New Horizons

These days I am frequently speaking to clients that are new to this world. By ‘this world’ I mean ‘investing’, and by ‘new’ I may actually mean..... err..... ‘more mature’ (bear with me and let me give you an example).

Last week I met Mr Jackson (not his real name). Mr Jackson had recently retired and had ample income from his state and employers’ pensions to cover his expenses and enough to generate a regular surplus. In addition, by virtue of his lifestyle and a regular savings habit he had built up substantial amounts in cash deposit accounts. In terms of savings, he had never used anything more complex than a cash ISA simply because he had never needed to. He came to me, as more and more clients are, because he didn’t like the historically low rates of interest that his savings were attracting and he didn’t like to think of his money reducing in real terms. In addition, he felt that what he had observed over the past few years both abroad and in this country lead him to believe that his money, while held with major banks, was perhaps not as secure as he had once thought. He felt that if he was going to take a risk with his money then he should at least be rewarded for it.

Mr Jackson is fairly typical of this new breed of investors. His are two of the most common reasons I hear for wanting to enter the investment markets now and at a relatively late stage in life (the third being that banks, having laid off most of their advisory staff, are no longer being proactive in presenting ideas and solutions for large sums of money held on deposit).

The good news is that a number of providers have anticipated that people like Mr Jackson exist. There is now a whole raft of lower risk products available ranging from traditional unit trust type structures to fixed term investments. As an example, funds that invest predominantly in UK gilts – long considered the safest of all investments – have returned approximately 40% in the past five years (source: Trustnet). The best available fixed rate bonds are currently offering around 2.5% per annum. Of course, investing is only suitable for you if you are prepared to be without your capital for at least a five year term and as an inexperienced investor I would only ever recommend that you consider the simpler and safer strategies available. However, if you think this is something you may wish to explore further then please feel free to contact me on the details below.

For further information please contact Shipman Financial Planning Ltd, 1 Barnfield Crescent, Exeter, EX1 1QY, telephone 01392 278491 or email info@shipmanfp.co.uk. This article is for general information only and reflects the views of the author only. You should seek professional advice in respect of your own circumstances. Authorised and regulated by the Financial Conduct Authority. Shipman Financial Planning is a highly respected professional adviser offering personal service and innovative advice.