Individuals who give personal recommendations; where an individual is involved who provides personal recommendations on retail investment products directly over the telephone or face-to-face.
The individual must meet the Training and Competence (TC) standards of a retail investment adviser.
Post-retail distribution review (RDR), the individual will need to meet all the new professionalism requirements, including having QCF Level 4 qualifications, completing a minimum of 35 hours of continued professional development per annum and holding a Statement of Professional Standing.
They must now, and after the RDR rules are implemented, behave ethically, including adherence to the ethical requirements set out in APER12, which they are subject to as an approved person.
Individuals who do not give personal recommendations can provided some support and information to clients, but must not stray into regulated advice, meaning no personal recommendations. The individual must avoid making any judgement on the suitability of one or more products.
The firm must ensure there are appropriate systems and controls in place to prevent the individual from straying into regulated advice or influencing the recommendations provided by the process.
As long as these requirements are met, the individual does not need to have any minimum qualifications or meet any TC standards. This is up to the firm providing the service.
Enable IFA’s of Bishops Stortford believe that to make sure you have the right investment products for you they need to be discussed over the phone or face to face.
Thursday, 29 March 2012
Simplified advice is not that simple...
The Financial Services Authority is set to provide final guidance on simplified advice this week. Last September, the regulator published a guidance consultation outlining its definition of simplified advice, it recommended 3 possible ways.
The first was advice provided through a fully automated advice system where the customer would not at any stage in the process have the opportunity of discussion with an employee. The design, testing and review of the operation of such a system could prove more complex than the design of procedures to provide advice to customers face-to-face, or over the telephone. Given the purpose of the system is to provide advice on investments a fully qualified retail investment adviser would need to be involved in the design process from the beginning anyway to confirm that the system was fit for purpose before it entered into use.
The first to explore simplified advice were Aviva, it developed a prototype online model based on decision trees, but has now opted to focus on execution-only services. Paul Yates, strategy and product development director at technology provider Avelo, said simplified advice was already "dead". "There were too many checks and it wasn't really simplified enough. The key concerns around simplified advice seem to be that. "They're asking people to take too much risk." Independent Financial Advisors Enable of Bishop’s Stortford believe people are vital to getting simple clear financial advice.
The first was advice provided through a fully automated advice system where the customer would not at any stage in the process have the opportunity of discussion with an employee. The design, testing and review of the operation of such a system could prove more complex than the design of procedures to provide advice to customers face-to-face, or over the telephone. Given the purpose of the system is to provide advice on investments a fully qualified retail investment adviser would need to be involved in the design process from the beginning anyway to confirm that the system was fit for purpose before it entered into use.
The first to explore simplified advice were Aviva, it developed a prototype online model based on decision trees, but has now opted to focus on execution-only services. Paul Yates, strategy and product development director at technology provider Avelo, said simplified advice was already "dead". "There were too many checks and it wasn't really simplified enough. The key concerns around simplified advice seem to be that. "They're asking people to take too much risk." Independent Financial Advisors Enable of Bishop’s Stortford believe people are vital to getting simple clear financial advice.
Clamping down on stamp duty
The Chancellor made for higher taxes on some residential property - starting on Thursday, the stamp duty paid on UK properties sold for more than £2m rose to 7% from 5% – from £100,000 to £140,000 – the use of schemes to avoid SDLT on residential property had grown, partly because of ineffective enforcement of the rules by HMRC. HMRC has now significantly stepped up its compliance work, but it was still possible to avoid SDLT on future sales by buying a property into a company. Levying duty on company sales was harder to enforce, as there was no easy way to track share sales, but some other countries manage to do so and we will now.
Lots of people had argued that council tax was the way to go the UK has about 27 million homes, but only 154,000 fall into the top band for council tax, with a further 920,000 in the next band, there was scope for the Chancellor to raise money by increasing council tax charged in the top two bands.
A house in the top band is worth at least £1.2 million in London (where one third are located) and at least £700,000 throughout England. The top band house in Scotland is worth at least £550,000, but just £420,000 in Wales.
Enable know that property is a vital part of most portfolios our IFA’s like to help property owners to stay abreast of any change of rules.
Lots of people had argued that council tax was the way to go the UK has about 27 million homes, but only 154,000 fall into the top band for council tax, with a further 920,000 in the next band, there was scope for the Chancellor to raise money by increasing council tax charged in the top two bands.
