Treasure hunting Returns...

Talk of deep sea treasure hunting evokes storybook images of swashbuckling buccaneers on daring ocean adventures not safe sensible returns on your hard earned cash. But maybe if your key investment goals have already been achieved and you are willing to readjust your attitude to risk the rapidly expanding sector of marine archaeology, scouring the depths of the sea for sunken riches is the business.

More recent technological advances have made marine archaeology much more of a viable business, "There are multi-hundreds of billions of dollars of potential in this industry," says Sean Tucker, founder and managing member of Galleon Venture an American based historical shipwreck and salvage exploration company. "Treasure bearing ships that have historical artefacts, coins, and emeralds" dating back hundreds of years are lying at the bottom of the sea just waiting to be brought to the surface, he says.  UNESCO estimate that there could be as many as three million wreaks scattered across the bottom of the world's seas. Although Sean Tucker is quick to point out that only 3,000 of these are likely to bear treasure of any value.

Discoveries like the three billion dollars’ worth of platinum found on a Second World War merchant vessel by American salvage company, Sub Sea Research, confirm the industry's potential.  Such huge rewards have inevitably led to increased industry investment in recent years, says Tucker.  Hedge funds, private equity firms as well as cash rich individual investors have all been eager to provide the capital to back increasingly specialised treasure ventures. If you fancy you have a bit of buccaneer spirit you might want to explore, and Enables IFA’s can talk you  through the possibilities.

Passive investment Checkpoints

At Enable of Bishops Stortford our IFA’s will always start by talking to you about your financial goals. Having a target is a powerful motivator. Knowing how big and far away the target is enables you to work out three essential parts of your plan:  How long you will need to invest, how much money you  need to put in and how much risk you’d expect to take for that level of return. To reduce the risk, you can increase your timescale or contributions.

So importantly you also need to assess how much risk can you handle.  Going for higher potential rewards will obviously mean taking more risk but if you spend sleepless nights worrying about your portfolio what is the point?  The more cautious you are, the more conservative your investment mix should be. One of the best ways to determine what your risk taking capacity is can be by taking a psychometric test something many IFA’s can arrange or conduct themselves.  The companion to risk is of course long term thinking.

One of the key things to do is harness the power of compound interest as early as possible because it has an astounding ability to boost your returns. It’s the effect of interest earning interest. The trick is to magnify the compounding effect by retaining every scrap of return in your portfolio: Don’t withdraw income until you hit your target. Reinvest all your dividends and other interest payments. Start investing NOW. The longer you invest the more compounding helps. Enable’s Independent Financial Advisors can help you set up your portfolio. So why not pop into our office in Bishop's Stortford for a chat or call us on 01279 755950.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Index Investment what’s not to love?

Enable’s experienced Independent Financial Advisors of Bishop’s Stortford know that the dangers of wealth investment can seem overwhelming to start with which is why we prefer to work with passive investment models.  Some wealth managers like to use active management of funds that can make dramatic claims to success as can the funds run by stock-pickers and more risk taking firms. But at Enable in Bishop’s Stortford we believe there are several good reason for modest steady investment.  To start with index investing is simple and one of the mantras you hear over and over again in personal finance is never invest in something you don’t understand, it’s excellent advice that can be too easy to ignore.

Index investing however is easy to understand, even for those with little or no investment experience.  You use simple index tracker funds or Exchange Traded Funds (ETFs) to construct a diverse portfolio very simply keeping your nest eggs in many baskets.  Then you make regular contributions to your funds and review and adjust your portfolio as little as once a year.  Above all you do not try to time the market or pick hot stocks.

Study after study shows that most actively managed funds are beaten by index funds over the long-term.  Because index trackers are cheap their low costs nibble away less of your pie than pricier active funds, which rarely put in the consistently stellar performances required to justify their high fees.  Index investing is not a ticket to instant riches and it doesn’t aim to beat the market but to capture the returns of the market. At Enable to build your investments the first step is to put money on the tortoise not the hare.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Tax-free cash penalties following Budget reforms reviewed

At Enable in Bishop’s Stortford we see that our clients are all pretty clear now that the Budget changes, which take effect from April next year, mean anyone aged 55 or over will be able to take their entire pension pot as cash.

