Whether you’re looking to invest money for your future, take out a mortgage, or plan for a major life event such as retirement or a big move abroad, having a financial advisor is always a good idea. An advisor can offer valuable guidance, and help you devise a finance plan that should help you achieve your financial goals (both short and long-term).

When you have an initial meeting with a financial advisor, they will ask you a series of questions about your financial situation right now, and where you want to be in the future. They might also ask you about your plans for the future – whether that’s expanding your family, changing job, or moving home. They will talk through your financial goals with you and determine the level of risk you’d feel comfortable with. This will give them an idea of how much risk you’re prepared to take with your money, and will help them determine products that are right for your situation.

Financial Advisor UK offers an instant matching service and extensive database of fully FCA-registered and approved financial professionals who can best advise you based on your circumstances and budget. From general financial planning to specialist advice, and mortgages to pensions, let’s get you matched with an advisor who suits your needs.

Choosing an advisor

When it comes to picking a financial advisor, it is always worth considering whether they are fully independent, or whether they sell products that are linked to an investment company. Some advisors also offer restricted services, meaning that the range of products they offer are limited. During your initial first consultation with an advisor, you should ask them if they are regulated by the Financial Conduct Authority (FCA), and if they are independent and compare products across the whole of the market.

Word of mouth is a popular way people recommend financial advisors, although sometimes it can be hard to find someone if you need an advisor immediately. You can also search the internet and read customer reviews on various financial advice services to see what they have to offer. It can be difficult to determine whether or not a financial advisor has done a good job, as you’re most likely to find out the answer to this later on down the line with your investments’ performance. Always remember that a friendly personality doesn’t necessarily mean that an advisor is good at their job. Do your research carefully and don’t be afraid to ask questions.

The benefits of hiring a financial advisor

A financial advisor is a good option if you’re looking into investment. An advisor should only recommend investment products that are suitable for your budget and particular needs. This saves you the time and hassle of searching the market and comparing products yourself. An advisor may also know of special deals or offers that can be made with investment companies, as they keep their ear to the ground and work in the industry every day. With an advisor on board, you should also find that the range of investment products available to you is far greater in scale, and far more than you would have had access to when researching alone.

If you have a financial advisor, you are also protected if things go wrong and you buy based on their advice. If you’ve been given unsuitable advice, you can complain to the Ombudsman. Sometimes this protection isn’t available if you were not advised before investing and took a risk with an investment decision.

If you approach a bank, building society or high street lender/broker, they should discuss your options with you and leave you to make up your mind on what you’d like to do. In this situation, you are buying investments based purely on their information, which means that the seller will not be assessing your situation carefully and considering whether that product is actually right for you. In this instance, you will have fewer rights to claim compensation if you bought a product (and things didn’t work out), after following their advice. In hiring a financial advisor, this can be avoided.

Fees

If you are looking for financial advice because you’d like to buy investment products, or you’d like advice for future finance planning, it is likely that you will have to pay fees to receive guidance. An advisor should make it clear to you what they charge for their fees, and whether they earn a commission for products you decide to purchase based on their advice. Fees are worth bearing in mind before you consider hiring a financial advisor for a particular reason like saving for a mortgage. For instance, some mortgage lenders offer mortgage advice for free, and there are also lots of free resources online. If a good advisor manages to save you money and increases your capital over time, their costs should pay for themselves. Some products are only available if you purchase them through an advisor, so weigh up your options carefully, factoring in potential fees.

Deciding not to have a financial advisor

Some people decide that hiring a financial advisor isn’t for them. However, before purchasing shares, stocks, ISAs, unit trusts and other investments, it is worth bearing in mind that these types of products are complicated, with complex terms that can be difficult to understand unless you are experienced in banking or finance. A financial advisor can suggest all available options to you and offer valuable guidance or explanations to things you may not understand. Before deciding against having a financial advisor, you should consider the element of risk there is in potentially purchasing the wrong product. Do your research and think about whether you have time to properly research several investment options, how much you can afford to write off if you lose money, and your experience when it comes to investing. If you’re inexperienced, and cannot afford to lose money in terms of risk, a financial advisor is likely to be the best option.

Financial Advisor UK can put you in touch with an FCA-registered financial advisor who suits your needs. Simply fill in our form to be instantly matched with a suitable advisor today.

The term ‘IPO’ stands for ‘Initial Public Offering’. It indicates a company’s first offer to sell its shares to the public on the stock market. When the company comes to the stock market, this is known as ‘stock market flotation’, as it indicates the point at which the company is officially listed on the stock exchange. IPOs usually involve private companies. Anyone can buy the shares – from the general public, to other types of regular business investors. An IPO is essentially a chance to purchase new shares before they officially hit the stock market. Investors therefore see them as a good opportunity to purchase shares before competition heats up.

Companies have many reasons for deciding on stock market flotation, including raising money for accumulated debts, reducing shares in a company that one or more executives own, and improving the company’s reputation in the market. Investors decide to invest in IPOs as they are considered a good opportunity to buy shares at a reasonable price when a company is about to be listed on the stock market. IPOs can therefore be a good return on investment when usual trading begins and the price of the shares goes up to a higher cost. The flip-side however is that there is no guarantee that the value of the shares will rise. Investors should therefore carefully research the company they plan to invest in.

Companies tend to make announcements about their intension to be listed on the stock exchange. They will usually disclose information about how much money they want to raise overall, and who the biggest shareholders are within the company. Once IPO pricing has been determined at around 7am, it is likely that selling can begin at 8am the same day. Unconditional dealing (when the shares are available to the general public/whole market), typically occurs a few days later.

Are you looking for advice on IPOs or other investments and savings products? Financial Advisor UK offers a national network of fully FCA-registered and approved financial professionals that you can be matched with to ensure you get the best professional advice for your circumstances. Just enter your details into our online form to be matched with a suitable advisor in under 60 seconds.

Before investing in IPOs

Before investing in IPOs, it is important to research the company properly. Before listing on the stock exchange, a company needs to provide a prospectus that is available to all potential buyers. The prospectus should detail everything from the company’s forward strategy for the future, to its financial history, legal issues, accounting policies, taxation, and audited financial accounts. Before applying for shares, always read the company prospectus carefully so you can carefully gauge the level of risk you are taking on. Questions you should be asking include:

• Are the business owners selling the entirety of their stake in the business?

• Is there a strong indication of growth within this business and sector for the future? Can this be backed up with reasonable evidence?

• Will capital raised be used to pay off existing debts? Or to fund growth within the company?

Warning signs

You should be wary of investing in IPOs if the following applies:

• You have a suspicion that the company is overvaluing its shares. This is sometimes the case with IPOs, and can cause you to lose money overall if you jump in without properly researching the company and the reasons why it is selling.

• The track record of the company’s management is patchy, disorganised and its reputation within the sector it trades isn’t strong.

• Management have recently tried to leave and/or left the business.

• Suspicious acquisitions and trading relationships have recently taken place.

• The company isn’t in a competitive position within its market.

• The company is trying to raise funds on the stock market to counter under-investment.

Buying IPOs

When a company has decided to float on the stock market, the price of the IPO will either be restricted to just certain investors, or it will be available to the whole general public. Investors usually have up to a month (known as the offer period), to browse documentation and to conduct research into the company before placing an order. At this stage, the company will not have a fixed price, so you’ll need to carefully consider how much you want to invest. Most investors usually position themselves between the figures of £1,000 – £2,000. All investors will be required to confirm that they understand the risks in investing, and have considered the positives and negatives of IPOs carefully before taking the plunge. They will also need to agree that they have read the company’s associated prospectus.

When the offer period has closed, the official share price is usually made public within two days. If too many people have placed orders (and the IPO is oversubscribed), then you run the risk of not receiving the desired number of shares that you had hoped for. If the IPO is only open to institutional investors, you’ll only have access to it once it becomes available on the stock market.

Risks of IPOs

Investment isn’t without risk – here is what to look out for when dealing with IPOs.

• Some companies do not fully disclose all information in their prospectus or admission documents, leading to investors’ disappointment when they find out later down the line. For example, a company could have a number of legal cases in its background, or a poor financial history that it tried to cover up.

• New market entries can have elevated prices, so be wary and question whether share pricing is inflated.

• There is often little trading data upon which to base investment decisions when it comes to new companies entering the stock market for the first time. Don’t be persuaded by promises of large dividends alone.

• Those who expected a higher share valuation may decide to sell their shares in the new company immediately, which can have a knock-on effect on your investment and push share prices down even further.

If you need help or advice on investing in IPOs, Financial Advisor UK offers a network of FCA-approved financial advisors who are on hand to answer your questions and can help you diversify your investment portfolio.

