Life Assurance

Sunset, Paragliding, Sky, Parachute

Life Insurance is like a parachute, if you don’t have it the first time you need it, there will likely be no second chance!!!

The importance of Life Insurance is often not realised by many until it’s too late. If you can relate to this and would like more information, you should be speaking to ABFM.

Email or call 01419565525 to speak with us and we will be more than happy to have a chat.

Thoughts on Investing Ethically.

The term ‘ethical’ is often used as a catch-all to describe funds managed with social, environmental, or other responsible criteria in mind.

Investing ethically offers the possibility of taking advantage of good performance whilst also benefiting society. And it’s becoming more and more popular with investors of all ages.

But of course, ethics are personal. An industry that seems abhorrent to one person might seem like a necessary evil to others. Take pharmaceuticals. Some investors would avoid the industry because of moral objections to animal testing. Others suggest the work of pharmaceutical companies contributes to the development of society.

That’s why you’ll need to make sure your investment is consistent with your moral views before you invest. When giving advice we look at the approaches taken by a selection of funds whilst taking into account how much risk you want to take just as you would with any other type of investment.

Striking a balance between investing morally and delivering strong performance is no easy task.

We are also strong advocates of diversified investment, and it seems to us this should also apply to Ethical Investing. The principle of diversification is well documented elsewhere is these posts and should be fundamental in portfolio choice in our opinion.

As with any investment, make sure it fits your objectives and you are comfortable with the risks before investing. And if you are unsure, seek advice.  Give us a call. We will be pleased to assist.

How Things Change

This picture takes me back a few years. Most of you will recognise what it is although maybe some of our younger readers may struggle.

To times when youngsters of my age (then not now!), collected records by the barrowload and played them at the highest volume possible much to the great annoyance of parents who generally thought the music was atrocious and the state of the bands scruffy.

Now all my music collection is on my iPhone and can be added to or deleted at will.

30 years age when I went into financial services, the Footsie 100 Share index was around 1700. Today, its around 7000. If you had invested, say £1,000 30 years ago, today your £1,000 would be worth around £4,000.

What will it perhaps be in 2050?

If you’d like a chat about investing and what might be suitable for you, give us a call. We’d love to hear from you.

ps Just in case you don’t know, its a record turntable for use in the days before CDs and Tapes! But you knew that, didn’t you?

Ageing – A Problem Facing Us All

What’s the solution to the ageing dilemma? As we grow older and live longer as a nation it puts strain on the state and on our own resources. According to the 2017 book The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton and Andrew Scott half the babies born in wealthier countries since 2000 will see their 100th birthday – 103 in the UK – changing everything from work and economics to our relationships. While living longer, potentially to 100 years and more, is to be welcomed, no-one would want to live it in poor health and relative poverty. 

What life span have the children got to look forward to?

The challenges of long-term care are well documented. State pension ages for men and women have been increasing and governments have launched new initiatives such as pensions freedoms and auto enrolment in recent years in order to boost individual retirement savings, which for most people are inadequate. As the 100-year life states, what this means for individuals is: “If we live for longer we need to invest more in our financial assets to support a longer life. However, a longer life is not just about getting the finances right but also about making sure you invest in your health, your families and friends and your own productive abilities. A longer life will lead us to reassess how we balance these financial and non- financial forces over our lives.”* 

A recent survey shows that women’s retirement savings are set to fall short by 16 years, while men are on average likely to come up 10 years short. So, although the average woman in the UK wants to retire at 63, if they did so their savings at retirement would run out by the time they were 69, assuming they are spending £27k per year. The survey based this on an average life expectancy of 85 and average savings of £392 per month. It says that in order for Brits to fund their living expenses to age 85, they either need to drastically increase the amount they save or continue working for significantly longer. 

I believe Advisers such as ourselves, are in a unique position to add value and expertise to clients’ wellbeing by helping them do this by building the products and tools that enable them to meet the wealth and health challenges of the future. 

The Butterfly Effect

I’ve been looking out my window this morning and “The Butterfly Effect” came to mind.

The term comes from the suggestion that the flapping of a butterfly’s wings in South America could affect the weather on the other side of the world, meaning that the tiniest influence on one part of a system can have a huge effect on another part.

Butterfly, Insect, Animal, Wing, Nature
The Butterfly Effect Perhaps?

In the case of today, maybe it was only a small butterfly, but the wind and rain, although not cyclonic, was certainly blowing a gale and the rain torrential.

Taken more broadly, the butterfly effect is a way of describing how, unless all factors can be accounted for, large systems like the weather remain impossible to predict with total accuracy because there are too many unknown variables to track.

Could the same be said for Financial Markets?

If you would like a chat, drop us an email. We love to hear from you.

FCA publishes guidance on treatment of vulnerable customers

The Financial Conduct Authority (FCA) has published a 41-page piece of guidance for businesses on how to treat vulnerable customers better.

The guidance is split into a number of sections: understanding the needs of vulnerable customers, skills and capability of staff, product and service design, customer services, communications, and monitoring and evaluation.

Fundamentally, the FCA said it wanted to see firms doing the right thing for vulnerable consumers and have that embedded in their business culture.

The main aim, the regulator said, was for firms to be more focused on ensuring outcomes for vulnerable customers were at least as good as those of other clients. It also wanted to see greater consistency across both firms and sectors so vulnerable customers were treated fairly no matter what financial service or product they were buying.

Who are vulnerable customers?

For the purposes of its guidance, the regulator said a vulnerable customer is someone who “due to their personal circumstances is especially susceptible to detriment” and that its definition was intentionally broad.

It added: “Some consumers will be actually vulnerable because of their personal circumstances. Actual vulnerability can be permanent but is often transient because consumers’ circumstances constantly change. This can cause consumers, who had not previously been vulnerable, to become so at some stage of their life.”

The FCA said examples of vulnerability could include health conditions or illnesses that affect the ability to carry out day-to-day tasks, the low ability to withstand financial or emotional shocks, major life events such as bereavement or relationship breakdown, and low knowledge of financial matters.

FCA executive director of strategy and competition Christopher Woolard said: “Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture. Where we find that firms are not doing enough to ensure that consumers are treated fairly, we will take action.

“Firms need to take particular care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm. The guidance should drive improvements across the industry, improving outcomes for millions of vulnerable consumers”.

Well done the FCA, say I.