Archive for January, 2012
Investing in the New Year
The New Year is a time we all make resolutions for positive change. Maybe you’re thinking of starting that diet, reading that book, or joining the gym. If you’re willing to put a little time and effort in, you’ll find the returns can be very rewarding. The same goes for decisions about your financial future. It’s never too early to consider what you want to do with your money – or what you want your money to do for you!
Planning ahead with your finances can be a difficult task. With mounting financial pressures and an uncertain economic climate, it’s often hard enough managing your money in the here and now. But deciding to plan ahead means you’ll hopefully be in a great position to not only enjoy the potential returns your savings and investments can bring, such as a lump sum towards a holiday or luxury item, but deal with any unexpected costs or financial burdens, such as medical care.
Long term investments are a popular way of achieving those future financial goals and, with a huge range of products on the market, are something everyone can do. There are a great variety of products designed to help you and your family invest in the future without spoiling your enjoyment of the present!
- Tax Exempt Savings Plans: you can invest your money in schemes and accounts, which generate returns protected from the taxman. These types of plans allow you to invest from £15 to £25 per month and avoid tax on the growth of your money. This allowance is in addition to the limit set on ISA investment plans. Be aware, tax payments may be due if you access your plan before 10 years.
- ISAs: Stocks and shares ISAs are protected from income and capital gains tax, meaning the money you make goes directly to you. As with any stocks and shares account, the value of an investment can fall and rise and your original contribution is not guaranteed.
- Child and Family Investment Plans: an investment doesn’t just have to be for you – and if you’re looking for investment opportunities to benefit the future of your children or your family, there are products such as the Junior ISA which once set up can be paid into by every member of your family to benefit a child. When considering child investment plans, it’s important to consider investments as long term strategies and keep in mind they may fall in value.
However you choose to use your money in the New Year, be aware of the opportunities available to you. If you’re planning to invest, make sure you’ve considered your options and are happy you have chosen the right strategy. Making your money work doesn’t have to be difficult – and it’s something in which everyone in the family can be involved!
Let them eat cake
OK first things first, before the comments section (if one existed) is littered with people correcting the title of this article. Of course, the actual phrase used was “Let them eat brioche” and it wasn’t, as often assumed, uttered by Marie Antoinette. It was in fact ascribed to a mythical princess by Jean-Jacque Rousseau whose major work The Social Contract is still highly relevant today.
Still the phrase is at least well understood these days as a shorthand for an out of touch elite suggesting solutions that belie a complete misunderstanding of the real world.
That’s my view of the financial services industry.
It applies to all the actors; providers, advisers, regulators and indeed the media. The brand value of the financial services industry is about as low as you can get without entering politics or tabloid journalism. And we deserve it. All of us.
We’ve lived with scandal after scandal and seem to respond to each and every one with a terrible wringing of hands and a new set of regulations which only widens the gaping chasm that exists between ourselves as an industry and our potential clients.
It’s no good the industry, a company or any adviser producing a list of customer satisfaction ratings as a way of disproving this theory. That’s just the worst kind of selection bias. It’s the people that don’t engage with the industry (who by definition cannot be clients) that should shame us.
Indeed the fact that the government (don’t get me started on them!) has instigated the de facto nationalisation of the group pensions industry, coupled with soft compulsory pension contributions on a highly unwilling public through the National Employers Pension Trust (NEST), is a tombstone of our failure.
But worse, NEST is exactly the sort of chattering classes solution to the serious problem of people’s general reluctance to invest for the future through a pension:
“The people are starved of investments they have any confidence in ma’am”
“Then let them compulsorily opt-in to NEST my good man”
Time will tell but a key statistic to watch over the coming months is the opt out rate from NEST. Within 12 months I suspect it could be over a third – the danger is of course that it reaches a critical mass when the whole thing implodes. But more, much, much more, on that later.
Let me be very clear here – I’m not setting myself up as the industry man of the people, who can personally bridge the valley between “real people” and the financial services industry. I don’t know how “ordinary people” think about financial services, I’m so out of touch I have to pay amarketing agency to tell me. I have to be tied to a chair and held down (and no I don’t like it) whilst I watch behind a one way glass with increasing frustration as my first draft marketing copy is torn to pieces, by members of the public who form a focus group on the other side of the glass, as being intellectual and inaccessible. It’s a humbling experience, but it means that the second and third draft of the copy improves dramatically, but we need a lot more humility in this industry – all of us.
We’ve got a long way to go to earn the trust of our existing and potential customers in the future. But they say the first stage to fixing a problem is admitting you have got one.
So… My name is Neil Lovatt and I’ve acted like a princess telling the masses to eat brioche. I will get better.
Making secure payments & purchases online
With a click of the mouse, you can buy nearly any product online – from ordering your weekly groceries to making savings and investments. The world of e-commerce, enables you to shop at thousands of websites and pay for purchases from the comfort of your own home. But just as you should take measures to protect yourself in stores outside the home (such as protecting your PIN number when paying for purchases) you also need to take sensible precautions when shopping, saving and investing online.
We all know that when shopping, or making savings and investments online, you should only use secure websites. ‘Common sense’, I hear you say! But how can you tell if a website is truly secure? Well, the good news is that it’s really quite simple.
Secure websites use encryption technology. This technology enables the transfer of information from your computer to an online retailer’s computer in secret code. Encryption scrambles the information you send (such as your card details) so it is securely transmitted over the Internet. The only people who can unscramble the code to read the information supplied are those with legitimate access privileges, in other words the retailer with whom you are interacting.
So, that’s the technical bit – sounds good doesn’t it! But how can you tell that an online retailer is using these security measures? Well, there are two things you should look out for as good indicators that the site you are dealing with is secure:
- First, if you look at the top of your screen where the Web site address is displayed, you should see https://. The “s” that is displayed after “http” indicates that Web site is secure. In many cases, you do not see the “s” until you actually move to the application page on a Web site.
- Another way to determine if a Web site is secure is to look for a closed padlock, usually displayed at the bottom right hand corner of your screen (depending on your browser, e.g. Internet Explorer). By double-clicking the padlock, you’ll see the security certificate for that website. If that lock is open, you should assume it is not a secure site.
As well as checking out the above, there are other sensible things you can do to stay safe when making your shopping or savings and investment purchases online. Most reputable websites will have a privacy policy – check it out before you buy. Then enjoy the benefits of online shopping, knowing that you’re doing it both responsibly and with confidence that you’re data is secure. And don’t let yourself down at the last hurdle! When you’re finished, if you’re using a public computer or terminal, always log out and close the browser for added peace of mind. Happy shopping!