Every aspect of finance and investment carries an element of risk. From selecting the right type of bonds to invest in, to when a bank considers a person for a loan and runs a credit check on them – decisions are all based around risk assessment. In investment, investors use techniques like portfolio diversification, among other strategies, to minimise/mitigate their level of risk and to outweigh any losses. If risk management isn’t properly considered, severe consequences can develop for an individual who is trying to be successful at investing. Also, if risk management isn’t carried out effectively, it can cause global economic crises such as the 2007 recession. In 2007, mortgage lenders were allowing mortgages to be given to those with poor credit, who couldn’t afford to pay the mortgage sums back. This and other poor risk-analysis-based decisions, contributed to the global economic downturn that followed.

When you plan to invest money, you must consider risk and exercise ‘due diligence’ in order to minimise the various ways you could lose funds. Identify what the main risks are in an investment, and develop strategies to control losses should the worst happen.

Are you thinking of investing money for your future? Hiring a financial advisor who can guide you on the best types of investments can be worthwhile. An advisor can also help you to assess risks and devise strategies with you to effectively reduce risk, keeping it to a minimum should things not work out as planned. Financial Advisor UK offers a network of FCA-regulated and approved financial advisors who are waiting to help. Just fill in our simple online form to get started and be matched with an advisor today.

Understanding risk

It is commonly perceived that risk is a negative term that is completely separate from successful performance. However, it is important to view risk as just an unexpected or different outcome. When you invest in a financial product, you have an idea of what you’d like to achieve in terms of outcome. When this outcome isn’t delivered, this deviation is the ‘risk’ factor that you gambled on, and it can be positive or negative. Professional investors generally tend to accept that deviation from an intended outcome can sometimes be a positive thing. That said, if you generally take on more risk, you take on a more volatile product, and there is more chance that the expected outcome may not transpire.

The amount of risk an investor takes on depends upon their financial and emotional tolerance to risk. It also depends on their investment goals and how much risk they are willing to take to achieve them. Generally speaking, if an investor believes they can withstand the risk, they usually invest.

Types of risk

Most investors have strategies and ways of dealing with risks. Most risks are controllable, although expect one or two to have some kind of impact that affects your portfolio in the short-term. In order to successfully manage risks, you need to determine which types of risk relate to the type of investment you are considering. Most risks fall into the following categories:

Company-related risks

This type of risk includes events that happen within a company, such as scandals, reputation mismanagement, and anything else specifically linked to a company. Such risks can be countered by diversifying your portfolio to include investment in other companies within the same industry.

Industry-related risks

These types of risk are relevant to the specific sector a company is based in. Risks include lack of demand, changing tastes and trends, and changes in industry regulations and law.

Investment-style risks

Investing too heavily in one particular investment method can be a great risk and result in major losses. Markets fluctuate and some investment styles can go down, while others go up. The key is to not place all your eggs in one basket.

Market risks

These types of risks are linked to investors’ general demand for stocks. If demand goes down, so does share price and value. You can counter these risks through diversifying your portfolio and investing in other markets such as real-estate, gold, international equities and so on.

Controlling risks

When you decide to invest, you must devise a strategy for dealing with any risks that may occur. Most of this is achieved through a varied investment portfolio in which investments are never ‘overlapping’ one another. This helps you to minimise your level of risk, which in turns means that you will lose less money if the worst should happen, and make more if you’ve timed things correctly. Becoming good at risk management generally comes with experience and knowledge of reading markets. Risks are directly related to the characteristics of every investment product.

Exit strategies

Before investing, you should always have an exit plan. No investment is forever, and there will come a time when a product no longer serves your financial portfolio and you’ll decide to cash in. Markets are also continuously changing, meaning that your financial goals will change in turn. When you find that an investment is no longer working for you, it’s time to leave that investment behind and sell up. It is important to continue to refresh your portfolio so that you are keeping up with market changes and can take necessary action when an investment is performing poorly. As a rule, remember that there is no such thing as a indefinite investment.

Before making the decision to invest in stocks, shares or other investment products, it may be worth consulting with a financial advisor who can offer guidance on minimising risks, as well as the right types of investment for your portfolio, budget and financial goals. With Financial Advisor UK, you can be instantly matched with an FCA-regulated advisor who suits your needs.

Stock markets have plummeted considerably since the Coronavirus outbreak. As it’s an uncertain time, you may be wondering how the pandemic will affect your pension and investments. Note that our guidance below relates to defined contribution pensions, and any element of risk will be borne by the employer that your pension is with. State pensions are unaffected by stock market behaviours and are provided by the government.

It is best not to make hasty decisions based on short-term current events when it comes to your pension. Decisions that are not well-considered may have long-term effects on your financial future and retirement plans. Before making any important decisions regarding your pension, it is worthwhile speaking to a financial advisor who can guide you on how to safeguard your pension savings for future. Financial Advisor UK offers a network of FCA-approved financial advisors who can offer guidance on Coronavirus-related financial issues.

Accessing your pension pot

Keep in mind that just as investment values go up and down, so can pensions, too. If you have many years ahead of you before you plan on accessing your pension fund (at least seven), then you may have sufficient time for your fund to recover from stock market fluctuations. If you are planning on retiring soon after the Coronavirus outbreak, then you may have to accept that your fund might not accrue as much as you had hoped. If you access your pension now, you may also miss out on any boost to its value that may happen as markets recover from the pandemic. Taking funds from your pension pot may also limit the amount you can put back into it in future. You should also consider tax implications. You’ll be able to take up to a quarter of your pension pot without paying tax. If you take more than this, you’ll need to pay taxes.

Always carefully consider other sources of income before you decide to start accessing your pension pot. If you start drawing your pension, this may affect other sources of income such as pension credit, universal credit, and other benefits. Don’t stop paying into your pension pot during challenging economic times. The more you can pay in, the more you will have when you retire.

Coronavirus and investments

If you are an investor and you have investments held in the stock market, (including your pension), then you might have seen the value of your pot decrease. It is very likely that many companies on the stock market will have struggled given the Coronavirus pandemic, and some have even left the FTSE 100 due to their share prices crashing. As an investor, it is important to remember that any return to pre-COVID levels on the stock market will take several years, and will not be fixed in just a few months.

Following the COVID-19 outbreak, markets are highly volatile and the situation is changing every day. It is therefore difficult to determine the type of impact this will have on investments in the long-term. On one occasion during lockdown, the FTSE 100 had a swing of 6.5% in terms of high and low points. As the number of Coronavirus cases continues to fall over time, investors are preparing for the long-haul and sitting tight with their investments. As economies recover, growth will be slow as social distancing measures are in still in place, putting pressure on demand and consumer behaviour. Increased unemployment could also change the way the economy looks for a number of years while countries get back on their feet. There is also the risk of a second wave of infection and the economic effect this will have. The best advice for investors is to sit tight and wait things out. If you are planning on retiring or accessing your pension that is linked to investment, speak to a financial advisor about losses you may incur, transferring your pension to another product, and whether holding off for a while longer would be a better option.

Generally speaking, as infection rates fall in certain countries, their markets are beginning to pick up slowly, which is an encouraging sign. That said, government borrowing is at an all-time high to try and kick-start the economy once again, so we are all in for a long period of slow growth. At the present time, you may feel anxious and worried about your pension investments fluctuating, but rest assured that markets will recover again, even if it takes some time. Try and decide whether retiring right now is the best thing to do, and consider the financial impact it might have on your savings.

Top tips for pension-holders

Always think long-term

It can be tough not to worry about short-term events and how they will affect your investments, but your pension is for your long-term future. Eventually, markets will recover to pre-COVID levels. If you invest long-term in the stock market, there is always opportunity for growth.

Keep calm

Don’t be tempted to make hasty decisions on the back of short-term events and rush to invest your money somewhere else in a lower-risk product. You might do this, and the value of your previous investment could go back up again due to market growth. If you’re unsure of what to do with your pension pot following a financial crisis, speak to a financial advisor.

Diversify your pension investments

The best way to minimise risk with your pension is to have various types of investments. A financial advisor can help you to invest in various products that expand the range of your portfolio. This way, if one investment is underperforming, the risk is countered by investments that are doing much better, and overall you should experience gradual growth without being too affected.

Hire a financial advisor

A financial advisor can talk through the various types of investment products and pension plans available to you, and advise you on the best products for your needs. They can also continually assess the investments you have on an ongoing basis to mitigate risk, and move things around when products are underperforming or no longer relevant to your financial goals. If you’re thinking of switching investments or transferring your pension, Financial Advisor UK can help you find the ideal advisor for your situation.

If you’re just starting out in investing, putting money into funds is a great way to begin, as the level of risk is minimal. As savings rates are currently at an all-time low, long-term investment into funds is a great way to maximise your capital in the long run. That said, remember that the value of savings and investments can go down as well as up. It is always advised that when investing, you consider things in the long-term (around 5-10 years time). The longer you can invest for, the more likely it is that you will reap rewards in the long-term.

