Everyone should know what they spend each month. Most of us know what we receive each month. I’m also sure a lot of people have taken time to do a budget planner. A budget planner allows you to make sure that your income always exceeds your expenditure.

With some people now experiencing a lower income through the current economic downturn it is time to revisit this exercise to make sure that you don’t fall into the debt trap. If you want a blank budget planner then contact us and we can email the one we use or you can download one from Money Saving Expert here.

But, once a planner has been done, what do you do with it? Whether it keeps you solvent or sends you into debt it is worth asking an expert on personal finance for their opinion. We can offer you a free consultancy on this. Call our office on 02476 251100 to arrange a meeting in our Coventry Office. If this is not geographically possible then please visit IFA Promotion to find a suitable adviser in your area.

What a disaster this is turning out to be. I speak as an investor, adviser and shareholder. Clients have lost money, advisers feel misled, shareholders worry about management and Standard Life ask for…..patience!!

Forget patience. If this company was still a mutual organisation (owned by its policyholders) I don’t think it would have ever gone down the route of chasing a fast buck at the beck and call of investors. And, even it had, I think it would have used its own funds to clean up the mess and financial loss of its wrong decisions and pay a lower bonus to with profit policyholders.

As a result of the wrong decisions I expect no winners. Clients won’t want to put new money in an organisation whose cash fund loses value, advisers won’t recommend a company that does not treat its customers fairly and investors will subsequently sell their shares in a less profitable organisation.

So is this goodbye to Standard Life or merely au revior until it changes it decision. Over to you Mr Crombie.

Please visit our download section to do obtain your free copy of the January/February 2009 edition of E-Smart money, brought to you by Simpson Financial Services, leading financial advisers forCoventry, Warwickshire and West Midlands.

One particularly good article in this edition is headed, “Holding Out For an Early Retirement.” We have seen an increase in the number of enquiries from people looking to combine an unfortunate redundancy with the possibility of early retirement. This is an area where we have a lot of experience and we can advise you if it is financially viable.

It is also worth remembering that the earliest retirement age is currently 50 but this changes to an earliest retirement age of 55 on the 6th April 2010.

Whether you are an individual or a business you might have approached your bank or building society for a loan. I too have been here and felt the pressure applied by their financial adviser to take the various insurances on offer in order to secure the much needed borrowing.

Now, with my 11 years as an Independent Financial Adviser, I can appreciate the importance of having those insurances. What I cannot tolerate is how much I was overcharged for the insurance policies. Fortunately, I addressed this 11 years ago and have been paying less for my insurance ever since.

This is because Independent Financial Advisers have access to the whole market and some insurance is bought purely on price. Life cover, for example, pays out a lump sum if you die. No grey areas here. Other insurance like private medical insurance is a little different due to the various benefit levels insurers offer.

If you have bought your insurance from the bank then I am 99% sure that we can offer you the same cover for a lower premium or better benefits for the same price. Why don’t you contact us now and see how we can improve your own circumstances.

In our last post I showed you the figures on how much money we can save an aged 40′s couple with a reasonable household income and some existing financial planning. to prove fee based financial advice works across the board I want you to consider a different position.

This time it is a single person aged 50 who is looking to retire in 15 years. they have £100k in a commission based pension fund which will return a fund value in 15 years time of £242k assuming a constant return of 7% per annum.

They also have a commission based investment bond worth £100k which is set to return a fund of £212k in 15 years time assuming a constant return of 6% per annum.

Now lets switch them on to our Gold Service at a cost of £85 per month and the figures begin to follow a similar trend as our last post. The commission free pension fund estimate rises to £262k and the commission free investment bond estimate increase to £233k.

over 15 years the client has funds which are now £41k higher but has paid advice fees of £15,300 leaving them a massive profit of £25,700. And that’s just based on cost and doesn’t take into account the potential further benefit they would receive from ourselves as their financial advisers.

Do your financial circumstances look like this? If so, perhaps you should be speaking to us about arranging a financial review for you.

There are many reasons to start a pension scheme for all or some of your members of staff.

  • Your duty as a caring employer to assist in the longer term care of your staff.
  • To help attract quality individuals to work in your business.
  • To help retain quality individuals who already work for you.
  • The Income Tax and National Insurance benefits on contributions you make.

However, there is none more so than you legal obligation to provide a pension scheme if you have 5 or more employees in your business. Currently there is no legal obligation for the company to contribute but that is changing.

Personal Accounts are expected to appear in 2012 with the likely contribution basis to be set as follows:

Employer 4%

Member of Staff 3%

Government 1%

This creates an opportunity for you, the employer, to begin to start contributing now and been seen as a good employer, rather than wait until 2012 when your staff will believe your only doing it because you have to.

Careful advice is required when implementing a new scheme and you should consider the future change in legislation, how you announce the scheme, how you administer the scheme and so on. Simpson Financial Services are experts in guiding you through all the relevant aspects of setting up a new pension scheme.

If you wish to arrange an informal discussion please contact us here.

Whenever we see a new client in need of financial advice, or revisit the existing financial plan for an existing client, we need to gain a thorough understanding of the current financial circumstances. This helps us to satisfy the Financial Services Authority guideline to financial advisers regarding “Know Your Client”.