However it might not have been so clear about some of the cash penalties until many insurers raised some concerns about HMRC rules that would prevent savers from putting tax-free lump sums back in savers’ pension pots as by doing so it could have lead to unauthorised payment charges. But now we can be clear on that too as HMRC have issued guidance confirming that it will not impose tax penalties in this situation. 

The Government has also extended the amount of time savers who have taken a tax-free lump sum have to choose a retirement income option up from 6 months to 18 months.  Under current rules, if a decision is not made within 6 months the lump sum is taxed at 55 per cent.

Treasury exchequer secretary David Gauke says: “At Budget the government announced the most fundamental change in the way that people access their pension in almost a century, ensuring that over 400,000 people who have worked and saved hard will be able to access their retirement savings more flexibly. “However, we recognise that decisions people take regarding their pensions are important and take time.

This extension to the decision making period will give people the opportunity to take full advantage of the new flexibilities introduced at the Budget.” Aegon regulatory strategy manager Kate Smith says: “Now HMRC has provided the clarity we’d hoped for we’ll move forward immediately to support customers who would like the chance to reflect on their retirement decisions in light of the Budget changes and proposed new tax rules.”

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

So what will constitute good advice from a specialist retirement adviser?

As experience Independent Financial Advisors at Enable we have long been looking at the concepts of tax-efficient income planning and sustainable income. Both these concepts are clearly important and it would be important to point out some obvious but very significant planning matters.
For example, it does not normally make sense to take money out of a tax-privileged environment and pay significant amounts of tax on income or capital that is not required. So it would then make sense to discuss the prudent level of income that should be taken from a drawdown arrangement, and make sure that is a sustainable level of income.

 Some people may well have a need for capital at retirement and therefore in some cases it might make sense to pay a large amount of tax to withdraw what they want but for many more people it will probably still be more sensible to use their pension to pay a regular income rather than take a lump sum.

An income is sustainable when it can be maintained at a certain rate or level and there are two things to consider – maintaining the absolute level and maintaining the real value.  A guaranteed, level annuity would maintain the absolute level of income but over time the spending power (real value) of this annuity will be reduce as inflation takes effect. An investment-linked annuity or pension drawdown policy does not necessarily produce an income that is maintained at the same level because it will rise or fall depending on future investment returns and other factors. One of the objectives of these policies is to provide an income sustainable in real terms but there is obviously the risk that the income could be lower, not higher in the future. If you want to talk through your options Enable's IFA’s are here to help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Face to Face Guidance

Enable IFA’s are used to delivering face to face financial advice and it would seem as new research suggests that the majority of savers want to take up Chancellor George Osborne’s budget “guidance guarantee” about retirement to be delivered face-to-face by qualified advisers,.

To support this governments radical pension reforms that will hand people greater freedom over how they spend their pension pot from April next year, everyone has been promised the option of receiving free face-to-face retirement guidance and the Government has set aside £20m to get the guidance service up and running, with the FCA being responsible for designing the framework. Any ongoing costs will be paid through a levy on providers and on trust-based pension schemes.

The nationwide survey of more than 1,000 over 40s with private pensions, conducted by Consumer Intelligence, suggests 69 per cent want their options explained in a face-to-face session.
A further 24 per cent said they would be willing to use online services in conjunction with human help, while 4 per cent wanted guidance over the phone. Just 3 per cent said they would be willing to rely solely on online help. Consumer Intelligence spokesman David Black says: “Decisions about retirement income are ones that people literally have to live with so it is clear that people want to take them seriously. “Face to face guidance is by far the preferred option for the free advice proposed by the government with most people willing to travel to ensure they get as much help exploring their options as possible.” If you want to get ahead of the game Enable’s IFA’s in Bishops Stortford are happy to meet face to face.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Investing or saving?