Are you considering investing in funds for your future? Financial Advisor UK offers a national network of fully FCA-registered and approved investment advice professionals. With our unique matching service, you will be matched to a professional advisor who can offer investment fund guidance that suits your level of risk.

How funds work

A fund is very different to a share of a company. With a fund, you place your money into a collective pool of capital along with other investors. All people in the fund benefit from how the fund performs. For this reason, it is less of a risk than purchasing shares, which can fall sharply and make a loss at any time. You purchase ‘units’ in a fund, which can increase or decrease in value. You can calculate the value of your investment by multiplying the price of every unit within your fund by the number of actual units there are. When purchasing funds, you should always allow an investment time of at least five years for your savings to mature and hopefully grow. Cash in your units too soon, and you could make a loss. If you need access to any money you are considering putting into a fund, this type of investment may not be for you.

How do I buy funds?

Funds can be purchased via a fund platform, (otherwise known as a fund supermarket). You can also purchase funds through a financial advisor, who will arrange the purchase and take care of the paperwork for you, but this will cost you a fee for their services. Many fund platforms can be found online and work in a similar way to an e-commerce site that enables you to buy, sell and hold funds across a wide range of industries. To use a fund platform, you must visit the platform of your choice and then browse the various funds on offer before selecting one. You will pay a fee for using the platform to obtain the funds, and to buy the funds themselves. The fees you pay will depend on the platform you use, so this is something to consider when you are weighing up how much you can afford.

Investing on a frequent basis is a great way to ride out the many ups and downs of the market. If you pull your funds out of a market at the wrong time, you can lose money. It is also important to invest in different categories of funds. These categories can range from emerging markets to utility, energy and gas firms, corporate bonds, shares and gilts. Many investors have a portfolio that spans across many of these areas, as it gives them greater financial stability when one fund may be making a loss or underperforming.

Fund management

It is possible to hire a fund or asset manager who can manage your funds for you. A fund manager will buy and sell your funds when they spot a good return, monitoring the market constantly to ensure that you are always getting the best deal. You will however have to pay for their services.

Fund charges

When selecting a fund platform, you have to keep in mind the charges that are imposed. You don’t want a substantial part of your investment to be wasted on paying high fees to an investment platform. Look out for cheaper platforms and those for investment beginners. Both the funds you purchase and the platform fees will cost you money. Such charges will be deducted from your account and given to the fund manager. You’ll need to pay a platform charge, which is either a flat fee or a percentage of your fund value, so the more value you have in terms of funds, the higher the fee you will pay as a platform charge.

It also costs to trade funds. Every time you buy or sell a fund on an investment platform, you’ll be charged a fee. These fees can be up to £25 per fund. Some platforms have no fees at all, which is why it’s best to shop around, or ask one of our advisors from Financial Advisor UK for their advice on the right investment platforms for your budget. If you are thinking of making several trades in a single year, opting for a platform with minimal or no fees is a worthwhile option.

If you move your investments from one platform to another, you will also be charged a ‘transfer out’ fee. This fee is calculated in accordance with the value of your investment funds. The greater the value, the more you’ll have to pay.

If you have an investment manager, you’ll need to consider their fee if they are managing your investment portfolio for you. A manager will always take a percentage of the money made on trading investments, and this averages at 0.75%. You should receive regular updates from your fund manager on how your investments are performing, so you can calculate the amount they will receive as a cut.

Selling funds

You can sell funds through the same online platform that you used to buy them, and this can usually be done from your account. Some platforms will also let you sell funds through phone apps. When you log in to your account, most platforms will give you the option to select either ‘buy’ or ‘sell’ in terms of the funds you’d like to trade. If you hit ‘sell’, you’ll be indicating that you wish to sell a fund. Keep in mind that funds are sold in relation to ‘forward pricing’. This means that you’ll get a price for the value of the funds the next working day, as the price is calculated by shares sitting in that fund. Trading needs to stop for that day before the share price can be finalised. Fund prices however do not fluctuate as much as shares.

Once you have received the capital from selling your funds, you can either choose to keep the money or reinvest in something else from the same platform. Always bear in mind that markets can generally go up and down. If everyone else is selling their funds, it doesn’t always mean that you should follow suit. Have a game plan and stick to it. If you’re unsure, consult with one of our Financial Advisor UK professionals before trading in investments.

Holding funds

You can hold funds through a trading platform, or you can invest funds within a pensions scheme, or an ISA ‘wrapper’ scheme. These schemes are designed to legally avoid tax. If you decide to hold funds in a trading platform or in an account, you have complete control over how much you buy/sell, without restrictions on the amounts you can invest. You will however have to pay tax on these funds.

If you decide to hold funds in a pension scheme or an ISA, you might be able to benefit from legally avoiding tax. It depends on whether or not you have maximised your capital gains tax allowance. If you sell an asset that is worth over £6,000, you have to pay tax on it. An ISA will let you invest £20,000 before tax. It is always worth speaking to a financial advisor through Financial Advisor UK before making any important investment decisions for your future such as investing in pensions and ISAs.

In order to make money as an investor, you have to think long-term. Investing for just a couple of years and then withdrawing funds won’t make you that nest-egg you’re dreaming of for the future. As a rule of thumb, the longer you invest your money for, the greater the return you should receive. Many investors invest lump sums that stay invested for a minimum of five years. If however you don’t have a lump sum to invest, making regular small investments can be a lucrative way to make money. This is done through what is known as ‘pound cost averaging’, which we’ll explain a little later in this article. As with any form of investment, always keep in mind that values of stocks, funds and shares can always go down as well as up, and will be affected by economic and political world events.

Are you thinking of maximising profits through regular investing? Or do you already have property investments that aren’t working for you? Within our quick and easy comparison service, Financial Advisor UK can match you with a financial advisor who suits your needs. All of our advisors have many years of expertise and are FCA-regulated, to give you complete peace of mind along with the right guidance for your situation.

The good news is that you don’t have to have a large lump sum to start investing. You can invest as little as £25 per month on many investment platforms, and can make as many increases to your monthly contribution as you like. You can even set up an investment to be made every month automatically using such platforms. By regularly investing like this, you have continued access to markets, and don’t have to wait for the prime opportunity to invest a lump sum of money.

Pound cost averaging

Regular investing every month revolves around a method called ‘pound cost averaging’ – a technique that involves the investing of a fixed sum on a frequent basis. For instance, if you invested £100 per month over 10 months, and the share price remained the same, any movement in the price of the shares you have purchased will have less of an effect on your investment’s overall value. That said, if share prices changed, you’d end up buying more shares when prices were lower, and fewer shares when prices were higher. As a result of investing smaller amounts of money, you’ll also receive a smaller amount of income that has been generated from your investments (in comparison to if you invested a large lump sum of thousands of pounds).

Riding out market ups and downs

Financial markets are volatile and can always go up or down depending on global financial and economic circumstances. By regularly investing small amounts of money into markets however, you can ensure that you are investing your money into a range of shares that have varied prices. On average, the price for all of these different shares should be roughly the same, which can help balance out your profits from successful shares with those that are under-performing.

Timing the market

Market timing, which is essentially the practice of trying to secure shares, funds or assets when they are at their cheapest, can be a very tricky process, even for highly skilled investors. Try not to speculate what will happen with assets too much. For instance, some shares may fall in price on one occasion, but that doesn’t necessarily mean that they’ll hit a rock-bottom price. Investing on a frequent basis can give you more investment discipline in the long run, and will help you make more measured and reasonable judgements about market behaviours. If you have a lump sum, you’ll have no choice but to invest the entire lot. By spacing things out, you have more control and will become more organised with your financial portfolio.

Investing large sums of money can be a huge gamble, leaving some investors in a panic over whether they have made the right decision. Also, if share prices fall, investors with large sums of money that are invested into one type of product are more likely to panic and sell out. If you’re inexperienced in investing, dipping your toe in the water and investing little and often is a great solution for those times when the markets may be a little volatile.

Beware of charges

You need to consider charges, especially if you are investing little and often. Make sure that you are not investing into lots of different funds across various markets, as this will cost you a ‘dealing fee’ for every trade. It is possible however to use an investment platform which can help you invest regularly without being charged fees. Some have loyalty schemes if you regularly invest, so the charges you’d originally pay to purchase shares are greatly minimised, or even free. Also make sure that you have enough money in your account to actually make regular investments in the first place. While you can maximise your profits, you don’t want to run out of cash. Only set up a direct debit if you are sure that you can afford to.

More investors are showing an interest in environmentally-friendly forms of investment, otherwise known as ‘eco-investing’. It is essentially a more environmentally-aware form of investment, in which an investor selects products and companies to invest in that offer green services or initiatives. An eco-investor will therefore decide what to invest in after considering the green credentials of a company, product or service. They will consider the impact the company or asset has on the environment, and how this affects their investment strategies. Eco-investors are also looking to maximise their capital and invest in companies and services that will deliver strong returns.

