Over-55s at the mercy of a new pensions ‘experiment’ next month
Incoming investment pathway rules have been dubbed “fundamentally flawed” and “potentially dangerous”, writes The Telegraph.
These new rules compel providers to offer people those without a financial adviser a default fund strategy based on their money plans when they hit the age of 55.
Providers are “licking their lips”, the article says. This is because the regulations will see pension providers potentially push retirees towards their own in-house funds.
A default fund could be an unsuitable proposition for many. Whilst we use a variety of our own model portfolios the process of selecting which one is appropriate is an in-depth process considering a client’s aims, circumstances and opinions.
Why you shouldn’t trust a robot when your financial affairs are fiddly
This article published in The Times urges the public to get face-to-face financial advice when their financial affairs are more complex. The article does pigeonhole all financial advisers as just portfolio managers, however.
The variety and scope of the services we offer mean direct fee comparisons are misleading. However, we wholeheartedly agree that for those with financial situations that are not simple, the best option is advice.
Debt dangers hang over markets
The Financial Times warns investors could face trouble chasing returns while they try to limit risks. The article suggests markets are “very fully valued by historic standards”. I would disagree with this as there is a lot of evidence that a number of markets around the world are trading at valuations lower than they have been in recent years.
The article suggests also suggests investors will not be adequately compensated for the risks they are taking. In the coming year, he sticks his neck out and guesses, markets will probably go up and down according to the ebb and flow of the news on Covid-19 and its vaccines.
One of the biggest risks the article looks at is that returns in coming years might not be as good as those over the last decade. To a certain extent, this is something we can do little about. The key here is to assess what the impact of lower returns in the future might be and to plan effectively. Taking more risk than is suitable to get higher returns usually backfires.
If you want to have a chat about anything, feel free to book in a free no-obligation chat here or get in touch.