There are 11 investment asset classes widely used and classified in four main groups, Equities, Bonds, Property and Cash and from investor experience in recent years, lessons can be learned by not ‘putting all your eggs in one basket’.

In the early 1990’s, technology companies were ‘the rage’ and more recently property investment. Both sectors shared the same experience in the investment cycle of rapid growth and decline and depending on what stage of the cycle the investor entered and exited, there were various outcomes ranging from high gains to extreme losses.

Based on this, it is fair to say that no single investment class has dominated the investment market and the preferred approach now is to adopt a more diversified approach.

Principle First’s investment approach is to apply various criteria filters to the initial investment fund selection, which reduces the original amount of around 3000 funds available to below 50 based on measures such as past performance, volatility, industry ratings, and the amount of time the fund manager has managed the investment fund. This research is carried out on a regular basis.

When it comes to giving advice and appropriate investment selection, we will firstly assess the attitude to investment risk a client has. We do this through using a ‘Risk Profiler’ which factors in existing investment experience, the range of investments a client already has, their expectation of growth and timeframe of investment, and more importantly their ‘risk appetite and capacity for loss’.

Understanding an investor’s attitude to risk will allow an appropriate Principle First Model Portfolio to be recommended.

We have model investment portfolios ranging from Lowest Risk to Highest Risk. The most suitable for the the investor is based on the investor profile generated and this can be reviewed and rebalanced at an annual review meeting or more frequently if required. Within each portfolio the options to use various tax wrappers are available such as ISAs, Bonds, Pensions and Investment funds.

To discuss your investments further or to have your investments analysed to see if they suit your investor profile, call us today on 0800 678 5929 or get investment advice.

Jelf Group are a consultancy group who provide advice on insurance, employment benefits and healthcare, as well as financial planning. The group reported an increase in revenue to £35million in the six months up until the end of March, slightly up from £34.9million the year before.

Through cost saving, group pre-tax profit increased from a £1.2million loss last year to a £800,000 profit in 2011, whilst operating profit increased from £1million last year, to £1.5million this year.

The financial planning groups chief executive Alex Always believes that the group will be debt free be next year.

Employee benefits and insurance moved forward, whilst financial planning lagged behind, with revenues falling 11% from £4.4million to £3.9million. Profitability actually increased.

The Jelf interim statement added, ‘In the current economic environment individuals continue to look to improve returns and seek sound financial planning advice, however the quality of advice demanded has risen.’

Jelf controls investments of £500million and services of £1billion of funds in older style products, which they claimed had, ‘improved the size of the on-going trail that can be derived from these investments enabling the group to service clients and grow the business’.

Alway added, ‘The business has continued to perform well in the first six months of this financial year, revenues have held up and we have achieved an increase in profitability and margin. Maintaining revenues against a continuing difficult economic backdrop is a good performance and our focus on improving margins means the business is well placed to take advantage of future opportunities.’

Currently those approaching pension age will have a pension pot with which they must buy an annuity, and whilst some companies publish their annuity rates for comparison, including Aviva, it is not compulsory, and some do not.

Retirement director at Aviva, Clive Bolton has called on the government to introduce the rules, arguing that retirees need o know how to get the best annuity based on their own individual circumstances.

Bolton added, “Many retirees do not know how to get the best annuity for their circumstances. This could be costing them thousands of pounds, with two-thirds automatically buying the annuity offered by their pension provider rather than a potentially better product.”

“Annuity providers are not required to publish their annuity rates. Many companies do but there is still a significant minority allowing no comparisons. Aviva wants publication of annuity rates to be made compulsory, where the best market rates are highlighted to retirees when the annuity they are being offered by their pension provider is 10 per cent less than the best rates available in the market for the same type of product.”

Aviva also called for the automatic transfer of pension pots when workers change jobs, after their research found that the average person works five different jobs throughout their lifetimes, often left with five smaller pension pots when one larger one could perform better for them.

Bolton explained, “Retirees are also living longer and the way in which they have built up their pension savings differs to previous generations. Recent Aviva research found a third of workers have five jobs throughout their lifetime, with many accruing a number of small pension pots. Aviva believes legislation should be introduced to allow the automatic transfer of small auto-enrolled pension pots, allowing savings to follow members when they move jobs and providing them with better annuity purchasing options when they come to retire. In addition, non-advised annuity sales should be subject to the same cost transparency rules as advised sales.”

Vipond, who is the director of financial regulation and tax at the ABI explained that the move could leave millions of taxpayers out of pocket.

