Diversification is a key part of any sensible investment strategy. But managing a handful of different investments can be time consuming, and the charges can mount up. The company I represent, Integrity Financial Solutions is delighted to have joined forces with Merchant Investors Assurance Company Limited (“Merchant Investors”) and Sanlam Fund Solutions to offer you an exclusive investment opportunity which gives you that all important diversification but with a minimum of hassle, and at a competitive cost.

The MI Carnegie Cautious Fund

With over 2,000 individual Unit Trusts and OEICs to choose from in the UK alone, creating a flexible portfolio of funds is quite a challenge. Not only does it take time and skill, it is expensive to make fund switches because of initial charges.

However there is an easier and cheaper way to create a diverse portfolio.

The MI Carnegie Cautious Fund is what is known as a ‘Fund of Funds’, an expertly managed portfolio of other funds that can be changed quickly in response to manager moves, economic developments or market events.

The Benefits of the Fund of Funds approach

• Diversification. Investments are spread across a range of regions, sectors, asset classes, and fund management styles in one portfolio
• Easily managed. The fund manager will be adjusting, reviewing and rebalancing the fund holdings on a regular basis on your behalf, saving time, paperwork and cost
• Actively managed. The portfolio is actively managed by a specialist team of investment experts to select the most appropriate combination of funds in accordance with the agreed portfolio mandate

Risks

As with any investment that is in part dependent upon the performance of the stock market, the returns from this fund are not guaranteed. The value of the investment funds and the income from them can go down as well as up and past performance is not necessarily a guide to the future. This means your initial capital investment may be at risk. The performance of funds holding assets denominated in foreign currencies will also be subject to variations in currency rates.

Reassuringly experienced

Integrity Financial Solutions has worked closely with Merchant Investors and Sanlam Fund Solutions to determine fund strategies that may be suitable for their clients.

Merchant Investors offers clients choice, innovation, flexibility and service of the highest quality. Their products are cleverly designed to take advantage of the best opportunities available on the market. All administration is carried out in-house and they pride themselves on the high calibre of their staff. Merchant Investors currently administers over £1.5 billion in assets.

Sanlam Fund Solutions is part of an independent portfolio manager, and has access to the full range of managed funds available in the marketplace. Their managers are experienced at analysing the market and identifying the most appropriate funds to meet the objectives of the MI Carnegie Cautious Fund.

Objective

The MI Carnegie Cautious Fund will be actively managed by Sanlam Fund Solutions, the fund manager selected by Integrity Financial Solutions, and appointed by Merchant Investors.

The main objective of the fund is to provide an attractive total return for clients over the longer term, taking a defensive attitude to risk. This is a low-medium risk fund aimed at growth over periods of at least 5 years. The fund’s peer group is the Association of British Insurers (ABI) Defensive Managed sector.

Is it easy to switch funds?

Yes. You can switch out of the MI Carnegie Cautious Fund at any time by choosing another fund or funds from Merchant Investors’ Pinnacle Range of funds. Switching is currently free within all MI’s products. If you appoint a new financial adviser, you may still be able to invest in the MI Carnegie Cautious Fund.

What will it cost?

The estimated Total Expense Ratio (TER) of MI Carnegie Cautious Fund is 1.68%. Integrity Financial Solutions will receive 0.25% of this total cost per annum.

The legal structure…

• The legal structure of the MI Carnegie Cautious Fund is as follows:
• This fund can only be accessed via pension and investment products issued by Merchant Investors;
• Merchant Investors establishes and administers the fund which is a unit linked fund, the assets of which form part of its long term business fund;
• Sanlam Fund Solutions is the appointed investment manager of the MI Carnegie Cautious Fund;

Merchant Investors has appointed Sanlam Fund Solutions as the investment manager under the terms of the investment management agreement between them, which sets out the responsibilities of the investment manager.

Merchant Investors and Integrity Financial Solutions are authorised and regulated by the Financial Services Authority (FSA). Sanlam Fund Solutions is the trading name of Principal Investment Management Limited, which is authorised and regulated by the FSA. Clients investing in the MI Carnegie Cautious Fund will normally be protected under the Financial Services Compensation Scheme through the product wrappers of Merchant Investors and the advice given by Integrity Financial Solutions.

