It’s quite rare that financial headlines transcend the boundaries of mainstream media; it’s even rarer, possibly even unheard of, that good financial news makes the leap. Recently there’s been extensive coverage in the press of a story that’s been brewing in the world of financial services for many weeks. The suspension of withdrawals from Woodford Equity Income and the fall from grace of the fund’s manager, Neil Woodford.
Modern life has led to us constantly upgrading, moving forward and taking advantage of advances in technology. How many of us have moved from videos to DVDs to streaming services over the past 20 years? I used to have a cassette player that chewed up my favourite tapes, now I don’t even own a radio, just a small box in the corner that talks to me in a disjointed voice and plays anything I want to hear (and often things that I don’t). We upgrade different aspects of our home and work lives all the time, but are we ignoring our money?
I give very little thought to the fact that I’m a woman working as an independent financial advisor, but it was brought to my attention in a meeting the other day. I met a nice gentleman in his late 70s who had researched local advisors online before choosing to contact us. The reason he chose our firm, which he correctly identified as being run by women, was simple: he likes to be told what to do by a strong woman. It’s one of the more novel methods I’ve heard for choosing a financial advisor, but all power to him (and I guess to us!) It did start me wondering though; what role does gender play in financial services?
The war on single-use plastic, awareness on the environmental impact of palm oil, the USA’s withdrawal from the Paris climate deal, the gender pay gap, the #metoo movement, the rise of veganism, the debate over assisted suicide…. it seems that environmental and ethical issues have been pushed firmly into the limelight in recent months. People are becoming more mindful of the effect of their actions on future generations, but is the world of financial advice ready to meet the challenge? This was the question I asked myself a couple of months ago when I started to prepare advice for a client with a preference for ethical investments.
During a conversation with a friend the other day, she mentioned that she has two types of money: frivolity fund and serious savings. The excess money she earns every month is her frivolity fund, to be spent on things that she likes the look of, once the important things like her mortgage and food shopping have been paid. The cash in her savings though, is serious savings; it’s there for a purpose and it can’t be spent on expensive frivolities, no matter how badly she wants them. Her main problem is that she doesn’t really know what her serious savings are for.
Robo-advice is a relatively new development in financial advice. You might have seen online adverts; they pop up now and again (usually on certain social media sites) often offering a cheap and easy way to build an investment portfolio and meet your financial goals. The attraction is a fast, cheap advice process that can be completed from the comfort of your own home. In the past robo-advice has been billed as the future of financial advice, and a threat to the traditional advice process.
While pensions and rental properties can both be beneficial in retirement if it comes down to a choice between the two I’d advise a client to use excess earnings to make personal pension contributions.
There’s a commonly held belief that financial advice is only for older people – because they’ve accumulated sufficient wealth to make seeking advice a sensible move and they also start to worry about their income in retirement. Many people in their 20s and 30s have a very limited interest in financial advice, because they either don’t have surplus income or spend it all – and matters like retirement planning seem like a lifetime away.
Every tax year savers are given a gift by HMRC by way of a set of new annual tax reliefs. How these reliefs are best used is very much determined by an individual’s circumstances. But we often find that savers aren’t aware of these tax reliefs and waste them – because they are granted annually and can’t be recovered later. HMRC limits the amount to which these tax reliefs can be applied; these limitations are known as the annual allowances. This is our quick guide to these allowances.
The chances are (if you’re reading this) that you’re already considering using a financial advisor. You might have already turned to the internet to tell you why a financial advisor could be beneficial to your finances – to be honest, that’s what I did when I was looking for ideas for this blog. And the internet provided the evidence i.e, many articles written over the years that contain the same ideas: financial advisors are highly qualified, they know the rules and regulations and they’ll do the research on your behalf thus saving you time while improving your financial situation.