He did however note that his organisation and the industry in general support plans by the government to simplify the tax system through their range of proposals announced in their plans published last Friday (27^th May)

Customers who make payments into a life insurance policy they took out before 1984 are currently entitled to a tax relief worth 12.5% of the life insurance products premium.

The entitlement, which was abolished for new customers in 1984, was left in place for existing customers when the government made their changes in the eighties because the ruling would naturally end as the last policyholder passed away.

The government appear keen to speed the process up, and want to simplify the system now, removing the need for rules relating to customers who took out policies before a set date, and introducing universal rules for everyone.

Vipond argued however, “Insisting on abolition now will affect up to 1.5m people. They may have to pay more into their policies to maintain the level of benefits they have been expecting for the last 30 years. Many of these people will be retired and on low incomes.

“It will require new legislation to prevent tax charges arising if policies are changed to reflect the loss of tax relief. It will also cost the industry, as a whole, millions of pounds to make this change.

“The people who get this tax relief started paying into qualifying policies taken out before 1984. The decision was made 30 years ago to let these policies run their course with this tax relief in place.

“There is no logical reason to change this approach now as this tax relief will end naturally over time anyway without the government doing anything.”

The study, conducted by unbiased.co.uk, revealed that taxpayers in the UK will waste £13.5billion across 2011 through unnecessary tax payments, and ten per cent of that figure would be as a result of inheritance payments.

The Tax Action Report also revealed that pension credits and tax credits were other key areas where Britons were wasting large amounts of money.

Despite the results, it was revealed that nine out of ten people living in Britain also reported that they had taken no action last year to organise their taxes, or made any plans to streamline their finances so there were no financial burdens for those they left their estate too should they die.

Karen Barrett from the firm revealed, “Vast sums are being paid unnecessarily in inheritance tax every year because the deceased had not made adequate provision.”

The coalition Government have vowed to simplify taxes, and have created an Office of Tax simplification.

The office have revealed that they intend to implement a review of inheritance tax and its various procedures and rules, although this may take some time.

Inheritance tax has various rules and regulations and it is advisable to seek specialist advise on the subject.

Inheritance tax is only payable on a persons estate if it is worth more than £325,000, and anything above that threshold is taxed at 40%.

In 2007 a new law was passed that enabled married couples and registered civil partners to be able to pass their assets to one another without incurring a charge after death.

In most normal circumstances the executor of the will is responsible for paying the relevant inheritance tax from the deceased’s estate.

Despite a global economic downturn it appears that companies offering financial advice are starting to see an upturn in fortunes as Jump Money have proved in their latest results.

The financial advisors saw strong growth in the number of advisors, issued policies and turnover for 2010 in figures announced yesterday.

The Leeds based firm saw the amount of financial advice they charged for increase to just over £3million, a demand which saw them increase the number of financial advisors on their staff from just 2 at the beginning of the year to 17 at the end of the year.

The number of policies issued throughout the year was also up 14% and that growth shows no sign of slowing.

Three months into 2011 the firm have expanded to 24 advisors, adding a further 7, and as a result issued policies and turnover has continued to grow.

The firms primary focus is the life assurance and protection sectors, although they have had to expand to offer private medical insurance, general insurance, secured loans, mortgages and credit cards through the difficult period.

They are now looking to expand into pensions, investment and equity release in the remainder of this year.

Managing Director of Jump Money, Adam Temple revealed, “The last 15 months has certainly seen the Jump Money business expand and develop as we have grown in a variety of areas. At the start of 2010 we had just two advisers and at the end of quarter one 2011 this had grown to 24 not including those based in our retentions department.

“As we currently stand we fully expect to substantially improve on our turnover and number of policies issued by the end of this year, whilst we will also be moving into a number of new and exciting product areas.”

The firm look to find customers without a financial advisor at present, and aim to offer financial advice through a web based platform.

Their existing customers have also welcomed the new ‘Personal Account’ section of their website that gives customers access to client reports, storage for all their policy documentation and the latest offers and discounts.

Brian Sweeney, the former education director of the Institute of Financial Planning has revealed plans to create an academy for advisors who wish to build up their own lifestyle financial planning proposition.

Sweeney’s new financial planning academy will offer Independent Financial Advisors (IFAs) who have reached their level four qualification the opportunity to join the year long course.

The Third Generation Financial Planner Academy will also be open to those about to take their level four qualifications, so long as they are set to do so before the retail distribution review deadline.

The course was set up by Sweeney, now chief executive of the Financial Planning Training Company, as a route into financial planning for all those IFAs who were unable to take the Manchester Metropolitan University masters in planning.

