In whose interest does the FSA ACT?

This should be straight forward.  The FSA acts to protect consumers from unscrupulous, shoddy, crooked, bad practice or even simple mistakes made by those that it regulates.  

The Royal Mint has doubled production of Gold Coins

Royal Mint doubles production of gold coins to meet surge in demand

Terminal bonuses are being cancelled.

Spread Betting - The risks and Rewards

Spread betting is used to describe a type of betting that bets on outcome of an event and where the punters reward

Day Cooper Adams leaves hundreds facing losses

It was only a matter of time before one these compensation firms went under owing money to clients.

Apart from the fact that using them gives little advantage to the claimant it means that the claimant who has a legitimate claim ends up not being fully compensated die to their fees.
This firm took fees up front and apparently FOS paid compensation to this firm which was never passed on.

This where FOS and FSA have dropped the ball.
NO IFA can can handle client money without some very strict regulations and protections in place.

FSA The LAUTRO Scandal and what have they got to hide?

The FSA admit they "Do not know how many consumers were compensated"  Either they did not ask or they do not care or both. 

The FSA's performance and behavior on this single issue, never mind the Equitable Life, Banking Crisis, Northern Rock etc etc ( its a big list ) sums up exactly why for the consumer they are supposed to protect and the industry they are supposed to regulate - they are a total and miserable failure.

Offshore Rates can double your return

Report in the Telegraph pointing out the current high rates available fro investors in Offshore accounts Isle of Man and the Channel islands.

Check carefully with your adviser which funds are covered by what scheme before investing.  In today's climate you must be careful, prudent and take advice from an IFA to establish what if any risks are involved.

The number of candidates registering for the exams that allow them to work in the City and that are required by the FSA has slumped.  The Securities & Investment Institute (SII) reports a significant drop in numbers which indicates a considerable reduction in recruitment by City firms

You can read the full report in the Times.

 

Power of Financial Planning

 

So, what is Financial Planning, who is it for, and why do we think that it is important?

The funny thing is that the finance part of it is not the most crucial element. The most important element is the planning side. And plans are pretty useful things. All great achievements have plans behind them - all great businesses have their business plans, all great explorers have their expeditions mapped out, all successful generals have their stratagems and a great financial future is no exception. Of course, you can have a great financial future without putting in place a plan, but we feel that putting in place the plan increases the likelihood of securing that great future.

What we at Capital seek to do when we first meet with you is to help to elucidate those things that matter most to you in your life, the goals that you have, when you want to achieve them and how much they cost. This is the discovery stage of our process.

We then create your own bespoke plan. Our expertise on the finance side of things then comes into play in the review of your existing situation, the creation of the plan and its subsequent implementation. All your investments, pensions, insurances, mortgages and tax planning will now begin to work in harmony and will be aligned with your goals. This is the planning and implementation stage of our process.

Just as businesses continually review their business plans to ensure that targets are met and that its performance is up to scratch, so you and your Financial Planner should continue to monitor the plan over the years to make sure that all is on track to meet your goals and make appropriate adjustments as circumstances or goals change. This is the monitoring stage of our process and we hope that our relationship with anyone we work with will evolve into a fruitful long term partnership.

In terms of who Financial Planning is for - we feel that everyone can benefit from Financial Planning - not just the rich, and that there is no time like the present to begin your Financial Planning - the sooner the better. You can build a Financial Plan on your own or work with a Financial Planner to help you. The important step is to begin to focus on what it is that matters to you in life and incorporate those desires into a plan. If you don't create a plan, you run the risk of drifting through life and not seeing your most important goals realised.