If you are wanting us to operate on a fee basis then you may want to collate this information yourself so here is a copy of the form for you to download and print. Then we won’t have to charge you for us doing it. It can be posted or emailed back to us before your first visit to our Coventry office.

personal fact find

corporate fact find

One of our areas of financial specialism is providing advice to owner managed businesses and we suggest that both documents are completed by potential clients in this situation.

However, we do require very exact detail about some of your pension, investments, insurances and other benefits so we may still have to write to some of your current product providers directly to obtain this. The small print in some of those older pension contracts can be quite valuable to you with the passage of time.

Whenever we take on a new client for personal financial planning services the first item on the agenda is a full review of their existing financial circumstances. This is where we probe deeply into your employment status and benefits, insurance policies, pension funds, savings, life policies and so on.

As independent financial advisers (IFA) we are authorised to advise on all your existing plans and policies and make further recommendations from the whole of the market place.

What often surprises me is that clients often are paying for insurance that they are unable to claim on. For instance, Client x took out a mortgage when they were employed and is now self employed.

But what about the redundancy insurance which came with the mortgage? They had been paying the £34 per month premium for the last 3 1/2 years but would never have been able to claim.

Often we find that new clients are overpaying for their insurance cover. Client y need a commercial loan for her business and felt obliged (or pressured) to take out key person life cover in case she died. A good idea but the bank could only sell it’s own insurance which was very expensive.

As part of our advisory service, we were able to provide identical cover with a different insurer giving her a saving of £62 per month.

Do you want to see if you can reduce your monthly expenditure, or even maximise the potential of your current budget. Call us now to arrange a free initial consultation.

Wealth managers, Simpson Financial Services, are proud to announce a new service to our existing clients who hold a broad range of investments. Whether in pension funds, bonds, trust etc. The system has taken 10 months to develop and clients are now able to obtain a real time portfolio valuation via the client log in section shown on every page of our website and there is no limit to the number of valuations you can do.

Consider a common situation where various investments have been made, assets accumulated and insurances bought. The ability for you to report on your asset allocation, investment performance and benefits can become difficult for you. This tool is provided to remove that problem.

Not only does this online reporting allow you to produce Portfolio Reports on your invested assets, you can now use the tool to notify us of any changes to your personal financial circumstance.

Our position of being responsible for the management of your financial planning has also been improved in line with our principles of Treating our Customers Fairly (TCF).

This new service is available to all Platinum and Gold clients so please contact us to make the new service live.

If you are considering appointing us as your financial adviser please contact us for an initial discussion on 02476 251100.

According to the Cambridge Dictionary, “Professionalism” is the combination of all the qualities that are connected with trained and skilled people. So raising examination levels must be part of the answer.

Treating Customers Fairly (TCF) has also been part of the answer in that it has actually required IFA firms to look at how they do business and then make any changes to improve the customer experience. I felt that my own 1 on 1 with the FSA in September 2008 was quality business advice.

I felt I had had an improved customer experience with them! I’m almost thinking that a 3 yearly 1 on 1 with the FSA for small firms would be another part of the answer to becoming more professional assuming that the cost is kept at 2008 prices, £0.

If we want the kudos of being associated with other professions then IFAs have got to walk the walk. If that means taking exams, doing quality Continual Professional Development (CPD), developing inter personal skills, running a compliant business, being a great adviser, treating your clients like royalty and so on then so be it.

The end goal for IFAs surely has to be dealing with clients who have sufficient income, assets or liabilities such that they need a more sophisticated level of advice and those clients will be willing to see the value of paying for it. I think that would reduce my own client bank from 780 clients to 156.

That leaves what we might call “bread and butter” business which might well be best served by “Money Guidance”, although Money Guidance should have restrictions on types and limits advice it can provide, thus creating an effective advice type filter for members of the public.

My guess here is that the FSA might do well to listen hard to the likes of the Citizens Advice Bureau (CAB), Which and Martin Lewis on this subject in order that they create something where there is an actual public need. Even consider making Money Guidance a Charity like CAB.

Aged 38, owner managed IFA business of 1 adviser and 1 para planner/admin, currently reading AF3 pension planning (page 7 of 66 after two weeks!!) and quietly confident about the future of small IFA firms (or what ever we’ll be called then).

During the current economic conditions we are seeing and reading an awful lot of information regarding job losses and business failures. Certainly, times are becoming more financially difficult so here are a few key points to help business owners prepare a little better.

1. Maintain a Cash Flow Forecast

List down all the cash inflows and outflows for you business and try to look forward 3 months. If you can forsee a period where cash flow maybe tight then speak to your bank about it now. The bank will be more sympathetic now rather than when the situation becomes desperate.

Also keep on top of the people or companies who owe you money (debtors). Do not assume that all you are owed will be paid. Try to plan for any debtor who is unable to pay.

2. Reconciling Your Bank Account

Don’t just look at your balance. Make sure that the cheques you have written historically have been presented and cleared your account. Don’t be taken by surprise when that cheque you wrote 2 months ago is suddenly hitting you current account balance.