Merchant Investors, Sanlam Fund Solutions and Principal Investment Management Limited are all part of the Sanlam UK group of companies.

If you want any more information about this exciting new partnership fund just give me a call on the free phone number above.

Hi everyone,

today’s article is about getting a little love back from the Taxman.

If you’re a business owner, highly paid director or even just an employee who wants high levels of life cover, you could be paying more tax than you need to.

An innovative new product from insurer Bright Grey called “a Relevant Life Policy” provides death in service benefits on an individual basis no matter how small your business is.

What Are The Benefits?

Whilst the company pays the premiums, they would not normally be treated as a benefit in kind and therefore, not assessable to income tax. This represents a significant saving, if you are a higher rate tax payer. (That would be nice – the taxman helping pay for your Life Assurance, don’t you think?).

An additional advantage for high earners is that the lump sum benefits do not form part of the employee’s annual or lifetime pension allowance, which is 1.75m in 2009/10.

These payments may be treated as an allowable expense for the employer in calculating their tax liability, as long as the local tax inspector is satisfied they qualify under the “wholly and exclusively rules”.
Provided that the appropriate discretionary trust is used then benefits can be paid free of inheritance tax.

How Much Cover Is Allowed?

• The minimum term is one year and the maximum term is 40 years or to age 75 if earlier and must be paid as a lump sum.
• Only death benefits can be provided.
• Maximum cover is 15 times the employee/director’s remuneration. This is equivalent to providing up to 4 times salary as death in service benefits and up to 11 times as a lump sum to buy an annuity as an alternative to a widow’s or dependants pension.
• The maximum benefit is £5m and for sum assured over £1m a financial questionnaire is required.
  Benefits must be paid through a discretionary trust and beneficiaries are normally restricted to family members and dependants.

Conclusion

This could be a very attractive proposition for some and to some extent it makes up for the loss of pensions life assurance, which was banned by the government when it proved too popular.

Whilst Bright Grey is the only provider to offer standalone RLP so far, I would certainly expect others to follow which would make it even more attractive cost wise. The combination of innovation, simplicity, tax efficiency and Bright Grey’s service makes this a very attractive proposition.

If you want to know more about this type of policy and whether it’s suitable for you, then please contact me on my free phone number – 0800 321 3508 or drop me an e-mail.

Hi all,

Just a short one today folks, but it’s very important…

I received an enquiry from someone concerned about their pension mortgage having been advised by their bank to take one of these vehicles out some years ago.

It really is two separate products though and therein lies our first problem. A pension is designed to create an income for you when you choose to retire whilst a mortgage is obviously a debt that will need repaid at some point.

Pension mortgages are designed so that the tax free lump sum is supposed to pay off the outstanding debt that has been taken out on an interest only basis. Like endowment mortgages there is an obvious risk with this in that it depends a great deal on your investment performance. If the funds under-perform then it makes it unlikely that you will have enough to pay off your debt at the end of the chosen term.

Not very nice.

However there is also another often unforeseen problem in that many of these may have been written only to age 50 as this was the earliest you could access your pension (except in some rare instances).

Changes to pension law mean that from April this year the earliest you can access any monies from your pension is age 55. In other words if you are not 50 before April this year then you will have to wait five years till you are 55 to access your pension. This would obviously have a serious effect on your financial planning for retirement.

If this relates to you, then you will need some urgent advice. Please just drop me a line and I’ll be only too happy to help guide you through what must be done as soon as possible.

Call me right away on 0800 321 3508

2009 Year of the ‘Baby Gloomers’

So much happened with regards to pensions in 2009 it’s difficult to know where to start. In a year dominated by one financial crisis after another, headlines included:

• Reductions in the size of defined contribution pots due to falling share prices
• More companies looked to reduce their defined benefit liabilities by closing or restructuring their schemes
• High earners were hit with a reduction in the tax relief on their pension contributions
• Bank employees pensions were bailed out by Government using public money
• The gap between private and public sector pension provision became ever wider
• The UK state pension was frequently described as ‘the worst in Europe’ when it was once right up there amongst the best.

