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Young people are a nation’s greatest asset. As societies grow older, youth are relied upon to enter work, pay taxes and rear the next generation. But in an international labour market, talent retention is hard work for governments let alone businesses.

In the EU’s single market, it is particularly cut-throat. Many southern and eastern European economies — including Portugal, Italy, Poland and Romania — often see their youngest and most educated up sticks for the bloc’s more prosperous, and higher paying, northern economies. Plenty have not returned, hollowing out economies back home. The brain drain is, according to former Italian prime minister Enrico Letta, the “dark side” of the EU’s freedom of movement.

Last week, Portugal decided to take matters into its own hands. The minority government of Prime Minister Luís Montenegro unveiled an imaginative budget proposal to turn the country into a low-tax haven for young adults, offering a decade of tax breaks to those starting their careers. Under the plan, those aged 35 and under who earn up to €28,000 would pay no income tax for the first year. Tax relief would then be tapered over the next 10 years. Foreigners would also be able to benefit.

There is a consensus in Lisbon that drastic action is warranted. Between 2008 and 2023, an estimated 361,000 people aged between 15 and 35 left the country, accounting for two-thirds of all emigrants during that period. Portugal is not the first to consider age-based financial incentives to arrest a brain drain. In 2019, Poland cut income tax for workers under the age of 26. Italy had a tax reduction scheme for returning employees and the self-employed. In 2015, Hungary’s Prime Minister Viktor Orbán even tried to lure young Hungarians back with free flights and a monthly stipend.

There is a logic to providing reliefs to cash-strapped, ambitious youngsters starting their careers. The transition from education to work is a costly one, particularly for those from poorer households. Portugal’s proposal sends a clear signal to young people that it is thinking boldly to persuade them to stay. But whether financial incentives actually make a significant difference in retaining or attracting talent is unclear. The IMF warned Portugal that the impact of preferential tax rates on emigration is “uncertain”.

Tax is just one of many factors young people consider when deciding where to live. The range of well-paying job opportunities and professional networks in Brussels, Berlin and Paris, for example, is a big draw. Portugal, by contrast, has a long way to go to diversify its industrial base beyond tourism and spur more job creation. Its youth unemployment rate is over 5 percentage points higher than the EU average. Workers also consider housing costs, child care support and public amenities when deciding where to set up. That is something the government needs to consider with its tax proposal, which is estimated to cost about €650mn a year.

Expats will want to see more evidence that Portugal’s long-term prospects are improving, particularly as they could be in for a hefty marginal tax rise when the proposed reliefs disappear in their thirties. That means initiatives to cut red tape, incentivise investment and raise Portugal’s burgeoning status as a hub for entrepreneurs are just as important.

Portugal’s plan, if it does pass through parliament, may jolt other European nations into bolder actions. The problem is that tax perks can only go so far when other countries are dangling their own carrots. Countries need to address a whole range of factors in their business environment if they want to win the race for talent.

Financial technology is becoming increasingly crucial to modern life. It’s what drives the movement of digital money, allowing consumers to buy goods remotely and greasing the wheels of contemporary commerce. But it also sits in a precarious position. 

Fintech companies like Flutterwave, Africa’s most valuable tech startup, must balance the needs of data security against the opportunity costs of growing larger and developing new services. And they must do it in a rapidly changing environment. 

“Our growth has been customer-defined,” Flutterwave CEO and founder Olugbenga “GB” Agboola said on “The Flip” podcast. “Our expansion is always customer-driven. Where does the customer want us to be? We listen to customers a lot in Flutterwave. We have an extreme customer obsession in Flutterwave when it comes to what our customer wants and how to deliver to the customer.”

What Does Fintech Do?

People often fall into one of two camps: the kind who never think about money, and the kind who always think about the bottom line. But even those who obsess over their bank balances don’t often consider what actually happens when they make a purchase or transfer money from one account to another.

Behind every swipe of a credit card, click of a “checkout now” button, and direct deposit, millions of micro-actions are taking place. Fintech is what communicates between banks, merchants, lending institutions, peer-to-peer transfer apps, and more. 

