim is originally from Belgium but has lived abroad for more than 20 years, of which the last 14 have been in Spain with his Dutch wife and children.
Can you tell us a little more about your role in Blacktower?
I look after the local office here on the Costa del Sol which is very conveniently located between Mijas and Fuengirola, just off the toll road. As financial consultants we assist our clients with their financial situation, many of our clients see us as their main port of call if they have questions that are not necessarily directly linked to their finances, but for example to life in Spain, healthcare; I have even been asked for a recommendation for where best to take your dog to whilst going on a short trip! This is why we find it important to stay at all times abreast of any changes in local taxes, residency rules, regulation and, of course, how markets are performing.
Could you tell me a little bit more about Blacktower?
Blacktower was founded in 1986 by our Managing Director, John Westwood in the UK. The business opened its first office on the European mainland in the Algarve ten years later, and Gibraltar and our Spanish offices followed not long after that. Since then, the business footprint has expanded exponentially and we now have a global presence, with offices all over Europe, the UK, and a few years ago we expanded into the Americas as well.
What are the main services that Blacktower offers to its clients?
Wealth management is probably the best term to describe what we do, or financial planning, as this includes all aspects of our services. Our service would typically start with a first meeting, during which we go through a person’s current situation and future objectives. From there, we would put together a personal plan; taking into consideration the family situation, tax and residency position, any investment experience and how involved the client wants to be, to name a few criteria. We can assist anyone from a young entrepreneur wanting to start saving for retirement to the person already in their retirement who is looking for a cautious plan for the money currently sitting in their bank account, not earning any interest. At the core of everything that we do is maximising growth for our clients whilst reducing their tax position wherever possible.
What makes Blacktower different from other financial advisers?
We have a very ‘family-style’ culture within our company,and we not only maintain this internally but also put this sentiment at the very heart of our corporate values, helping families shape and protect their financial futures.
We are one of the few companies that were very proactive in ensuring that we were covered for all possible Brexit scenarios, meaning that we could continue to look after our clients across Europe via both our MiFID and IDD license. We have also invested heavily in new technology and back-office systems during the Covid pandemic, meaning we can provide an efficient and personal service to our clients whatever the circumstances may be.
How have the last twelve months been?
Quite a rollercoaster! We first had the pandemic and the uncertainty of how long it would take before there would be some light at the end of the tunnel. Markets don’t like uncertainty which in turn caused a drop in the markets and many investors to panic. Everyone needed to adapt quickly in the way we conducted our day-to-day business, I believe everyone took a 10-year leap forward in the use of technology and videocall facilities.
Subsequently markets recovered and have remained volatile for some time. However, from an investment perspective, it turned out to be very positive 12 months for our clients.
Then there was Brexit,of course. As the Brexit deadline drew nearer,the window was closing for many Brits who had delayed decisions to obtain some form of proof of residency and enter the Spanish system. Many of those, that in the end obtained a residencia or after that a TIE, then came to us asking to have a review of how obtaining fiscal residency would affect them and their assets, which kept us very busy towards the end of the year.
What can we learn from 2020?
From an investment point of view, we can learn that world events and how markets react to them are two very different things. Terry Smith, a well-known fund manager, touched on this during his annual shareholder conference where he shared the following scenario: If someone told you last year, in January, that there would be a pandemic,with a global recession as a result, and that the GDP of the world’s biggest economy, the US, would shrink by 9.5% in one quarter, would you have considered investing in equities? Probably not. Still, if you would have taken your money out of your investments in light of that prediction, you would have missed out on up to 12% return, if you were 100% invested in equities. Even with perfect foresight, it is impossible to know how markets react. Therefore, the old adage from Warren Buffet has proven very true last year, “it is TIME IN the markets that matters, not TIMING the markets”.
This was definitely the message that we passed on to our clients when markets were at their lowest point somewhere halfway through March last year, and which turned out to be very true.
On another note,I believe that many will have realised the true importance of safe-guarding your future. Many people scrutinised their finances during the lockdown and indeed, a piece of research that we conducted showed that 77% of people living in Malaga started saving more during the lockdown than at the start of 2020.
What would be your general advice for 2021?
From a generic perspective, if you are living here on a more or less permanent basis and with that I mean if you are spending more time in Spain than the 183 days per year, make sure that you have taken care of the requirements to be a resident of Spain. Ignorance is not an excuse anymore, plenty of information of what needs to be done is available to you and if you need help, then visit your local Town Hall or indeed give us a call and we may be able to answer your questions as well. Over the last year, all sorts of automatic exchange of information agreements between governments have been put in place, the Common Reporting Standards, FATCA, and even Gibraltar and Spain now have a new agreement in place.
From an investment perspective: last year the divergence between “winners” and “losers” was probably larger than it has been for a while. Winners were predominantly found in growth sectors such as Technology. For some years now, we have seen a strong rise in demand for so called trackers and passive funds, it was often questioned if the higher cost of active management was justified. Last year many active funds with excellent fund managers that were able to identify the “winners” considerably outperformed the passive funds. Therefore, my advice would be to check where your money is invested. Funds that adhere to the so called ESG principles (Environmental, Social and corporate Governance) have done very well recently,now that sustainability,in everything we do, is taken into consideration. We expect these principles to only further increase in importance which is why investors need to be aware of this.
What should and should not investors be doing at this moment?
What people should be doing is, as I mentioned previously, not trying to time the market, but stay in it and be patient. We are still in a low interest environment where money in a bank account is losing value in real terms due to inflation. The only real alternative where growth is made are real asset-backed investments. Solid investment funds with high quality fund managers and long track records have proven to provide solid returns in the medium to long term.