Be careful out there...

Friday, 2nd May 2008 18:24 - by Resident IFA

I think they used that phrase in Hill Street Blues after their morning briefing, as the Cops were heading out onto the mean streets of downtown USA. “That’s a bit dramatic!” I hear you cry, but I think I am justified in using the phrase in relation to your personal finances. I’ll give you a couple of examples to start your Bank Holiday weekend with... Annuities I recently heard quoted that the annuity (The technical name for what your Pension ‘pot’ buys, which then provides your Pension income) market is now worth £12 Billion per annum or thereabouts. I recently advised a Client who happened to pop into my office as he was passing, being local to him. I managed to arrange retirement income for him that was 10.1% higher than he had been quoted by his Personal Pension providers! The providers in question did not offer ill-health annuities, whereas I could consider all the providers that offer this type of annuity across the entire market. I would still have improved upon his standard offer of income, even if he were ‘fit as a fiddle’. More power to his elbow for shopping around, I say. Investments Another recent experience with a ‘walk-in’ gentleman centred on his dispute with a couple of financial firms as to an Investment Bond and how it had been invested for him. Although not his main concern, the spread of investment areas (Aka ‘asset allocation’) within the Bond was very poor and lacking in thought. Reading between the lines, he has approximately £1.3 Million invested in the Investment Bond in question and...wait for it...it was invested 100% in Commercial Property funds! Regardless of the recent sharp downturn in the property markets and commensurate downturn in his Bond’s value, the lack of assessment of his personal attitude to investment risk and diversification into areas such as Fixed Interest, Corporate Bonds, Equities, etc. is nothing short of scandalous. Guess what my main thrust is? Shop around. Seek independent advice. Look after yourself and make sure those extra pennies, or at least the chance of receiving them, are grabbed with both hands! Until next time...