The constant stream of bad news meant that the much mentioned Baby boomers became very worried. They worried about how falls in their retirement income will affect their ability to support their elderly parents and their children. So worried are they that a new phrase emerged… ‘baby gloomers’.

But it hasn’t been all doom and gloom…

Pensions reform – now to 2012

Auto-enrolment for millions…

Industry bods like me eagerly awaited the release of draft regulations dealing with the finer details of pensions reform, including the new employer duties due to start from 2012. As mentioned in previous articles these new duties will, for the first time in UK pensions history, require employers to automatically enrol millions of eligible employees in a workplace pension scheme.

However it’s not just about Personal Accounts.

To aid with this reform a new pension scheme, currently known as ‘personal accounts’, is also being created. Almost daily, both the financial and popular press run stories about whether this scheme will go ahead or not in its current form.

One of the unfortunate aspects resulting from such press coverage is that new employer duties are being closely linked with personal accounts, thus giving the false impression that auto-enrolment might not happen. If there’s one lesson to be learned from 2009, it’s that auto-enrolment has support right across all the main political parties. Personal accounts however may not. Consequently auto-enrolment is far more likely to happen.

It should be remembered that this feature is just one part of a pension reform package that includes fundamental changes to the basic and state second pensions.

What the future holds for employers

In the coming year, employers will need to know what auto-enrolment means for them.

They’ll need to…

• Be aware of the impact that their new duties will have on their business.
• Analyse current pension provision to ensure that it at least meets the minimum requirements. If there is no scheme in place, they will still be required to auto-enrol their eligible employees into a suitable plan and in doing so will have to decide if they want to set up their own private workplace pension scheme, or use the basic personal accounts scheme.

Where Independent Financial Advisers (IFAs) fit in

The problem is pensions are complicated and employers will need help. The good news is that there is a group of professional people who have all the knowledge and expertise to help them. They’re known as IFAs. If you want anymore information on any of these topics just drop me a line because I’ve been one for over seventeen years now! You can call me free on 0800 321 3508

Until next time, have a prosperous beginning to 2010.

Hi everyone,

I hope you’re one of the lucky ones to have dodged the snow so far, (friends of mine down South have been snowed in big time!) because I’d like to think this article this will give you a little warm feeling a week before Christmas… or at least warn you about some of the treacherous financial black ice that is very definitely underfoot just now.

First things first, watch out for an increase that’ll quietly catch pretty much all of us with the return of 17.5% VAT rate (yep it’s been a year already since it was dropped to 15%).

To sidestep it is impossible but you can be proactive and still stay standing like this – firstly budget an extra 2p or 3p in each pound you spend to cover the rise. Secondly and quite urgent if you do want to truly ‘beat it’ – if you have a large purchase you wish make, try all you can to order and pay for it before the start of the New Year. Getting to those early “January” Sales running directly after Christmas could be a wise and urgent priority for you depending on what you’ve got your eye on.

Now a little bit of pre-Christmas cheer (or how to get another 2.5% back again)…

The basic state pension goes up by 2.5% in April 2010. This means up £2.40 to £97.40 weekly for a single basic rate pension and up £3.85 to £156.15 a week for a couples’ basic rate pension.

Oops! Now we’re onto the ice again…

National Insurance contributions rise by 1% in April 2011 – for those earning over £20,000 whether employed, employer, or self employed. Next onto aspiring homeowners…

Freedom from having to pay Stamp Duty for those who purchase a property for less than £175,000 will end and the threshold will return to £125,000 after the new year Budget.

Ah, but at least shady bankers will get their come uppance will they not – do I hear you ask? Well, not quite, but Alistair Darling just announced in his Pre Budget Report that there will be a one off tax of 50% applied to all discretionary bank bonuses over £25,000; income tax is applied as normal… the Bankers themselves just squeezed out of that one.