3. Reviewing You Own Salary

Can the business continue to manage the level of salary or drawings you take from your business or can the world cruise be put off for a year or two. Leaving a little extra cash in the business will allow you to mitigate risks like debtors not paying (see point 2). Assuming the risk passes in the future, you can still draw the money then take that cruise. I’m sure you’ll have earned it.

4. Review Your Overheads

Consider the effectiveness of every overhead (staff, premise, service providers etc) you have and see if the overhead can be squeezed a little more in terms of its efficiency. If it can be made more efficient, can it be provided cheaper. Even consider if it can be provided by someone else.

Simpson Financial Services is a privately owned business like yours. In that, we have experience in these matters. Where we think your circumstances would be even better served by other professionals we will make you aware of that.

Contact us and arrange a meeting today to discuss these aspects of business planning in more detail.

If you are thinking of buying a property for the first time, moving home or remortgaging your property then you will need to appoint a solicitor to act for you. Solicitors normally refer to this service they give to you as conveyancing.

Every firm of solicitors has a different charge for this service. In our experience, the actual service you get can very dramatically. They all get you there in the end, it’s just that some are more efficient than others.

We have an excellent tool on our site so that you can obtain a comparative quote from over 300 solicitor firms throughout the UK for their conveyancing service. Not only does it give you the fee it also shows you the feedback that the particular firms has been given by other people like yourself.

I personally used the service last time I remortgaged in April 2008. I used a firm who were over 300 miles away and they were excellent in terms of price and service. I saved about £300 against quotes I received from local firms in Coventry.

So, see if you can save yourself a few pounds and try the system out. If you like the price you can instruct the firm online as well!

So you are reaching your intended retirement age and you are beginning to receive your maturity options from your various pension providers. What do you do now? How do you decide on which style of annuity is best for you. Level in payment or increasing? A spouses pension or single life? Take the tax free cash or not? Or even is buying an annuity the best way for you to provide income in retirement?

For the purpose of this article, lets assume that a single life, escalating annuity is best for you. The next part of our advice process now involves finding which Pension Provider is going to offer you the highest income for your fund. This ability to shop around for the best annuity rate is called The Open Market Option.

The Pension Providers base their annuity rates on their own experiences of average life expectancy. Don’t be fooled by there warm brochures covered with pictures of a happy pensioners. They want you to die prematurely so they don’t have to pay your annuity out for long. In fact, a number of Pension Companies will now offer enhanced annuity rates for smokers and retirees who have serious medical conditions such as high blood pressure, historical heart attacks, diabetics etc.

We don’t advocate you start smoking just before you retire but if you do, or you take medication, then contact us to see how much extra pension income you might get.

You only get one chance to buy your annuity so make sure you contact us to get the correct advice on both style of annuity and the Pension Provider offering the highest rate.

Then all you have to do is live a long and happy retirement!

Women aged 53 to 60 will soon be able to pay a further six years worth of national insurance (NI) contributions to boost their state pensions.

It raises to 12 the number of extra years of contributions that can be topped up, going back to 1975.

The government’s decision is included in an amendment to the Pensions Bill currently going through Parliament.

The change is aimed at helping some women who left the workforce to raise families or care for other relatives.
The extra six years of contributions will generate extra pension of about £18 a week from 2010.

In 2010 the number of years of NI contributions needed to qualify for a full basic state pension will come down to 30 for both men and women.

Currently the number of years needed are 39 for women and 44 for men.

New weekly credits will also come in to help people caring for children or disabled people build up their contribution records in the same way as if they had been working.

People who want to take advantage of the ability to buy six extra year’s worth of contributions will have to have paid for a minimum of 20 years already.

The cost of buying those extra contributions will also go up, from the current rate of £8.10 per week.

But is it a good thing to do. Well, compared to what it would cost to buy that level of income from a private annuity, it represents some good value. But one factor you will never know is how long your going to live for.

If you die soon after retiring, any annuity represents poor value for money. But, live until your 100 and they are the best investment you are likely to make.

Still confused? A good starting point to asses you own situation is to request a free State Pension Forecast online.

I am sure that all people who have been looking at taking a new mortgage or remortgaging recently have noticed how expensive the lenders arrangement fees are.

Mortgage Arrangement Fees are charged by the lender and are usually added onto the loan but can be paid by the applicant upfront. They used to be from £250 to £500 but now you are going to be lucky to find anything below £700. Cheltenham & Gloucester (part of Lloyds TSB) have fees of about £2500. Ok, their rates are good BUT £2500. Wow!!

As a general rule of thumb, once you have gather together all the mortgage products which fit your personal borrowing requirement you can then begin to work out which product is most cost effective for your size of mortgage eg. 3 year fixed rates with no extended tie in period.

Obviously, that’s where I want you to get a little stuck so you give my business a call and arrange a meeting with me to do it all for you.

As a client of ours (hello Neil) said today,

“It’s a little like the baker charging you to make the bread and then, when its made, make you pay for it.”

Please note that for mortgage advice, we receive a commission from the lender or charge you a fee (in case you think we will be biased towards the lender who pays us the highest commission)