Should I still invest in an annuity?

Since the government pension reforms if you are currently nearing retirement, it is important you take these changes into account. Enable’s IFA’s in Bishop’s Stortford are happy to help you look at how the recent changes impact on your pension planning. For pension planning many are still asking is there still room for normal annuities or income drawdown and some experts think investment-linked annuities offer the best of both worlds.

The reason people still buy annuities despite rates being so low is that they offer the only means of turning a lump sum into an income that’s guaranteed for as long as you live. Your annuity may still be paying you in 40 years time but how inflation will have eroded its value is impossible to tell.

An income drawdown plan solves some of these problems but brings new ones, these schemes, mean your pension fund remains invested and you can withdraw money from it to provide an income. Within limits your income can vary as your needs do. Of course if you keep your fund invested in assets such as shares, they have a reasonable chance of keeping pace with inflation. The problem is that if you use drawdown as a means of getting a better income than an annuity, you risk eating away at the fund itself.

Investment-linked annuities might provide a solution for some here your income will rise if the underlying investments do well (and fall if they don’t), but you get two important guarantees that drawdown doesn’t offer: your income will never fall below a set minimum, no matter how badly the investments perform; and the income will be paid until you die. Enable’s IFA’s are happy to talk through annuity options.

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

Bonds vs equities a common question

At Enable of Bishop's Stortford our experienced independent financial advisors are often asked this question, how do bonds compare to equities. Asking simple questions often provides a good way of drawing attention to how perceptions can differ from reality when talking about financial markets.

 It is also a question Juan Nevado a fund manager from the M&G multi asset team has recently been addressing asking “Over the past 30 years, would it have been better to be an equity investor or a bond investor? Considering the massive tailwinds bonds have experienced, it probably would not surprise many people that bond investors in most developed markets have just experienced a 30-year bull market. However, it is interesting to note that in many regions, since the late 1980s, equities have delivered real returns in line with – or even higher than – bonds. It is interesting because the only benefit of holding bonds over equity over the period as a whole has been much lower volatility. It is also notable that since 2008, cash, the ultimate perceived haven, has lost value while both bond and equity investors have made money.”

Many have suggested that investors could have expected bonds to deliver much more than equities. The shock of the 2008 financial crisis of course ignited a prolonged period of broad-based risk aversion which investors may still not have fully shaken off, this most definitely will have had some impact on equities.  Alongside this there has of course been the business of central banks engineering a bond rally by stimulating massive demand through extraordinary levels of quantitative easing.  In the light of this most investors would probably still feel much lower volatility for comparable returns is the obvious choice. To talk over your investment choices Enables IFA’s are happy to share their experience.

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

Sustainable Responsible Investments?

There are a vast range of wealth management and investment opportunities out there and Enable of Bishop’s Stortford like to make sure that they can provide as many different options as there are opinions.  Recently it’s independent financial advisors have notice that again Alliance Trust Investments have release a pair of risk profiled funds for its sustainable fund range.  The new funds have been risk rated by Distribution Technology and will be available to investors from 24 July.

The new launches are the Alliance Trust Sustainable Future Defensive Managed fund and the Alliance Trust Sustainable Future Cautious Managed fund, with both investing in a mixture of equities, bonds and cash. Both funds will be managed by Alliance Trust Investments head of socially responsible investing Peter Michaelis as lead manager. Investment managers Simon Clements and Stuart McMaster will work on the funds as co-managers.  Michaelis says: “We are launching these new funds in response to a growing demand from the intermediary market for a comprehensive range of risk profiled ethical investment opportunities. As SRI becomes ever more mainstream, IFAs are increasingly asked to recommend these types of funds.  “The range that we now offer not only adds to the choice available, but for the first time, gives advisers clarity about risk levels so that they can match their client’s preferences and requirements to the right fund.”

At Enable we understand the importance of matching clients with  the right funds with to suit their preference.  If you want to discuss further any wealth management concerns you have our 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

If you are thinking of Buy-to-let do the maths

Enable’s Independent Financial Advisors in Bishop’s Stortford know that many, as part of their pension plan consider buy-to –let as a good investment but make sure you have done your maths before you jump in. 

The first thing to do is to have a really good think about the cost of houses you are looking at and the rent you are likely to get. Traditionally buy-to-let lenders wanted rent to cover 125% of the mortgage repayments, although many had relaxed this in the tail-end of the boom years. Most also looked for a 15% deposit, which protects against falling prices.  After the financial crisis, many are now demanding 25% deposits, or even larger, for rates considerably above residential mortgage deals. The best rate buy-to-let mortgages usually come with large arrangement fees.

Existing investors should now be benefiting from lower rates, and the slashing of base rate down to 0.5% has done them a favour. This is especially true for many as a lot of buy-to-let deals do not have typical SVRs but a revert rate that tracks the bank rate.  However, new buy-to-let mortgage deals remain expensive in comparison to residential deals.