We think that the benefits of good Financial Planning may include the following:

• Giving you the freedom not to worry about financial matters
• Giving you a better quality of life by allowing you to concentrate on the things that are important to you
• Increasing or preserving your wealth and reducing your tax
• Permitting you to have a much clearer view of your future
• Creating a greater level of interest and knowledge in financial matters
• Educating and empowering you to feel in control of your life

And what have we been able to do for our clients? Well, take one of our clients, a partner at a City law firm, as an example. When he came to us, we helped him and his wife to formulate their goals, which included:

• Early retirement
• Maintaining their existing standard of living throughout their lifetime
• Ability to provide for their children's education and to help them onto the property ladder
• Not being a financial burden on their family in the future
• A review of their existing financial arrangements

We were able to:

• Provide peace of mind that retirement could be taken at age 55, with a higher standard of living than currently enjoyed
• Increase the budgeted amount to be provided to the children for help on the property ladder
• Reduce tax bills
• Create more tax efficient income in retirement
• Give peace of mind that they would not be a burden on their family in the future

So ask yourself this question: have you in the last few years reviewed your existing situation and thought of your plans for the future, plus how best to achieve these? If not then perhaps it is time to start investing in "you" by taking time out to create your own Financial Plan.

Alan Smith
Director
Capital Asset Management
27 Great Queen Street
London
WC2B 5BB

Tel - 0207 831 9108
Fax - 0207 242 7169

email: alan@camfinancial.co.uk
web: www.camfinancial.co.uk

Wealth Management - Importance of Diversified Portfolios

In the 1950s academics such as Harry Markowitz and Bill Sharpe proved that using a diversified portfolio for different types of investments would greatly reduce risk, often with little or no reduction in investment performance. Whilst some of their other conclusions that using mathematical formula to predict returns and the absolute relationship between risk and return are still debated within investment and academic circles, the use of a diversified portfolio to reduce risk and maximise returns is almost university accepted.

Some assets are highly correlated and move in similar ways in different market conditions. Obviously an investor investing in shares in four banks is only slightly more diversified than an investor with one bank share. Investing overseas will help but with the advent of globalization many markets now move in similar ways. To obtain real benefits from diversification completely different types of assets should be chosen where historically their movements have not been correlated. This has however been severely tested in recent markets as Investment banks and hedge funds dumped assets to raise cash investments of all types seemed to be falling.

The type of asset that could be included in a portfolio for wealth investor is indeed diverse and even in these recent most troubled times asset classes like government bonds and gold rose.  The spread of assets is an important area.  There are still some very respectable investment groups that only asset allocate into shares and fixed interest securities.  Whilst this may provide a better spread than just using a single asset class it is hardly a diversified portfolio.  For our own clients even when investing in collective investments i.e. unit trusts, investment trusts or open ended Investment companies (OEICs) which are typically suitable for portfolios up to £200,000-£250,000 we would typically split investments according to the client's risk profile across the following asset areas;

Cash, fixed interest securities, share based funds in UK, Europe, North America, Far East, Japan and emerging markets, property funds (although not in the current market) and commodity funds. The availability of fund supermarkets that act as an administration platform and give access to a wide range of funds from many different managers allow a diversified portfolio to be created for small values so even a single ISA can have a spread of funds.

The idea of a hedge fund that can make money even in falling markets is attractive but scandals like Madoff and the general lack of regulation makes most sensible investors cautious. Luckily there are now a number of properly regulated funds from major investment companies that use the same techniques and this adds to the diversity of a portfolio.

With cash returns so low a return to a spread of investments is a move many investors will have to make but care needs to be taken to ensure they are getting genuine diversity and regular reviews and rebalancing.

 
Ian Smith BA (Hons), APMI, FPFS, IMC, CFP.
Director & Chartered Financial Planner
Central Wealth Management Limited
Unit 36 East Moons House
Oxleasow Road
Redditch
B98 0RE
 
Also at 29 Harley Street
London W1G 9QR
Tel 0845 0066 204
Fax 0845 0066 254
www.centralinvest.co.uk
ian@centralinvest.co.uk
 
Central Wealth Management Limited is an appointed representative of Central Financial Planning Limited which is authorised and regulated by the Financial Services Authority.