In financial services the desire to over-complicate seems endemic. Junior ISAs, for example: designed to be for the parents, guardians, parole officers etc of children under 18, Junior ISAs are staple media fodder yet pretty much redundant for the vast majority of people.
Why? Because parents have their own adult ISA allowance of £15,000 each for each and every tax year.
If parents want to save for their kids' future the adult ISA allowances will be more than enough for nearly everyone; how many couples with young children will be salting away £30,000 a year from taxed earnings, before putting even more aside for the nippers?
"Not many" is the obvious rhetorical answer.
Yet Junior ISAs continue to be a source of fascinatation for the financial media totally out of proportion to their actual utility. Nobody with a brain should go near them. This short video explains why.
As ever, do not watch this short clip thinking you will be given chapter and verse. I cannot do that in a timely fashion and - if I could - I would be straying into giving advice. Which is uber-naughty.
Enjoy. I hope to hear from you and thanks for your time.
"K.I.S.S" - Keep It Simple, Stupid. If only: the language of financial advice seems perpetually caught in a fog of obfuscation, double meanings and jargon.
Why though? It does NOT have to be this way. Solid financial planning is NOT rocket science. Rocket science is rocket science, as this clip demonstrates.
For investors, the take-out from the Cass report is to remember to “K.I.S.S.”, to keep it simple.
Unfortunately, many people and institutions in financial services seem keen to perpetuate the myth that dispensing financial advice is akin to rocket science.
This, dear reader, is complete and utter horrocks.
Proper financial planning has four simple constituents.
Everything else is just noise: lazy copy emailed in to wedge between the insurance company adverts.
1) Have A Plan
Think about what you want from your life. Then have an educated guess at what this lifestyle will cost, for the rest of your days. Finally, work out how you are going to fund this (petrifyingly enormous) amount. In other words, work out your “Number”.
2) Stick To Plain Vanilla
Boring, mainstream financial products: for most people, that is all they need to use to achieve their life goals. Think ISAs, collective funds, personal pensions. Really, that is probably all you need. If you speak to an adviser who blinds you with rocket science about some "can't fail" product or investment, remember what Mr Einstein said: "If you can't explain it simply, you don't understand it well enough."
And, for my sake, punch such an adviser on the nose: When these "can't fail" products do fail, it is Muggins here who picks up the bill.
3) Keep An Eye On Costs
As the Cass research shows, there is little to gain from trying to identify the next star manager. But there is lots to lose, in terms of cost, missing market gains, poor stock decisions and so forth. Make sure your adviser has a stated, methodological investment philosophy. And make sure your adviser invests his money where he wants you to stick yours.
4) Stick To The Plan
This is the toughie. A place where emotions enter stage left and reason scarpers stage right. Where there will always be reasons to save less, to spend more: you needed that gadget, this holiday, those Global kitchen knives (highly recommend these beauties, BTW).
As well, there will be nasty periods when your investments plummet in value - guaranteed. You will wobble, maybe lose your resolve and consider scrapping your plan, vowing never to enter “the markets” again.
In terms of your long-term financial health the biggest enemy can often be you. Or rather, your reaction to events. We help our clients to stay on course, "on plan". After all, it's not rocket science.
In our view, educated investors are happier investors.
In this post we outline our approach to investing client money. It will help you understand what we do (and why) with your investments.
To start, please watch the documentary below (not our work in any way). This is split into eight bite size segments. Grab your phone, tablet, PC or laptop and watch these as and when you can. You will learn an awful lot about the beliefs that underpin the advice we give to all of our clients.
Our "Statement of Independent Investment Principles (SIIP)" expands on the above and shows simulated performance for our range of Model Portfolios. For the record, past performance really is no guarantee of likely future returns.
In financial services the desire to over-complicate seems endemic. Junior ISAs, for example: designed to be for the parents, guardians, parole officers etc of children under 18, Junior ISAs are staple media fodder yet pretty much redundant for the vast majority of people.
