Pets, The Guinness book of Records and Serious illness

One of my favourite Christmas presents I received this year was the Guinness book of records 2012.  It's   full of bizarre and incredible facts, most of which you will never use, but all worth knowing anyway!  However whilst flicking through the book the other day, nestled away on the top page 149 was this fact:-

"In it's lifetime, the average dog will cost it's owners £6746 and the average cat £4950"

So, why did this fact catch my eye....and why are these figures so important?

A recent survey by Aegas Protect confirmed that based on a survey of 3000 individuals, 12% of Adults in the UK have pet insurance when compared to 9% who had a critical illness policy.

We all know that people love their pets, however their seems to be a lack of perspective for the people who have been survey which tends to illustrate why critical illness is less popular than pet insurance.  Firstly, let's consider both the financial and emotional impact on you and your family if you suffered from a critical illness (for instance a serious form of Cancer).  

You may be off work for a prolonged period of time while you recover and still have a monthly mortgage payment to cover.  You may not be able to work again, or you might want to pay debts off if you do suffer from any form of critical illness...you can see how these costs could quickly build up in the event of your suffering from one of these illnesses.  However the right level of cover is always personal and based on your thoughts and feeling in this area.  It's always worth speaking to a financial planning professional about the best route forward.

However, regardless of your circumstances....it's likely that the level of cover provided in the event of your suffering from a really serious illness is more than the total costs of looking after a pet.  I have critical illness cover with a sufficient amount to pay my mortgage off and then a little more to provide an additional level of financial security in the event of a critical illness.  My thought process is that the only thing I want to worry about if I ever suffered from a critical illness is recovering from said illness.....the last thing I want to concern myself with is money.

Therefore the financial impact of the ill health of a pet is far less than the financial impact of my ill health....Also, apart from the odd exemption (like the cute dog from the Oscar winning film, The Artist) there aren't many pets who can go out and earn a crust on your behalf.  This is why I believe Critical Illness cover is more important than pet insurance....but as ever, I'm open to other opinions.  What do you think?

Approaching retirement? Why you shouldn't go for the easy option

So, imagine you're approaching retirement and wondering what to do with your money purchase pension scheme.  You receive a pack highlighting the fact that you have the opportunity to either take the annuity (where you convert your pension pot into an income) offer from your existing provider or shop around for the most preferential deal.

Whilst there are now alternative options to buying an annuity most people still opt to buy an annual income on all or the majority of their pension fund.  For someone who wanted to take this option the easy route would be to sign the form within the pack and take one of the income options available through your existing provider....right?  Well it may be the easy route, but how much you could be losing out by taking the easy route and not shopping around?

Well, according to this Article from the Telegraph published last year UK pensioners lose 3.3 billion pounds a year (based on research from the Oxford Economics and PICA) by going for the easy option instead of shopping around for the best possible income they can receive from their pension fund.

The potential additional amount you may receive at retirement by shopping around for the best income depends on a number of factors, however it's always worth consulting your independent financial adviser to help you with this or alternatively, if you prefer to conduct some initial research, the Money Advice Service provide a useful annuity comparison tool to provide indications of how much you potentially may receive.

One important factor many people approaching retirement don't consider is how if that individual has poor health, are overweight, or are smokers may potentially increase the income they receive in retirement due to these factors.  For individuals who fall within these categories, it's even more important to ensure that they shop around for the most appropriate arrangement.

It's also important for someone approaching retirement to understand what the options are available when selecting the best income and consider whether you want Fixed or Increasing retirement income or a guaranteed period.

So, when it comes to selecting the most appropriate income at retirement....ensure that you take that time to select the best income possible.  The income you choose is likely to be with you for the remainder of your life....why not make it the most attractive it can be!

The power of "offline" networking

When any of us first start a new business one of the fundamental challenges we all face is how to gain new clients and therefore income for our fledgeling organisations.  When I first started I came from a relatively safe corporate environment where the majority of my clients were introduced via the business I worked for.

When it's your own responsibility to acquire new clients the challenges you face are fundamentally different!  Many businesses use a range of strategies including advertising, making their website more visible on Google and even cold calling.  

However I quickly realised that these strategies wouldn't be as effective for my business as going out, meeting fellow business owners, evidence my expertise and building long term relationships and thankfully my business has and is going from strength to strength by adopting face to face networking as a core business strategy.

When I started networking with the aim of winning new clients and at the time didn't realise how powerful the "fringe" benefits of meeting fellow professionals and business owners are.  I've now got access to a trusted team of experts with a range of specialisms, key strategic partnerships and some really good friends.  All aspects of business networking which are too often ignored.

In a later Blog Entry, I'm going to share with you where I network face to face and what strategies have worked for me.

My Top 3 Ted Talks...