Enable’s independent financial advisors in Bishop’s Stortford know that having a large lump sum to invest is quite rare. Most of us build up savings by tucking away some of our salary each month, and then perhaps managing to top it up with the occasional windfall.

For some this 'little and often' means they think they're not in a position to invest – and think that they are just saving but it is possible for almost anyone to build a sizeable pot by investing a small amount regularly, especially if you start earlier.

The key really is to get started - the sooner the better as then your investments will have more time to grow. With such low interest rates it really might be worth considering the stock markets. For those prepared to accept the risks and take a long-term view, investing in the stock market offers the potential for significantly higher returns than cash, albeit with no guarantees, and significantly more risk as you may get back less than you invest. You have to remember that Investments will rise and fall in value over time.

If you had but away £100 a month in a popular fund starting 40 years ago you would have tucked away £48,000 in total, but if you had put it in the right place that  investment could be worth so much more with cumulative or compound interest. Please note past performance is not always a guide to future returns and the amount received depends on the investment returns actually achieved. But with inflation also reducing the spending power of your capital over the long term it is really worth investing even if you don't have a 40-year time horizon it's still possible to build a significant sum by investing regularly.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Understanding the Chinese economy

It’s not always easy to make sense of the movement in global economies. It has been reported again that last month China’s exports and imports unexpectedly fell and its Premier has stated that China will roll out more policies to support growth while avoiding stronger stimulus. Exports declined 6.6 percent from a year before, the administration said in Beijing recently, attributing the drop partly to distortions from inflated data in early 2013 while imports fell 11.3 percent.

Asian stocks and the Australian dollar pared gains after the report added to concern that expansion in the world’s second-largest economy will deteriorate further. The Chinese government is taking steps including railway spending and tax relief to support growth while avoiding monetary measures such as cutting banks’ reserve requirements or the scale of stimulus used to counter the financial crisis in 2008. “Economic momentum may have stalled temporarily in March,” Zhang Zhiwei, chief China economist at Nomura Holdings Inc. but the government may wait to see how the economy responds to the latest fiscal measures before taking additional action to aid growth, said Zhang, who previously worked at the IMF .

But it is always hard to read the data. Taking into account the distortions from inflated data in 2013, exports may have increased by 5 percent to 8 percent in March from a year earlier, improving from a pace of about 3 percent in the first two months of 2014, Zhang wrote. Royal Bank of Scotland Group PLC estimated “underlying export growth” at 3.7 percent in March, revising an earlier estimate of 5.2 percent after reviewing more-detailed data. If you want some independent Financial Advice to help you work out how to make sense of all the information Enable’s IFA’s are here to help.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Clarity about Financial fees

Santander was fined £12.4m last month by the FCA for serious failings in the way it sold thousands of customers’ investment products. It seems that many firms offering investment advice are not being clear about their fees, and some may even be misleading. The Financial Conduct Authority FCA has recently turned its attention to financial advisors and it says it has uncovered what appear to be widespread failings in the way firms selling investments, pensions and other products disclosed information on their costs and services.

An official ban on commission paid to financial advisers came into force at the end of 2012, with firms and individuals forced to charge a fee for their services rather than hiding costs in a product's charges. The changes have prompted many banks to exit the advice market, either partially or fully, thereby creating what some have dubbed an "advice gap" for mainstream consumers.

The FCA has recently surveyed 113 firms – including banks, small and large financial advisers, and wealth management firms – to see how they had implemented these so-called disclosure rules, and said it had found that "too many" were not being clear with consumers.

The FCA found 73% of firms had failed to provide the required information on the cost of advice. For example, 58% failed to give customers clear, upfront general information on how much their advice might cost, while more than a third either failed to provide a clear explanation of the service they offer in return for an ongoing fee, or failed to properly outline the customer's cancellation rights. If you want to understand fees involved in your investments Enable’s IFA’s will clearly talk them through.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE