Just some ill informed rubbish about George Osborne

According to Osborne, anyone who expresses concern about these reforms is guilty of spouting “ill-informed rubbish” and “shrill, headline-seeking
nonsense”. This includes Crisis, Shelter, the National Housing Federation, the Children’s Society, Citizens Advice, Disability Rights UK,
Mencap, Scope, the National Autistic Society, the Royal National Institute of Blind People, Disability Alliance and naturally, that shrill cesspit of
communism, the Church of England.

Osborne watched Chelsea play Manchester United on Monday. He saw John Terry, Frank Lampard, Fernando Torres, Robin Van Persie, Wayne Rooney and Eden Hazard do their stuff.
The combined wages of these six players are a staggering £1,035,000 per week. These six players – on their wages alone, never mind other sources of income ,were handed a tax break of roughly £2.5m next year by the very Chancellor applauding them vacuously.

That is roughly 110 teachers; it is roughly 120 nurses; it is roughly 15,000 “spare bedroom subsidies”.

And such premiership royalty are in very good company. While the Chancellor waffled on about how “we are all in this together”, it was announced that the Queen was receiving a 16 per cent boost to her Government grant. Not to sound unpatriotic, but being “in this together” would seem to imply we all have to make sacrifices. It is utterly obscene, at a time of economic stagnation during which the state is imposing untold misery on millions of those who can least afford it, for the person at the very top of the pile to be getting a £5m raise. That is roughly 220 teachers; it is roughly 240 nurses; it is roughly 30,000 “spare bedroom subsidies” in exchange for the extra reward given to the UK council tenant with the most spare bedrooms in the country
I am led to believe that the Tories don’t care if they get any growth in the economy as long as they can make their ideological changes so deep as to be irreversible.

Party on George

Party on George

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Money-web.co.uk Expand UK Debt Solutions Business

Money-Web.co.uk are continuing to expand their range of services in the UK by now offering their debt solutions to the people of Scotland.

Money-web are pleased to be working with a leading, licensed provider of “Protected Scottish Trust Deeds”, similar in Scottish law to the I.V.A or Individual Voluntary Arrangement in England & Wales. Helping people get out of debt by agreeing an affordable monthly payment with their creditors and often writing off thousands of pounds of their outstanding debts.

free_professional_pension_review_image4_contact_usMoney-web.co.uk will be offering these services through Mackenzie Stewart Ltd of Glasgow who will also be able to offer customers advice on Sequestration or Managing Bankruptcy in Scotland and a range of related services.

Voters blame banks not over-spending for deficit

From Liberal Conspiracy A new poll (in the USA)shows that the public blame failures in the banking sector for causing the deficit more than they blame overspending.

45% of respondents said “greed and recklessness amongst bankers on Wall Street and in London” was most responsible for the deficit and growing national debt, with 43% blaming “the failure of governments to properly regulate banks and financial institutions”.

‘Over-spending’ options all received significantly lower scores – 28% blamed “overspending on benefits and immigration”; 19% “overspending on the wars in Iraq and Afghanistan” and just 3% blamed “overspending on schools and hospitals”.

Participants in the poll by Greenberg Quinlan Rosner were asked to pick the top two causes of the deficit and growing debt.

Just 6% placed the blame entirely at the feet of overspending, while more than three times as many (19%) exclusively blamed the failures of the banking sector.

While nearly half the population (44%) saw spending as one of the two main causes of the deficit, more than two thirds (69%) saw banking failures as at least one of the top causes.

Even 2010 Tory voters don’t exclusively blame spending. Just 7% picked only spending options in the poll, while 60% identified banking failures as one of the main causes.

James Morris, Director of GQRR’s European Office, said:

Voters take a broad view of the causes of the deficit. It isn’t enough just to control spending – voters also want to know that politicians are willing to change the culture and practices of the banking sector. The government’s failure to move strongly and rapidly in this area is one reason why their promise of ‘short term pain for long term gain’ has begun to sound hollow.”

This poll also shows why banks face such a struggle to rebuild their reputations. Consumers don’t just see bankers as greedy, they think that greed has directly impacted on their lives and their country. To rebuild trust bankers need to be seen to embrace measures that protect the wider economy. Bankers that becomes the champions of change rather than its enemy are poised to do well.

