Post on 25-Jun-2015
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AGENDA WHAT CHANGES IN DELIVERING FINANCIAL ADVICE MEAN FOR YOU
HOW ADVICE CAN MAKE YOU BETTER OFF
YOUR BIGGEST HIDDEN RISKS
WHY DIY FINANCIAL PLANNING GOES WRONG
WHO WOULD BENEFIT FROM ADVICE
PARTICULAR RISKS IN LATER LIFE
HOW TO MAKE YOUR MONEY LAST AS LONG AS YOU DO
Here’s Julie!
OLD WORLD NEW WORLD
INDEPENDENTTIED
COMMISSION
LOW QUALIFICATIONS
INDEPENDENTRESTRICTED
ADVISER CHARGING
MUCH HIGHER QUALIFICATIONS
WHAT CHANGES IN THE DELIVERY OF FINANCIAL ADVICE MEAN FOR YOU
HOW ADVICE CAN MAKE YOU BETTER OFF
£100,000 JOINT WHOLE OF LIFE INSURANCE Legal & General £110 pm Zurich £103 pm Prudential £94 pm Canada Life £30 pm
SAVING OVER 10 YEARS = £9,600
HOW ADVICE CAN MAKE YOU BETTER OFF
£75,000 PENSION POT Existing Provider Annuity - £4,104 pa Best Alternative - £5,519 paSAVING OVER 10 YEARS = £14,150
YOUR BIGGEST HIDDEN RISKS
THE HIDDEN RISK OF SHORT TERM THINKING
£100,000 NO IHT
£100,00040% IHT£60,000
THE HIDDEN RISKS OF TAX
e.g. CASH ISA
e.g. EIS
THE HIDDEN RISKS OF INFLATION
WHY DIY INVESTING GOES WRONG
WHY DIY INVESTING GOES WRONG
WHY DIY INVESTING GOES WRONG
WHY DIY INVESTING GOES WRONG
SAME SECTOR!!
Top performer 3 years ago
Worst performer 3 years ago
16
Follow My Leader?
Source: Datastream and Morningstar (total return in Sterling) as at 31 December 2009.Diversity strategic weighting = 34% FTSE All Share Index, 33% FTSE Govt All Stock Index, 6% Goldman Sachs Commodity index, 7% UK IPD index, 20% HFRI FOF composite. Re-based annually.
You cannot predict the future
Rank/% Annual return
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 00/09
1 Commodities61.6%
Property7.1%
Commodities 19.4%
Emg Mkts40.5%
HY Bonds21.2%
Emg Mkts50.5%
Europe ex UK20.1%
Emg Mkts37.5%
Gilts12.8%
HY Bonds101.7%
Emg Mkts161.5%
2 Property10.5%
Corp Bonds6.6%
Property10.5%
HY Bonds39.5%
Property18.9%
Japan41.0%
Property18.1%
Pacific ex Japan34.2%
Cash5.7%
Emg Mkts59.4%
HY Bonds153.97%
3 Corp Bonds10.2%
Cash5.1%
Corp Bonds9.8%
Pacific ex Japan32.8%
Emg Mkts17.4%
Commodities40.4%
UK16.8%
Commodities30.4%
Japan1.3%
Pacific ex Japan54.2%
Pacific ex Japan108.6%
4 Gilts8.8%
Gilts3.1%
Gilt 9.3%
Europe ex UK29.7%
Pacific ex Japan13.9%
Pacific ex Japan34.4%
Emg Mkts16.3%
Europe ex UK15.7%
Corp Bonds-3.6%
UK30.1%
Property81.5%
5Diversity
Strategic Wtg 6.13%
Hedge2.8%
Cash3.9%
Japan24.7%
Europe ex UK13.8%
World ex UK24.9%
Pacific ex Japan16.1%
Hedge10.3%
US-13.2%
Europe ex UK20.1%
Corp Bonds74.5%
6 Cash6.0%
Pacific ex Japan1.6%
Hedge1.0%
UK20.9%
UK12.8%
Europe ex UK24.1%
HY Bonds11.8%
World ex UK9.7%
DiversityStrategic Wtg
-13.22%
World ex UK18.9%
Gilts70.0%
7 Hedge4.1%
Emg Mkts0.2%
Diversity Strategic Wtg
-2.56%
World ex UK20.7%
DiversityStrategic Wtg
9.8%
UK22.0%
Hedge10.4%
Diversity Strategic Wtg
7.04%
World ex UK-17.1%
Diversity Strategic Wtg
12.38%
Commodities63.4%
8 Europe ex UK1.7%
HY Bonds-1.6%
HY Bonds-11.%
US15.3%
Commodities9.4%
Property18.8%
Diversity Strategic Wtg
7.74%
Cash6.2%
Hedge-20.96%
US12.2%
Cash57.7%
9 HY Bonds-1.9%
