Investments...we can help you to decipher complex financial information

Enable Independent can help you decipher overly complex financial derivatives.

“Despite concerns about their role in the financial crisis, many experts are worried about the re-emergence of increasingly opaque investment products”, says File on 4. “Warren Buffett famously called them weapons of mass destruction and policymakers damned them for their part in the 2008 crash. But in Britain and elsewhere, complex financial derivatives are once again thriving. Take one of the fastest growing and most popular ways for people to invest their savings, the "exchange traded fund" (ETF).

ETFs began as a simple enough product - a cheap and convenient way for individuals or pension funds to invest in the performance of a stock market index such as the FTSE100.  Early ETFs needed little financial engineering. Investors bought shares in an ETF, and the ETFs' managers bought shares of the companies in the index their ETF had promised to track. Just over half the ETFs sold in Britain are still like that.

In the trade these are known as "plain vanilla".  Saker Nusseibeh Head of investment, Hermes

But, following the 2008 crash, large investment banks - mostly European - started heavily promoting ETFs of a very different flavour, called "synthetic" ETFs. To all appearances, synthetic ETFs look much the same as the original kind. But inside, they are completely different because they are based on complex derivatives.  At Hermes Fund Managers, one of the biggest pension fund advisers in Britain, the head of investment Saker Nusseibeh told File on 4, "I think synthetic ETFs look too good to be true".

If something “looks too good to be true”, it usually is, Enable, an IFAin Bishop’s Stortford have the experience to help you make educated financial decisions about all financial matters. 

What are bonds? And how to protect your bonds

The UK's Financial Services Compensation Scheme (FSCS) now protects up to £85,000 per saver per institution if a bank goes under.

The UK cover roses to the sterling equivalent of the first 100,000 euros on 1 January 2011, with the Republic's "eligible liabilities guarantee" (ELG) covering sums above that until 30 June 2011.
The ELG protection may be extended beyond that date.

If you have a fixed term bond you might wonder how that is protected.  If taken out before 11 January 2010, then the following bonds now benefit from the UK's 100% protection of the first £85,000 of savers' money:

Growth Bond
FiveYear Saver
Guaranteed Equity Bond
Guaranteed Capital Bond
Loyalty Bond
Fixed Rate
Cash ISA
Exclusive Saver
Online Bond
Guaranteed Capital Bond Cash ISA

Things are different for the following fixed-term bonds opened between 11 January 2010 and 30 June 2011.
Growth Bond
Loyalty Bond
Fixed Rate Cash ISA
Online Bond

From 1 January 2011 the FSCS cover was increased to 100% of the first £85,000 (100,000 euros) while the ELG will guarantee investments above that level.

There is some complexity to these rules. Experts like Enable Independent tend to advise consumers to spread their savings over various institutions - especially if they have significant sums. But Independent Financial Advisers can help talk you through the complexities to find the right place for you to have your investments.

Post office money - Are my Post Office savings safe?

During the global financial crisis, savers have understandably shown concern over the safety of their savings. I would like to draw your attention to the fact that the Bank of Ireland also provides savings products for the Post Office. More than two million people in the UK have invested in banks in the Republic - mostly through the Post Office.

The latest financial upheavals facing Europe and the Euro have to include the Irish Republic.  Fortunately savers have greater protection of their deposits than was the case a couple of years ago.

As the Bank of Ireland provides savings products for the Post Office -  these products are now covered by the UK's safety net.  So if you ask is my money safe in the Post Office the answer in a nutshell is yes up to a certain amount.

Up until 1 November, 2010, this was done under a licence in the Republic, but since then it has been run through a UK subsidiary.

As a result, all Post Office savings are now covered by the UK's Financial Services Compensation Scheme (FSCS).

Those who have deposited money in the Irish Republic are covered by the Irish Deposit Guarantee Scheme. This covers all savings up to 100,000 euros (£86,000) if a bank folds.

Banking expert Ralph Silva, of Silva Research Network, said: "It is inconceivable that banks would fail in relation to the retail or High Street investor." Enable IFA’s in BishopsStortford are always available for advice.

Retiring? When is the best time to cash in your pension?

Personal pensions are usually cashed in at the point of retirement and having a personal pension has no impact on your entitlement to a basic state pension.

Whenever you make contributions into your pension pot, the government offers tax relief on these contributions. This means that for each pound you contribute to your pension policy, your pension provider claims tax back from the government at the basic rate of 20%. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. If you are a higher rate (40%) taxpayer, it is up to you to apply for the additional 20% tax relief, the difference between basic and higher rate.

When you do retire, there are several different pension options available to you and your IFA can help you exchange your pension fund into a lifetime income by purchasing an annuity, whereby at least 75% of your pension fund is handed over in return for a regular income payable normally until your death.

