Adviser Blog - are the changes in financial services an opportunity, a threat or both?

Originally written for inclusion in FT Adviser - Letter of the week.

Firstly let me say this, I appreciate the fact that some of the upcoming changes in our profession are unsettling to say the least.  However one thing you can be sure of, especially in our world, is constant change.  Therefore one thing I can’t understand is the constant flow of letters in the trade press and posts of financial forums bemoaning RDR.  Surely at this late stage most advisers and advisory firms have made one of two choices, either to prepare for the upcoming changes or to leave the business.

Whilst RDR provides a challenge, it also provides a range of opportunities for the professional advice community.  It also means that there is more focus on a  IFA’s looking at their existing business model and moving towards a more sustainable (post RDR) business model and a move towards more clients receiving a high standard of ongoing service, and surely that’s a good thing.

Also, I believe there will be a greater demand for advice in the corporate / SME business market due to the introduction of auto enrolment.  Whilst there are certain firms which are active in the market, there doesn’t seem to be enough to meet the potentially overwhelming demand of firms seeking advice to prepare for the upcoming changes they will need to make.  I believe that the business demand, if we position ourselves correctly will be ready to take these opportunities.

However one concern I have is that a large part of the population may not have the opportunity to seek affordable independent financial advice at a time when they may need it the most. 

Any advice business needs to ensure they remain commercial and unfortunately all of us need to make a sensible decision about who we can afford to provide our service too.  I suspect that the internet will play a part in filling this gap providing a low cost guided solution, so it will be interesting to see how either web based financial guidance (or web based advice) may develop over the next year or so.

UNUM's latest marketing - what do you think?

UNUM, a life and health insurance provide have come out with this recent video to promote their income protection product.  Whilst we would always encourage you to shop around for the best deal, either independently or through an adviser, I've got to say I'm quite impressed with the advert.  What do you think of it?

Why an addition to the family means another visit to your financial planner...

As many of you who read this will know, we've recently had a new addition to the family.  Little Sophie was born at the end of November and our life is back to sleepless nights, constant feeds and having to plan with military precision how we get everything we need in the car when we decide to take a trip anywhere.

So, what has this meant to our personal finances.  Firstly, it means life has just become more expensive.  A recent study by LV= places the cost of raising a child at £218,024 in total with the main cost being education (which has increased by 120% since 2003)

One of the main reasons for the huge increase is the rule change in tuition fees and whilst many young people will fund this with student loans, many parents want to ease the burden post university by planning to contribute toward these fees.  This is where a relationship with your financial planner should come into play.

However there is another fundamental reason you should see your financial adviser if a new arrival comes along....the need to review your existing protection needs.  In our household the arrival of Sophie meant that our life cover designed to protect our family needed to be reviewed.

So, you may be asking why?  Before Sophie arrived all our family protection policies were due to finish when Charlotte was 21.  However if I kept the same policies in place without reviewing these plans they would finish when Sophie was 13....meaning that I've got a gap in the cover needed to protect my family until Sophie was 21.  Therefore, it's important I look at the options to ensure this gap is filled.

So, a couple of questions....

When was the last time you reviewed your protection needs?

Was the last time you saw your financial planner since an addition to your family?

What action are you going to take to ensure you have the peace of mind to ensure your family are protected?

Money on the go - the 6 top financial mobile apps

Mobile App's are brilliant aren't they?  You can play games, keep up to date on the latest news, or keep in touch with friends via social media...all from your Mobile or Tablet computer.  However, are there any applications which allow you to manage your money more effectively using the power of technology?

The answer is yes, there are plenty out there, but what ones are genuinely useful?  Below are our favourite top 6 financial mobile applications.  

But firstly an apology...I'm an Iphone user and therefore these applications are Iphone focussed, therefore I'm sorry if these App's are not available on your mobile of choice.  However I'm sure that if you're not an Iphone user, you can find something pretty similar available on your phone....anyway, onto the list:-

Iexpenseit - (Lite version - free, Full Version £2.99)

Whilst many of our clients understand exactly their month to month financial situation, we have a few who find it hard to keep track of their outgoings every month.  This is completely understandable as it can be tough to keep track of what you spend as you go about your daily business.  Iexpenseit goes a long way to solve that problem.

The application allows you to record your income, and more importantly, your expenditure on the go.  You can add multiple accounts (so it can potentially be used for personal and business accounts) and has the facility to provide PDF reports (illustrated with some nifty little charts) at the touch of a button.

The Lite version allows you to enter 200 entries, so you can try before you buy.  However with the cost at a reasonable £2.99 it offers a low cost way to manage your day to day expenditure.

AVIVA Time to Act (Free)

This nifty little free app, which is sponsored by Aviva, provides you with a rough and ready indication of whether your current retirement provisions are enough to live on in later life.  

When you put your annual salary, existing pension fund, contributions, retirement age and attitude to risk into the app it will provide you with the amount you are entitled to in tax relief but more importantly provide broad projections of what you may receive as an income in retirement based on the data you input.

  

Whilst this isn't an app you'd use every day...it's interesting to see if what you believe is a sufficient amount to save for retirement is actually enough.  It also allows you go back and play with the numbers to see what difference paying a little extra contribution might make, or if you retired 5 years later, or if you were prepared to take a little more or less risk.

There's also a similar app available on Android called Nest Egg for all you non Iphone users....

Bloomberg (free)

Whilst many people use the Bloomberg application for tracking individual share portfolios, it can also be used to get up to date information on your Investment ISA's, Pension Funds and Unit Trust investments.

Just type the name of your fund into the App (be careful you select the correct fund and if in doubt contact your adviser) add it to your favourites list and it allows you to keep track of how many of your investment funds are doing right on your phone.      

However please bear in mind by their nature many of your investments will fluctuate and therefore bear this in mind when keeping track of the investment performance in your funds.

Inflation Calculator (69p)

This application provides historical data of how prices of goods and services have increased over the years.  Select any year from 1800 to last year and it will give you an indication of how prices of changed.  

So, why is this important?  Whilst we can't predict what increase in the cost of living will happen in future years, it clearly illustrates that the value of your money is eroded over time.  

This could potentially help you make the right savings and investment choices so that your money has a fighting chance to keep up with this inflationary rate and therefore maintain it's true value.

RedLaser (free)

What use is money if you can't spend it on the things you enjoy?  However ensuring you get the best deal on your purchases is important and RedLaser can help you achieve this.  

You can use RedLaser to scan the bar code of many potential purchases to ensure the deal in the store you are in is competitive.  RedLaser does the hard work and does a search online for the best deal on that new potential purchase.  It can also be used to find the nearest shop with the best deal, and includes a QR code scanner as part of the bundle.

It's important to note that the database doesn't include all retailers and you may be able to get a more competitive deal by shopping around yourself.  However as a quick method of seeing whether the deal where you are is overly expensive or actually pretty competitive it's a nice piece of kit.

and lastly....

Twitter (free app)

Ok....so it's not strictly speaking a money related app....but Twitter is incredibly useful as a financial resource for a number of reasons.  Firstly, there are many financial professionals willing to share knowledge, provide tips and interact on a range of money related subjects.  

Secondly, although as you may know, the content is limited to 140 letters, there is a steady flow of useful links to more in depth analysis on many different aspects of money.  Thirdly, it's fun!!

So, who should you follow on twitter to benefit from these resources.....I think I'll leave that for another blog entry.