The survey questioned 3,174 respondents and was weighted to be nationally representative. Fieldwork was conducted 13-16 July 2012.

Lords claim RDR reforms will widen ‘advice gap’

Peers in the House of Lords have blamed forthcoming financial reforms for worsening an ‘advice gap’ that could leave the poorest stranded at retirement.

Originally posted on Citywire.co.uk by William Robins on Nov 28, 2012 at 11:08

Peers said in a debate last night that the retail distribution review (RDR) reforms, combined with high pension charges, would hurt savers with small pension pots.

The RDR reforms will abolish the payment of commission to financial advisers and require them to hold higher qualifications from the end of this year.

Cross-bench peer Sally Greengross, who led the debate, said the RDR would lead to those on a modest income being priced out of the advice market.

‘There is a big chance that [the poorest] are exactly the set of people who will receive no advice at all, as costs are made transparent and IFAs follow more high net worth clients,’ she said.

‘We must narrow the advice gap. Much more should be done to ensure consumer information is delivered but that must be from a consumer, rather than a compliance, perspective.’

She added that a fragmented government savings policy, split between the work of the Treasury, the Department for Work and Pensions and the FSA, was contributing towards the problem.

Tory peer John Patten added that it was possible for cost-effective investment and advice options to be made available to savers with small pots. ‘We could use the buying power that a million people would have to negotiate for good advice or a better deal when they invest,’ he said.

‘There may be market driven options. They have £2 billion to invest – the market could come up with a process to get a better deal for pensioners.’ Government whip Tina Stowell said the Department for Work and Pensions would consider his idea.

Patten also harshly criticised charges taken from pension pots. ‘These charges have just abolished any chance of getting these rates. People talk about the magic of compound interest but [there is a] tyranny of high charges.’

Labour peer Patricia Hollis added that self-interest among pension providers was also hurting the drive to create a savings culture.

‘I argued for small pots to be transferred to Nest [the National Employment Savings Trust] but this was batted away by the self-interested howls of the industry who would lose money under management,’ she said.  ‘In much the same way they have batted away any early access to a slice of pension savings that would also help transform savings culture.’

‘Many will be left with a portfolio of small pots which will be inaccessible to them at retirement. Those pots have gone AWOL, stolen by the structure of the pension industry we have helped to create.’

Labour peer Lord Lipsey added that the Financial Services Authority had failed to engage politicians in its efforts to reform financial services with the RDR.

‘I did not get a briefing from the FSA – this is extremely neglectful. It’s the FSA’s RDR that’s created the advice gap. Surely those here have a right to hear from the FSA. I don’t know whether this is FSA incompetence or FSA contempt of Parliament.’

Lipsey, who is the president of the Society of Later Life Advisers, said it would be wrong to assume advisers would not write unprofitable business at retirement as ‘winning the trust’ of a pensioner could mean getting other work, such as on inheritance tax issues, later on.

Make a free 30 minute meeting with RDR qualified Independent Financial advisor now

Arrange a free 30 minute meeting with RDR compliant  Independent Financial advisor now.

“the economy is absolutely screwed” Says Conservative MP

Former Conservative Cabinet Minister Lord Forsyth said  on the Daily Politics on Tuesday 9th October:

“I think we have got fixated with reducing the deficit – of course we have got to reduce the deficit but the way to reduce the deficit is to get growth going again and I think what was lacking in the speech from the Chancellor was any indication, other than this scheme for equity and small businesses, was any indication of how he is going to get small and medium sized businesses roaring ahead again and that is the only way forward…. It feels a bit like Mister Micawber – he is hoping something will turn up when the numbers come out.”

Yet Tory MP Mark Garnier was more honest still, speaking at a fringe meeting today he said:

“The reason we have a low interest rate is because the economy is absolutely screwed”

The chancellor’s speech was obviously well received then…

 

Never Trust an IFA?

‘Never trust an IFA, they are commission-grabbing ******s.’

By Mike Deverell – Posted from  www.citywire.co.uk

This is a typical comment on Citywire’s forums – often underneath one of my articles – and seems fairly representative of the average Citywire reader’s opinion of Frankly, many of those in the industry have only themselves to blame for this shoddy reputation. Although I have come across many fantastically professional, diligent and honest individuals during my career, I have also met my fair share of salesmen only interested in earning the maximum commission.