Financial technology began as a way to improve the efficiency of the pen-and-ink ledgers of days past. But it’s become much more than a digital balance sheet. Today, fintech powers automated investment technology, assists nonprofits with fundraising operations, revolutionizes how credit card companies do business, and has spurred new industries like microloans. 

In short, it’s how the modern economy does business and how it keeps score. 

Nearly every modern financial action, from mortgages to day care, is managed by financial technology. 

And the revolution has just begun. 

How Flutterwave Grew

As one of the fintech sector’s most exciting startups, Flutterwave has played a crucial role in the modern financial economy. The 8-year-old, Flutterwave serves enterprise clients like Microsoft and Uber, as well as individuals seeking to easily pay for goods and services, send money to friends and family, and cover out-of-country tuition costs. 

By serving both multinationals and everyday people, the company has become a service provider on both ends of the modern economy, giving it a unique perspective into how today’s business functions. 

Flutterwave is also unique in that it was comfortable using its understanding of the marketplace to dictate its growth, said Agboola. 

“We helped Uber to scale across Africa and we follow them into every market that they were going to go into. So, our expansion and growth story can be linked to our customer requirements, and it can also be linked to our philosophy about making payments simpler across Africa and simplifying payments for endless possibilities,” he said on “The Flip.”

“For us as a company, it’s really just about: How do we make sure our customers can scale on our platform? How do we make sure our customers can go to a new country in Africa and all they have to do is just flip a switch, literally, on our dashboard and they can just go live in their new market?” he added. “Our expansion is always customer-driven. Where does the customer want us to be?”

How Flutterwave Prepares for the Future of Fintech

The focus on service — not growth — is what ultimately allowed Flutterwave to prosper amid a sea of rival service providers. Through Agboola’s leadership and partnerships with influential market leaders like Uber, the company navigated its way from promising startup to a Series D fundraise that resulted in a valuation north of $3 billion. 

Companies don’t get to that level by being lucky. It takes a certain amount of skill at understanding the present and predicting how the currents of today will shape the waves of the future. 

For Flutterwave, the future of fintech will result in a more integrated, interconnected world. From the beginning, Agboola has claimed that his company’s goal was to connect the whole of Africa. Following that logic, it’s clear the future of fintech is complete market saturation, allowing every person across the globe access to the worldwide economy through their phones, laptops, or computers. 

But as they become ubiquitous, fintech platforms will change. Fintech could become more convenient for users, integrating directly into nonfinancial software. Social media users may be able to pay for products from content creators and advertisers directly through their favourite apps, and retail apps feature new services, such as buy now, pay later options at checkout.

There might also be a revolution in how traditional financial institutions, like banks and lenders, serve consumers. Digital payments and banking services could make all kinds of big-ticket purchases, like mortgages and car loans, simpler and faster for consumers.

The wealth of new data may lead to software that delivers personalized financial advice to consumers, allowing lenders or artificial intelligence to steer individuals toward smart investment strategies, better ways to save for education, and more.

All of these new ideas are exciting, but none more so than what Flutterwave continues to train its focus on: the democratization of modern finance. 

As developing countries move into the digital world, their economies will undergo a tectonic shift. By empowering a new segment of the market, Flutterwave will help create the next generation of marketplaces by helping to provide fintech services to entire niches that have been excluded from the modern economy for decades. 

Transforming small communities can have profound downstream effects that will ripple outward to the entire world economy, according to Agboola. 

“We are an enabler,” he said. “We may not go directly to help reduce poverty, but we are going to enable businesses that help to reduce poverty.”

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India is withdrawing its high commissioner and five other diplomats from Canada, citing fears for their safety, hours after claiming they had been targeted in the murder case of an exiled Sikh separatist.

Canadian officials are probing what Prime Minister Justin Trudeau last year claimed were “credible allegations” of Indian government involvement in the murder of Hardeep Singh Nijjar, a Sikh separatist who was shot dead in a suburb of Vancouver in June 2023.

