The consumer association recently conducted an undercover investigation into the suitability of investment advice provided by high street bank and building societies.  In total 37 advisers were tested on their investment advice, only 5 were found to have given good advice.

The researchers who carried out the investigation were all over the age of 60 and were inexperienced investors.  That didn’t stop 17 advisers recommending investment bonds that had high exit fees, in some instances as high as 12% if you wanted to access your money in the first 5 years.

Of the 37 advisers, 18 claimed that the advice was free.  Even though they were being paid commission which had been deducted from the investment.  A Yorkshire Bank adviser failed to disclose the commission that was being paid on a £50,000 investment even though it was £4,400 equivalent to 8.8% of the investment.

Of the three visits made to HSBC, two advisers did well but on the third visit the adviser provided one of the worst instances of advice.  The researcher expressed on 4 occasions that they didn’t want to take on much risk, however 83% of the money was invested in a way that was above his risk tolerance.

When seeking investment advice always get independent financial advice, an independent financial adviser will be able to source solutions from the whole of the market and won’t be restricted to one company.

Investment advice is never free so always make sure that the charges are disclosed and explained to you.

The Consumer Prices Index (CPI) fell to 5% in October down from 5.2% in September.  This is mainly as a result of falls in the price of food, air transport and fuel.  However inflation still remains way above the Bank of England’s target of 2%.

Price Changes

Food prices fell as a result of heavy cost cutting by the supermarkets and good harvests.  Flight costs are known to fluctuate wildly and are 6% lower than they were last year.  The cost of us filling our cars up with fuel has also decreased with petrol 0.5p a litre lower.  Items increasing in price were clothing, electricity and gas.  Energy supply companies have recently been increasing bills and this is expected to have an impact on November’s inflation figures.

Dear George

The latest figures mean that Mervyn King, the Governor of the Bank of England has had to write to George Osborne the Chancellor of the Exchequer to explain why inflation is above the 2% target.

In his letter he says that the high level of inflation is due to “the increase in the standard rate of VAT earlier this year, and previous steep increases in import and energy prices.”  He goes on to say that without these temporary measures inflation would be below the 2% level.

Last week was “Write a Will Week” and research by Unbiased shows that an alarming number of people don’t have a will in place.  The results showed that over 29.5 million adults in the UK don’t have a will in place.

Even more worrying was that 48% of married adults currently do not have a will in place.  Under the current rules of intestacy, the rules that come in to play if a will does not exist, a spouse or civil partner can only inherit £250,000 if there are children or grandchildren.  For couples who live together but aren’t married, 67% had savings they wanted to leave to family and friends and 54% wanted to leave a property to their partner, yet they will get nothing if there is no will in place.

Given the importance of having a will in place, it’s maybe surprising that the biggest reason for not getting one arranged is apathy with 25% of people saying they plan to arrange one when they are older.

During the financial planning process it’s important to make sure that wills are in place and more importantly that they are up to date and reflect the wishes of each party.

A recent poll carried out on behalf of unbiased.co.uk says that over 72% of adults in the UK are concerned about their personal finances.  Worse still is that over 13.5 million UK adults haven’t done anything to sort out their money worries.

Two in five people are concerned about their savings while 29% are worried about their pension provision.

With the current low interest rates and high inflation it’s no surprise that these can be worrying times.  The recent volatility in the stock market will not have helped these concerns either.

The top worries in the poll were savings (39%), personal retirement planning (29%).  41% of 18-34 year olds and 43% of those aged 55 and above said that savings were their biggest concern.  Pensions proved to be the biggest concern for the middle-aged (38%).

Those that had taken action, 22% said that they had started saving, one in five (20%) said they had changed the way that they saved and invested.  13% had made a tax efficient investment such as an ISA (Individual Savings Account).  9% had taken independent financial advice and 8% have made contributions to their employee pension.

It’s never too late to start or review your savings, if you would like to meet with us to discuss your situation then we are always happy to meet for an initial meeting without obligation and at our expense.  If this would be appropriate for you please do not hesitate to contact us.

The latest data from Halifax part of the Lloyds Banking Group shows that house prices were up 1.2% in October but prices were down 1.8% over the last year.  That leaves the average house in the UK valued at £163,311.

The report goes on to say “The housing market has proved highly resilient in recent months despite the weak economic recovery and the deterioration in the outlook for both the UK and global economies. Despite these developments, house sales and the supply of properties for sale have remained very stable since late 2010. The prospect of exceptionally low official interest rates over the foreseeable future is likely to continue to support the market in the face of a very difficult economic climate. Both prices and activity levels are expected to remain close to current levels over the coming few months.”

The Halifax House Price Index is the longest running measure of UK house prices with data going back as far as January 1983.