Are you looking to invest in green companies and services? Do you require advice on environmentally-friendly investing? Financial Advisor UK offers a national network of fully FCA-registered and approved financial advisors and a unique matching service to pair you with the right advisor for your needs. We can ensure you get the best professional advice, along with the best deals available.

Eco-investors usually select the companies and assets they invest in by carefully researching a company and the impact it has on the world’s climate. They will take a particular interest in companies that work to tackle climate change, reduce pollution and adopt green technologies. This form of investment is becoming increasingly popular because of the awareness of climate change and the need to limit damage to the environment. Eco-investors often consider how the stocks and shares they hold affect climate change and their climate footprint.

In previous years, eco-investors have been seen as activists rather than serious investors. But that approach is rapidly changing, with US markets alone seeing around $26 trillion invested in sustainable companies and initiatives. According to CNBC, since 2016, socially responsible investment (SRI) assets have been growing year-on-year. On the market, eco-investors have more options now than ever before.

Sustainable investments

Some investors are wary of sustainable or eco-investments because they are worried about the impact on their returns. This view is based on the belief that very few companies on stock markets are actually completely green and sustainable. This view is however outdated, as eco-companies are taking up more of the stock market share in the modern business world, and are attracting larger numbers of investors. In many cases, sustainable stocks outperform other stocks.

When it comes to environmentally-friendly investments, you can either select and invest in sustainable companies and funds yourself, managing your own investment portfolio, or you can use a wealth manager/wealth advisor or an investment platform that will help manage your portfolio for you, recommending products that you may be interested in.

If you are new to sustainable investments, we highly recommend speaking to one of our advisors at Financial Advisor UK, who can offer guidance on the best products and companies to invest in based on your available capital and financial situation. As investment always carries a level of risk, it is important that you speak to an advisor to determine whether sustainable funds are right for you, how long you wish to keep your money invested for, and how much you’d expect to get in return for your investment.

Investments can also go down as well as up, and you should always make sure that any money you invest is money that you will not need within the next five years. As a rule of thumb, you should aim to invest any capital you have for as long as possible without accessing it, in order to maximise your chances of a good return. Our experts at Financial Advisor UK can talk through the best investment practice and strategies with you in order to diversify your portfolio and minimise your level of risk.

The pros of environmentally-friendly investments

When you invest into an environmentally-friendly company or fund, this acts as an incentive for that company to boost their sustainability policies. In order for that company to remain competitive in its market, it has to continue to revolutionise the way it conducts its business operations in order to minimise its impact on the environment. As an investor, a huge positive is that you have the reassurance that the companies you have invested in are working hard to counter their impact on climate change and environmental issues. You don’t have the concern that companies you have invested in are doing damage to the environment. In this sense, by becoming an eco-investor, you are helping to implement a greener change in business and renewed approach to environmental awareness.

The returns you can receive from an environmentally-friendly investment portfolio are also positive. According to the Harvard Business Review, in 2016, low-carbon investments experienced average returns of 27%. Some investors experienced returns of 80%. Such market activity has caused attitudes towards eco-investing to change, with many investors seeing that it is both profitable and better for the environment.

Beware of ‘green-washing’

Newbie investors who are keen to dip their toe in the waters of eco-investment should be aware of ‘green-washing’. This deceitful practice happens when a company claims to place environmental sustainability and green initiatives at the top of its agenda, when it really doesn’t. A good example is a company that boasts of initiatives it takes part in that are actually required by law, or green initiatives that simply do not exist. In order to avoid ‘green-washing’, you should carefully research any company you intend to invest in before doing so. If you are unsure of a company’s credentials or if something doesn’t feel right, it probably isn’t. Trust your instincts as an investor. Our financial advisors at Financial Advisor UK can help you invest in companies and products that operate genuine sustainability practices.

Investing money is a great way to increase your overall wealth and to save up a larger sum for your future. This is because investments often give a good rate of interest that grows with inflation – far better than if your money was sitting in a standard bank account without earning anything. If you’re good at investing, you’ll need to spread your assets across various investments to stand the greatest chance of getting a good return. But are you ready to invest? And is investing right for you?

For many people, investing money as soon as possible gives them the best chance to make the most return on their investments. Investing any sum of money should be carefully considered. If you’re wondering whether investing is the right decision for you, speaking to a financial advisor can be a great option, as they can look through your assets and help you decide which investment products are right for you so that you can maximise return.

If you’re looking for advice on investments and savings products, Financial Advisor UK can help. We offer a national network of fully FCA-registered and approved professionals that you can be matched with to ensure you get the best professional advice on investments, along with the best products available. Let us compare the market for you to find the right investment products for your needs.

Here are a few signs that you may be ready to take the plunge and start your investment journey…

You have no debts that carry high levels of interest

If you decide to invest in stocks and shares, you can expect a general return of around 7%, making it a great investment in the long-term. While this is a a good interest rate, it isn’t as high as some rates of interest on debts such as payday loans or credit cards. You want to make sure that the rate of interest you earn on your investments isn’t less than what you are currently paying on any loans you may have, or you’ll still be losing money overall. This is why it’s a great idea to clear off any debts that carry a high level of interest before you start investing. This way, your money pot can grow when you start investing, and you won’t need to continue to take chunks of cash out of your overall funds to pay off debts.

You have an emergency nest-egg saved up

If you are disciplined enough to have substantial savings saved up, you’ve already shown that you are a good saver. You might be an even better investor! If you’re going to invest cash in a variety of investments, particularly in stocks and shares, it’s also a good idea to have a sum of money to fall back on, as markets can go up as well as down. If you invest money, you are investing it for the long-term, and will need to leave it for at least five years to mature and weather any market storms. You shouldn’t invest any money in markets if you need frequent access to it. Ideally, you should leave your investment for between 5-10 years for it to stand the best chance of growing. As you may also have expenses that you’ll need to cover during this time, you should always have a nest-egg saved up that you can easily access should you require the funds. You don’t want to have to take money out of your investment in the case of an emergency, as this will greatly affect your returns.

The emergency fund you have saved up should cover you for between three and six months of living expenses, including mortgage and the covering of major bills and other expenses such as food.

You have some spare cash that you are able to invest

If you are financially living month to month, and are unable to put aside any money once you have paid your bills and regular outgoings, you may want to reconsider whether investments are right for you. You don’t want to be in a situation where you have money tied up in investments that you’d effectively lose if you accessed them. That said, you can invest very small amounts of £25 or more little and often. This can be done on a trading platform website for a small fee, helping you to slowly grow your investment portfolio without needing a lump sum.

Of course, when it comes to investments, the more capital you have to invest, the more likely it is that you will experience gains on that investment. If you have some spare cash saved away that isn’t earning much interest, investing it may be an easy way to grow that capital.

You have a general idea of how to invest

Do you know how the stock market works? Have you read articles on how to invest? Or looked into various investment products before? If so, you may be ready to start investing. As an example, you should really know how stocks and shares work, what a mutual fund is, and the basics of the various types of assets and products you can invest in. Selecting individual stocks is often too high-risk and complicated for first-time investors, which is why it is good to speak to a financial advisor where possible so that you can discuss how to expand your financial portfolio for the best chance of returns. This is important, because if you have one asset that is underperforming, your other assets won’t be affected as a result. You should also be aware of the kinds of fees you’d be charged for in terms of your investments, and also how they will make money in the long-term. If you’re unsure about any of this, you might not be ready to invest, or you may need to speak to one of Financial Advisor UK’s professional advisors, who can help you determine whether or not investing is right for you.

As the COVID-19 pandemic continues to hit investors hard, here’s how to weather the financial storm and continue investing in rocky times.

Are you thinking of investing in funds or other assets for your future? Financial Advisor UK offers one of the UK’s largest networks of financial professionals and advisors who can offer guidance and compare the market to find you the best deals.

Investing during the Coronavirus pandemic

The Coronavirus pandemic has taken its toll on markets around the world, causing many investors to pull a record £10 billion from funds in March alone. The financial world is dealing with the consequences of a completely unprecedented event. The FTSE 100 in mid February was at 7500 points, and had dropped to an alarming 5000 by March. Exchange rates are appalling, currencies are weaker, and many investors are facing all-time low rates of interest.

Actions that have been carried out by governments (seen as necessary steps to contain the spread of the virus), such as closing shops and entire industries, have had a devastating effect on global economies, and have even shocked the most seasoned of investors. If you have shares, it is likely that their value has fallen by at least 25%. Understandably, if you are new to investing, this can all feel pretty overwhelming.

Bear in mind however that although performance of a fund can never be guaranteed, your money should do far better in the long-term and mature much more quickly than if it was just sitting in a bank account with a very low rate of interest. By purchasing funds, stocks or shares, you are accepting that you may experience a few bumps along the way in your investment journey. Depending on the type of investment you have, your funds may have faired better than others.