Despite this, I believe financial advice is severely undervalued in this country. The value it can add, both in pound-note terms and in terms of comfort and confidence, is seriously underestimated.

I normally write about investment matters, but I thought it was time I set the record straight about our industry, the sharp practices to look out for, the changes that are afoot, and the value that good-quality financial advice can add.

It’s all about incentives

As anyone who’s ever read Freakonomics can tell you, people respond to incentives whether consciously or unconsciously.

Commission is an incentive that misaligns the interests of the client with that of the adviser (salesman). A commission-based adviser’s objective is to sell a financial product since he or she will not be paid otherwise. This product may well meet the client’s objectives, but it may not. The commission incentive ensures that client and adviser have a different objective.

If paying by fee, the adviser gets paid whether or not a product is sold. A fee-based adviser is much more likely to recommend a client keeps their money in cash, or uses it to pay off a mortgage, for example.

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Mis-selling scandals

Commission has been a major component of almost every mis-selling scandal, whether it involves IFAs or not. For example, the Financial Services Authority (FSA) recently expressed concerns about how poorly constructed incentive schemes caused mis-selling of payment protection insurance (PPI) at banks.

Luckily, commission is about to be banned under the retail distribution review (RDR). This comes into play from the beginning of 2013, and will go a long way to cleaning up our industry.

However, an inappropriate fee structure can also wrongly incentivise advisers or discretionary managers. For example, a typical trick by many wealth managers is to charge a relatively small annual management charge, but also charge, say, £25 for each trade.

This gives firms an incentive to trade, which might not necessarily be in the clients’ best interests. At Equilibrium we worked out that a single switch (which remember is actually two transactions – a sale and a purchase) for all our clients could earn us £200,000 if we charged £25 per trade! That is an incentive we do not want to have.

Even after RDR you will need to think carefully about whether the fee structure being proposed offers an inappropriate incentive.

The value of advice

Although it is important to be aware of the potential for sharp (or just poor) practices, professional financial advice can be invaluable.

Financial advice covers a wide range of areas, but quality advice can, among many things:

  • Reduce the amount of tax you pay, whether that be on income or gains from investments.
  • Help protect your family against the unknown with appropriate insurance.
  • Help you plan for the future, knowing how much you need to save for retirement and work out when you can afford to retire.
  • Reduce inheritance tax on your estate.
  • Build appropriate investment portfolios to match your risk tolerance and objectives.

Most Citywire readers have as much chance of selecting decent investment funds as the average IFA. Unfortunately, selecting a good fund manager is a fairly minuscule piece of the investment jigsaw, with asset allocation accounting for more than 90% of the variance of investment returns. Quality investment advisers therefore focus on asset selection rather than fund selection.

Do advisers avoid investment trusts?

One myth that I consistently see repeated on Citywire forums is that advisers only recommend investing in unit trusts or open-ended investment companies (Oeics) instead of investment trusts. They do so – so the story goes – because they get paid trail commission.

Quality advisers who use wrap platforms rebate trail commission back to their clients. They also get a discount on annual management charges, which makes unit trusts similar in cost to investment trusts, often cheaper. We find that the discounts we can obtain on funds often pay for a large part of our fees.

After RDR, trail commission will be banned, and to call themselves independent, advisers will have to consider investment trusts, exchange-traded funds (ETFs) and a much broader spectrum of products as well as unit trusts.

Some may decide they haven’t the time or resources to review all the relevant types of investment. These advisers will no longer be allowed to call themselves ‘independent’, but rather they will offer ‘restricted’ advice.

Qualifications

The RDR also means advisers must now achieve a much higher level of qualification before being allowed to give advice. The previous benchmark for financial advisers was the Certificate in Financial Planning. This was a level-three qualification. From next year, all advisers must be qualified to level four as a minimum. All advisers will also have to sign up to a code of ethics and be a member of a professional body.

To be sure of professionalism, look for chartered financial planners who have qualifications equivalent to degree level. Chartered financial planners must also have a certain amount of experience and carry out a set amount of learning each year to maintain their chartered status. The same can be said for certified financial planners, although their qualification is equivalent to the first year of an undergraduate degree course.

Frankly, most quality financial advisers can’t wait for these new rules to come into play since this will force the unscrupulous and the unprofessional to either clean up their acts or go out of business.

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