However, if you like a laugh with friends at the bingo – you get 2% back yourself; Bingo duty is down 22% to 20%.

Meanwhile the Chancellor continued with some cold blasts of his own – the Inheritance Tax Threshold will be frozen at £325,000 until at least 2011.

Next here’s a slippery slope for those who earn “too much” – anyone earning £150,000 a year or more including employer pension contributions will find their Pension tax relief slashed from 40% to 20%, but it won’t affect those earning less than £130,000 per annum.

And… because we all love the Internet sooo much – we’ll all be throwing 50p a month into the tin to fund super fast broadband if we have a landline.

On the other hand if you’re worried about keeping a roof over your head in 2010 then hope may be at hand for a little longer – those who are facing repossession can take advantage of The Mortgage Interest Scheme for another six months, which is how long it’s been extended by. Hopefully, by summer it may be a little warmer then.

Keeping warm also gets a boost with an extra £150 million going into the Warm Front scheme for those families on low incomes to make their homes properly habitable with new heating and insulation. Low income families can also look forward to a new boiler when the Government introduce their “Boiler Scrappage Scheme” in April 2010 which gives the neediest £400.00 towards a new, fuel efficient boiler.

At the same time an extra 500,000 children from low income families will get free school meals and the child component of Children’s Tax Credit also goes up by £65.00. Additionally inflation-linked benefits go up by 1.5% in 2010. This includes Child Benefit, Guardian’s Allowance, Working Tax Credit (except things relating to childcare), Working Tax Credit will not be taken into account when calculating Housing Benefit and the disability elements of Child Tax Credit. 

There we have it then – a quick trip out on the ice and back, hopefully you’ll enjoy the skating and remember it’s one way to beat the winter blues. For the eagle eyed among you, today’s picked out some of the key things of note arising out of Alistair Darling’s Pre Budget Report 2009 last week… which reminds me, there’s one last thing for you; consider it an early Christmas present from Mr Darling himself…

The ISA Allowance will go up to £10,200 for all savers (with a £5,100 Cash ISA maximum) from 6th April 2010
but if you are over the age of 50 then you can take advantage of this increased limit right now.

As ever, if you need to talk about anything just give me a call on 0800 321 3508

Hi everyone,

since 1995 significant changes have been instituted regarding State Pensions. These were followed by changes brought in by the Pensions Acts of 2007 and 2008. The Act of 2008, whilst mainly focusing on Private Pensions, did also introduce changes to the State Pension as well.

The Government wishes to build on this earlier work along the following principles…

To try and make the State Pension fairer and more widely available

To simplify the State Pension simpler while making it more generous, ensuring it’s a solid vehicle that people can use to save with.

By introducing automatic enrollment into workplace pensions and the creation of personal accounts the Government hope to make saving for retirement much easier. Their hope is that those who don’t have access to occupational schemes actually start saving towards the day when they will retire – and won’t bury their heads in the sand instead.

The final principle is to “support and encourage extended working lives”… yep, it looks as though many, many people will have no choice but to work long into their old age.

Here are the key elements of the current pension reform package that you need to be aware of…

1. The State Pension age (SPa) for women is increasing from 60 to 65. This will be the same as for men. (This change comes into effect from 2010).
2. From 2024 the SPa for men and women will gradually increase from 65 to 68.
3. The number of qualifying years required to get a full basic State Pension is being reduced
4. The current minimum National Insurance contribution conditions required to obtain a basic State Pension will be removed.
5. New weekly credits for parents and carers will be introduced.
6. Adult Dependency Increases (ADIs) will be abolished.
7. New rules will allow husbands and civil partners (as well as wives) will be able to get a State Pension based on a spouse’s or civil partner’s National Insurance contribution.

There are important changes to age thresholds and qualifying ages for other Pensioner and Working Age benefits. They cover…

– Up-rating the basic State Pension in line with earnings.

– Increasing the number of people eligible for State Second Pension (S2P), which will also become flat-rated in the future.

– Allowing certain customers to buy additional voluntary National Insurance contributions.