When riding out rocky times in the investment world, you must stay calm and remember that your investment is for the long term. Current events will not remain that way forever – markets are constantly changing, and always bounce back, even from terrible recessions. This may however take longer than you had anticipated, so sit tight and remain patient for the best outcome.

Don’t panic

During a financial crisis, your hunch may be telling you to cash in your funds while you can, before you lose too much more money, but you shouldn’t. Stay calm, and don’t panic. Don’t even log in to your account to see how your funds are performing. Take a huge step back and let the crisis run its course. Remind yourself of the various reasons why you chose to invest in the first place, and your long-term investment goals. You’re not going to withdraw your funds within the next five years (at least, we strongly advise that you don’t), so at this point, the best thing is to wait things out until the waters have calmed. If you panic, you are less likely to make a rational decision in the moment, and this could hurt your investment opportunities in the future.

Are you looking for advice on lifetime ISAs or other savings products as a consequence of the COVID-19 pandemic? Financial Advisor UK offers a national network of fully FCA-registered and approved professionals that you can be matched with to ensure you get the best professional advice along with the best deals available.

To sell, or not to sell?

If you can see that markets are performing disastrously, it might seem like the most obvious solution to just sell up, before any more damage is caused. Remind yourself that this could hinder the value of your capital in the long term. Intuitively, when things go wrong, we instantly want to try our best to fix the issue. Pulling out of investments isn’t the answer. Remember that sometimes a market can recover quite quickly. If you cash in before things get too low, consider how much money you’ll lose. If you do nothing, let things ride and remain patient, will you end up with more money in the long run? The chances are that you will, as difficult as it is to believe during a crisis. As a market recovers, your investment will benefit from the growth that is experienced as funds and shares stabilise again.

You should also consider rocky times as a way of re-evaluating the levels of risk you’d like to take going forward. When faced with the reality of a financial crisis, many investors experience a wake-up call and realise how much or how little they are really prepared to lose. If you have realised that your level of risk is much lower than you had anticipated, it may be worth moving your assets to low-risk funds.

Diversify your portfolio

Make sure that your portfolio is diverse enough that it can withstand any rocky times experienced by financial markets. Many investors spread their investments across various industries, covering gilts, shares, stocks, emerging markets, funds, ISAs and so on. By diversifying your portfolio, you are not exposed to large levels of risk in just one market, as you are dealing with several markets all at once. If one fund underperforms, it is likely that somewhere else, another of your investments may be performing well, outweighing the loss. If you make regular small investments on a monthly basis, this is also a common way to level out losses, because ‘pound loss averaging’ navigates the rises and falls of stock markets. When stock markets rise, you buy less shares in a fund, and when they fall, you buy more. Putting a regular amount of money into the stock market every month helps your savings to navigate the rocky times that investments can experience.

The Government continues to raise substantial sums in Inheritance Tax revenue each tax year, collecting an eye watering £5.4 billion in inheritance tax receipts for the 2018/19 tax year.

And although the Government has already received £2.2 billion less this year compared to 2019, highlighting the economic slump, it goes to shows just how important this tax is to the Government in its need to bring in revenue each year.

There is even some speculation that Inheritance Tax could rise as part of the Government’s need to claw back much of the money spent on propping up the country in the wake of the Coronavirus outbreak. The fact is that the rate at which Inheritance Tax was charged, was raised to a huge 80% after the second world war, which some people are drawing comparisons with the current crisis.

Although this is all just rumour and speculation at this point, it shouldn’t be ignored as there are already many things you can do now, that could minimise the IHT bill for your estate. So why wait.

More families are being pushed over the current Inheritance Tax threshold of £325,00, due – in the main – to increased property prices. This means that now is a good time to ensure your wealth is passed down to your loved ones and not into the hands of the taxman.

Understandably, Inheritance Tax can be an emotive subject, which means many of us don’t want to think about it much less discuss it until much later in life, if at all. But you do have alternative options that help to protect your legacy.

Inheritance tax is chargeable on estates worth more than £325,000, or if you are married or in civil partnership a combined £650,000. The current rate of 40% Inheritance Tax is payable above this threshold although property passed to direct descendants can total up to £500,000 or £1million for married couple or civil partners.

And there are ways you can actually benefit from the current climate and fall in the markets that could help to preserve wealth.

How falling markets can help preserve more of your wealth

With the recent shocks to the stock market and subsequent falls following the global pandemic, there could be a benefit to passing on your wealth now in a tax-efficient way to your family and loved ones.

Gifting investments

When considering passing down wealth to your loved ones there are many options available but one of the more simple approaches is gifting over your lifetime.

Gifts will immediately reduce the value of your estate for Inheritance Tax purposes, benefiting your loved ones now as well as later down the line.

You can choose to gift any asset but these tend to include cash, property or investments.

As Inheritance Tax is calculated based on the value of the asset at the time the gift was made, now could be a good time to gift assets, such as investments, that may be substantially lower value than they were earlier in the year when many of us had probably never heard of Coronavirus and before the crisis took hold.

By gifting now while markets are down and assets are cheaper, it means that your beneficiaries may hopefully benefit from any market recovery if they hold onto the investments for the longer term.

In each tax year, you have an annual gift allowance of £3,000 and can give away assets or cash up to this value without it being added to the value of your estate for Inheritance Tax purposes on death.

You are also able to carry forward any unused allowance from the previous tax year, to enable you to make a larger gift. This may be particularly attractive for couples who have not previously used their allowances, as they could make a joint gift of up to £12,000 which will be immediately outside of your estate for Inheritance Tax purposes.

Gifts in excess of the annual allowance will potentially be subject to Inheritance Tax should you die within seven years of making the gift.

This type of gift is known as a potentially exempt transfer (PET). There is no limit on how much you can gift under these rules however the catch remains that you must survive seven years for such a gift to be wholly exempt from inheritance tax.

It is important to remember that we all have an Inheritance Tax nil rate band, currently set at £325,000. The value of your estate up to this limit will not be liable to pay Inheritance Tax and those gifts made up to this figure but falling within seven years of death would also not find themselves liable to pay tax if the overall estate remains lower than the allowance.

However, tax will be due on anything above the nil rate band amount, at 40%.

There could be a capital gains tax too

Typically, gifting investment holdings to anyone other than a spouse or civil partner is considered to be a disposal for capital gains tax purposes.

This means you would need to pay tax on any gains you made since you bought the investments that were in excess of your capital gains tax allowance of £12,300.

Given the fall in investment markets, this capital gain on your investments will likely be much lower currently and you could pass on more of your wealth tax efficiently and potentially limit any capital gains tax liability.

You may also realise capital losses which can be set against any future capital gains.

If you’d like to learn more about Inheritance Tax planning and how you can protect more of your wealth for your loved ones contact us and we can arrange for a meeting with one of our expert advisers.

We’re also offering all those with £100,000 or more in savings, investments or pensions, the opportunity for a retirement review worth up to £500. Do you know when you can afford to retire? It could be sooner than you think. Contact us for more information.

Please note that the Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice.

The value of your investments can fall as well as rise. You may not get back what you invest.

Whether you’re going to be retiring soon or in a few years’ time, it pays to be as prepared as possible and to plan your finances in advance. You should start financially planning your retirement funds at least two years before you stop working.

Do you require help or guidance on planning your retirement income? Speak to a financial advisor by using our unique matching service at Financial Advisor UK. Our national network of fully FCA-registered and approved professionals can offer you the best advice while providing information on the right deals available for pension plans, annuities, life insurance and investments for your future.

Here’s what you should be doing to carefully plan your finances for retirement.

Calculate your retirement income

The most important part of this step is that you will need to figure out how much income you’ll need to live on in retirement. Firstly, obtain a statement of your State Pension. This will let you know how much you will receive directly from the government based on the number of National Insurance contributions you have made during employment.

If you have a defined benefit (DB) or defined contribution (DC) pension, the next step is to obtain recent records of these funds to see how much is in them. This will indicate how much money there will be to access when you retire. Get in touch with the pension provider for more details, discard any old statements and request up-to-date paperwork. You should also take this opportunity to track down any lost pensions that you may have forgotten about. This can be a problem if you have worked for many different employers during the course of your working life. The Pension Tracing Service can help you locate a lost pension, and is a free service provided by the government.

Finally, calculate any other investments or savings pots you may have accumulated for your retirement or later life. These funds could potentially be used to boost your retirement income.

Re-assess your investments

If you have a personal pension or defined contribution (DC) pension, it is likely that your pension fund will be tied up in investments. You will need to reassess how much risk you want to take with these funds, especially as you will be needing access to them later. As you are getting closer to retirement, it makes sense to lower the risk factor in these investments. This should be done around 10 years before you retire, ideally. You can discuss your investment options with a financial advisor from Financial Advisor UK, who can advise you on lower-risk investments.

