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.

6 Things you need to know about the changes in pension law

New rules coming in next year will impact every employer.  Whilst talking with and helping employers there are a number of questions which continue to be asked....so I thought it might be helpful to highlight five of the main points here....

1.   Will the changes in rules impact me and my business?

The simple answer is, if you employ, yes!  However if you are a sole trader or a single director of a limited company (with you as the sole director) it won’t.  Whilst the extent of how the changes in rules impact you depend on a number of factors, if you employ there is some value in finding out how it will by seeking professional advice.

 2.  When do the changes in rules start to impact employers?

The new rules start to impact employers in October 2012.  However at this stage it’s the big companies who are affected first.  The new rules start to impact SME businesses in 2014.  However, many of the companies we work with are starting to prepare sooner to ensure that they fully understand and their businesses are prepared for their rules sooner that this.

3.  If I employ, how will the new rules impact me?

The changes in rules will effectively mean that most employers (excluding those where all employees earn less than a specified limit) will have to offer their employees a contribution into a pension, with the employee also being asked to contribute.

Whilst your staff can “opt out” they will be automatically be opted back in every 3 years.  However employers do not have the option to “opt out” of the scheme.

The minimum contributions going into the scheme from both employer and employee will increase gradually.  However after October 2017 onwards the minimum contribution is 3% employer and 4% employee (with 1% tax relief).

4.  What options do I have in selecting a pension?

There has been a government sanctioned scheme (called NEST) set up which employers can use to meet these new regulations.

However, employers do have the option to select their own scheme from reputable pension providers on the market as long as their own scheme meets certain minimum standards.

5.  Is it going to happen.....really?

The new rules are law today!!  The basis of the new rules was confirmed in law by the Pensions Act 2008 under the Labour government.  Whilst there was a degree of speculation about whether the Conservative government would continue to enforce these rules there is no sign that these rules will be repealed.

Also, the new rules remove the liability the government has and ensures the responsibility to save for retirement is in the hands of both employers and employees.  Therefore in times of austerity it’s logical that the government wants to pass this liability on!!

6.  What do I do now?

This article is designed to provide you with some of the main points you need to consider when preparing your business for the changes in rules.  For more depth you should consult an independent financial adviser who can help further, or alternatively there are a number of web based resources which will provide additional information.

The ostrich, premeditated thought and why you should be more like a chimp

Let’s start this blog entry with a couple of animal stories


The Ostrich

There is no scientific evidence that Ostriches react to danger by burying their heads in the sand. Whilst they are do briefly stick their heads in the sand to swallow sand and pebbles...they react to danger in a far more practical way.....they run!!

The Chimp

In 2009, Santino, a Chimp in Furuvik Zoo in Sweeden was able to collect stones and “stockpile” them away for future use. The reason Santino was doing this was because he wanted to ensure he had enough missiles to throw at the visitors when they came to see him!

The interesting thing about this story is that scientists believe that this shows that Santino possessed a skill considered by many as a uniquely human quality....Collecting these stones now so that he could throw them at visitors in the future was an illustration to many that Santino had “shown evidence of premeditated thought.” In other words...the ability to plan for the future!!

The Point

So, you may be thinking....”why is an independent financial adviser starting his latest blog entry with a couple of stories about Ostriches and Chimps? “

Stick with me....there is a reason!!

Although Santino has shown that the other animals have the capacity to plan for the future, making plans is still one attribute which makes humans relatively unique to the rest of the animal kingdom. The ostrich, although we now know do not put their heads in the sand when in danger are not particularly well known for their forward planning skills!!

However, sometimes I’m surprised that there are a few fellow business owners who, when it comes to planning for the future of their business behave more like the ostrich than the chimp, specifically by not planning for the upcoming changes in pension rules which are going to impact every employer.

These rules were bought into being by the “excitingly titled” Pensions act 2008 and effectively mean that if you employ, it’s likely that both you and your employees will be paying into some form of pension within the next few years.

Although there are some exemptions, the specific rules on the changes are too detailed to go into on this blog...if you want the key facts on the upcoming changes they can be found on our factsheet here:-
So, let’s end with a question....have you already ensured your business is ready for these upcoming changes or have you decided just to run away from danger?

In other words....are you a chimp? Or an Ostrich?

Do you think it's right to turn down business?

Whilst I enjoy the technical side of the job I do for clients, the area of my work I really enjoy is the people side....building a relationship with a client, understanding them as an individual and gaining enough information from the client to do a great job.

I was referred a new client this week and we had a really enjoyable client meeting. Now, I know what you’re thinking.....surely an enjoyable meeting with an Independent Financial Adviser is a bit of a contradiction!! However we had a really good chat about what he aims to achieve financially in the future, what’s important to him as an individual, as well as discussing subjects as diverse as his favourite coastal resort, the implications of the recent riots and favourite sandwich fillings!

When I meet with prospective clients, one of the important factors is whether we both believe we will able to work together. I like to think that I get on with most people and this occurrence is pretty rare, however In the past at the end of either the first or second meeting I have decided that I don’t see the relationship with the client working longer term and have decided we couldn’t work together.

Now, I’ve mentioned this during the past in meetings with other businesses and I received a shocked look!! “Chris, are you mad?? Why would you turn down business just because you don’t get on with the client??” was one of the comments I received.

However, I’m sticking to my guns on this one, and here are the reasons why....

Firstly, life’s too short!! I spend a lot of my waking hours working and I’d prefer to be enjoying this time working with individuals or businesses I have a good relationship with rather than working with clients where I don’t enjoy spending time with them.

Secondly, due to the fact that my promise to my clients is to review their financial provisions and plans on a regular basis...I need to ensure that the foundation of a long term relationship is built from day one. I’m not sure that you can build this relationship if you feel you can’t get on in the initial couple of meetings.

And lastly, if I’m feeling that the relationship isn’t working....surely the prospective client feels the same way?

However, I’m prepared to be proven wrong on this one.....what do you think?

Sweets, Swimming and Inflation

I don’t know about you, but whilst I use the weekends to catch up on a bit of work....the majority of the weekend is family time. This weekend involved a trip to the swimming pool and an interesting comment from my daughter Charlotte whilst we were getting changed after our swim.

I’d asked Charlotte to get the clothes out of the locker....and she was shocked to find she didn’t get the 20p we’d deposited into the locker back!! However, after giving it some thought, she turned round to me and said....”Don’t worry Daddy.....what can you buy with 20p anyway!!”

My initial thought was “how times have changed!!” I remember at Charlotte’s age going into my Local corner shop and being able to get a bag of sweets for 20p, buying some sweets at half a penny too!

Interestingly, According to a recent study by Santander, the cost of sweets has gone up by 24% between June 2008 and June 2011. Now dependent on your opinion, this could be perceived as a positive move, encouraging moving children away from sugary foods. However, the cost of all goods and services increase....this is called inflation and why you should always ensure that you take this into account when saving for a specific goal...consider this, If a basket of shopping would have cost £100 in 1986, the same basket would cost £228.53 today. (source – Bank of England inflation calculator).

Due to this increase in prices of the goods you want to buy in the future, and therefore it’s worth considering if your money is keeping its value...so when you want to spend it, you’ve got enough money for something a bit more luxurious than a bag of sweets or a locker in the swimming pool!