One of my favourite websites is Ted.  Now you may be asking yourself, what or who is TED?  Allow me to explain...

TED is an organisation committed to spreading ideas.  At conferences across the world it has a range of expert speakers in their respective fields and then publishes their presentations on their website.  Whilst their are over a thousand different videos on their You Tube channel.....I wanted to share with you just three of the talks I found the most inspiring.  So, who's on with my List:-

Jamie Oliver

Cassie, my wife, loves Jamie Oliver.  She's got most of the cook books, and we even had one of his recipes for Christmas dinner!  I'm an admirer of fellow Essex resident Jamie for slightly different reasons....the work he has done to challenge child obesity and to get us all eating healthier.  Here is Jamie accepting the Ted Prize in 2010 and talking passionately about trying to make a difference....

Daniel Pink

Daniel has some surprising insights on business and motivation.  More specifically how motivation for creative tasks differ from more day to day tasks.  Based on research conducted by scientists...he argues that motivation comes not from financial incentives, but actually comes from the desire to control our own lives, the passion to get better and better at what we do, and the desire to do things because they make a difference.....

JR

The winner of the Ted Prize in 2011 was JR, a street artist from paris.  Now whilst I'm quite a traditional sort of chap when it comes to Art...the use of photography in areas of conflict and poverty provides an part shocking, part inspirational and part funny story about how creativity can make a difference...

So.....these are my 3 favourite TED talks, what are yours?

Why you should "give something back" ethically, healthily and commercially.

If you're anything like me, you have a relatively busy life.  When you consider the amount of time you spend working, ensuring you have sufficient amounts of opportunity to spend time with the family, and importantly, enough time to recharge your batteries and it doesn't leave much space in the day for anything else.

However, I'm a firm believer in ensuring that, regardless of how busy you are, you should find time to support a charity, community group or get involved in supporting the community in some way.  Personally I try to help out my Daughters school by acting on the Governing Body, and also do as much as I can to support my Charity of choice - Richard House Children's hospice.

Firstly, and probably like you, I've been relatively lucky in life, especially when it comes to having two healthy and happy children, and therefore I absolutely believe that we all should support those who haven't had the same breaks in life.  The most important job in my life is as a parent, and therefore I choose to support a charity which supports unwell children and their families, due to the fact that it's so close to home.  When you are looking at who to support as a charity, select one which is important to you....and when it's cold and raining outside and you're looking to train for your next run, it might be just a little bit easier!

Now I do this for a number of reasons.  Secondly, it's to try to keep relatively fit.  I'm running for Richard House in the Greenwich Tough 15k in a few weeks, but unfortunately I'm not a natural runner (due to the combination of currently carrying a few extra pounds and having the coordination and balance of a three legged dog). However one thing I am is goal focussed and having an objective to achieve means that I'm more focussed to achieve the required level of fitness needed to get round the circuit.

Thirdly, it's a great chance to meet and connect with like minded people.  I'm doing the upcoming run with three other business people, Clive Myers, Ted Wigzell and Jeroen Geut.  Like many organisations (and more than likely yours) our business is a people business.  Our relationships with both clients and introducer's is built on a foundation of trust.  Working together on a common goal which is designed not to benefit us commercially, but help families who need our support actually builds those relationships.  Whilst this is not the key factor for supporting your favourite charity building these relationships can help you and your business too.  So, why don't you dust off those trainers, contact your local charity of choice, and help.

Cash ISA's - Things to consider...and why it's important to read the small print!

The examples provided within this article are accurate as of the 13th Febuary 2012.  Please check the small print of your chosen ISA at time of deposit for specific terms.  Please note that the examples provided are not unique with the providers mentioned and are only provided as an indication of how your Cash ISA can be impacted by the small print discussed.

Cash ISA's are one of the most tax efficient methods of holding your deposit based funds.  However, if you are confused about the number of different rates out there, you're not alone.  There are a number of comparison tools available online to compare Cash ISA rates (Moneyfacts, This is Money, and Which amongst them).  However whilst looking at the headline rate, it's important the you understand the underlying terms before you put your hard earned cash into one of these and I've detailed the main points you should consider below...

Fixed Term ISA's


Many of the attractive rates you may see in relation to Cash ISA's are Fixed Term arrangements.  The benefit of these type of arrangements is that you know how much you will receive in interest over the specified period.

Therefore these rates may suit you if you are sure you won't need the money for the Term the ISA is fixed.  However it's important to consider if you may need the money before the fixed rate period.  If requiring access is even a remote possibility it's time to read the small print!

Although the rate might be attractive, how is the rate impacted if you need access?  Does the interest rate reduce? or are they penalties of no interest for a fixed period of time, and how does that impact the rate?