Find ways to increase your pension pot

In order to enjoy retirement and live a comfortable lifestyle, you’ll need to make sure that you’re boosting your pension pot as much as possible, and that you have as much money to live on as you had imagined when working. If you have realised that you have less money in your pension pot than you had envisioned, use the time you have before you retire to increase funds as much as possible. You can do this by paying more into it (when working) before you retire, or postpone the date you start drawing your pension, so you have more funds when you start eventually drawing money from it.

Calculate your everyday retirement living budget

How are you planning on spending your retirement? Are you going to be spending money on lots of luxuries? Taking a few more holidays? Taking up a new sport such as golf? You’ll need to calculate how you are going to spend your days in retirement so that you can make sure you have enough money for such activities. It is likely that you’ll have less money to live on in retirement than you did when you were working, unless you are on a final salary pension scheme with lots of benefits, or have lots of investments to reap benefits from. Make sure you have paid off any debts, and calculate what your everyday living costs will be. Consider bills and utilities, mortgage (if you haven’t yet paid this off), food, clothing, medical care and so on. You’ll also need to consider leisure activities and transport. You may find that your spending goes up in some areas, but comes down in others. Consider if there are any changes you need to make in order to live comfortably. Remember that your retirement income will not be like when you were working – if you spend it, you can’t do some overtime to make a little extra through your employer. Plan your expenditure carefully.

Pay off your debts

No-one wants to be in the position of owing money in old age and retirement. Your retirement is for enjoying yourself after many long years of hard work. Start your retirement being debt-free if you can. Figure out how much you owe on any debts, credit cards, mortgages, personal loans and so on. Calculate the interest you are paying on such debts. If you can, pay off the debts with the highest interest rates off first. If you decide to take part of your pension as a tax-free lump sum, you could use this to pay off your mortgage or other debts, so that you are starting retirement without owing money. However, if you have a DB pension scheme, taking your lump sum may be more expensive and reduce the amount of pension income you receive. Always get financial advice first before drawing your pension. Our advisors at Financial Advisor UK can offer guidance on making the most of your pension, and calculate how you can use your funds to become debt-free in retirement.

Consider when you’d like to start drawing your pension

You’ll need to have a date in mind for when you begin drawing your pension. Remember that you must be aged at least 55 to begin drawing your pension, unless you need to take early retirement due to Financial Advisor UK health or long-term disability.

You can check with your pension provider to see when you can start drawing your pension, and decide whether you still want to keep the start date as it is. There are also many options about how you can draw your money from your pension, depending on the type of fund you have and whether it is a DC or DB scheme. If you have worked for the public sector, there will be rules around when and how you can access your money. It may be in your financial interests to transfer your pension, but you should never do this without first speaking to a financial advisor. It is also possible to delay when you take your State Pension, so you receive a higher amount when you do start drawing it.

To talk through all of your pension options with our FCA-regulated advisors, use our easy matching service to be paired with a financial professional who can answer all your queries and help you make the most of your retirement fund.

A mortgage is an important financial product to get right, as you want to make sure that you’re getting the right deal for your money. Before embarking on your search for the best mortgage deal for your circumstances, you should make sure that you have considered the following regarding the type of mortgage you want:

• Do you want to take out a repayment or interest-only mortgage?
• Do you want a fixed rate mortgage or a variable rate mortgage?

These questions are very important, as they will affect the way you pay off your mortgage. If you opt for an interest-only rather than a repayment mortgage, you’ll need to make sure that you have a plan in place to pay off the actual mortgage, as you’ll only be paying off the interest on a monthly basis. You’ll need to put aside some money in a separate fund to pay off the entirety of the mortgage when the term comes to an end, as the mortgage provider will expect this sum in full. This is why, for many borrowers, a repayment mortgage is often the best option. You should also decide whether you want a fixed or variable rate. A fixed rate will determine the amounts you pay for a fixed amount of time, while variable rates will fluctuate and go up or down in line with the base rate of the Bank of England.

Finally, there’s a lot of fees to consider, including stamp duty, legal fees, survey costs, mortgage fees and so on.

Are you looking for advice on mortgages and the right type of mortgage deal for your circumstances? Financial Advisor UK offers a national network of fully FCA-registered and approved financial professionals and mortgage brokers who can help you find the best deals available.

Here’s what you can also be doing to secure the best mortgage deal…

Put down the largest deposit possible

You should put down the largest deposit that you can scrape together when taking out a mortgage, as this will place you in a better loan to value (LTV) ratio, which a lender will look favourably upon. If you are close to the next LTV band, try and push to put down more in your deposit so that you reach it. Mortgage rates really start to drop when you put down more as a deposit. You’ll also get a better deal on interest rates. Try to put down at least 20% as a deposit if you can. Although some lenders will let you put down 10%, you won’t be able to get the best rates if you compare them with those you’d receive in putting down 20%.

Check your credit score

You may not realise, but your credit score is a measure of how good a deal you can get on your mortgage. A lender will use your credit score to assess the level of risk you pose to them in borrowing money. If you have a lower credit score, a lender may make the assumption that you could be unreliable and miss regular mortgage payments. A lender might therefore charge you higher interest rates to cover this element of risk. If you have a higher credit score, you’ll be seen as being more likely to pay your repayments on time, without missing them. This puts a lender at ease that you are a reliable borrower. As a result, they are likely to offer you better rates.

In order to improve your credit score, you can request a credit report from various credit score checking websites online. You should also register to vote, as this helps lenders to verify who you are. Finally, avoid racking up large credit card bills, missing payments on loans and so on, as this will all help you to improve your credit score.

Do your research

The best way to get the right mortgage deal is to shop around. Ask high street banks and lenders for more information on their mortgage deals. If you’re already with a bank or building society in terms of your bank account, the same company may offer you a better deal on a mortgage if you are already a customer. There are lots of lenders to choose from, and the amount of choice can be overwhelming. Comparison websites can help, as can enlisting the help of an independent mortgage advisor, who can compare the market for you.

At Financial Advisor UK, we can help you find the right independent mortgage advisor who can search the whole of the market for you, taking the hassle out of finding the best mortgage deal. You can be instantly matched with a suitable advisor in seconds using our quick and easy matching service.

A mortgage advisor will also be able to help advise you on the right type of mortgage for your circumstances, such as if you are a first-time buyer. An advisor will also know certain lenders very well, including exactly what they ask for in terms of criteria. They can help make the process of applying for a mortgage much smoother and easier, and support your case with the lender.

Keep an eye out for fees

Watch out for fees when trying to get the best deal on a mortgage. Check the small print carefully. Interest rates will greatly impact on the overall amount that you pay back to a lender. You need to check other fees that mortgages come with (in exchange for a low interest rate), as sometimes the fees can push up the cost, to the point where it outweighs the benefits of agreeing to a low-interest rate in the first place.

Closely check arrangement fees that the lender charges to set up your mortgage. Generally speaking, mortgages that have low-interest rates have high arrangement fees of £2,000 or more. If you have a large mortgage, it is worth paying a higher arrangement fee in order to receive a lower interest rate overall. If however you have a lower mortgage, a higher interest rate may be preferable in return for lower arrangement fee costs.

Overpayment fees are also worth consideration. Overpaying on your mortgage is a great way to reduce the overall amount you owe. Many lenders will let you make an overpayment of up to 10% each year if you are on a fixed rate mortgage. If you’re on a variable rate, it is likely that you will be able to make as many overpayments as you wish, without being charged for them. Some mortgage lenders charge high overpayment fees to dissuade borrowers from overpaying. These fees can be thousands of pounds, so read the terms and conditions carefully.

There are many reasons why you may want to discuss your retirement plans and pension with a financial advisor. Unless you are in a scheme known as a ‘final salary’ pension, in which you receive a pension based on your final salary (because you worked at a very large corporation or organisation), it is likely that your pension will involve you saving into a scheme that holds your pension pot. An advisor can offer guidance on the best way to use this pension pot when you reach retirement, so that you can maximise its spending power.

There are lots of questions to think about regarding your pension and how best to use it, which is why it can sometimes help to have an experienced financial professional to hand who can advise on the most worthwhile options for you. New legislation which came into force in April 2015 states that you now have more control over your pension pot. Over the age of 55, you can decide to use your pension pot however you’d like to. Having the correct advice has never been more important. Unless you have a strong idea and a good knowledge of what to do and how pensions work, speaking to an advisor is always a good idea.

If you require help or guidance from a financial advisor and would like to discuss your pension and retirement plans, Financial Advisor UK can help. We offer the UK’s largest network of FCA-regulated professionals who can offer you help with retirement planning, pension funds, investments, annuities and more.