A house in the top band is worth at least £1.2 million in London (where one third are located) and at least £700,000 throughout England. The top band house in Scotland is worth at least £550,000, but just £420,000 in Wales.
Enable know that property is a vital part of most portfolios our IFA’s like to help property owners to stay abreast of any change of rules.
Pensions in the budget?
Given that it was a well publicised maybe even over publicised budget there was no surprise that the Chancellor did little to interfere with pensions as expected. At Enable Independent Financial Advisors of Bishop’s Stortford we were keen to consider any changes to pensions. It seemed unlikely that there would be a withdrawal of higher rate relief for pension contributions – the Chancellor would have found it hard to respond to calls to cut pension tax relief, not least because the current system was only put in place in April 2011.
Withdrawing higher rate relief would be much more complex than it might at first appear. The way in which Defined Benefit schemes work could mean employees in such schemes could end up with a big pension and low earnings. Some public sector schemes aren’t funded, so levying a charge which is then borne by taxpayers raises no money at all. There’s also a problem with Defined Contribution schemes. Cutting tax relief could mean many put in less money. However, many schemes operate on a matched contribution basis, cutting an employee’s contributions would also cut the employer contribution. Another option being floated would be a cut in the amount that could be put into a pension scheme each year; currently this is £50,000. If you have cash that you might be considering putting into your pension Enable’s Independent Financial Advisors would be able to help you consider your options..
Withdrawing higher rate relief would be much more complex than it might at first appear. The way in which Defined Benefit schemes work could mean employees in such schemes could end up with a big pension and low earnings. Some public sector schemes aren’t funded, so levying a charge which is then borne by taxpayers raises no money at all. There’s also a problem with Defined Contribution schemes. Cutting tax relief could mean many put in less money. However, many schemes operate on a matched contribution basis, cutting an employee’s contributions would also cut the employer contribution. Another option being floated would be a cut in the amount that could be put into a pension scheme each year; currently this is £50,000. If you have cash that you might be considering putting into your pension Enable’s Independent Financial Advisors would be able to help you consider your options..
Commercial Property Investments
Commercial property is traditionally core to many individual financial portfolios. So it could be good news that the lack of grade A space in the industrial and distribution market has become so acute across the UK that rents for prime space have risen for the first time in three years according to the latest research by Lambert Smith Hampton.
National Industrial and Distribution Market 2012 analysed activity across 59 locations in 11 regional UK centres during 2011. Across the locations recorded in LSH’s research, prime rents increased in 27 per cent of locations, with a further 39 per cent of the locations seeing prime rents stabilise.
In the East of England, availability was recorded as the lowest across the UK. In Essex, where Chelmsford, Basildon and Thurrock represent the county’s most dominant industrial markets, the supply of space is no less of a challenge with 5.7 per cent of total stock currently on the market.
Demand in Cambridge and the surrounding area has remained stable throughout the year resulting in a total take-up of 529,921 sq ft in 2011.The majority of demand has been focused on units less than 5,000 sq ft which accounted for 68 per cent of overall activity.
The largest transaction in 2011 was the letting of Titan, Space Ten, Papworth, which saw Ultra Electronics take the 37,533 sq ft unit. The number of requirements for larger good quality space has remained stable, but due to the lack of new development, demand outstrips supply. Enable’s IFA’s can talk you through your commercial property investment options.
National Industrial and Distribution Market 2012 analysed activity across 59 locations in 11 regional UK centres during 2011. Across the locations recorded in LSH’s research, prime rents increased in 27 per cent of locations, with a further 39 per cent of the locations seeing prime rents stabilise.
In the East of England, availability was recorded as the lowest across the UK. In Essex, where Chelmsford, Basildon and Thurrock represent the county’s most dominant industrial markets, the supply of space is no less of a challenge with 5.7 per cent of total stock currently on the market.
Demand in Cambridge and the surrounding area has remained stable throughout the year resulting in a total take-up of 529,921 sq ft in 2011.The majority of demand has been focused on units less than 5,000 sq ft which accounted for 68 per cent of overall activity.
The largest transaction in 2011 was the letting of Titan, Space Ten, Papworth, which saw Ultra Electronics take the 37,533 sq ft unit. The number of requirements for larger good quality space has remained stable, but due to the lack of new development, demand outstrips supply. Enable’s IFA’s can talk you through your commercial property investment options.