Consider, as an example, the Halifax 5 Year fixed rate ISA.  Looking at the small print, it states that if early withdrawal occurs, the loss of interest is 365 days.  Therefore you lose a years worth of interest if you need the money within that 5 year period.  As you can imagine that can have a huge impact in the amount of interest you actually receive and therefore it's important that you understand this before entering into this type of arrangement.


Bonus rates and Bonus periods


Whilst comparison websites are an incredibly useful way to compare "headline" rates, Cash ISA providers understand that there are many of us who will look at these rates to compare the best providers.  However these "headline" rates can include two aspects, a standard rate and a bonus.

This Bonus is usually for a specified period of time and then the rate reduces to the standard rate.  Therefore although the rate you receive initially may look incredibly attractive....it may change at a stage in the future and reduce to a rate which is far less attractive.  Whilst ISA providers are all fighting to attract your funds, they are also reliant on one key factor, complacency.


In our busy lives it's easy to miss when your ISA rate is due to change, however if your Cash ISA has a bonus introductory rate ensure that you put that date when this finishes in your diary so that you know when it's time to shop around again.

Currently the Nationwide ISA provides a "headline" rate of 3.10%.  However this rate only applies until January 2013, and after this time reduces to a variable rate (currently 1%).  Therefore you can see that due to the reduction the importance of ensuring that when a bonus period expires, it's time to shop around.

Minimum Amounts


Let's assume you deposit some money, say £1000, into your Cash ISA.  You then need access to some of your money and you take £100 out.  So, you'd be safe to assume that the interest rate you receive would be the same as when you had the £1000 in the account, Right? Wrong!


Currently Cheshire Building Society pay 3.06% on their Web Based Direct Cash ISA (Series 1) on any balance greater that £1000.  However if your balance reduces to £999, the interest rate drops to 0.25%.

Whilst Cheshire building society isn't alone in having this sort of arrangement, the important point is regardless of who your Cash ISA is with, ensure that before making a withdrawal you understand the impact on your interest rate.

Financial Strength and Compensation

Many more consumers in today's economy are looking to understand how they are protected in the event of their ISA provider failing.  However with many ISA's provided by it's important to understand who provides the underlying deposit.

The AA, for example provide an ISA.  However if you look at the small print the current 'Deposit Taker' is Birmingham Midshires (which is currently a division of the Bank of Scotland).

The important point to consider is how your money is protected in this situation.  Whilst this constitutes a blog entry all on it's own, you can find full details of the Financial Services Compensation Scheme (including the standpoint of how subsidiaries are impacted) here :-

http://www.fscs.org.uk/what-we-cover/products/banks-building-societies/

To conclude.....




I hope you have found this article useful, and whilst it's not designed to be a conclusive list of areas to consider,  if there is one major point to all of the points shown here is that reading the "small print" and understanding these factors are important when selecting the right Cash ISA product and provider.

Diary of an IFA - Adviser Blog

"Diary of an IFA" - written to be featured in FT Adviser

Diary of an IFA

Monday

The day starts at 5:30am in the form of a human alarm call from baby Sophie.  Although she’s only a month and a bit old, her sleep patterns are settling down and 5:30am is a bit of a luxury.  Once the morning feed is done, and breakfast and a nice strong coffee are consumed, it’s off to the office for client Research and checking emails.

Then it’s off to the first meeting at 11am with a new client.  The lady in question runs a training business and received some investment advice from one of the banks.  The investment had been running for 6 years and had made a loss.  There had been no annual reviews and the client had now been told the bank in question no longer provides advice.  I found this disappointing, but ultimately not surprising.  Then it’s back to the office for some client research, checking emails and meeting preparation.

Tuesday

The day starts with a call from the head of a prominent local chamber of commerce.  We are currently working together to ensure that the businesses who are members of the chamber are prepared for Auto Enrolment.  We discuss the fact that the auto enrolment date has been put back for most SME’s and how they will react to this news.  Chamber head believes that many businesses may decide to defer making provisions for an additional year, I hope they use the additional year to prepare for auto enrolment more gradually.

Later on in the day, I received a call from an existing client.  His private medical cover is up for renewal and he wants to make sure he is receiving a decent deal on the renewal.  We speak and he emails the documents over for me to take a look at. 

More research for existing clients followed by a trip to the local gym.  My 8 year old, Charlotte practices Jujitsu whilst I have the first circuit training session of the New Year.  I’ve got a feeling I’m going to ache in the morning!

Wednesday

It’s another early start this morning as the baby decides to wake at 5:00am.  I’m feeling the impact of the training session, but I’m hoping it’ll get better next week!  After breakfast and a strong coffee I’m ready for my 9:00am meeting with a new potential introducer to the business.  

Most of our work comes from working with fellow professionals and cross referrals in business.  The meeting goes well and we agree to meet up in a month to see how we can move our relationship forward.