Taking financial advice

If you decide to use a financial advisor, you should understand the type of service you’re going to get from them. Not all financial advisors are the same. It is worth having a personalised financial advice service so that your advisor can go through your circumstances in detail with you. From here, they can then advise you on what they think you should do. A financial advisor who offers a personalised service can go through a wide range of choices with you – far more than if you did the research on your own. They can also explain any complicated concepts that you do not understand.

Remember that all financial advisors must only recommend actions that are suitable for your personal circumstances. If it turns out that you were advised incorrectly, you have legal protection and can complain to the Financial Ombudsman Service. All of our advisors at Financial Advisor UK are regulated by the Financial Conduct Authority, are highly qualified and experienced in offering the right advice to clients.

You should consider speaking to a financial advisor if you’d like to do any of the following:

• Invest your pension differently
• Transfer your pension
• Pay more into your pension
• Receive advice on leaving money after your death and minimising tax
• Mixing pension options

Always ask your advisor about their payment terms and what you’re expected to pay for their recommendations, as well as their fees and charges. There may be a fee for a one-off consultation, but some advisors give this away for free if you later decide to go ahead and use their services.

What to expect from meeting your financial advisor

Your financial advisor will discuss your retirement finances, your goals for retirement, investments and other financial products such as life insurance and annuities. They will discuss and recommend retirement income products that are suitable for your circumstances and what you’re interested in doing with your capital. The more you prepare for your meeting with your financial advisor, the more you will benefit from the meeting. Prepare to hand over details of your pension pot and other investments and income you have, such as pay slips and statements. Your financial advisor will cover lots of topics with you, including your accounts, investments, long-term care, potential disability, healthcare, life insurance, your will, your estate and other assets.

Why should I have a financial advisor for my retirement plans?

A financial advisor will help you achieve any financial goals you have for retirement – whether you dream of retiring abroad, cashing in an investment, moving home or planning how you will leave your estate to your loved ones. They are also there to inform you and make complex financial topics easier to understand, so you are more in control of your money. They can advise on saving and budgeting, investment strategies, insurance and other complicated tax matters.

Your advisor will talk through your financial situation in great detail and will help you plan for the future you’d like to have. They will need to get a complete picture of what your finances look like at the moment, including any assets you have, income sources, liabilities, debts, and any financial obligations you may have in future. They’ll also need to know any details of pension plans you have, investments, trusts and gifts you intend to give to family in the future (or have already given away).

Together, you will discuss the level of risk you are prepared to go to, as some investments are low risk, while others are medium, and some are high. Your advisor will need to know which level of risk you’d be most comfortable with, and also which type of investment products you’d prefer should this be applicable when managing your pension and investment portfolio. Your advisor may also look at your estate-planning, family situation, your will and plans for later life, including how your estate will be left to others, and whether you may need funds for care or health issues.

Based on your current financial situation, the advisor will be able to make projections for your future based on your goals and life circumstances. This will then take the form of a financial plan for the next five to ten years. If you are married, they may also cover how your spouse or partner will be covered financially in terms of your combined pensions and assets.

Reviewing your financial plan

After you and your advisor have both approved your financial plan for the future, you’ll make adjustments as you go along, depending on how your retirement is progressing, how your plans change, and what happens with your pension and investments. You’ll receive frequent updates from your advisor on your portfolio and how it is performing, which will enable you to make assessments as to what is and isn’t working. You can also work with your advisor to prepare for a significant change that could happen in your life that could affect your finances, such as the death of a loved one. Careful and continuous review of your financial plan will enable you to stay on track in reaching your retirement goals.

Investing money in property is one of the most common types of investment, and can take the form of purchasing buy-to-let property, buying property outright, and property fund investment. The decision to invest in property shouldn’t be taken lightly however. Here’s our ultimate guide to investing in real estate, along with some of the pros and cons of such an investment.

Are you thinking of investing in property? Or do you already have property investments that aren’t working for you? Within our quick and easy comparison service, Financial Advisor UK can match you with a financial advisor who suits your needs. All of our advisors have many years of expertise and are FCA-regulated, to give you complete peace of mind along with the right guidance for your situation.

How do I invest in property?

When you invest money into property, you can either make a return by letting out the property to tenants, or buy the property when it is cheap, do some work on it, and then sell it at a higher price. You can also invest in a fund that is investing directly into real-estate. Such funds are more flexible than buying property outright, as you can decide to withdraw whenever you’d like to out of a pooled fund with a number of investors. You are paid returns based on how the fund performs and the amount of rental income received.

Pros and cons of investing in property

There are various risks to investing in property. If you purchase a new build for instance, there is a risk that the property may not be finished to a high standard, or that the developer will go into administration before or just after it is finished. You may be stranded with a mortgage to pay, or have to fork out extra cash to fix issues with the property. That said, a new build can be a cheap investment that you can almost always sell on for a profit if you don’t have to do extra work to it.

Buying buy-to-let property can be risky in cases where you are not able to secure tenants. You’d need to source another income for those months when you had no rent coming in. You can also unfortunately have times when tenants do not pay rent on time, which can prove stressful and leave you out of pocket. If you have reliable tenants, having a buy-to-let property is a great way to make extra capital.

Generally speaking, the property market can be volatile and fluctuate greatly depending on world and global events, economic markets and general demand for housing. Any investment in property is for the long-term. Bear in mind that if you choose to invest a considerable amount of money in property, if the market drops or becomes slow, it may take a while before things begin to pick up again and you see returns.

Buying and selling costs are other issues associated with property investment, including legal and solicitor fees, estate agent fees, land tax, stamp duty and additional costs when you purchase a buy-to-let property. Doing your sums is crucial to ensure that the investment produces a valuable return against all outgoings. Managing a property also takes time and hard work.

Finally, if you take out a mortgage to buy a property as a buy-to-let investment, you’ll need to ensure that you earn enough rent to cover your outgoings and mortgage. The cost of the mortgage may increase, so you’ll need to increase rents to cover this. If you find that you can’t keep up with your mortgage payments, your lender may repossess your property.

Before making the decision to invest in property, it is worth speaking to a financial advisor through Financial Advisor UK, who can offer help and guidance on the best investment approaches for your situation.

Investing in property investment funds

When you invest money into a property fund along with other investors, you’ll have a fund manager that collects the money from you, and then invests it into several aspects of the property market, such as property shares, or property itself. Examples of property investment funds include unit trusts, investment trusts, overseas property organisations, REITS (real-estate investment trusts), property shares and property funds managed by insurance companies. There are normally management or administrative fees associated with this type of investment, which you’ll need to factor into your returns.

Investing in property overseas

Many investors decide to put money into overseas property, either as a holiday rental or a second home. This type of investment has many pros, including having a second home that you can use whenever you like, in a location you love. You can also let the property out when you are not there (to make extra cash), and get a lot of property for your money depending on where you decide to purchase the home.

Cons of buying property abroad include the potential of having two mortgages on two properties (unless you purchase your home abroad outright). Rental income you receive from the property must also cover you financially in terms of overheads and expenses, as you will be responsible for maintaining the property if you rent it out to others. Finally, the returns you get from an overseas property will depend on demand in the area the property is located in, and the exchange rate. If the property isn’t in a desirable tourist location with high demand, you may not be able to charge the rental income you had hoped for. Managing and maintaining the property can also be an issue if you are only living in the country yourself for a few months of the year.

Is property investment right for me?

Investing in property is a big commitment, and can make you lose money just as easily as it can give you capital. Always ensure that you discuss other investment opportunities alongside your property investment with a financial advisor, so that you can diversify your portfolio. If you are buying property to rent, you should do this with a long-term approach. Always budget carefully and look at the costs involved with maintaining and renting a property per month, against the amount of income you’d receive from rent. Also consider the amount of money you have to invest initially in any property fund investment schemes – look at whether the return is worth it and whether there are any restrictions imposed on when and how you can withdraw invested funds. If you require a mortgage to purchase a property, think carefully about how you will afford the monthly repayments, and try to put down the largest amount (that you can afford) down as a deposit.

Family is what matters most, which is exactly why it’s very sensible to plan carefully for your loved ones’ financial futures, as well as your own. Not only will this make you and your children more sensible with money, but it will also give you peace of mind about the years to come. Here’s a few steps you can take to financially protect your family.

Take out life insurance

Life insurance is a worthwhile option if you want to ensure that your family can afford overheads such as bills, food and other payments, as well as the mortgage and rent should you pass away. If you have family members who depend on you financially, life insurance is very important. Without life insurance protection and a payout (in the event that you passed away), how would your family afford things when you were gone?

Life insurance is purchased through a life insurance provider. You pay this provider monthly premiums (or annual premiums) to guarantee that the life insurance policy will pay out should you unexpectedly die and leave your dependants without a source of income. The amount of cover you choose to have will determine the amount you pay for your premiums. The higher the amounts of cover you request, and the older you are when you take out the policy, the greater your payments will be. You’ll need to decide the amount of cover you require, depending on the outstanding mortgage you have on your property, any rent or ground rent you need to pay, the number of dependents you have, outstanding debts you have, credit card bills, your current salary and the amounts of income you may receive from other sources (i.e. if your partner or spouse works). You should also consider everyday living expenses such as food, education fees, child maintenance and care, and the cost of your funeral. Generally speaking, you should multiply your annual income by at least five.