There we are then, that’s a snapshot of what’s coming to us all very shortly. I’ll be doing more on these State Pension Reforms over these next few weeks, so stay tuned and please… start saving for a rainy day, and then hopefully, when you do retire, it’ll all be sunshine and ease for you.

Until next time, take good care.

]]> http://www.williamgeorgeifa.co.uk/2009/10/23/state-pension-reform-what-you-should-know-now/feed/ 0 http://www.williamgeorgeifa.co.uk/2009/10/09/bear-or-bull-for-your-investing-can-you-tell-yet/ http://www.williamgeorgeifa.co.uk/2009/10/09/bear-or-bull-for-your-investing-can-you-tell-yet/#comments Fri, 09 Oct 2009 13:28:35 +0000 William http://www.williamgeorgeifa.co.uk/?p=300

Hi everyone, I thought it timely to bring you my latest thoughts regarding where we are in investment terms, concerning the downturn which continues to grip western economies so powerfully.

There is much debate about whether we are in a bear market rally at the moment or whether we have hit the bottom and are now on our way up again. Evidence can be found for both views and it is useful to note that there is no obvious consensus on this position at the moment.

Those with defensive portfolios will be hoping we are in a spike and those holding cyclical stocks and banks are hoping this is a more sustained rally.

So, what is the evidence for each argument?

From an optimists perspective certain economic data can point to things getting better relatively rather than absolutely. Despite the Bank of England’s caution, it seems that the effect on corporate earnings has not been as bad as forecast and that the increase in unemployment is slowing.

Globally there are more positive data points, especially the Purchasing Managers Indices (PMIs) in both manufacturing and services.

I would also highlight the following areas: the UK PMI figures; the BRIC PMIs (now above 50 collectively); German manufacturing orders, and to top it all, US weekly job claims are now dropping.

The stress testing of banks in the US has been completed without markets finding any chinks in the armour although this may be a slow burner as interbank lending, whilst picking up, is not flowing just yet.

The market in general is continuing to deleverage and the fact that a number of hedge funds have completed some of this and have in some cases stopped shorting the market has also helped. Outside of the traditional core areas the emerging markets and especially China have shown some encouraging data although the shift to a more domestic based demand will take more time even with large stimulus packages.

This evidence however is at best unpredictable – as is shown in the UK housing statistics which have fluctuated in message over the last few months with different surveys indicating opposing trends. Whilst activity has been picking up it is still well below the norm and prices are still coming down. A number of economists want to see this stabilising before they will declare more confidence in a sustained recovery.

Manufacturing inventories are always a good indication of the overall state of the economy and these are continuing to decline. Whilst there is some time lag with this indicator, these days improved communication mean that the lag is shorter. Production will only increase when orders are required which is not yet happening.

Unemployment is increasing, although the rate of increase is falling – unemployment tends to generate more unemployment due to reductions in demand so there may be some way to go before the situation improves.

The Chicago Board of Trade produce equity volatility statistics and these show the market considerably above trend at the moment. Many feel these levels of volatility need to come down before equities can move forward in a more consistent manner.

On balance, the weightier of the two arguments is probably on the negative side, particularly given the latest forecasts for GDP growth in places like the US. Some experts are arguing that the market has rallied too early, before the fundamentals are in place to back this up and that we will see some profit taking bringing the market into a lower trading range.

We can continue to compare statistics for some time but it won’t prove conclusively whether markets are now on a consistent upward trend, or whether we are in a temporary blip. Perhaps the strongest point to take from the debate is the fact that these arguments are taking place at all – this is a clear indication that the downward trend has been broken suggesting at least that there is some positive, or should I say less negative, news to interpret.

From an investment perspective, all the speculation and the uncertainty adds substantial weight to the old arguments for being invested over the longer term and that regular saving is the sensible approach in this environment rather than attempting to time markets.

Anyhow, that’s how the view looks from here!