A call comes through from a fellow financial planner who wants to work on a case with us.  I’ve known her for years but have renewed the relationship through connecting via social media.

  

Thursday

The day starts early with a networking meeting at a pub in Theydon Bois, Essex.  I enjoy my first post new year fried breakfast, however I might have to worth extra hard in the gym to burn it off!       

Then it’s on to a meeting with one of our solicitor introducers.  They are professional trustees on behalf of a number of clients and when they feel appropriate approaches us to provide investment advice on behalf of the client.  

We agree to the fee structure for the initial report and they ask me to conduct the work required on behalf of the client.  Another meeting follows with another solicitor and a life coach who specialises in helping the newly retired.  We meet in a little village pub in rural Essex and discuss how we may be help each other move our businesses forward.  We share some great ideas and go our separate ways.

Friday

The first meeting of the day is with one of our main introducers.  I talk about getting used to having a new born in the house again and lack of sleep.  He tells me about his Christmas trip to Dubai.  The meeting went well, however I did feel slightly envious of his January tan.

Then it’s on the train to sunny Essex for my last two meetings of the week.  I make this meeting with 2 minutes to spare with a HR consultant introducer.  During our conversation, he tells me about his client he wants me to contact as they need advice on how to prepare for auto enrolment.

Then it’s on to meeting number 3, where I meet with a commercial insurance broker to see how we may be able to help his clients.  As its 5pm on a Friday, the meeting is held over a pint.  I’m happy with the week’s activity, with new business opportunities coming to fruition and some productive longer term relationships which are starting to develop.  I’m doing Sophie’s overnight feed tonight though, wish me luck!

Top Financial Twitterer's - Part 1

During a presentation for a networking event last week, I mentioned that one of my favourite money related mobile money app's was Twitter.  If you want to see why twitter is a great money tool you can read this Blog

One of the questions asked at the end of the presentation was....

"Fine, so Twitter is a great application for great financial tips and links to additional resources....but with so many so called 'money experts' on Twitter, who do you trust?"

So, in this entry I'm going to give you 3 of the top money related people to follow on twitter.  Also, I'm going to do an entry weekly with 3 new twitterer's.  So if you're reading this and you're not on here don't be offended, I'm sure you'll be on here soon!

Anyway, the first 3 entries are:-

@PeteMatthew - why?  I'm a great believe in ensuring everyone has the required information to make informed  financial choices....and there is no-one who does more to provide great content than Pete Matthew.  Please do check out his videos on this site....Pete is demystifying the world of money one video at a time!

@Pensionsmonkey - I'm sure you've seen Tom before (the man behind the Monkey!) as he is always popping up on BBC breakfast.  Worth following for his in depth pension's knowledge and always quick to comment on the latest news and changes.

@CashQuestions - Annie Shaw who is an active tweeter who provides a great service with her website.  It's a simple idea but incredibly effective....Ask a money related question and get it answered by a financial expert, for free.  Whilst this doesn't replace professional financial advice, it will give you a starting point or a greater understanding of your area of concern....and that's got to be good thing.

Keep looking out for more entries into the top money twitterer's....there will be more coming next week.

Should your next move be into a Corporate environment or should you consider an SME?

This Blog entry was written as a guest post for the GAAPweb Blog

So, let’s assume you’re looking for your next opportunity to develop your career and feel that you feel that you can’t fully utilise your skills in your current role.  Let’s also assume you have two opportunities on the table, one with a large corporate organisation and another with a medium sized niche practice.  A natural assumption is that the opportunities, potential career progression and scope of work within the corporate environment would be greater due to the size of the organisation.  Whilst on many occasions these assumptions are correct, is it worth considering looking at the smaller business.

Personally, I’ve been on both sides of the fence.  I now run a small financial planning business but have worked for large corporate organisations for the majority of my career.  So, in my experience, how does the corporate environment compare with working within a SME practice environment?

Firstly, I don’t believe I would have launched my business without having the training, development and supportive environment of a large business.  I also believe that if you are at the early stages of your career, a larger corporate environment tends to provide more support in helping develop your skills than a smaller niche professional practice can.

However, and I’m sure it depends on the culture of the business you work in, I reached a stage in my career when I wanted to broaden my portfolio of skills, build my own long term professional relationships and start to develop my own systems and practices. 

In my experience taking this element of control can be particularly tough in a corporate environment and it tends to be easier to develop as a professional (once a certain level of competence has been achieved) in a smaller niche practice.

Within my business we encourage our staff to share ideas, take on new projects, develop new business opportunities and suggest changes to our systems to make the way we work more efficient. 

This culture was developed based on my frustration of working within a large corporate where sometimes that creativity was stifled. 

Therefore the question I believe you need to ask yourself is, does the opportunity you are considering offer the opportunities, flexibility and scope to build as a professional?