Other factors will also affect your life insurance premiums include your age, health, marital status, hobbies you take part in, family medical history, whether you smoke, and whether or not your profession is considered to be of high risk.

If your family ever need to make a claim on your life insurance policy because you have passed away, they will only be successful if you have been transparent with the insurer regarding your medical history and current health. If you didn’t disclose information and withheld details from the insurer, and it affected the circumstances surrounding your death, your policy might not pay out a lump sum.

If you need help taking out a life insurance policy that includes the right amount of cover for you and your family, our experts at Financial Advisor UK can help. All of our professional advisors are FCA-regulated and accredited, and can offer guidance on the right life insurance products for your circumstances. Over time, your life insurance requirements will change. Speaking with a financial advisor can help you ensure that you always have the right cover package for now and into the future.

Set a family budget and save

Budgeting is the best way to ensure that your family always has enough money month-to-month. It sounds simple, but can be harder to achieve than you think. Additional unexpected bills coupled with the ups and downs of general life can throw our household finances off track. The best and easiest way to save is to have an additional savings account so that you can save up a little bit every month. This fund can then be dipped into to cover any unexpected bills that throw you off track on occasion. The easiest way to save regularly is to set up a standing order that deducts money from your account (ideally as soon as you have been paid), and places it into your savings account. That way, you won’t be tempted to skip payments month-to-month. Over time, the money you place into this savings account will start to earn interest and grow. There are plenty of bank accounts out there that offer higher rates of interest to savers, if you are happy to leave the capital in such an account and only access it on rare occasions.

Consider investments

Another option is to place your savings away into an investment vehicle, in the hope of making financial gains. Investing shouldn’t be confused with saving. Investment involves a level of risk, as your investments could go up or down, and there is no guarantee that you will receive all of your money back when you decide to trade-in. Stocks and shares ISAs are available, as well as Unit Trust Investment Funds. You can make small payments into such investment schemes.

It is important to keep in mind that investment products are seen as long-term. You shouldn’t invest money that you may need access to in the short-term future. Long-term however, investments often outperform cash savings in bank accounts, but there is always a level of risk.

To find out which savings and investments plans are right for you, search for the right financial advisor for your needs through Financial Advisor UK. All of our professionals are FCA-regulated and can help you find the right investments to help your money grow.

Save up for your children’s future

Saving up for your children is a great way to set them up for their future lives, whilst teaching them about money. There are several ways you can save for your child’s future to help them financially:

• Set up a bank account on their behalf (a children’s account). They can start using their account when they are seven, and learn the importance of saving.
• Set up a Junior Cash or Stocks and Shares ISA. Your child should already have a child trust fund. This fund can be transferred into a Junior Cash ISA. This type of savings plan is a good idea because the interest acquired on the capital in a Cash ISA is tax-free, as is a Stocks and Shares ISA, which is free from Capital Gains and Income tax and also enables you to purchase shares, bonds and other investments on behalf of your child.
• Establish a child trust fund. This can be transferred to a Junior ISA at a later stage. If the funds are not transferred, a child can access the money when they reach 18.
• Buy some NS&I premium bonds. These can be purchased with a minimum of £25, and you can win prizes that can be invested back into the bonds, up to a maximum investment amount of £50,000.
• Start a child pension. You can contribute to this pension until the child reaches 18, upon which they can begin to make their own contributions. They will be able to access this pension when they reach the age of 55.

Defined Benefit schemes pledge to pay employees a fixed pension per year based on various factors such as salary and years of service. Paid in to by both employers and employees, the schemes are run by the employer.

Like many Financial Planners we have seen a steady rise of people obtaining Cash Equivalent Transfer Values – CETV (the figure your DB pension is worth if you decide to cash it in) from their pension schemes and then contacting us for advice.

Our advice is not always, in fact is rarely, cut your losses and run. For one, there are definite benefits to having a guaranteed fixed income. But one size does not fit all, so what are the pros and cons of cashing in or keeping a Defined Benefit Pension?

Defined Benefit Pension Schemes (DB) – The Pros and Cons

Advantages:

• Provide a guaranteed, index linked income for life.
• There is no investment risk on the individual. Once you’ve started drawing your pension, assuming you are past the scheme’s Normal Retirement Date (NRD), even if the scheme goes bust the Pension Protection Fund will pay 90% of your pension, if you have not already retired.
• If you are looking for a guaranteed index linked pension your DB Pension typically offers better income levels than comparative annuities in the open market. However, it would be advisable to seeking financial advice from your IFA.
• Your If you have the misfortune to die early then the scheme will continue to guarantee a 50% spouse’s pension, which will likely mean you do not lose out in monetary terms over both of your lifetimes.

Disadvantages:

• If you want the tax-free cash from your DB scheme, then you have to take your income. In contrast transferring to a personal pension and going into drawdown enables you the flexibility of taking your tax-free cash in as many payments as you wish and leave the rest of the pension invested (albeit at your own investment risk). This can be advantageous to clients where income levels can be varied to suit their income requirements and tax liabilities.
• DB schemes are not very good at providing lump sums of cash in the event of a members’ death. Typically they provide a return of the members’ contributions as a lump sum before retirement, but often no lump sum is paid to the beneficiaries once the member has started taking their pension. Whereas if your money is in a personal pension, then on your death your spouse/beneficiary receives up to 100% of the fund value. When potentially the family need it the most.
• The majority of DB scheme rules pre-date pension flexibility rules of 2015 which therefore will mean tax free cash amounts are lower than 25%, under the new rules.
• There are reports that many large DB pension schemes are worryingly short of cash so employees are less likely to receive their promised pension in full. The Pension Protection Fund reported in March 2020 that of the 5,422 Defined Benefit Schemes in their index, 3.606 schemes were in deficit. The BHS story is a recent, horrific example. Against this backdrop you might think that cashing in and extracting your cash from your DB Pension would be the best route.

Please Note: If you are single/divorced, so you do not need to provide for a spouse on death, transferring the scheme to a personal pension might be more appealing. Another reason why some people transfer is if you have serious Financial Advisor UK health problems or if you are in serious financial difficulties.

How to transfer

Get a CETV

Approach your DB scheme provider and request a CETV. The first one will be provided free of charge. The scheme will provide a free one every 12 months but will usually charge approximately £250+vat for another within 12 months.

Visit an IFA

Find a local IFA who specialises and are experienced in Final Salary Pension transfers. This is not only good practice, it is a legal requirement if your DB pension is over £30,000. Look for an adviser who specialises in pensions. The adviser will discuss your options and objectives and talk specifically about future income needs and cashflow (so work out a budget for when you retire).

Make your choice

The IFA will prepare a Transfer Value Assessment Report (TVAS) which analyses all the benefits of your DB scheme and compares them against the benefits of a Personal Pension/Drawdown Pension, including looking at the projected income, death benefits, spouses benefits, the inflation linking and the funding position of your current scheme. It’s all very well having an excellent DB pension but will the company still be there to pay it?

How long does it all take?

From start to finish, at least three months, possibly longer depending on how quickly the pension scheme responds to queries.

How much does it cost?

Typically the IFA will charge an engagement fee to prepare the TVAS report and recommendations. Do not be put off by upfront fees from £1,000-£10,000, dependent on the complexity for preparing such a detailed impartial analysis and be wary if the IFA will do it for free.

What will I get if I transfer?

Once the funds are transferred into your Personal Pension, you can access your Tax Free Lump Sum (up to 25% of your entire pension) and withdraw a taxable income or leave it all invested. The choices are endless! Beware, some providers do not offer all the bells and whistles, so speak to your IFA about what you are planning on doing and they will recommend the most appropriate pension provider.

Get leading Final Salary Pension advice from Seymour Financial

Seymour Financial is an independent wealth advisory firm who focus on the areas of retirement planning and final salary pensions to provide clients with a clear guide as to what they should be considering. This is a specialised area of advice for clients for which we have adopted the PFS Pension Transfer Gold Standard which promotes ethical behaviour, the highest professionalism for technical knowledge and client servicing.

For clients 55 years or older who are considering the options of consolidating their pensions or transferring their final salary pension, now is a good time to look at this. As we live through the biggest change of our lives as a result of Covid 19, stock markets have collapsed; some companies are fighting for survival, with pension assets having dramatically dropped in value with over half of UK companies now having company pension schemes in deficit.

If you wish to explore all your options and you are 55 years or older with pension(s) totalling more than £300,000 in value then please get in touch with us for a professional review of your pension options.