On Monday, New Delhi said in a statement that it had received a “diplomatic communication” from Ottawa suggesting that high commissioner Sanjay Kumar Verma and other diplomats were “persons of interest” in an investigation, escalating an already acute diplomatic rift between the two countries.

It later specified that five diplomats would be withdrawn in addition to Verma.

On Monday evening, India’s ministry of external affairs said it had summoned Canada’s chargé d’affaires over the “baseless targeting” of Verma and other diplomats, which it described as “completely unacceptable”.

“It was underlined that in an atmosphere of extremism and violence, the Trudeau government’s actions endangered their safety,” India’s foreign ministry said. “We have no faith in the current Canadian government’s commitment to ensure their security.”

“Therefore, the government of India has decided to withdraw the High Commissioner and other targeted diplomats and officials.” New Delhi said it also reserved the right to take “further steps” in response to what it called “the Trudeau government’s support for extremism, violence and separatism against India”.

Trudeau created an uproar in India last year when he said Canada was investigating “credible allegations” that Indian agents might have been behind the assassination of Nijjar, a supporter of the creation of an independent “Khalistan” in the Punjab region, which is split between India and Pakistan.

The accusations, combined with a US criminal case brought against suspects in an alleged murder plot against Gurpatwant Pannun Singh, a US-Canadian Sikh separatist, shone light on allegations of alleged official targeting of diaspora activists India considers terrorists. India has rejected allegations of government involvement in Nijjar’s killing and the attempt on Pannun’s life. 

Canadian authorities in May arrested and charged three Indian nationals with Nijjar’s shooting. The Royal Canadian Mounted Police said at the time that it was investigating whether there were any ties to the government of India, adding that others might have been involved in the killing. 

“The government of Canada has done what India has long been asking for, and Canada has provided credible, irrefutable evidence of ties between agents of the government of India and a murder of a Canadian citizen on Canadian soil,” Stewart Wheeler, Canada’s deputy high commissioner, told reporters in New Delhi on Monday evening.

“Now it’s time for India to do what it said it would do and look into those allegations,” he added.

Earlier on Monday, India rejected what it said were “preposterous” and “ludicrous” allegations against its diplomats, and attacked Trudeau personally. “His Cabinet has included individuals who have openly associated with an extremist and separatist agenda regarding India,” the ministry of external affairs said. Verma could not immediately be reached for comment.

The diplomatic dispute over Nijjar’s killing has brought relations between India and Canada to a low point, with India expelling most Canadian diplomats and temporarily suspending visa services last year. 

Indian officials have accused the Trudeau government of pandering to Sikh voters with views New Delhi considers extreme, in what it called on Monday “vote bank politics”.

There is a word I have been thinking about a lot recently, particularly in the context of its effect on our wellbeing. That word is: control.

Sam Wren-Lewis holds a PhD in the philosophy of happiness and has written an academic, but very readable, book called The Happiness Problem.

He observes that we tend to take two different approaches to happiness: control or acceptance.

This is not binary, but rather a sliding scale, and we might use each approach for different circumstances.

So, how does our need (or lack of need) to have control affect our financial decisions?

Control

Wanting to have control is fine when it is possible. We see something we don’t like and we try to change it. This can be a very positive thing – see some litter on the road, pick it up, put it in the bin.

However, if we want control where it is unavailable to us, this can make us unhappy. Maybe we see something on the news which makes us angry but which we cannot influence. Wren-Lewis calls this going to “war with reality”.

We can see this all around us. Social media, for example, is full of people who are angry because things have changed in a way they don’t like but can do nothing about.

Acceptance

The alternative is to accept things as they are. This is simple – but can be very hard to do.

We see this principle in many religions. A central tenet of Buddhism, for example, is that suffering occurs when change has occurred, but we still want things as they were. Everything changes all the time – if we refuse to accept that change, then we will be unhappy.

Of course, there are times when not accepting change is the right thing to do. Choosing when to join a protest march or when to pick up that litter, and when to recognise the change is going to happen whether you disagree with it or not, is a significant factor in our wellbeing.