]]> http://www.williamgeorgeifa.co.uk/2009/10/09/bear-or-bull-for-your-investing-can-you-tell-yet/feed/ 0 http://www.williamgeorgeifa.co.uk/2009/10/09/your-free-2010-pension-age-change-pdf/ http://www.williamgeorgeifa.co.uk/2009/10/09/your-free-2010-pension-age-change-pdf/#comments Fri, 09 Oct 2009 12:52:45 +0000 William http://www.williamgeorgeifa.co.uk/?p=297

Hi everyone,

following on from my last article covering the new Pension Age Change that comes into effect from April 6th 2010, I’ve got a great PDF for you that will explain the issues involved.

From this date you will not be able to receive an income or a tax-free lump sum from any private pension before your 55th birthday, unless your health is very poor. I highly recommend you download and read what it covers if you were banking on accessing your pension income in this manner and are approaching 50 years old.

It covers thing like…

• Do I buy an annuity?
• Do I transfer to an income drawdown plan?
• Should I just do nothing instead?

The case studies are also very clear and the whole read only takes 20 minutes or so, but in terms of you accessing the right retirement income it could be a very valuable 20 minutes spent indeed.

Thanks again and let me know if you’ve any questions you like answered on 0800 321 3508.

I’ll be happy to help.

Here is the direct link to download the Pension Age Change PDF 2010

Until next time take good care.

]]> http://www.williamgeorgeifa.co.uk/2009/10/09/your-free-2010-pension-age-change-pdf/feed/ 0 http://www.williamgeorgeifa.co.uk/2009/09/29/pension-age-change-official-%e2%80%93-ignore-it-and-you-could-lose-out/ http://www.williamgeorgeifa.co.uk/2009/09/29/pension-age-change-official-%e2%80%93-ignore-it-and-you-could-lose-out/#comments Tue, 29 Sep 2009 11:37:17 +0000 William http://www.williamgeorgeifa.co.uk/?p=294

Hi everyone,

Did you know the minimum retirement age increases from 50 to 55 on 6 April 2010? As a result you may be adversely affected by this important change.

At the moment it’s possible to use your pension to provide a tax-free lump sum and/or an income at any time after you reach the current minimum retirement age of 50. You don’t even need to stop working to do this.

However, if you are over 50, or will be by 5 April 2010 – and you do not access your pension benefits by 6 April 2010 – you will not be able to take out any money from your pension fund until you are 55, up to five years away. Which means…

This simple fact could have significant consequences for you, in particular if you need funds for a specific purpose before your 55th birthday; for example to help a child going off to university, finally taking that dream holiday, or paying off the mortgage.

The good news is that you still have options that let you retain this financial flexibility.

Alerting you to this change now, means you have ample time to take financial advice and make any necessary changes to your financial plans before the 5 April 2010 deadline.

In these tough economic times I understand that you will be looking to keep as many of your options open as possible. You may be concerned about the security of future employment, or are simply seeking alternative income sources (due to the rapidly decreasing interest rates available), but this change in legislation could potentially get in the way of those plans.

So what to do?

Well, here are two ideas for you to consider..

You could choose to buy an annuity, a financial product that would provide you with a regular income for life in exchange for a lump sum payment. If you buy an annuity before the end of this tax year you can avoid being affected by the increase in retirement age. But if you aren’t ready to swap your pension fund for a guaranteed income just yet, there is a more flexible alternative.

The Income Drawdown option: Income or Tax Free Lump Sum – or both?

An income drawdown plan allows you to take an income from all, or part, of your pension fund while leaving the remaining funds invested. On top of this you can take up to a quarter of the money as a tax-free lump sum. The income can be increased or decreased, within set limits, to suit your requirements. It allows you to retain the right to draw an income from your pension before your 55th birthday without having to commit to an annuity just yet.

If you think you might need a tax-free lump sum or an income from your pension fund before your 55th birthday, taking action now to pre-empt the increasing minimum retirement age could be the solution. However, it is vital that you also consider the impact this will have on your income later in retirement when the possibility of earning is no longer an option.

If you wish to make an appointment to discuss any of the issues in this letter, please contact me on the free phone number 0800 321 3508 to arrange an appointment. I look forward to hearing from you soon.

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