DiversityStrategic Wtg
-4.27%
Pacific ex Japan-14.6%
Hedge11.6%
Japan8.6%
US16.9%
World ex UK5.7%
UK5.3%
Property-22.5%
Hedge11.6%
Diversity Strategic Wtg
57.21%
10 US -2.1%
US-9.8%
Emg Mkts-15.0%
DiversityStrategic Wtg
11.41%
World ex UK7.8%
DiversityStrategic Wtg
15.35%
Cash4.8%
Gilts5.3%
Europe ex UK-24.0%
Corp Bonds11.1%
Hedge44.6%
11 World ex UK-4.1%
UK-13.3%
Japan-17.6%
Property11.2%
Corp Bonds6.9%
Corp Bonds8.7%
US1.2%
US3.3%
HY Bonds-25.0%
Property2.2%
Europe ex UK38.0%
12 UK-5.9%
World ex UK-14.0%
UK-22.7%
Commodities8.6%
Hedge6.8%
HY Bonds5.3%
Corp Bonds0.8%
Corp Bonds1.9%
Commodities-25.9%
Cash1.2%
UK17.7%
13 Emg Mkts -25.1%
Europe ex UK-20.1%
Europe ex UK-27.0%
Corp Bonds5.9%
Gilts6.6%
Gilts7.9%
Gilts0.7%
HY Bonds-0.9%
UK-29.9%
Commodities1.0%
World ex UK11.1%
14 Pacific ex Japan-25.3%
Japan-27.5%
World ex UK-27.4%
Cash3.6%
Cash 4.5%
Hedge7.5%
Japan-10.5%
Property-5.5%
Pacific ex Japan-33.5%
Gilts-1.2%
US-12.4%
15 Japan-27.4%
Commodities-30.1%
US-29.8%
Gilts2.1%
US3.0%
Cash4.7%
Commodities-25.5%
Japan-6.8%
Emg Mkts-35.2%
Japan-6.7%
Japan-34.7%
THE PEN-LIFE INVESTMENT PROCESSRisk rated portfoliosAsset allocationAcross all “tax wrappers”“Best of the best” funds within each sector Quarterly fund change and rebalancingQuarterly reporting
THE PEN-LIFE INVESTMENT PROCESS
WHO WOULD BENEFIT FROM ADVICE?• People wanting to retire early• Those with risks of loss of a wage earner• Those seeking better returns on existing plans• People wanting to reach a financial goal• Those worried about the affect of Inheritance
Tax and care costs on their Estate• Business owners wanting to exit the business
PARTICULAR RISKS IN LATER LIFE
40
45
50
55
60
65
70
75
80
Life
exp
ecta
ncy
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010Year
THE RISK OF LIVING TOO LONG
PARTICULAR RISKS IN LATER LIFE
Inheritance Tax – payable at 40% on assets above £325,000So, estate worth £800,000 pays £190,000 tax
PARTICULAR RISKS IN LATER LIFE
People with more than £23,500of savings have to pay for theirown care
Average UK care home costs £700 per week (£36,400 pa)
PARTICULAR RISKS IN LATER LIFE
There are relatively painless ways to solve the problems.Most of them take time to be effective.You have to plan ahead – it might be later than you think
HOW TO MAKE YOUR MONEY LAST AS LONG AS YOU DO
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 200
100000
200000
300000
400000
500000
600000
700000
800000
Portfolio growth and income options for £215,000
5% Income from cash
6% growth
PDP 6% growth & 5% Income
Years
£
SQUANDERING
HOARDING
START WITH THE BASICS
Where there’s a Will
It’s estimated that less than 30% of the UK population has a Will.
SUMMARY WHAT CHANGES IN DELIVERING FINANCIAL ADVICE MEAN FOR YOU
HOW ADVICE CAN MAKE YOU BETTER OFF
YOUR BIGGEST HIDDEN RISKS
WHY DIY FINANCIAL PLANNING GOES WRONG
WHO WOULD BENEFIT FROM ADVICE
PARTICULAR RISKS IN LATER LIFE
HOW TO MAKE YOUR MONEY LAST AS LONG AS YOU DO
SO JOIN THE RANKS OF THE HEALTHY, WEALTHY & WISE
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