Alternatively, you can choose to go into income drawdown until you reach 75, when government legislation means you must convert your pension fund into an annuity.
Income drawdown allows you to draw an income directly from your pension fund, while the balance of the fund remains invested.

How much your pension fund is worth at retirement will depend entirely on how much you have put in since taking out your policy and how the investments have performed.

Your pension provider will send you a pension forecast every year that will tell you how much your fund is worth and how much you can expect to receive when you retire if you continue to contribute at your current level.

If you need any help and advice on your pension then get in touch with us, we are a team of Independent Financial Advisors.

Which Pensions? So how much will you make?

Returns are based on the level of risk and fluctuation you are willing to take in pursuit of financial gain. For this reason, it is wise to alter your asset allocation over time by lowering your risk levels as you draw closer to retirement. This could be done by turning to either cash or fixed interests, such as gilts, Independent Financial Advice can help you with your risk assessment.

If you are investing in a collective investment scheme, every time you contribute to your pension pot, your money is pooled into an overall pension fund of which you own certain units or shares. You can think of it as a huge layer cake with hundreds of different assets stacked on top of each other and each time you invest, you are buying a small slice of it.

If you want to be a little more selective over which slice you buy and exercise some personal control over the investments in your personal pension can choose to invest in a self-invested personal pension (Sipp).

Sipps provide wide access to most funds and assets, as well as access to buying individual shares, commercial property and many other investment opportunities.

There are two key differences you will need to consider before choosing the additional option of self-investment for your personal pension; to utilise a wider and more flexible investment choice, you will pay higher charges for a Sipp than an investor who simply wants access to a cheaper index tracker or an insurance company managed fund in a stakeholder plan.

Most schemes allow full flexibility to stop contributions or move accumulated savings or future contributions to another fund, and there should not typically be any penalties for this. However, before you change your pension, you should always check the details in advance with  an IFA.

An IFA - All you know is that personal pensions exist but you don’t have one

So a clear option is find out more about a personal pensions. This is an investment policy designed to provide a lump sum at retirement and an income for life.

A stakeholder pension is also a type of personal pension, operating in a similar way, except it has to conform to certain minimum standards set by the government. This means they must have lower charges and clear terms.

Personal pensions are "money purchase arrangements", meaning you regularly contribute to the policy and the money you save is put into investments for you such as bonds or stocks and shares.

Personal pensions are purchased from a provider such as an insurance company, High Street bank, building society or most typically, a pension company. They are far more complex than other financial products so do not appear on comparison websites as often.

Consumers are best off finding an independent financial adviser (IFA) who will have qualitative research on the different offers from providers.


Personal pension contributions can be invested in most asset classes. In other words, they can go into UK and overseas equities, fixed interest, cash and commercial property.

When you invest in your personal pension, there are no guarantees of returns and the value of your investments can fall as well as rise something worth talking through with Enable if you live in Bishop's Stortford or nearby.

It's important to remember that we all invested for the long term and not to panic...

Dear Investors

You will no doubt have been observing with interest (all be it morbid) the latest developments on the world markets (not to mention the riots).

Significant falls in the value of shares has proven to be something of a worry to all.

I thought I’d send a brief message intended to reassure.

It is important to remember that we are all invested for the long term and that this means riding out fluctuations when they come.

It is a common mistake for investors to run for the hills when trouble strikes, meaning that when the inevitable recovery comes, they miss out....and often these reactions mean we leave the market after the horse has bolted. Hence there is a danger that people turn to cash investments when the market has already fallen - only then to be out of the market when the inevitable rally comes.

If anything, these falls in prices represent an opportunity for those with long term plans to place further money into the market and therefore benefit in the long run.

I have taken the text below from Citywire which seems to suggest that we have reached the bottom. Of course I do not know whether this is the case but I found this information encouraging and hope you do to.

If you have any worries or concerns about the current situation please do not hesitate to get in touch.
After enduring their worst session since the depths of the financial crisis, US equities are poised for lift, with futures pointing towards a rally on the opening bell.

The Dow Jones Industrial Average - a key indicator of the future direction of trade - is hinting the sell-off will halt during Tuesday's trade as fearful investors await a decision from the Federal Reserve on rates and additional easing.

With around two hours before the opening bell the index is pointing towards a 1.8% rise when trading begins on hopes that the US rates will include details on a new round of quantitative easing. Also consumer sentiment was given a boost by oil's dip beneath $100 a barrel, a six month low.

The prospect of a more upbeat session across the pond has also raised hopes of an end to the equities sell-off in the UK, leading the FTSE 100 to climb to 5,051 after spending much of the session below the 4,900 for most of the day and 20% below its July peak.