To compare different property's values use their yield: that is annual rent received as a percentage of the purchase price her is the maths. For a property delivering £10,000 worth of rent that costs £200,000 has a 5% yield. But you have to remember, if you are buying with a mortgage, rent-to-property price yield will not be the return you get.  If you want to look at property as part of your wealth management portfolio Enable’s IFAs are happy to talk you through your options.

Your home is at risk if you do not keep up your mortgage repayments.

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

Managing your own investments?

It is understandable that since the introduction of new regulatory rules to make the true cost of financial advice transparent, people have become wary of advice but it should be remembered there are still a lot of potential pitfalls when managing your own investments.

When making a new investment it is important to keep in mind your personal goals, time horizon and circumstances. However, the huge number of topical articles and write-ups heavily tipping particular funds can make this really difficult. Often something that might sound attractive may not really be suitable for your circumstances. What’s more, investing without advice carries less regulatory protection than taking it, so having a well thought out strategy and making decisions based on the context of how an investment fits alongside your portfolio is vital. It is also the case that buying investments on an ad hoc basis can lead to unnecessary levels of risk and a lack of overall balance.

One thing that seems obvious is to choose funds that top a performance league table or have the lowest costs. That may seem like an easy way of building a successful portfolio but unfortunately, the past is no guarantee of the future, so selecting a fund on backward-looking data alone is like trying to drive a car by only staring in the rear-view mirror. Having access to quality research rather than relentless marketing will help you make informed decisions and should be an important consideration when choosing who to invest with.  It might also be the case that you simply do not have the time.  Enable’s IFAs are happy to explain any fees or charges before moving forward.


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

How to keep your wrap fees low...

One of the most confusing issues to many investors is determining exactly what fees they are paying on their investments and investment programs. Fees are often a key factor in the choice of advisors, so making a decision without full and accurate information can have a significant impact on the ultimate success of an investment program.

The fee issue has taken on added significance as the number of advisors that charge an asset based fee has increased appreciably over the past decade. Historically, many advisors did not charge a fee per se for their services but rather were paid a portion of the commission costs on trades made in client accounts. Charging an asset-based fee is considered to be more beneficial to the client as both parties share a common goal of growing the overall value of the account.

At Enable our carefully constructed risk graded range of of portfolios are carefully selected to keep fees low.  All the asset classes used in our portfolios are accessed using very low cost passively managed funds. We currently use institutional class funds from Legal & General and Dimensional Fund Advisors plus Exchange Traded Funds (ETF’s) from iShares and Lyxor but are constantly looking to improve our offer to clients. The resulting total composite Annual Management Charges (including all trading costs, custodian fees etc) being in the region of 0.19% - 0.54% p.a. depending on the size of the portfolio and the risk grade selected.

(Please note that Enable’s fees and the investment platform/investment wrapper fees are in addition to these.)

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

Learning to make investments...

Kevin Peachey Personal finance reporter, for the BBC has said recently  “A learner driver's natural instinct, when their vehicle is veering to the left, is to overcompensate and find the car is swerving to the right. With experience, the driver learns how to maintain a steady course by taking stock of where they are on the road and making slight adjustments as they go along. The same can be argued for making choices about financial investments.”

Enable’s experienced Independent Financial Advisor agree that the whole person and their emotional development have to come in to play. Greg Davies, the head of the behavioural finance team at Barclays, says,” people should recognise how their emotions can affect their financial decision making. "People are much more comfortable taking risks when times are good, when markets are high, not when there is crisis and panic," he says. "Yet, selling out at the bottom of the market and sitting on the cash may be costly. "Mr Davies is evangelical about considered investing. He only allows himself to make his own investment decisions at the weekend, when he has time to sit down to think about them.”

Greg leads a relatively unusual team at Barclays, who encourage people - both within the bank and their clients - to consider psychology before making investment decisions. He says that a set of rules can save investors from making bad decisions on a whim. The Barclays behavioural finance team was set up in 2006, and was the first of its kind established by a bank. Enable’s IFA’s in Bishops Stortford also think it wise to learn slowly and carefully to make investments. If you feel a bit more like a learner driver we can take you through your paces to get you up to speed.

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

If you are looking for a place in the sun, Ibiza could be the next hot spot

Enable Independent have become aware that homes in the Vista Alegra gated community are selling like hot cakes, after the word has got around that there has not been a single burglary in the past five years.

‘Whether the threat of burglary is real or perceived, affluent house hunters place great importance on security,’ said Daniel Chavarria Waschke, managing director of Balearics Sotheby's International Realty.

Plots currently range from a 1,000 m2 to in excess of 11,000 m2, with permission to build a property of up to 40% of the plots size, prices range from €450 to €1,200 per m2. With all of the Villas being integrated into the landscape.

Properties can offer spacious bedrooms, ample living rooms and vast expanses of glass to view the surrounding countryside, as well as natural ventilation and solar energy. Local Developer Fernando Corominas stated: ‘Most in demand right now is a very large frontline sea property but, however large, we try to conceal the home within the landscape,’ said Corominas.

If you are looking to finance a holiday home, then why not come and talk to your local financial advisors, we will be able to cherry pick from the best mortgages in the market place.