Sweeney criticised the masters course saying that it was, “great for those individuals who are either certified or chartered, of which there are about 3,000, because that’s the entry criteria, but what about everybody else?”

Sweeney went on to add that the requirements for his new course were more universal explaining that, “you don’t have to be chartered, you don’t have to be certified, but you do need to be heading in that direction to get maximum use out of this. We don’t want to exclude people because they are not there already.”

Sweeney pointed out that his new course also allowed students to learn financial planning principles that they would be able to apply in business as they moved through the course.

‘We will teach them how to do the fundamentals of financial planning,’ he said, adding, ‘We’ll teach them about how financial planning is different from financial advice, the skills they need, and what are the tools and techniques.’

The new course is intended to take a year to complete and will be split up into four different modules. The modules take three months each, with an away day to introduce the students to the different aspects of the module, followed by remote learning for the rest of the term.

The new academy is set to launch by January 2012.

Consumers organising a pension, mortgage, insurance or general financial planning much prefer to have independent financial advice, according to a new report from Axa.

Forty-four per cent of UK adults see  independent financial advice as much preferable to a bank adviser or an accountant, when choosing financial products, the research showed. Advice from a tied adviser in a bank was preferred by just 35% of consumers, with 11% saying they would approach their accountant.

The benefits of independent financial planning advice have been quantified and highlighted in various reports recently, but perhaps the most important single finding was that consulting an independent financial adviser for mortgage advice will, on average, save you £962 per year on your mortgage repayments*.

By seeking financial advice from an independent source, your financial planning is based on looking at the whole market, whereas an adviser at a bank or building society is ‘tied’ in that they can advise only on the small range of products they sell. Financial planning advice on mortgages at a bank or building society is based, on average, on a range of just 20 mortgages, compared to the many thousands that can be compared by an independent financial adviser, when making his recommendations.

The report is the 5th annual Axa ‘Retirement Scope Research’ report based on interviews with 500 working consumers aged 25-59 and 500 retired consumers aged 55-75.

*”The Value of Mortgage Advice” by the Association of Mortgage Intermediaries (AMI)

If you are close to the threshold where your next salary review could cost you your child benefits, then listen up. The good news is that some timely financial planning, with the help of a qualified financial adviser, could prevent that from happening.

The government is currently proposing that child benefits be taken away from any family where at least one parent is a higher-rate taxpayer, earning more than £43,875 per year.

There are many workers just below that threshold, who could rise above it if they were promoted, or following their next salary review. Those in the ‘danger zone’ may be currently earning £40,000 to £43,000, but are still eligible for child benefits of £20.30 per week for their first child, and £13.40 per week for younger children.

For a 2-child family, this means annual child benefit of £1,752.40 that would be lost through a wage increase – possibly wiping out the benefit of their salary increase in the process.

With financial advice, however, a salary sacrifice arrangement could be built into the employee’s financial plan.

Salary sacrifice is where the employee ‘gives up’ their raise, and instead their employer passes on the benefit in a way that does not increase their taxable pay. This could be through additional contributions to the employee’s pension, saving the cash towards retirement and with the bonus of tax relief as well.

Other options that could be negotiated with an employer include childcare vouchers, or a company car.

Savers are increasingly in danger of losing money by failing to factor in tax and inflation, when comparing best bank savings accounts.

Savers who focus on bank current accounts are also failing to consider the longer-term tax-free savings options offered by stocks and shares ISA accounts.

Many savers on comparison websites, who look at the current listings of instant access current accounts, will see bank savings accounts from ING and Santander which describe ‘top interest rate’ accounts offering 2.75% gross per year.

In order to work out the real value of savings interest that will be paid in such accounts, it is first necessary to remember that the 2.75% figure is gross. In other words, any earnings are liable for income tax.

Income tax does not just apply to your salary, but to all forms of earnings classified by the Revenue as income, including interest on savings in traditional bank current accounts.

For a basic rate taxpayer, this means that 20% tax would be due on the 2.75% interest, so that the actual interest paid net by ING and Santander would be just 2.2%. A higher rate taxpayer would be worse off again, paying tax at 40%, so that he would receive only 1.65% of interest on his savings.

Then inflation must be considered, which currently stands at 3.1%. Every saver must keep the value of their money growing ahead of inflation, to preserve its ‘buying power’.

This means that a 20% taxpayer would need to achieve at least 3.9% in savings growth, before his money is really growing. The 40% taxpayer would need to achieve almost 6% in interest, to achieve the same.