Investment Advice Windsor

I am constantly asked “whats the best investment” and “where do you put your money” by my clients – however it should always be based around how much risk my client is prepared to take.  How do we work this out?  Well we have a  questionnaire which asks very intuitive questions to gauge the risk of our clients.  This is called Personal Risk Profiling.  This questionnaire has been created partnership with Ibbotson Associates who are world renowned Asset Allocation specialists.  Through detailed analysis we will generate a Risk Profile which we will discuss and agree with you.  Once this has been done we will select a suitable strategic asset allocation designed to meet your risk/return criteria.

We then used Model Portfolios which Ibbotson and Morningstar have helped us to create and they are the leading research houses in their respective fields.  Once this has been done we then implement your portfolio.  We will use research conducted by Old Broad Street Research (OBSR) or a diversified Model Portfolio. OBSR are a leading research agency who undertake a detailed analysis to create a best of breed fund ’buy list’ on a quarterly basis.  We use this research to construct and adjust our portfolio’s.

This is our Structured Investment Process which we use to ensure that your investments are manged in accordance with the level of risk that you are willing to accept and  monitored regularly.

The value of investment can fall as well as rise and you may get back less than the original amount invested.

What is NEST – Windsor

NEST stands for the National Employment Savings Trust and is a simple pension scheme to help employers comply with the Pensions reforms which are being phased in from 2012.   It is predominantly aimed as the lower income employees who want a competitively charged pension, but will have little in the way of investment fund  choice (maybe 4 or 5)  At the moment the maximum contributions are £350 per month or £4,200 per annum.

Why is it being introduced?  Well because as a nation we have little in the way of pensions savings and this needs to be addressed for 100,000′s of people.  Stakeholder pension schemes were supposed to address this issue – but they did not work!

So as an Employer or Employee will I have to join NEST? Well no, as long as you comply by having your own Pension Scheme.  But there is strict compliance rules which are coming into place with heavy fines (£5,000) for Employers who miss the various Opt in, Opt out deadlines for their Employees!

As I’ve said, Stakeholder failed and the government need to take decisive action!  The percentages will be phased in but ultimately the employer will be contributing up to 4% of the members salary and the Employee will be contributing 5% (gross).

The work that we are doing at the moment is by helping small employers encourage their employees into putting away this money for their retirement.  We talk them through the commitments of the Employer and find the best possible scheme for their circumstances.  One of the main factors for Employers is ease of use and we help source companies which have a robust web based software proposition to help with this.

We can help them with salary sacrifice where the employee sacrifices part of his salary and can save valuable Tax and National Insurance Contributions to either increase the employees net pay, boost his monthly pension or both.

As ever its about the right financial planning to maximise tax efficiency and growth, like our little friend below is trying to do!  Stop sweating and let us help you through the process.

The State Pension Scheme

So based on the fact that the State Pension gives a single person who is retired or age 65 year old a pension of £102.15 per week or £5311.80 per annum, how would this compare to what they could have from their own Personal Pension scheme.  Well assuming we purchase an annuity which will keep pace with inflation/CPI like a State Pension, this would get us an annuity which would pay £5,000 for every £100,000 of pension funds that we have.  This would therefore mean that his state pension would equate to a fund of over £106,000 if it were capitalised!

I also learnt today that for anyone who retires to Australia, Canada, New Zealand or South Africa they will not receive any indexation to the Basic State Pension.   I thought this was unusual for mainly ex-commonwealth countries?!

Pensions advice – Flexible Drawdown from Windsor

I am sat in my office in Windsor, Berkshire studying for my next exam (J05) and reviewing the new Capped and Flexible Drawdown pension changes.  Capped as you might know prevents a client taking out an income that they might need at the time because they have to adhere to the GAD limits which are based on the Redemption Yield of UK 15 Year gilts (have I lost anyone yet – bear with me it gets simpler!!).   These are relatively low at the moment however for a male aged 65 the rate is £63 per £1000 of pension,  so based on a retirement fund of  £400,000 the maximum that you could possibly draw, in that year at retirement is £25,200 per annum.  Lets assume for one moment that you are this Male (sorry ladies!).  Now £25,200 might pay for your day to day living expenses – depending on the quality of wine you drink!  But it’s hardly going to pay for a World Cruise in the year that you retire!  Or pay for the porters to help you up Kilimanjaro on your zimmer frame – if you like climbing mountains?!

However assuming you fit the criteria, Flexible Drawdown will allow you to take an income to suit your needs at the time.  This is especially good for clients in their early retirement because they might have used their Tax Free Cash paying off their mortgage but still want to do the World Cruise or climb a mountain before they get too old.  Previosuly you would have been restricted due to the drawdown limits BUT now with Flexible Drawdown you can take pretty much take what you want – however you do have to qualify by meeting a minimum income currently set at £20,000.

So my thinking for some clients would be that they could buy an annuity to meet the limits add on their State Pensions plus any other Scheme Pensions, match the £20,000 minimum and then move into Flexible Drawdown instead of Capped.  This would then allow you to take the necessary income to fund your cruise or climb up Kilimanjaro like I did several years ago!  I could have done with a zimmer frame then and I am only 45!!

J04 in the bag!!

This is to update my blog with the fact that I passed my J04 exam that I took in April.  I found out just before we went on holiday to Menorca and it was great!!!  A years hard work paid off and all I need to do is get a few more!!  I have just ordered the material for J05 and AF3 and have booked the J05 exam on 6th Ocotber 2011.

 

 

My new Blog

Having just passed R01 and on my way to Diploma status with the CII before the deadline of 31/12/2012, I thought I would make some notes on my “studious” journey.  Some of my questions with regards to these blogs and the usefulness of them is starting to materialise.  Maybe if I relate them to the business they will fuel my Google placings when potential clients look for – Investment Advice, Pension Planning, Inheritance Tax Planning etc.  Should I use Google’s web sites and tools as they would be better than this WordPress site.  Who knows?

Hello Giles Warren Financials first blog!

So I have decided to start a blog about what happens in my working life and someone recommended that I start it off with Word Press.