Tuesday, 20 March 2012
Bond basics
With much talk of Eurobonds it’s been hard not to know more about them than you might want to but if you are still not sure Enable’s IFA’s can take you through the basics. Governments borrow money by selling securities known as bonds to investors. In return for the investor's cash, the government promises to pay a fixed rate of interest over a specific period - say 4% every year for 10 years. At the end of the period, the investor is repaid the cash they originally paid, cancelling that particular bit of government debt. Government bonds have traditionally been seen as ultra-safe long-term investments and are held by pension funds, insurance companies and banks, as well as private investors. They are a vital way for countries to raise funds.
Once a bond has been issued - and the government has the cash - the investor can hold it and collect the interest every year until it is repayable. But investors can also sell the bond on the financial markets. The price of the bond will fluctuate as the outlook for interest rates changes. So, for example, if the markets think that interest rates are going to rise sharply, then the value of a bond paying a fixed rate of 4% for the next 10 years will fall. Bond prices will also fall if investors think that there is a risk of the government that issued the bond not being able to make the annual interest payment or repay it in full on maturity . The key thing to remember is that bad news drives down bond prices, which pushes up bond yields.
Once a bond has been issued - and the government has the cash - the investor can hold it and collect the interest every year until it is repayable. But investors can also sell the bond on the financial markets. The price of the bond will fluctuate as the outlook for interest rates changes. So, for example, if the markets think that interest rates are going to rise sharply, then the value of a bond paying a fixed rate of 4% for the next 10 years will fall. Bond prices will also fall if investors think that there is a risk of the government that issued the bond not being able to make the annual interest payment or repay it in full on maturity . The key thing to remember is that bad news drives down bond prices, which pushes up bond yields.
ISAs futures and past
Independent Financial Advisors Enable of Bishop’s Stortford want to remind you to take up your individual ISA allowance before the end of the financial year if you can, and to remember that the new Individual Savings Account (ISA) allowance for the 2012/13 tax year will be £11,280. The new ISA allowance, will become available from 6th April 2012, and is £600 higher than the current limit of £10,680 for 2011/12.
Remember you can invest up to £5,640 into a cash ISA with the remainder up to the total allowance of £11,280 available to invest in an investment ISA. Enable know that ISAs are core part of financial portfolios and are able to make sure you maximise your tax efficiency by saving in them.
Remember the Mini and Maxi? In the past, ISA rules were unnecessarily complicated, making savers fret about whether to go 'Mini' or 'Maxi'. Thankfully since the 2008/09 tax year, this became history. Yet anyone who had savings in either of these should be aware of what happened when the terms were dropped. Did you have Mini ISAs? These were places to hold Cash or Shares separately from each other. If you had a 'Mini Cash ISA', this has now converted into a 'Cash ISA'. If you had a 'Mini Shares ISA', this is now labelled a 'Stocks and Shares ISA'. With Maxi ISAs, the two types of investments were bundled together, and bought from the same provider. Now Maxi ISAs have been abandoned, the cash element automatically became a 'Cash ISA' and the shares element evolves into a 'Stocks and Shares ISA'.
Enable can help you sort out your ISA s.
Remember you can invest up to £5,640 into a cash ISA with the remainder up to the total allowance of £11,280 available to invest in an investment ISA. Enable know that ISAs are core part of financial portfolios and are able to make sure you maximise your tax efficiency by saving in them.
Remember the Mini and Maxi? In the past, ISA rules were unnecessarily complicated, making savers fret about whether to go 'Mini' or 'Maxi'. Thankfully since the 2008/09 tax year, this became history. Yet anyone who had savings in either of these should be aware of what happened when the terms were dropped. Did you have Mini ISAs? These were places to hold Cash or Shares separately from each other. If you had a 'Mini Cash ISA', this has now converted into a 'Cash ISA'. If you had a 'Mini Shares ISA', this is now labelled a 'Stocks and Shares ISA'. With Maxi ISAs, the two types of investments were bundled together, and bought from the same provider. Now Maxi ISAs have been abandoned, the cash element automatically became a 'Cash ISA' and the shares element evolves into a 'Stocks and Shares ISA'.
Enable can help you sort out your ISA s.
Subscribe to:
Posts (Atom)