Financial planning

If we accept the objective of financial planning should be to help people be happier, then this principle of control and acceptance has a major implication.

We are not being judgmental here – if somebody likes to be in control and they are able to be in control, and that is doing good, then all is well.

But what if someone wants to be in control of something when they cannot be?

Wanting to have control is fine when it is possible. We see something we don’t like and we try to change it

Suppose you recognise a client has a particularly strong desire to be in control. Perhaps they are a business owner who likes to be very hands-on in their management style.

A financial plan with a fixed retirement date, or the looming prospect of the sale of their business, may look to that person like the beginning of a time when they will not be in control of their lives. This could lead to a failure to engage and make them unhappy.

In this instance, how might you respond? One solution is to explore what might replace the thing they will be losing. Many people approach the selling of a business or retiring with little thought as to what life will look like beyond.

The answer comes in helping a client find the right thing for them to get involved with

Planners will typically help their client with this process. Perhaps the client could join a school governing body or become a trustee of a charity. This goes far beyond ‘keeping busy’ – it gives them purpose and can provide them with their need for control.

Training

That said, this can create disharmony. Being a school governor is not like running a business. It requires different skills and knowledge. There are many examples of people who make things worse with their desire to be in control and do things their way.

The answer comes in helping a client find the right thing for them to get involved with. This means something that will bring them wellbeing – both in terms of giving them a sense of purpose but also to effect change in a positive way.

This means asking some simple questions, such as: “What does a happy retirement look like for you?”, then: “When you have that, what will that give you?”.

Chris Budd’s new book, The Four Cornerstones of Financial Wellbeing, is out now. Financial Wellbeing Pulse is a way of measuring the relationship with money and demonstrating the impact of your advice

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With the UK government trying to plug a £22bn fiscal hole, investors figured it was worth taking a punt on higher gambling taxes. Shares in Flutter, Entain and Evoke fell as much as 14 per cent early on Monday morning on reports of a £3bn raid on bookies.

Think-tanks have provided grist to this mill: vice taxes carry a social as well as financial benefit, they argue. Doubling duty on online casinos alone could bring in £900mn, says the Social Market Foundation. That is a quarter of this year’s estimated duties, levied on gross profits or total stakes, of £3.6bn.

Though government figures downplayed the idea of a tax raid, this looks to be an opportunity for a decent haul without raising mass hackles. It is easier to target a contentious sector. A lightly staffed online sector means reduced risk of job cuts. The UK, already a low taxer by international standards, would be following Sweden, which has raised gambling taxes, and the Netherlands, which will do so from January. 

Still, there would be an outsized blow to the industry. UK-related operating margins stand at about 20 per cent. A few big participants have fatter margins (Flutter’s ebitda margin is about 30 per cent for UK and Ireland) but plenty fall below that. Taxes at the rates proposed by IPPR — 50 per cent for online operators and a doubling to 30 per cent for high street bookies — would essentially wipe out profitability.  

Operators cannot simply pass these on to customers: this is no penny added to a can of full-sugar soda. True, bookies can offer poorer odds. But in a competitive and largely undifferentiated industry, this would be tough unless the companies moved in lockstep. 

There would be other ramifications. Companies might seek savings by cutting back on sponsorships and advertising budgets. Online gambling generates about £1.4bn of marketing spend, says Regulus Partners, a consultancy. Poorer odds could also drive gamblers into the so-called black market. Customers already stake an annual £2.7bn here a year, reckons the Betting and Gaming Council, equivalent to 2 per cent of the £128bn in Britain’s regulated market.

Nearly £15bn of that is placed by customers who also use black market operators and who may be minded to switch more activity over. Fears that money would flow from the regulated sector (denting the Treasury’s take) has long deterred action against the industry.

The knee-jerk share price moves were an overreaction. Last year, for example, Flutter derived three-quarters of its revenue outside the UK and Ireland. But those reflected nerves about an unpopular sector, still on the watchlist of regulators and governments.

louise.lucas@ft.com